The maker of Coca-Cola’s Honest Tea brand says it has donated thousands of pairs of eyeglasses to citizens of Assam, India, paid more than $155,000 in fair trade premiums for raw materials and diverted 2.4 million pounds of drink pouches from landfills by making them recyclable.
In the corporate world where profit and shareholder value is king, such practices might have been mentioned in the annual report as proof of community involvement.
These days, however, good deeds are routinely woven into marketing strategies to help win loyalty among customers who want their purchases to have greater meaning.
One big target for so-called “purpose marketing” is millennials, whose purchasing decisions — backed by $1.3 trillion in buying power - are believed to be especially influenced by community involvement.
Brands such as Whole Foods, Chipotle Mexican Grill, eyeglass-maker Warby Parker and Atlanta-based Chick-fil-A have gained a following in part by touting distinct business values and social responsibility.
Many of metro Atlanta’s biggest companies — including Coca-Cola, Newell Rubbermaid, Delta Air Lines and aluminum can maker Novelis — have taken steps to lessen their environmental impact or support organizations that they think customers support.
“Consumers make decisions that are a reflection of who they are and more and more they are shifting toward brands with a point of view,” said Seth Goldman, co-founder of Honest Tea, a Maryland-based brand that Coca-Cola purchased in 2011. Honest Tea lists sustainability and integrity in business practices among its principles.
“The success of our company is intertwined with the impact of our mission,” he said.
Such organizations also do well in recruiting and retaining employees, experts said. Employees who feel good about a socially conscious company, especially the young, will take less pay if they feel a greater sense of value, “The Wisdom of Crowds” author James Surowiecki, quoting survey data, wrote in a 2014 New Yorker article.
There is some movement toward figuring out how to monitor whether corporations live up to the feel-good hype.
B-Lab, a non-profit in Wayne, Pennsylvania, has launched B Corporations to evaluate and certify the environmental and social performance of member companies. Companies that meet the criteria are given a “B” logo, which is gaining in popularity in countries around the globe. Members include Ben & Jerry’s, Patagonia, Cabot Creamery and Revolution Foods.
Purpose plus profit
The business case for having “purpose” alongside “profit” among company goals includes these numbers: Eight in 10 millennials associate their purchase decision to a brand that displays corporate responsibility, according to 2011 research in the book “The Millennial Momentum.”
And one in every two millennials will choose a brand that supports a social cause over those that don’t, according to a 2014 Boston Consulting Group study.
Further propelling the trend is the growth of social media and an almost limitless access to a company’s behavior via the Internet. Both have altered how corporations are viewed and what consumers know about them — and say about them.
Longtime Atlanta ad and marketing man Joey Reiman, considered one the godfathers of the “purpose” model, said it only works if it’s authentic. There must be passion in the workplace for the company’s mission and staff must work off the same page.
He said “purpose” is more than corporate responsibility. It’s the positive impact a company seeks to make in the world and not just making money, although the two are not mutually exclusive, he said.
“Brands with purpose stand for something,” said Reiman, CEO of Atlanta consultancy BrightHouse. “Purpose is about why we exist.”
Purpose marketing may backfire if viewed as a cover for crisis management, experts said. In a rosy commercial campaign trying to lure back travelers to the Gulf coast in 2011 and 2012, British oil giant BP was criticized by some for suggesting its mandated cleanup efforts had revived the area after the massive oil spill two years earlier.
And the high bar “purpose driven” companies set doesn’t shield them from normal business disputes. Chipotle, which has won fans for sourcing food from cruelty-free farms, for instance, is being sued by more than a dozen employees who claim they were required to work without pay.
Coca-Cola was an early adopter of such marketing with its feel-good “Hilltop” ad, whose chorus, “I’d like to teach the world to sing,” inspired millions in the 1970s. Yet the company has been accused of being environmentally unfriendly in some parts of the world — particularly in India, where authorities accuse Coke of using too much groundwater.
At the same time, the beverage giant has pointed out its efforts to capture rainwater to replenish water its uses, recycling wastewater and a goal of becoming water neutral by the end of the decade.
For consumers, the first place to gauge a company’s commitment to purpose is its own website.
Checking for authenticity
“They are going to your Facebook page,” said Andrea Freeman, vice president of marketing for Atlanta-based rent-to-own giant Aaron’s. “They are going to check your social media to see how authentic you are.”
The late Ray Anderson, founder of Atlanta-based modular carpet maker Interface, was one of the first CEOs to focus on sustainability. His company has been lauded for recycling thousands of pounds of fishing net in the Philippines into nylon yarn used in carpet tile.
The company in January named Jay Gould, a leader in “purpose driven” models at Coke, Newell Rubbermaid and most recently at American Standard, as its new chief operating officer.
Adherents to a purpose-driven philosophy said it is easier to maintain and sell to consumers if it is a part of a corporation’s DNA from the beginning. Inferface, Honest Tea and Chick-fil-A leaders said their companies were founded on the guiding principles of mixing business with helping others.
“Truett always felt he wanted to have a positive impact on others,” Rodney Bullard, the company’s vice president of community affairs, said of company founder Truett Cathy.
Cathy was influenced by his own poor childhood as well as newsreels when he was young of children being abandoned. Chick-fil-A franchisees often provide free food for schools, community groups and children’s programs — in the process boosting the chain’s brand.
“That’s why it was so important to him to remain a privately held company so he could retain those values,” Bullard said of Cathy.
