Sales and Economic Performance

For a company with over 50 percent growth in 2008, 2009 was a difficult year as gross sales declined 2.8 percent. In the context of a deep recession, consumers changed their shopping habits to reduce costs, though they tended to stay with the green products they had been buying — good news for our company. The Natural Foods channel experienced a significant decline in sales volume that affected all of our major product categories. Shoppers found better value buying through the internet, or in grocery or Mass Merchandising stores such as Target. Driven by this change in consumer behavior and a growth in distribution, our Mass Merchandising sales increased 24 percent. Cleaning products remained our largest product category as sales of dishwashing detergent grew industry-wide, aided by a recessionary drop in eating out.

In the first quarter of 2010, sales are climbing and we plan for 20 percent growth for this year. Key components of our turnaround are the national launch of our brand awareness campaign Protecting Planet Home and a focus on right-pricing and new distribution with a few key customers.

At Seventh Generation, we don’t think consumers should have to spend more to do the right thing. Many retailers have a habit of charging more for green products. While we can’t control what retailers sell our products for, we can work with them to demonstrate that if our products are priced right, our sales volume will increase enough to provide the retailer’s necessary profit margin even at the lower price. This was a major focus for us in 2009 with promising results. Reducing our spray cleaner price from $3.69 to $2.99 at Target lifted sales 80 percent. Our Lavender Dish Liquid, priced at $2.69, was the top-selling hand dish washing liquid at Target for 52 straight weeks. When we dropped the price on two sizes of our dish liquid from $3.99 - $3.49 and from $3.29 to $2.99 at Whole Foods Market, our sales increased 30 percent. Our goals in 2010 are to ensure competitive pricing for our products and to improve selection and availability.

 

Lynn Hashinsky, Seventh Generation’s Canadian Sales Director:

on Seventh Generation’s Investment in Canada

 

“Canadian customers have been very excited and impressed that Seventh Generation has made this investment in resources in Canada. I hope that by living in the marketplace, I will be able to communicate product and distribution opportunities on a timely basis. Our products are sold all the way from Vancouver Island in British Columbia to St. John’s in Newfoundland and even as far north as Yellowknife in the Northwest Territories. With such a vast market, it’s hard for my colleagues south of the border to focus on opportunities in Canada. By having a Canadian perspective we are more likely to hit the mark on our expansion plans. 2009 was a difficult year in Canada as it was everywhere else but we did add 7,000 new points of distribution with customers such as Sobeys Atlantic, Metro Ontario, Loblaw Companies Limited, and London Drugs. One of our major retailers is entering the Canadian internet market and we expect sales in this currently underdeveloped market to take off in 2010.

The response to Seventh Generation’s Canadian website and content in both English and French has been very positive. Our customers are thrilled that we included a store locator specific to Canada and our consumers love the Canadian coupons. We still have a lot of work to do in the Quebec market, but a bilingual website was a big first step. It was a signal to the entire country that Seventh Generation is serious about doing business in Canada.”

Lynn began work in April, 2009 as part of our Canadian expansion plan.

 

Are you bothered by the waste and annoyance of excess packaging when you order from the internet? So are we. Our online retail partner Amazon created its Frustration Free Packaging (FFP) initiative to encourage simpler, less wasteful packaging. That has been the goal of the work we’ve done on our own packaging over the past two years leading Amazon to acknowledge us for meeting their FFP criteria. We are discussing ways we can increase our involvement in this program such as by putting the FFP logo on our packaging in 2010.

See the difference FFP makes in this video.

 
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