Many analysts are predicting that 2011 will be a make-or-break-it year for many green businesses as increasing competition in the green sector drives some businesses to new heights of innovation and service while other businesses lag behind. Keeping your finger on the pulse of macro and consumer trends is one way to ensure that your business will pass all challenges with flying colors, and make 2011 its strongest year yet!
Here are eleven green business trends to be aware of in 2011:
1. Collaborative Consumerism
With the aftershocks of the Great Recession still hurting working families around the country and environmental awareness on the rise, many families are trying to simplify their lives, protect their financial well-being, and go green at the same time by getting rid of possessions they don’t need and cutting back on unnecessary purchases. This has led to a sharp increase in the number of people leading what some are calling the “leasing lifestyle.” Why spend money, consume resources, and use up valuable storage space on something you’ll only use a few times a year, the philosophy goes, when you can just rent it instead?
In addition to seeking out traditional rental companies, many families are turning to more creative alternatives to ownership. One that is becoming increasingly popular is the concept of “collaborative consumption.” This is a catchall term that includes many different ways families are saving money and reducing their consumption, including peer-to-peer (P2P) sharing, P2P renting, bartering, swapping, fractional ownership, and more.
In an economy dependent on consumer spending, this may seem like a dangerous trend, even for green businesses dedicated to the principles of reduce, reuse, recycle. However, it offers many business opportunities for creative green entrepreneurs, especially on the web. Local, national, and international websites such as Freecycle, Rentalic, Zilok, Swap.com, and Neighborrow are already springing up to help facilitate these types of collaborative transactions, and there is room for many more.
Online communities have formed around some unusual types of “rentals” as well. Couchsurfing.com is a P2P travel network that enables members to rent out unused rooms, beds, or even couches to travelers as a unique form of cultural exchange. Hyperlocavore, a yardsharing community, matches up apartment dwellers and other people who want to grow their own food but don’t have the resources with people who have unused land or who need help tending their gardens. Coworking.com enables people interested in sharing workspaces with others to facilitate creative collaboration and community. And of course, blogs have sprung up to document the phenomenon and share information and resources among collaborative consumers!
Another consequence of the recession may be a decline in so-called “planned obsolescence” in certain types of consumer products. Clothing, appliances, tools, and other products that break down after just a few months or years of use not only cause frustration and aggravation, they are also hard on consumer’s pocketbooks, and with more consumers trying to cut back on unnecessary spending, expect to see more high quality, long-lasting products in stores.
This won’t just help consumers save money, it will also conserve resources and reduce waste, improving environmental sustainability. Many green businesses are already booming due to the rise in ethical consumerism around the world, and are well equipped to capitalize on this trend by developing innovative, “eco-superior” products that are not only greener than conventional alternatives, but also offer superior performance and durability.
3. Reduce, Reuse, Recyle
As concerns about waste and dwindling resources have grown, the three Rs of green living have gained more attention from businesses than ever before, and a growing number of companies are developing creative solutions to reducing waste and resource consumption.
One such is Recycle Match, which operates on the philosophy that one company’s trash is another company’s treasure. RecycleMatch matches businesses who have waste products such as used vinyl billboards, polyester textile waste, and salvaged building materials with businesses who need them. The business offering the waste materials has the opportunity to make money off something it would otherwise need to pay to dispose of, the business receiving the waste materials gets a lower price than it would if it sourced the product through traditional channels, and both businesses are able to protect the environment by reducing resource consumption and waste. Founded in 2009, Recycle Match has already helped keep more than 3 million pounds of waste materials out of landfills!
Another green business trend that has taken off in recent years and is expected to continue to spread is the concept of “upcycling,” which takes low value waste materials and turns them into products that are useful and beautiful. Recent years have seen a resurgence in the popularity of crafts such as knitting, pottery, and weaving in many parts of the world, and clever crafters have turned discarded candy wrappers into handbags, aluminum pop tops into jewelry, and worn denim into braided rugs. Many of these crafters now sell upcycled products online on Etsy.com or their own green business websites, meeting the growing demand both for eco-friendly products and for high quality, handcrafted goods.
4. Social Shopping and Group Buying
Social shopping has been around in one form or another since a Sumerian housewife first recommended a new potter to her neighbor, but since the advent of the internet, it has exploded in popularity. E-commerce websites such as Amazon are now able to track your purchases online and suggest other products you may be interested in based on the purchases of others who made the same purchase, while popular shopping social networks such as ThisNext allow members to display favorite products as recommendations to their friends on the website itself, and increasingly on other social media sites as well.
In addition to personalized recommendations from friends, many green consumers are increasingly savvy about “greenwashing” and seek out reliable ecolabeling information and similar resources to help them make informed decisions about green products and services. Although most ecolabels are issued by non-profit organizations, one way green businesses are capitalizing on the desire for reliable information is by turning retail stores into information resources that offer detailed information about the environmental impacts of particular products in the form of supplier scorecards or similar factsheets. One unique green startup pursuing this business model is Source4Style, an e-commerce site and information resource for eco-conscious fashion designers all in one. Co-founded by model and eco-fashionista Summer Rayne Oakes, the site allows designers to research and source sustainable materials, receive swatches and make purchases, and share reviews with fellow designers.
Other green businesses have taken a social enterprise approach to ecolabeling. One of the most recognized for-profit ecolabels is the Marine Stewardship Council, which provides certification for sustainably harvested seafood.
Another consumer trend likely to make a splash in the green business world in the coming year is group buying. The success of group buying startup Groupon, which allows members to receive substantial deals at local restaurants and other businesses if enough people sign up within the deadline, has been well documented, and several green entrepreneurs, including Sundeep Ahuja of Blissmo and Annalea Krebs of EthicalDeal.com are hoping to duplicate the model with a focus on green businesses. Green products and services have a not-always-deserved reputation for being more expensive than conventional products and services, and group buying is one of several creative solutions green entrepreneurs are using to reach a wider audience and make going green more affordable.
One of the hottest trends in social media in 2010 was “gamification.” Gamification is the practice of adding game mechanics such as points, badges, and leaderboards to everyday activities.
To date, most of the social media startups banking on gamification as a business strategy have focused on geolocation or entertainment. For example, Foursquare, one of 2010’s fastest growing social networks, allows users to earn badges, discounts, and other rewards, for “checking in” to their favorite restaurants and other businesses with GPS-enabled smartphones, and GetGlue, which raised more than $6 million in venture capital to build its popular social entertainment platform, offers stickers and a personalized recommendation engine for checking in to books, movies, tv shows, and other types of entertainment.
However, there are interesting signs that the addictive power of gamification may increasingly be used to promote positive social change. One popular recent startup, Health Month, tackles behavior modification through social gaming, encouraging members to eat healthier, exercise more, go green, and be more financially responsible with the help of points, brackets, and a dash of friendly competition among team members. Green startup Practically Green offers badges, points, and achievement levels based on simple, practical green living tips such as composting kitchen waste and replacing conventional light bulbs with LEDs. Social games such as these and others will likely spread over the coming year, and more social gaming startups that encourage players to live greener and more eco-conscious lives can be expected, as can elements of gamification added to everyday appliances, electronics, and vehicles.
6. Energy Dieting
One area where gamification is already being rapidly adopted is energy efficiency technology. As world economies begin to recover and demand for oil returns to pre-recession levels, oil prices in 2011 are expected to rise to levels not seen since the record prices of 2008. This will hurt businesses and households alike, so expect to see renewed efforts to improve energy efficiency and reduce energy consumption.
Gamification is likely to play an increasing role in these efforts due to the irresistible element of competition it adds. The new Nissan Leaf electric car incorporates a software program that allows drivers to calculate their mileage per kWh and compare it with other Nissan Leaf drivers in their local area and around the world, with a leaderboard displaying the best results. Smart grid companies have also embraced the trend. OPOWER, one of the rising stars of the industry, not only tracks the energy consumption of a household and compares it to the previous month and the same month the previous year, it also compares it to other households in the same neighborhood! Utilities have reported that customers receiving this type of comparative report consistently lower their energy consumption compared to customers that don’t, driven on by a spirit of competition.
Another recent startup, EarthAid, offers more direct rewards to customers who reduce their energy consumption. EarthAid connects to your utility accounts and compares your energy consumption to that of your friends and neighbors. Through its partnerships with sponsors such as Dove and Starbucks, it then offers coupons and other financial rewards to families that reduce their electricity, gas, and water consumption!
Of course, many green businesses and households have continued efforts to reduce energy consumption despite the comparatively low oil prices of 2009 and 2010, so as oil prices begin to rise again in 2011, expect to see many green businesses outperforming their oil-dependent competitors, and a growing realization in both the business world and among ordinary families that going green is not only good for the environment, it’s also good for the wallet!
7. Alternative Transportation
Another consequence of higher oil prices in 2011 is likely to be the growth of the alternative transportation industry. New electric car models such as the Nissan Leaf and the Chevy Volt are expected to disappear quickly off lots in 2011, and the booming popularity of electric scooters and electric bikes will likely continue.
The auto and transport industries are also likely to see an increase in collaborative consumption. Carpools and ridesharing arrangements have long been a staple technique of eco-conscious commuters, but in the coming year we are also likely to see the rapid expansion of car-sharing in urban areas. A number of businesses and organizations, including ZipCar and even the traditional car rental service Hertz, have started successful car sharing services in urban areas with a fractional ownership model, allowing members to pay an annual fee and in exchange get access to a car for short trips whenever they want. More recently, the phenomenon of P2P car rentals has started to make a splash, with websites such as the UK based WhipCar and the Australian Drive My Car helping to arrange fully insured short term car rentals between neighbors, creating an extra source of income for people with unused cars while allowing non-car owners to save money and continue a primarily car-free lifestyle.
8. Urban Farming
Another consequence of rising oil prices is likely to be rising food prices, which may lead to food riots and even the collapse of governments in unstable regions of the developing world. In more stable societies, it is likely to lead to the continued expansion of the local food movement, with particular emphasis on urban farming and gardening.
The gardening and edible landscaping industries have already seen substantial growth in the last few years due to the recession. As families seek to reduce their grocery bills by growing more of their own food, sales of vegetable seeds, garden tools, and other products that help improve food security can increase 75% or more. At the same time, more and more consumers are seeking out fresh, organic, local, and non-GMO foods due to concerns about the health and environmental impacts of conventionally produced food products, and a growing percentage of organic consumers are becoming concerned about weak organic standards and greenwashing by industrial agriculture.
Gardening offers health conscious families a way to control both the health and environmental impacts of the food they eat, but with nearly 80% of the US population now living in urban and suburban areas, growing food requires a little more creativity than it once did. Fortunately, a number of clever green entrepreneurs are helping urban and suburban farmers out with everything from hydroponic farms designed to fit into apartment windows to rental chickens that allow would-be backyard chicken farmers an opportunity to try before they buy! As food prices rise and the demand for ethically produced food continues to rise, the popularity of urban farming is sure to rise along with it.
9. Local Action
Food is not the only area where green businesses and organizations are increasingly looking to local solutions. With many environmentalists bitterly disappointed by the results of national and international efforts to curb greenhouse gas emissions, such as the disastrous Copenhagen Summit and the ineffectual Cancun Climate Summit, expect to see an increase in efforts to fight climate change on a local level. Grassroots efforts such the Transition Town movement have spread quickly and mobilized local communities around the globe to make a difference, as have awareness building events such as the 10/10/10 work day organized by 350.org.
Green businesses will likely benefit from this trend thanks to increased awareness of environmental issues among local residents, and by being one step ahead of more conventional businesses in the face of new regulations designed to improve local sustainability.
10. Sustainable Investing
Some market analysts are predicting that 2011 will be a strong year for green Initial Public Offerings (IPOs), especially in the clean tech field.
For less Wall Street savvy investors who still want to put their money where their mouth is, the explosive growth of microfinance, crowdfunding, and P2P lending will increasingly offer opportunities to earn interest or other rewards for helping fund small businesses and other projects.
Several non-profits, including Water.org and Energy in Common, are applying the microfinance model popularized by the Grameen Bank, Kiva, and others to support small-scale environmental infrastructure projects designed to improve access to clean water and renewable energy in the developing world.
To date, crowdfunding sites such as Kickstarter and Sellaband have focused primarily on creative endeavors such as art, fashion, music, or writing. However, as the popularity of these sites continues to grow, new startups may offer opportunities for small scale angel investors to support green business startups with microinvestments of as little as $25.
The United Nations has declared 2011 the International Year of Forests, and scarcely a moment too soon! More than 97% of temperate “frontier” forests, also known as virgin forests or old growth forests, have been lost, and more than 60% of the world’s total “frontier” forests are gone. Although some reforestation efforts have met with great success, forest loss remains a pressing problem, not only for environmentalists, but also for local communities affected by the loss of ecosystem services provided by forests. The devastating floods that struck Pakistan in 2010, covering as much as 15% of the country in water, are blamed on a combination of factors, including the illegal logging of 80 million trees over a three year period in one “protected” forest reserve alone. Trees play a tremendously important role in flood mitigation, so the greed of a few illegal loggers may have cost more than 1,500 of their countrymen and women their lives, and tens of thousands more their homes and livelihoods. More recently, Australia and Brazil have been hit by severe floods and mudslides blamed partly on deforestation.
The memory of these disasters, combined with worldwide efforts to raise awareness of the importance of conserving and restoring forest lands, is likely to lead to renewed efforts to protect and manage forests in sustainable ways. For businesses and green entrepreneurs, this offers a great opportunity to expand corporate social responsibility programs, and it even creates a number of unique business opportunities. In particular, the field of agroforestry, which focuses on providing sustainable human livelihoods with forest products while also increasing total forest cover and biodiversity, has received a lot of attention from non-profit organizations, businesses, and landowners alike. Agroforestry has proved particularly popular in Africa, where it has spearheaded a quiet green revolution that has increased yields for many poor farmers by 100% or more without the use for chemical fertilizers, but it offers many applications in the developed world as well, where organizations such as CityFruit are using tree crops to reduce hunger and improve nutrition in urban areas.
Trends may come and go, and of course, it is impossible for any green business to stay on top of all of them, nor is it worthwhile to try. However, keeping track of green business trends is a great way to ensure that your business stays fresh, flexible, and creative in the face of new challenges and opportunities, the surest way to green business success in 2011 and beyond.