In 2007 and 2008, major retailers and consumer products companies were active in a variety of initiatives around Green products for consumers. For example, in 2007 Wal-Mart announced a new “Living Better Index” with plans to track sales of products in several categories thought to represent "sustainability."

That same year, the retail giant announced plans for a Green supplier scorecard that would be used in some way when considering what products to stock on its shelves and eventually visible identification of "Green-ness" to consumers.

Around the same time, Home Depot announced the launch of what is called the “Eco Options” program, which enabled customers to easily identify products that are the most environmentally friendly of the available product choices.

Consumer packaged goods companies also launched a flurry of Green-oriented products, and spent heavily on advertising to promote them.

In 2011, however, the promise of Green consumer products have dimmed, either due to the impact of the severe economic downturn, or an overestimation of just what sorts of Green choices consumers might make.

For example, in 2008, Clorox introduced Green Works, an environment-friendly cleaning line, with much fanfare, marketing dollars, and merchandising support from WalMart. Sales for the line in 2008 reached $100 million.

However, sales for the brands have fallen to just $60 million per year now, a trend being seen in the sales for most other Green products released by CPG companies in the 2008 time frame.

"The consumer’s love affair with Green products, from recycled toilet paper to organic foods to hybrid cars, faded like a bad infatuation," an article in the New York Times recently noted. "While farmers’ markets and Prius sales are humming along now, household product makers like Clorox just can’t seem to persuade mainstream customers to buy Green again."

Could it be as simple as the fact that the Green products often do cost at least a few cents more, if not an even greater premium.

The ingredients in the Green products often cost more than traditional brands, experts note. Additionally, CPG marketers don't want to kill their traditional brands either, and use price as a way to differentiate and capture the Green-oriented consumer willing to pay a bit more for environmentally-friendly products. It just turns out there may not yet be nearly as many as some market pundits expected.

Green products introductions and advertising spend supporting them have dropped off substantially since 2008. Retail research firm Mintel, for example, found that there were 14 introductions of Green dishwashing liquids in 2007, 85 in 2008, and then 58 in 2009. The number in 2010 was likely much lower than that.

The New York Times reports that Clorox spent more than $25 million advertising Green Works in both 2008 and 2009, but just $1.4 million in 2010.

The drop has been even more dramatic at SC Johnson, where sales of its Green Nature's Source Scrubbing Bubbles fell 71% in 2010 to just $589,614 (excluding WalMart sales). Other products in the line similarly retrenched, despite price reductions last year.

So what is the problem?

A new report from OgilvyEarth, a division of the advertising giant, found that that 82% of Americans have good Green intentions but only 16% are dedicated to fulfilling these intentions, putting 66% of consumer firmly in what Olilvy calls the “Middle Green.”

It says that "most of the dialogue and marketing to date has focused on Super Greens on the one hand and Green Rejecters on the other. There has been limited success in motivating the masses or the Middle Green."

While consumer price isn't the only factor in this Green gap, it is an important one, according to Olgilvy.

"One trip to the grocery store and you would see that Green products can have as much as a 100% price premium. It’s as if we’re penalizing virtuous behaviors with a de facto sustainability tax,” says Bill Becker, Executive Director of the Presidential Climate Action Project.

"Unless they can figure out how to close the gap, there will never be a business case for green,” adds Freya Williams, Director of Strategy at OgilvyEarth and co-author of the study.

“We haven’t given up on launching innovative, earth-friendly products, we’ve just taken a step back to think about how and when consumers will be ready,” Arm & Hammer chief marketing officer Bruce Fleming said to the New York Times in an email.

Retail sales data shows that Green versions of traditional consumer packaged goods products now hold just .5% of the market, down from about .7% in 2008 and 2009.

WalMart's Living Better Index seems to have been put in retirement for now, by the way..

Why do you think Green products are stumbling in the marketplace? Is it mostly price - or something else? Are we just too early in the market curve? Let us know your thoughts at the Feedback button below.

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