If you’ve been shopping for environmentally friendly products created from sustainable resources, you may have noticed that they occasionally cost more than conventional substitutes. It’s no secret that environmentally friendly goods cost more than traditional ones. But why is there a price disparity? And perhaps more significantly, is paying more for sustainability worth it?
This can be really annoying. You don’t anticipate getting worse off financially if you’re striving to live morally and understand the value of sustainability.
You’ve probably walked into your local organics grocery store, looked at the prices, and walked back out. Or perhaps, you’re ready to move on from $2 Kmart T-shirts only to realize that the actual cost of a sustainable sourced Tee is over $40.
Mindful consumers have all had these experiences. But is the discrepancy in price between eco-friendly and conventional really that significant? According to a study by the Netherlands consulting firm Kearny, green products are 75-85 percent more expensive than conventional products.
|Ice cream (dairy-free)
The average percentage difference between conventional food and organic food was 107.51%.
The average percentage difference between conventional personal care and natural personal care was 135.97%.
The average percentage difference between conventional fashion and eco-friendly fashion was 713.13%. This was an eye-opening exercise, yes, to see the difference in prices, but to also understand just how cheap some of the conventional products are, especially in fashion.
So why such a price difference? Let’s take a look.
It’s true that most eco-friendly products cost more to buy than the mass-produced equivalents you might find on the high street. There are a few reasons for this. Mostly, the extra costs involved in buying raw materials, and in the manufacturing and production process.
When you’re in the bubble of sustainable living, it seems like everyone is trying to make more eco-conscious decisions — and to an extent, there’s some truth to that. In 2021, a survey of over 10,000 people from 17 nations found that sustainability is becoming increasingly important to customers’ purchasing choices.
24 percent of Baby Boomers and Generation X will choose an eco-friendly alternative when available, which jumps up to 32 percent for millennials. These are encouraging statistics. However, when you look at product availability, only a fraction of our shelves represent sustainable options — showing that demand for these goods still has a long way to go.
What does demand have to do with exorbitant prices?
When there’s little to no demand for an item, companies have nothing to gain from reducing their price as this will not increase sales. In fact, it may even lose them money! Then there are economies of scale — the more you produce, the less it costs. The production system from machinery, human resources, factories, etc., is set up to create mass-manufactured items.
Therefore, when it comes to sustainable products that are not yet in high demand, companies cannot rely on economies of scale and must charge more for the product. But, as mentioned earlier, increased awareness and demand from customers is slowly starting to change – which is encouraging.
2. Raw materials
The cost of sustainable products is often higher than conventional products due to expensive raw materials. These premium raw materials are necessary to produce a product that has a lower environmental impact.
For example, using recycled paper instead of virgin paper saves trees, but recycling the paper costs more than cutting down new trees and using them for pulp. The same is valid for harvesting organic cotton and using organic dyes instead of conventional cotton and synthetic dyes.
These raw materials cost more because they are produced in smaller quantities, but that higher price tag is the cost we must pay to help reduce our environmental impact on this planet.
Read Also: What Are Sustainable Wood Products?
Another example is sustainable construction materials. Sustainable buildings cost more to construct than conventional buildings, but the long-term savings offset this increased energy and maintenance costs.
Additionally, sustainable buildings are healthier and more comfortable places to live or work in, contributing to their value.
The use of chemicals like preservatives and pesticides is a way to keep the price of products down. By using these chemicals, companies can avoid using more natural/expensive preservation or pest control methods. While there are health and environmental risks associated with their use, the commercial benefits often outweigh the risks in the eyes of these companies.
The omission of toxins in eco-friendly products increases those products’ costs compared to conventional alternatives. This is because those items must meet a higher standard to ensure that they are safe for human use and do not contain harmful chemicals.
For example, a conventional cleaning product can contain harmful chemicals such as:
- Chloroform is an anaesthetic that can cause liver failure and has been linked to cancer.
- Diethylene glycol monomethyl ether (DEGME) is used in brake fluid. It causes eye irritation and corrosion of the skin.
- Dimethyl glycol (DEG) is used in paint and nail polish remover. It can cause eye irritation and damage to the central nervous system if inhaled or absorbed through the skin over a long period.
Conversely, a natural cleaning product cannot contain any of the above chemicals and must be made from non-toxic materials. This means that it will cost more to produce than its conventional counterpart, which explains why eco-friendly products are generally more expensive than their counterparts.
One of the largest expenses for businesses is wages. The cost of labor can make or break a company. It’s no secret that many businesses are underpaying their employees and contractors. This is because they feel like they can get away with it. But the consequences of this practice are far-reaching.
One reason for this is competition; other companies may pay more than you and steal your talent if you don’t keep up. Another reason is greed; your company might think it can profit by not giving its workers what they deserve.
How poorly are workers paid? Offshore contractors for large companies can be paid as little as $0.15 per hour, while workers in the United States make an average of $29.81 per hour. This is a huge discrepancy, and it will only worsen if we don’t take action.
On the other hand, sustainable businesses understand that paying employees fairly is not only the right thing to do, but it’s also good for business. When workers are paid a livable wage, they can afford basic needs like food and shelter. This means they can spend money in their local community, which helps businesses grow. In addition, when workers feel appreciated and valued, they are more likely to stay with the company long-term.
However, sustainable businesses have higher labor costs than their competitors. This means they need to find other ways to make money by charging more per product or service. In addition, these companies may be unable to compete on price with non-sustainable businesses that are willing to pay workers less than minimum wage and don’t provide benefits like healthcare.
Certifications can often drive the price of a product up, as they require more rigorous testing and inspection. Organic, fairtrade, b-corp and leap bunny certifications are all designed to ensure that the product is sustainable and ethical.
This increases the cost of production, as these certifications require extra time, money, and resources. For instance, organic certification fees can be thousands of dollars depending on the volume and variety of products, and the audit process can take months.
Leap Bunny Certification is the most rigorous and expensive of all the certifications. It requires companies to go through a detailed application process that covers animal testing, ingredient disclosure, marketing claims, and manufacturing processes. Certification also requires annual audits to ensure that companies comply with the certification policy.
Although these certifications can be expensive and time-consuming, they provide consumers with peace of mind knowing that their purchases are ethical and sustainable.
Unavoidably, some of these costs are passed on to the customer, driving up prices.
6. Business practices
Companies that produce sustainable products tend to adopt eco-friendly business practices themselves like:
- Installing solar panels
- Using energy-efficient appliances,
- Allocated staff time to contribute to environmental causes
It’s almost a requirement for these businesses to adopt these practices. Otherwise, they’ll be seen as hypocritical to the public eye. There’s pressure to “walk your talk”.
But these practices can add up and increase expenses across the company. So, how do these businesses stay afloat and continue making a difference? You guessed it. Pass on some of those running costs to the end consumer.
It all starts with demand. With more demand, eco companies will increase their sales and profits, thus enabling them to have more buying power with suppliers and reach economies of scale to reduce overheads. Perhaps more importantly, demand will attract more players into the market, which will increase competition. And with competition comes the pressure to decrease prices to attract and retain customers.
As a result, demand for sustainable products and services will increase in tandem with the reduction of prices. Also, more people will be able to afford these eco-friendly alternatives, which heightens awareness and education on the importance of sustainability – an effect that contributes to positive change.
Right now, sustainable living costs a bit more. So do you spend the extra few bucks on sustainable items, or do you go for cheaper traditional products?
- Better quality products that last longer
- Made from non-hazardous sustainable materials
- Reusable products always save money in the long run
- Usually recyclable or compostable if made from organic materials
- Do not harm the planet or contribute to plastic waste
- Pay workers fair wages
- Sets a good example for your friends and family
- Buying more green products will reduce their prices in the future.
How to approach shopping for sustainable products when it’s outside of your budget
It can be overwhelming to not only find sustainable products that meet your needs but then to fork out the money to shop in line with your values. So here are some tips to consider when trying to navigate the prices of eco-friendly products.
Reset your expectations
Perspective is vital when voting with your hard-earned cash. We’ve been conditioned to acquire items as cheaply as possible — to the point where $1 for a garment is normal. The same cognitive dissonance that plagues animal cruelty also applies to eco-friendly choices.
So the first step in finding better prices for sustainable goods is ironically to reverse a lifetime of conditioning for seeking the lowest possible prices all the time.
It’s when you’re open will you start to see the savings. Until you reach that point, you’ll be conflicted because you’ll be comparing the price of sustainable items against conventional items instead of sustainable items against other sustainable items.
Reduce repeat purchases for personal care products
In perpetuity, we repeatedly purchase personal care items like deodorant, body lotion, shampoos, toothpaste, etc. This is critical for your budget as, generally speaking, sustainable alternatives are quite potent, and often you don’t need to apply as much to reach a level of effectiveness.
For example, suppose you’re draining yourself in Lynx deodorant daily versus using a small finger full of deodorant paste on each armpit. In that case, you’ll need a higher volume of Lynx deodorant during the course of a year. This is not to say that less volume works out to be cheaper, but its cost is more favorable than perhaps you initially thought.
Another example is menstrual pads, which need to be disposed of and repeatedly purchased. Swapping dispensible pads for reusable pads or menstrual cups will not only save you money but will have a significantly reduced ecological footprint.
Be prepared to work harder for groceries
There are savings to be made when buying organic foods if you’re willing to put in the effort. The first mistake we make is relying solely on the supermarket or health food stores for organic food. It’s in these places the prices are exorbitantly high. Not for everything, but for some items. And therein lies the issue.
To save money on food, at least in my experience, you need to be okay with sourcing specific ingredients from different suppliers.
Here’s what our weekly food shopping looks like:
- Supermarket – canned legumes, oils, tofu, tempeh, mushrooms, plant-milk
- Farmer’s market – general fruits and vegetables
- Bulk foods store – general fruits and vegetables (not available at the farmers market), spices, nuts, seeds, grains, dried legumes, salt
- Organic grocer – gluten-free bread
As you can see, we’re getting food from various locations depending on the cost of certain foods. It’s a bit of a pain to do the rounds, but we make significant savings by understanding the going rates at each supplier.