Why companies hide their eco-friendly bona fides

February 9, 2012: 11:13 AM ET

Environmentalism may be in vogue, but many successful businesses are thinking twice before screaming green.

By Ethan Rouen, contributor

The Maker's Mark distillery in Loretto, Kentucky

The Maker's Mark distillery in Loretto, Kentucky

FORTUNE -- At the Kentucky home of Rob Samuels, the chief operating officer of Maker's Mark bourbon and grandson of founder Bill Samuels Sr., not far from the nature preserve on which the distillery sits, the 54-year-old first bottle the company ever made sits behind the bar.

"If we were to open that bottle tonight, it would taste exactly like what we produce today," he says.

Maker's is possibly the most environmentally friendly and socially responsible alcohol company in the world, but Samuels believes that the many initiatives the company has taken are just part of doing business. What most customers need to know is only that every time they peel off that red wax seal, they'll get what they are paying for.

"It's part of the DNA of Maker's Mark," Samuels says of the company's devotion to the environment. "The way we connect with consumers is in part about who my grandfather was. He was very modest. It's not about standing on top of a mountain and screaming the loudest that this is happening."

The "green" label has wormed its way into the marketing campaigns of countless products as businesses try to capitalize on the growing environmental consciousness of consumers. Even environmentally damaging products with notorious reputations like bottled water and vinyl siding now boast their green credentials.

But many of the most genuine corporate innovators in the environmental space prefer not to throw it in their customers' faces. Whether it's coming from a fear of sounding disingenuous, a perceived lack of customer interest in corporate social responsibility, or a slew of competitors claiming the same mission without the same results, many successful businesses are thinking twice before screaming green.

"What's important is looking at the fit between customers and products," says Sanjay Dhar, a marketing professor at University of Chicago's Booth School of Business. "You must assess the needs and motivations of your customers and the importance of integrating the message of green with … the product."

See also: How Big Chocolate plans to save its cocoa supply

While one product's carbon footprint may inspire a complete lack of interest among consumers, another product's green credentials may trigger associations with inferior quality, he says.

Environmentally friendly products of the late 20th century were often expensive, ugly, and inferior (think first-generation hybrid cars). Some in older generations still cling to that idea, but it has faded as a new generation enters the consumption economy, Dhar says.

"The younger generation has a clean slate in their mind when it comes to green," he says. "They are growing up in a much more socially responsible world."

Maker's strategy is to advertise the quality of its alcohol and introduce the details of its manufacturing process only to customers who visit its Kentucky headquarters, which is a nature preserve.

There, more than 100,000 visitors have learned about how the company uses locally sourced ingredients and recycles the byproducts to power its plant. They can also learn about the on-site wastewater treatment plant that pumps fresh water into nearby creaks during the dry season and the company's long-term goal of becoming carbon neutral.

Maker's advertising, on the other hand, features only information about its bourbon. "It's always been the way we've lived and operated on a daily basis," Samuels says.

Fireclay Tile, which builds hand-made ceramic tile using recycled material, also doesn't boast his company's green bona fides.

"Most of our environmental initiatives are fairly meaningless to our customers," says co-founder Eric Edelson. "Most of them are guided by look, price, and timing, since we are made-to-order."

He compares the company's use of recycled glass to clothing makers' use of recycled plastic for fleece: It's a superior product regardless of where the materials come from.

Customers' eyes may glaze over during conversations about sourcing, but Edelson has found one place where the company's green initiatives help: in its attempts to hire people.

See also: Why McDonald's should have known better

"It's a key component of recruiting," he says. "We hired a marketing manager, and her first line during her interview was, 'My license plate says "tree hugger.'"

John Stein, the founder of Kirei, a high-end design materials manufacturer, has been exploring how to market his green materials to different constituents for a decade. "It's a tightrope," he says. "Naming your company 'eco' or 'green' could be good if you are going after the green market, but it could be a turn-off to the wider mainstream market."

Kirei's products, materials for top-of-the-line design and architecture, are all sustainable and non-toxic, but when a client like a casino, which cares only about having the "most fabulous materials" and not the most green, walks in the door, Stein knows which story to tell, the one about how innovative the products are.

But he needs to hone his message even for those who are willing to pay more for the most environmentally friendly products, he says. There is little regulation in the green certification industry, so even something as environmentally unfriendly as vinyl siding can be certified as green.

Success, he says, is found in keeping the message nimble and researching customers before pitching to them. Quality products have numerous aspects that sell, and a successful company will know which ones to brag about while never touting all of them at once.

"The market is a pie chart," Stein says. "You need to think about what percentage of the marketplace considers green as a major decision. If it's only 20%, you're shutting yourself off as not accessible to 80% of the market."

Join the Conversation
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.