Clorox scores with green line

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Last winter, the Clorox Co. gambled that its famous name would translate well from the world of bleach into the world of environmentally friendly cleaning products. So far, that bet is looking like a winner.Just eight months after its introduction, Clorox's Green Works line is on track to generate first-year sales of well over $40 million. It's already outselling all other brands in the green cleaning products niche. And perhaps most significantly, Green Works seems to be luring customers away from traditional cleaning products rather than from green rivals -- expanding the overall market for green cleaners.The company has faced some bumps in the road, including controversy over the Sierra Club's backing for Green Works and a dispute over some of Clorox's advertising claims about the product line.But overall, observers say, Green Works' rollout has been a model for how a big consumer products corporation can successfully enter the green market."They did their homework, saw an opportunity with the sea change in green, and got a good product name," said Nik Modi, a stock analyst with UBS who follows Clorox. Clorox had historically built its $5.3 billion business on household products that were effective and affordable but not particularly green -- things like bleach, Glad plastic wrap, and cleaning products sold under the brands of Formula 409, Liquid-Plumr, Pine-Sol and Tilex, as well as Clorox.But since the arrival of CEO Donald Knauss in 2006, the company has moved into the market for natural products in a big way. In November, Clorox spent $913 million to acquire Burt's Bees, which makes beeswax-based body care products. It has also been promoting its line of Brita water filters as a greener alternative to bottled water. And with Green Works, Clorox became the first major consumer products company to offer a line of green cleaning products -- turf that had previously been limited to small firms such as Seventh Generation and Method Products.Clorox made several key decisions in entering the market. First, it put considerable effort into formulating products made from 99 percent natural, non-petrochemical ingredients, rather than just slapping a green-looking label on a conventional product. It also decided to keep the Clorox name on the new line to defuse consumer fears that green products would be less effective at cleaning."The lesson is not to be shy about using your brand name," said Ali Debadj, an analyst with Sanford C. Bernstein & Co. "It can bear fruit in the natural category."As a result of all this, Green Works' sales quickly shot past Clorox's longer-standing green competitors. For instance, Green Works sold $3.4 million worth of glass cleaner in just eight months, compared with $1.1 million sold by Seventh Generation and $947,000 by Method over a full 12 months, according to Information Resources Inc., a Chicago market research firm. (Those figures don't include sales at Wal-Mart.)But Method and Seventh Generation didn't see their sales drop. In fact, their share of the overall cleaning market continued to grow -- a sign that Green Works was attracting people who hadn't previously bought green cleaners. "You're never terribly excited when Goliath is entering your space, and you're David," said Eric Ryan, co-founder of Method. "But the great thing is they're bringing more attention and significant working capital to educating Americans that you can be green and effective. That's only going to grow the category."Meanwhile, it remains to be seen whether Green Works will be able maintain its strong out-of-the-gate sales. "It takes nine to 12 months to get a good feel for 'repeat' -- will customers keep buying it time and time again?" said Modi. But company officials, who have raised their sales projections six times since January, are confident. They have already added liquid dish soap to the line, and may add more products."We're the leader in natural home care eight months after our launch," said Berlind. "We're very, very happy."(Distributed by Scripps Howard News Service, www.scrippsnews.com.)