I've blogged about how Wal-Mart's (WMT) new eco-labeling policy would force full disclosure from household cleaning products companies on the contents of their potions. Two of the main players, Clorox (CLX) and SC Johnson, have started to come clean with disclosure policies that reveal most of the ingredients in their products. But their drive for transparency is more than just altruism and reaction to Wal-Mart's policy. It's also a nod to a new reality in the household products segment that is increasingly skewing toward green and nontoxic.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Clorox launched its Greenworks line specifically in order to cash in on this trend. Method, the first cleaning company to have its founders named as Person of the Year by PETA (People for Ethical Treatment of Animals), is now omnipresent in U.S. supermarkets as well as in big-box stores like Costco and Babies 'R' Us.
Chicago-based market research firm MinTel estimates that sales of eco-friendly cleaning products will hit $623 million in 2013 and will account for nearly 30% of all household cleaner product revenues. Compare that to a tally of $17.7 million in green cleaning revenues in 2003, and it's clear this is an exploding market.
To get a closer look at green cleaning, I sat down with Julia Fry of Vaska, an up-and-coming laundry products company. Vaska is one of a select group of green cleaning products on sale at Wal-Mart's Sam's Club warehouse stores. The company initially started out as a product for commercial laundry services and hotels, but has expanded into consumer goods. Here are edited excerpts of our conversation:
Daily Finance: Give me a quick intro to Vaska.
Julia Fry: I started this company about 10 years ago because as a fabric designer, I was tired of my clothes getting ruined by traditional laundry soaps. We are one of the few green cleaning companies that do both institutional and retail.
In institutional, we also sell products for housekeeping -- odor removal, stain removal, etc. Those are not for sale in the consumer channel yet. Most of our institutional customers are in the [San Francisco] Bay Area, where green awareness is very high. We clean 250 hotels and do the laundry for the San Francisco Giants baseball team.
Clearly this is a growing market. Why are so few of the larger companies involved?
The official statement from big cleaning companies, with the exception of Clorox (CLX), is they won't be developing anything green anytime soon. There is an inherent problem for them because if a clean products company comes out with a green line then that says, "If you don't want our poisonous stuff, we have something else to offer."
Authenticity is something that is very important in the green market. When Clorox bought Burt's Bees, it had its own identity. Unless your focus is only green, you are not perceived as a green player. The green consumer is educated enough and vigilant enough that a company that has bad practices in another area is not going to be able to just float a green line.
We've heard a lot about cleaning products companies revealing their ingredients. How useful is that?
One thing to keep in mind is that there is only so much disclosure you can give. We disclose the category of chemicals in our products. We can't disclose our formulas. Then everyone could easily copy them. And that will be true for everyone. But even categories are useful. You can find out if a product has chlorine in it, whether it has alcohol in it or optical brighteners.
There are 11 known carcinogens in laundry products, and in housekeeping products there are 20 -- and several supposedly green products have these carcinogens. You can get a good idea if they are in your product if you see a full ingredient disclosure. This is why we have removed all known carcinogens from our formulas. That's a fine point that people don't get. How can it not be harmful to the environment but still be a carcinogen to people? It's about what's passing through your skin.
Toxins go into your bloodstream more efficiently through your skin than through your stomach. That's why they give you a nicotine or birth control patch because it's the most efficient way into your bloodstream. If you wouldn't drink your laundry soap, you should think about what you are using because you are effectively drinking it by wearing it all day long.
All of that said, green laundry products have been a particularly tough sell. It's one of the late-blooming parts of the green category.
True. Its not enough just to be green in laundry. You have to be better than the regular players because no one will accept laundry that does not look clean and smell fresh. So we had to build products that outperform traditional chemistry as well as the green players. We have lab tests that show we outperform Tide as well as the top green brands. In both mass and green, we are outperforming in stain removals, softness, color retention, water solubility.
You are in the middle of a big retail push?
We started retail three years ago. Everyone hated our bottles, so we had them redesigned, along with our branding, and now it's really starting to gather steam. In retail, we have seen 900% growth in each of the last three years, which is very strong for a launch product. For retail we look at IRI data that comes off the store. That data is impressive.
In New York City we are outselling Seventh Generation by seven times and Method by 10 times. We are in Duane Reade in 254 locations in New York City, which is phenomenal penetration for a start-up. And we are in Sam's Club, both in the warehouse and online. Another place people can buy is Alice.com, a new online retailer that has a lot of promise by connecting households goods brands directly to consumers.
How have you gotten the word out?
We have a blog, and we use Twitter, but it's primarily been word of mouth. We're not buying any media. There is no advertising campaign in television or in print media. It's all editorial or samples in people's hands. In green, it's an education piece. You have to talk about the formula and why it's different.
And it's all about Gen Y and the Internet. People can research and do things online that they couldn't do a few years ago. Gen Y is very suspicious of traditional marketing messages. So it's perfect for a product like ours where we are completely transparent.
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