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6/22/2003

Money also is driving force in LOHAS market

By Tony Kindelspire
The Daily Times-Call

BROOMFIELD — The following is not a statement you would have expected to hear at last week’s seventh annual LOHAS conference: “Product is king, and it should be for every one of your companies,” said Michael Crooke, chief executive officer of California-based Patagonia.

But while Crooke’s company is like any other business — that is, trying to make money — the way the business operates is the reason he was chosen to be one of the keynote speakers at the annual Lifestyles of Health and Sustainability conference at the Omni Interlocken.

The three-day conference, organized by Broomfield-based Conscious Media, brings together companies in a variety of industries that all have one thing in common: they are all, on some level, targeting the LOHAS consumer — a market said to be worth $230 billion annually.

Sometimes referred to as “conscious consumers,” these are people who care about issues like the environment, their personal health and promoting sustainable resources, and then support such beliefs through the market choices they make as consumers.

The people who buy goods and services with these ideals in mind on a regular basis are the core LOHAS consumer: an estimated 68 million people in the United States.

People who sometimes make these types of choices — picture someone who doesn’t buy recycled products very often but will only buy bleach-free coffee filters — are considered “nomadics,” and these people total another 81 million.

It’s a serious market with serious spending power, and the LOHAS conference gives businesspeople a chance to network and discuss some very serious issues.

According to Mara Engel of OrganicWorks Marketing, the public relations firm for the event, “well over 400” people attended over the course of the three days. About 10 percent to 15 percent were local, she said, while the rest came in from other parts of the country.

Crooke described how his company, founded in 1957, is so serious about its commitment to the environment that it took a major business gamble on organic cotton.

He said that 25 percent of the world’s entire insecticide usage goes to treat one crop: cotton. Company officials came to realize that the insecticide was ruining the land where the cotton was being raised and was endangering the health of the workers who picked it.

“It made us decide we didn’t want to be a part of it anymore, so we went to organic cotton — cold turkey,” said Crooke.

Because there was no worldwide market for organic cotton — Patagonia had to basically create one — the company had to raise its prices when it began using only organic cotton. This hurt the bottom line — sales of its cotton products fell from $70 million to $15 million.

But over time, he said, sales crept back up. Patagonia began sharing information about organic cotton with its competitors, even to the extent of providing those companies with names of organic growers and openly telling the competitors what price they were paying for the cotton. Today, Crooke said, there is a strong market worldwide for organic cotton.

“That’s what doing things differently is all about,” said Crooke. “We don’t talk about things in terms of the next quarter or the next year. We talk about things in terms of the next 50 years.

“We’re not in it just for survival; we have to win — we have to be mainstream. That’s what we’re in it for.”

Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at tkindelspire@times-call.com.