Livin' la Vida LOHAS LOHAS consumers are out to change the world, one purchase at a time. By Brian Holland, EarthCraft Communities fellow

A new breed of shopper is walking the streets and the strip malls of America. You probably work with them, or even sleep under the same roof with them, but you may not know of their habits at the store. They are poised to transform the way companies do business. They should be considered armed - with both cash and a conscience - and they may be dangerous to companies that don't recognize them.

This character is known in the marketing world as the LOHAS consumer. The LOHAS consumer leads a "Lifestyle Of Health And Sustainability," and their buying choices reflect this lifestyle. The defining characteristic of this set of people is their preference for products that are better for the environment, society and personal health. The LOHAS marketplace includes a range of products, from basic consumer goods like organic foods and natural cleaning products, to pricey services like ecotourism expeditions and even socially responsible investments. No matter the product, LOHAS consumers base their buying choices on their social and environmental values.

The field of marketing is replete with classifications for different subsets of people, or in marketing lingo, "market segments," but usually these categories are based on demographic characteristics such as age, race or income. The drawback of this sort of profiling is that demographic generalizations are often not very accurate. Moreover, offensive stereotypes can arise in market segmentation, as in one notorious classification system identifying groups like the wealthy "blue-blood estates" or the povertystricken "downtown, dixie-style" consumers. The LOHAS consumer segment is different. It is based not on background and circumstance, but instead on the consumer's expressed belief that the values of health and sustainability should guide market behavior. The LOHAS market transcends age, race, gender and other traditional categorizations.

Representing over 68 million people, or one-third of the American population, the LOHAS consumer segment is large and growing larger. According to the Natural Marketing Institute, which conducted the 2003 survey that produced these numbers, the LOHAS group expanded its ranks by 7 percent over 2002. That is an increase of approximately 4 million LOHAS consumers in just one year. It is the kind of increase that businesses notice. In 2003, LOHAS consumers spent nearly $230 billion on goods and services that improve health, social conditions and the environment.

Beyond Boycotts

The idea of conscious consumption is not a new one. The recognition that consumers have tremendous collective power to affect change has been a fundamental component of the environmental movement for decades. One significant shift occurring now is that consumer sentiment is reaching a tipping point, and business is responding. Another shift is the proactive nature of the LOHAS market. The movement is not about boycotting the worst of the pack, the flagrant polluters and exploiters of the global economy, as in the consumer movements of the past. Instead, it seeks to reward companies that are developing a new model for corporate responsibility. Understandably, many businesses want a piece of the expanding LOHAS market, and some are reforming their business practices to begin meeting the demands of the conscious consumer. For a business wanting to get in on the action, the question is: what do these LOHAS consumers hold so dear, that they are willing to even pay a premium to attain?

In Search of Sustainability

"Health and sustainability" are the hallmarks of LOHAS, and they are interrelated but distinct concerns. The LOHAS consumer values personal health and development, a fairly straightforward concept that businesses are effectively addressing. The LOHAS consumer's desire for a sustainable product is more difficult to understand and satisfy. Sustainability was originally conceived in the 1970s by ecologists seeking to better understand the world's environmental predicament, and only recently has the term "sustainability" become part of the popular lexicon. The definition of sustainability varies widely depending on who is using the word, but perhaps the most credible definition came from the Brundtland Commission's report Our Common Future, which popularized sustainability in the late 1980s. Sustainable development "meets the needs of the present generation without compromising the ability of future generations to meet their needs."

Clearly this definition goes beyond a strict environmental formulation. The LOHAS consumer wants to see a fundamental change in the way society operates. Bound up in this conception of sustainability is not only environmental protection, but the question of human needs, of economy and equity. The LOHAS consumer views sustainability as a holistic concept, encompassing environmental, social and economic concerns -and their interactions -in a whole system.

Businesses that seek to operate sustainably and enter the $230 billion LOHAS marketplace must expand the horizon of their traditional concerns. The most innovative businesses are going beyond the typical financial bottom line to address the "triple bottom line" of economy, environment and society. The triple bottom line acknowledges costs that were not traditionally included in the balance books, such as employee health, water pollution or impact on local communities. While in the past firms were held accountable solely by economically-motivated shareholders, the sustainable firm is now encouraging the participation of all stakeholders, including employees, consumers and community members, to ensure that the triple bottom line is being adequately addressed.

These strides in the search for sustainability are welcomed by LOHAS consumers. In a 2002 survey of consumers, the Natural Marketing Institute found that LOHAS consumers are often willing to pay a twenty percent premium for more sustainable products. The LOHAS market is increasingly lucrative, and businesses may take advantage of "new merchandising mixes, the chance to increase basket and sale size, differentiation in the natural products channel, and potential for increased incremental sales opportunities," according to Frank Lampe, editor of the LOHAS Journal.

The first, and most difficult, step for a company to begin harnessing the LOHAS market is to implement changes that result in a more sustainable operation. The next step is letting LOHAS consumers know about those changes through targeted marketing campaigns. In a recent article, Lampe advises companies on marketing strategies to reach the LOHAS consumer. He emphasizes quality and authenticity, the antitheses of the outgoing massproduction model, and encourages companies to highlight social and environmental responsibility. And importantly, Lampe recommends, recognize that the LOHAS consumer is averse to consumerism and materialism and is generally suspicious of flashy corporate marketing.

This is salient warning at a time when consumers are becoming more savvy at identifying greenwash. "Greenwash" is a term for environmentally-themed marketing of products and companies that are in fact contributing to environmental degradation. It results when companies skip the first step into the LOHAS marketplace - becoming a more sustainable operation - and instead start with the second step - the marketing of sustainability. Examples of greenwash abound in a number of industries and documentation of misleading environmental marketing is widely available. No fingers will be pointed here, but suffice it to say, greenwashing is a common practice that threatens the capacity of the LOHAS marketplace to deliver better environmental performance. When conventional companies claim to be more sustainable, LOHAS consumers become less certain that their buying habits will really make a difference, and the innovative firms pursuing sustainability are robbed of their due distinction.

The uncertainty surrounding greenwash can be partially alleviated by strict verification standards, which are already found in several industries. Sustainability certifications are a way to verify that companies are backing their words with action. The best of these standards provide clear, objective, and consensus-based guidelines that are administered by an independent organization. Certifications are in place for sustainable agriculture and forestry, for sustainable homes and workplaces, and for "Fair Trade" companies that use, but don't abuse, the global economy.

Here in the Southeast, Southface is continuing to build a comprehensive certification for green homes and developments. More than 1700 homes have been certified under our EarthCraft House standard, which is supported by Southface, the Greater Atlanta Home Builders Association, and other community and government partners. Now, EarthCraft House is expanding its reach to certify multi-family buildings, renovated homes, and communities across the region. Created by both builders and environmentalists, EarthCraft House is an environmental standard that consumers can trust. Certifications like EarthCraft House are critical for LOHAS consumers to distinguish between true green and its tepid, pastel variation.

In conclusion, competitive businesses should be aware: the LOHAS market is growing fast, and participation will require systemic changes in business practices. LOHAS consumers won't settle for low prices - they want to change the world.

In the age of consumer consciousness a wealth of resources are available that enable the pursuit of sustainable living and knowledgable purchasing power. Various sustainable living magazines are available at the Southface library-feel free to stop by Southface to peruse.