eco-label marketing study in france, spain and uk by...

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C O N T E N T

EXECUTIVE SUMMARY _________________________________________________ 3

1. CONTENT OF THE REPORT ____________________________________________ 8

2. THE NORDIC SWAN SCHEME _________________________________________ 12

2.1. FACTUAL ELEMENTS __________________________________________________ 13

2.2. GENERAL FUNCTIONING OF THE NORDIC SWAN ______________________________ 13

2.3. PROMOTION ACTIVITIES________________________________________________ 16

2.4. IMPACT OF THE PROMOTION ACTIVITIES ON THE DEVELOPMENT OF THE NORDIC SWAN FOR

3 PRODUCT GROUPS: DETERGENTS, TISSUE PAPERS, REFRIGERATORS ____________ 21

3. THE BLUE ANGEL SCHEME __________________________________________ 25

3.1. FACTUAL ELEMENTS __________________________________________________ 26

3.2. GENERAL FUNCTIONING OF THE BLUE ANGEL _______________________________ 28

3.3. PROMOTION ACTIVITIES________________________________________________ 30

3.4. IMPACT ON THE DEVELOPMENT OF THE BLUE ANGEL FOR THE 3 PRODUCT GROUPS:DETERGENTS, TISSUE PAPERS, REFRIGERATORS _____________________________ 34

4. LESSONS TO BE LEARNED FOR THE PROMOTION OF THE EU SCHEME ____________ 37

4.1. INTERPRETATION OF THE NORDIC SWAN AND BLUE ANGEL COMMUNICATION STRATEGIES38

4.2. LESSONS DRAWN FROM THE ANALYSIS OF THE NORDIC SWAN AND BLUE ANGEL

PROMOTION ACTIVITIES ________________________________________________ 39

4.3. PRELIMINARY COMMENTS FOR THE PROMOTION OF THE EU SCHEME ______________ 41

4.4. LESSONS FOR THE PROMOTION OF THE EU SCHEME __________________________ 42

5. REVIEW OF THE CURRENT SITUATION IN FRANCE, SPAIN AND THE UK ____________ 45

5.1. FRANCE ___________________________________________________________ 46

5.2. SPAIN_____________________________________________________________ 48

5.3. THE UK ___________________________________________________________ 49

5.4. SIMILARITIES AND DIFFERENCES _________________________________________ 51

6. THE STRATEGY RECOMMENDED FOR THE EU SCHEME DEVELOPMENT ____________ 53

6.1. THE CORE STRATEGY _________________________________________________ 54

6.2. OTHER USEFUL ELEMENTS _____________________________________________ 56


7. IMPLEMENTATION OF THE EU SCHEME DEVELOPMENT STRATEGY FOR THE THREECOUNTRIES AND THE THREE PRODUCT GROUPS ____________________________ 58

7.1. FRANCE ___________________________________________________________ 59

7.2. SPAIN_____________________________________________________________ 65

7.3. THE UK ___________________________________________________________ 68

7.4. INVOLVEMENT OF THE EU ORGANISATIONS _________________________________ 73

8. CONCRETE ACTIONS TO BE PERFORMED IN THE SHORT TERM __________________ 75

8.1. SHORT TERM ACTIONS ________________________________________________ 76

8.2. THE RESPECTIVE ROLE OF THE EUROPEAN COMMISSION AND THE COMPETENT BODIES_ 86

APPENDIX 1: PERSONS INTERVIEWED FOR THE NORDIC SWAN AND THE BLUE ANGEL __ 87

APPENDIX 2: THE NORDIC SWAN LICENSEES FOR DETERGENTS__________________ 90

APPENDIX 3: THE NORDIC SWAN LICENSEES FOR TISSUE PAPERS________________ 92

APPENDIX 4: THE BLUE ANGEL LICENSEES FOR TISSUE PAPERS _________________ 94

APPENDIX 5: THE ECO-LABELLING CRITERIA FOR THE 3 LABELS AND THE 3 PRODUCTGROUPS________________________________________________________ 97

APPENDIX 6: SOME ELEMENTS REGARDING THE STRUCTURE OF THE RETAIL SECTOR INFRANCE, SPAIN AND THE UK________________________________________ 102

APPENDIX 7: LIST OF ORGANISATIONS INTERVIEWED FOR THE EU ECO-LABEL (FRANCE,SPAIN AND THE UK / DETERGENTS, TISSUE PAPERS AND REFRIGERATORS) ______ 104

APPENDIX 8: LIST OF COMPANIES MANUFACTURING FOR PRIVATE LABELS __________ 107

APPENDIX 9: LIST OF SOME MAIN MEMBERS OF EUROCOMMERCE _____________ 115

TRANSLATION ENGLISH / FRENCH OF SOME KEY WORDS ______________________ 117

EXECUTIVE SUMMARY


EXECUTIVE SUMMARY

In view of the historical context and of the current situation of the Nordic Swan andthe Blue Angel, the promotion actions concerning these two national labels mainlyconsist in general communication (TV, newspapers, magazines…) and informationabout the label and the product groups criteria. They are directed towards thenotoriety and the presence of the label in people’s minds (it is a pull strategyconsisting in saturating the mediatic environment of the consumer), with indirecteffects on the marketing strategy of manufacturers.

Besides, in the two successful cases (Nordic Swan for detergents and Blue Angel fortissue papers) out of the six analysed (detergents, tissue papers and refrigerators forthe two national labels), the product groups benefited either from a favourablecontext or from a catalyst specific to the product group which initiated a snow balleffect.

In the case of the EU scheme, with a low notoriety level and a low consumers’awareness, the most appropriate approach to develop its use consists in taking intoaccount the structure of the markets to benefit from market dynamics and to by-passstructural constraints.

In fact, a comprehensive marketing strategy is to be set to allow thedevelopment of the use of the EU scheme, just as an industrialist would do if hewanted to develop a product:

1. a strategy component (to understand the power relationships betweenmanufacturers and retailers and to define a specific approach for each productgroup),

2. a marketing component (to identify the catalyst factor, to negotiate and motivateand initiate the snow ball effect),

3. a communication component (to create a favourable context).

To successfully sell their products, manufacturers have to go through retailers.Consequently, retailers have acquired a determining role in the markets structure. Asa consequence, the strategy recommended consists in using retailers as thedriving force.

After having interviewed around 50 of main actors, we recommend the followingspecific tactics, of which the core consists in arousing the retailers’ interestthrough their private labels :

• use retailers as the driving force: when they are willing to develop theirprivate labels and their market share, they aim at communicating oncriteria which differentiate their private labels from national brands,

• emphasise and communicate on retailer’s initiatives to create a snow balleffect thanks to various actors: manufacturers (mainly SMEs), NGOs(consumer associations, environmental associations), government (public

EXECUTIVE SUMMARY


procurement) and other purchasers (green purchasing),

• try to increase the effect by involving national brands manufacturers. The aim is thus to boost the development of the EU scheme by leaning on thedynamics of the markets and sectors and not only on the consumers’ expectations. Of course, this tactics has to be adapted to each national context and to eachmarket. This has been done for the three countries and the three product groupscovered during the study. France, the most favourable case:

• retail sector: favourable context of the large-scale retail sector (high marketshare of hypermarkets and supermarkets, large-scale retailers which are willingto increase the market share of their private labels and to improve the perceptionof their image),

• SMEs: in order to make their investment profitable, SMEs such as DALLEHYGIÈNE, CHIMIOTECHNIC… are ready to sell eco-labelled products throughother retailers in France and abroad than those they are used to working withtoday. More generally, SMEs should be informed that distributors are going topush them to go for the EU eco-label as most of them will not apply for it pro-actively (if they are not asked to).

• NGOs: some are already active in promoting eco-labels. Their involvementshould be further encouraged, partly by training and informing their staff.Besides, it will be possible to dedicate a few minutes to the EU scheme duringthe ‘Conso Magazine’ TV programme weekly broadcasted on France 2 andFrance 3.

• detergents: although a quite unfavourable context where retailers have very fewinterest to develop private labels (low price difference, low quality differencebetween detergents perceived by consumers; market share of private labels:2%), the main retailers that we met have shown some interest in the eco-label.

• tissue papers: the context of this product group is favourable to the developmentof the EU scheme (range effect with several products included in this productgroup, market share of private labels higher than 40%, significant pricedifferences between brands and high elasticity of the sales to price which allowsto sell more expensive products by improving the image and the perceivedquality of the products). The eco-label is considered by the retailers that we metas an appropriate differentiation tool in order to intensify the credibility of theirprivate labels and to improve the consumers’ perception. Retailers as AUCHANor CARREFOUR are highly likely to ask their suppliers to apply for the EU eco-label.

• refrigerators: the EU eco-label is challenged by the energy label. However,SMEs could be interested in applying for the EU eco-label to differentiatethemselves from competition. The same strategy of differentiation is likely to befollowed by leading retailers (such as CARREFOUR) which are in the process ofdeveloping private label refrigerators.

EXECUTIVE SUMMARY


EXECUTIVE SUMMARY


Spain, a snow ball effect from French retailers initiatives:

• retail sector: the EU eco-label is likely to be introduced in Spain through Frenchretailers which are the leaders of Spanish large-scale food distribution: PRYCA:CARREFOUR, AL CAMPO: AUCHAN, CONTINENTE: CONTINENT (despite ofseveral negative characteristics of the large-scale retailing sector in Spainregarding the development of the EU scheme: a fragmented distribution sector, acritical mass problem due to low sales volume, the lowest market share inEurope for private labels, low environmental awareness),

• SMEs: most SMEs are far from meeting environmental legislation. Consequently,most of them cannot meet standards expected by the EU eco-label. They willonly apply for this label if they are asked to by one of their big client. But SMEsproducing abroad will export to Spain (DALLE HYGIENE, LUCCHESE…).

• NGOs: NGOs are interested by the EU eco-label (although they have otherpriorities). They could play a pushing role towards retailers but need to bemotivated.

The UK, the less favourable case:

• retail sector: unfavourable context of the large-scale retail sector (high level ofloyalty from retailers towards existing suppliers, already large market share ofprivate labels; besides, larger retailers such as SAINSBURY are against the EUeco-label since they consider their name as a label of quality in itself; inparticular, holding the EU eco-label would raise more questions among theconsumers than it would help; besides, the). However, opportunities exist amongsmaller retailers.

• NGOs: do not seem to be interested in the EU eco-label. However, some keyNGOs as “Consumers’ Association” do not seem to have been properly informedon the EU eco-label topic. Information of the NGOs should be started right fromthe beginning.

• SMEs : poor perspective, except for small retailers.

• detergents: retailers consider that the only holder of the EU eco-label (“Down toearth” by RECKITT & COLMANN) is of a poor quality. This poor image iswidespread and is negative for the EU eco-label, even if it is probably not reality.Retailers seem to be satisfied with the code of good practices that they consideras a direct competitor to the EU eco-label.

• tissue papers: same remark as for detergents. Retailers seem to be satisfied withthe Forest Safe Council initiative.

• refrigerators: same remark as for detergents. However, ICELAND (one of thethree leading refrigerators distributors) is about to launch a new range of HCsrefrigerators and is an ideal target for the EU eco-label.

To finish up, a (non exhaustive) list of concrete actions to be performed in the shortterm has been established in order to take advantage of the contacts opened duringthe study.

EXECUTIVE SUMMARY



1.

CONTENT OF THE REPORT

1. CONTENT OF THE REPORT



The study aimed at developing a promotion and marketing strategy for the EU eco-label. Two phases have been distinguished:

• Phase 1: an analysis phase mainly focused on the Nordic Swan and the GermanBlue Angel;

The purpose of phase 1 was:

− to analyse the promotion activities of two national labels selected by DGXIwhich can be considered as successful (at least for some of the productgroups addressed in this study),

− to identify efficient promotion activities which could apply for the Europeaneco-label.

• Phase 2: a synthesis phase consisting in defining the promotion and marketingstrategy for the EU eco-label, based on case studies.

The case studies concern three product groups -detergents, tissue papers andrefrigerators- in three countries -France, Spain and the United Kingdom-.

For each of the two national labels, the report describes:

• first, the current status of development of the label (factual elements),

• secondly, the general functioning of the label: identify stakeholders’ role at eachstage of the launching of a new eco-label: choice of product groups, criteriasetting up, revision, promotional campaign... It may help to explain some of thecharacteristics of the decision process to participate in the label or not,

• thirdly, the promotion activities implemented (budget, examples of activities...),

• last, the impact of the promotional actions on the development of the label for thethree product groups surveyed.

Chapter 4 concludes this analysis. It stresses the lessons that can be learned for thepromotion of the EU scheme. After having described the current situation in the three countries in chapter 5(development of the EU scheme, structure of the industry and the retail sector),chapter 6 details the general strategy that we recommend for the development of theeco-label. In chapter 7, we analyse specifically each of the three countries and each of thethree product groups to work out how the strategy can be implemented.



Concrete actions to be performed in the short term are then listed in chapter 8.



NB:

In the following chapters, we will deal with product groups for which the eco-label iseither a success or a failure. How to define a success story?

• From a financial point of view, the success of a product group could beconsidered as proportional to the income generated by subscription fees. It is thepoint of view of the competent bodies interviewed in the scope of this study.

• From a quantitative point of view, the success of a product group could beconsidered as proportional to the number of applicants or number of products towhich the label was awarded.

These two different approaches do not always lead to the same results since theincome generated by subscription fees cannot be necessarily measured through thenumber of applicants or the number of products to which the label was awarded. As a matter of fact, subscription fees are proportional to the turnover. Consequently,small companies pay low subscription fees as opposed to large companies that payhigher subscription fees. For that reason, the total income generated by a productgroup with many SMEs which have been applying may be lower than the totalincome generated by a product group with few large companies. Besides, few expensive products may generate the same income as many cheapproducts. These two definitions are based on absolute values (money, number of products ornumber of companies). Another definition could be related to relative figures: for instance, the performanceof the label for a product group could be measured through the percentage of eco-labelled products within the product group (the market share of labelled products). All these definitions have advantages and drawbacks. It is not the purpose of this study to solve this problem. For that reason, in thefollowing chapters dealing with the Nordic Swan and the Blue Angel, we willconsider the point of view of the competent bodies (the success of a productgroup is considered as proportional to the income generated by subscription fees).


2.

THE NORDIC SWAN SCHEME

2. THE NORDIC SWAN SCHEME



2.1. FACTUAL ELEMENTS

Nordic environmental labelling is common to Denmark, Finland, Iceland, Norway andSweden. The work in the various countries is co-ordinated through the Nordic co-ordination body which decides on a common set of rules for Nordic environmentallabelling.

Creation date 1989 Target Mainly consumers

Possibly professionals Number of product groups for whichcriteria have been set up

48

Number of product groups for which thelabel has been awarded

<45

Number of labelled products About 2000 or more (about 530licences)

Number of companies using the label Around 400 Number of product groups accountingfor 60% of labelled products1

4: printed matter (33%), printing paper(14%), detergents for textile (8%), allpurpose cleaners (6%)

2.2. GENERAL FUNCTIONING OF THE NORDIC SWAN

THE 5 COMPETENT BODIES

• Denmark: DK Teknik (Copenhagen),

• Finland: Finnish Standards Association SFS - Ecolabelling (Helsinki),

• Iceland: Environmental and Food Agency (Reykjavik),

• Norway: Norwegian Foundation for Environmental Product Labelling (Oslo),

• Sweden: SIS Eco-labelling (Stockholm). Decisions made by the five competent bodies must be unanimous.

1 The 4 product groups representing 60% of the labelled products do not necessarily account for the

majority of the income generated by subscription fees - see chapter 1.



CHOICE OF THE PRODUCT GROUPS FOR WHICH CRITERIA WILL BE SET UP

Product groups are selected by the co-ordinating body.

CRITERIA SETTING UP

Draft criteria are set up by the inter-Nordic expert groups (initiated persons fromState authorities, environmental organisations, trade, industry...). The final decision is made by the Nordic co-ordinating body. The criteria setting up is financed by the fees received by the distinct competentbodies2 and by grants from the Governments.

MAIN METHOD TO SET UP CRITERIA

The main method used is the screening Life Cycle consideration (from craddle tograve).

SELECTIVITY OF THE CRITERIA

Around one third of the products should be able to fulfil the criteria when they areset.

ORGANISATION IN CHARGE OF AWARDING THE NORDIC SWAN

The secretariat in each of the 5 Nordic countries handles the licence applications andissues licences. Obtaining the label generally takes 5 weeks.

APPLICATION FEES

The application fee is different for each of the five countries that belong to the NordicSwan. Examples of application fee:

COUNTRY LOCAL CURRENCY ECU EQUIVALENT

Denmark DKR 3,500 469 Finland FIM 4,000 670 Norway NKR 12,000 1,382 Sweden SKR 15,000 1,632

2 This could explain that the total income of the Nordic Swan per country is much higher than the

income of the Blue Angel (about 10 times higher).



This application is to be carried out in only one of the five countries.

FEES FOR THE USE OF THE ECO-LABEL

Annual fees for the use of the Nordic Swan eco-label represent 0.4% of the annualturnover of the labelled product in the country where the label is used. This is to bepaid in each country where the labelled product is sold. There is a minimum and a maximum fee for most countries:

COUNTRY ANNUAL FEES IN LOCALCURRENCY

ANNUAL FEES IN ECU

DENMARK

Minimum fee no minimum fee no minimum fee Maximum fee DKR 250,000 33,478

FINLAND

Minimum fee FIM 4,000 669 Maximum fee FIM 250,000 41,818

NORWAY

Minimum fee NKR 10,000 1,151 Maximum fee NKR 300,000 34,543

SWEDEN

Minimum fee SKR 10,000 1,088 Maximum fee SKR 350,000 38,088

RENEWAL OF THE NORDIC SWAN LABEL

The Nordic Swan is automatically awarded to the holders of the label until the criteriaare revised.

ORGANISATION IN CHARGE OF THE REVISION OF THE CRITERIA

The Nordic expert group created by the national Board and formally appointed by theNordic Co-ordinating Body is responsible for the revision of the criteria.



2.3. PROMOTION ACTIVITIES

BUDGET (ANNUAL)

• Denmark: joined the Nordic Swan only in June 1997. It is therefore difficult togive an annual budget (high level of Government participation, nearly80%).

• Finland: FIM 500,000 to 2,000,000 (ECU 83,000 to 333,333) depending on theyear.

• Norway: close to Finland.

• Sweden: about SKR 5,000,000 (ECU 600,000)3. The equivalent of 3 personswork full time on the marketing side for the Nordic Swan and the EU eco-label.

Marketing budget in Sweden is much higher than in the remaining Nordic countries. If we exclude Sweden, to these promotion budgets have to be added the salary ofone or two persons in each of the Nordic countries.

BACKGROUND

Owing to national specificities, each of the five Nordic countries is responsible formarketing the Nordic Swan on its own territory. Promotional actions in commonbetween countries are rarely carried out (“ an effective promotion implies that youknow the customers and their habits in your country ”).

PROMOTION STRATEGY AND EXAMPLES OF PROMOTION ACTIVITIES

Promotion activities are described below for Sweden which spends the highestbudget and for Finland. Sweden

At the very beginning, in 1990, only three persons were working in the SIS-Ecolabelling since incomes from the Nordic Swan were low. Over the first years, themarketing budget was more than ten times lower than today. Advertisements wereprepared internally and not subcontracted. At that time, no promotion was carried out towards consumers since they would not

3 The total annual budget of the SIS Eco-Labelling is SKR 30 million (ECU 3.6 million). This budget is

financed by the Government (ECU 350 000) and by fees from industrialists.



have found eco-labelled products in stores. Promotion was conceived to mainly inform manufacturers and retailers. Real promotion efforts directed to consumers started in 1993, as a significantnumber of eco-labelled products could be found in shops. As highlighted in the above table, the Nordic Swan promotion strategy combines,on the one hand, a general communication on the label and, on the other hand,communication specific to product groups. Moreover, it tackles allstakeholders: consumers, manufacturers, retailers... As far as consumers areconcerned, the communication is generally carried out directly towards them, and notthrough consumer associations which are not very powerful in Sweden. Today, the equivalent of 3 persons work full time on the marketing side. One personis working full time specifically on the promotion towards industrialists (within aproduct group, finding the first company that applies to the Nordic Swan requires lotsof marketing efforts). Concerning the promotion budget, about 50% is spent on general communication(not aiming at specific product groups) and about 50% is spent on specific productgroups. On the one hand, general communication is addressed towards all key players:

• final consumer,

• industry (manufacturers),

• retailers.

The media used are TV and general newspapers / magazines.... The SIS-Ecolabelling considers that if it is to be effective, a promotion campaign hasto tackle both final consumers and industry / retailers. None of them should be leftapart. On the other hand, specific promotion about product groups can be of two types:

• the one being carried out once criteria have been approved and before acompany holds the label.

This promotion essentially tackles industry and distributors. In fact, it is no useinforming the final consumer on a specific product group before items can befound on the shelves.

Media used: specialised magazines, SIS magazine, meetings....

• the one being carried out once the first company holds the label.

This promotion essentially tackles the final consumer.

Media used are: TV, newspapers, ... . The content of the promotional message generally underlines the following two



points : 1. the Nordic Swan is friendly to the environment, 2. the Nordic Swan guaranties a certain level of performance.



Examples of promotion actions, which involve advertisements, fairs, TV, magazines,seminars..., are given below. General communication about the Nordic Swan - towards consumers A TV ad has been launched for the Nordic Swan in 1994, with a famous SwedishOlympic skier. The Nordic Swan was presented as a global concept withoutreferring to single products. The impact on the population over Christmas and the New year period has beenquite positive. The latter resulted in a very high awareness for the Nordic Swan. In 1995, for the fifth birthday of the Nordic Swan, a survey has been carried outamong the population to assess if the population knew the Nordic Swan. 97% of thepopulation recognised the Nordic Swan, and 30% knew that one of the criteriareferred to performance. General communication about the Nordic Swan and specific to product groups -towards consumers, manufacturers, retailers, communities An exhibition presented a house (three rooms and one kitchen) exclusively withbuilding materials and every day life eco-labelled products. Among these productswhere EU eco-labelled products (tee-shirts, paints...). The other products werelabelled with the Nordic Swan. The cost of this house has been ECU 700 000,financed by the fees. The media have been very interested in it. General communication about the Nordic Swan or specific to product groups -towards consumers or manufacturers, retailers, communities One page ads are released in leading or specialised newspapers, sometimes inconnection with licence holders. Companies can also put ads in the SIS-Ecolabelling(Swedish Competent body) magazine. General communication about the Nordic Swan and specific to product groups -towards retailers, communities The SIS Eco-labelling releases its own magazine (25000 copies) that is sent towholesale buyers, communities... pushing them to buy Nordic Swan labelledproducts. Communication specific to product groups - towards consumers TV campaigns are generally launched after one applicant obtains the label,informing consumers that the concerned products can be found in stores (andgenerally without referring explicitly to the first holder).



Finland

When the Nordic Swan has been launched, basic information was provided to theindustry (direct contacts, articles in newspapers). Today, the promotion strategy is much more developed and looks close to the onedescribed above for Sweden:

• marketing towards consumers started in the early 90’s and refers toadvertisements in the streets. TV and newspapers have been used since year1995. It consists in providing general information about the Nordic Swan andsometimes a specific communication on product groups after one product isawarded.

• communication towards the industry and retailers about the label in general andproduct groups (mainly to inform that new criteria are established or revised).

General communication about the Nordic Swan - towards consumers The most effective promotion campaign has been carried out in 1995: it referred toadvertising on TV. It was quite costly but effective. During this TV campaign, theNordic Swan was presented as a global concept without referring to singleproducts. Communication specific to product groups - towards consumers The SFS sometimes advertises with the first holder of a licence (to enhance afirst mover). General communication about the Nordic Swan - towards consumers ormanufacturers, retailers Advertisements on the Nordic Swan (global concept) in newspapers are carried outonce or twice a year. General and economic newspapers are used, together withspecialised magazines. Many articles are also written in newspapers on this subject and seminarssometimes take place. General communication about the Nordic Swan and specific to product groups -towards manufacturers, retailers Direct contacts are taken with the industry and with distribution channels. Thiscontact with distribution channels (large-scale retailers) is essential. Brochures,posters and indicative signs are sent to stores (sometimes free) so that they canpromote products labelled with the Nordic Swan in their shop. Example of posters:“ Here are labelled products ”. This promotion is effective and not very expensive.



2.4. IMPACT OF THE PROMOTION ACTIVITIES ON THE DEVELOPMENT

OF THE NORDIC SWAN FOR 3 PRODUCT GROUPS: DETERGENTS,TISSUE PAPERS, REFRIGERATORS

The three product groups covered illustrate the diversity of situations since theNordic competent bodies consider:

• detergents as a very successful case,

• tissue papers as a case with a medium success level,

• refrigerators as a failure. The analysis performed shows that the same kinds of promotion activities have beendeveloped for the three product groups:

• general promotion of the Nordic Swan label (see above chapter 2.3),

• promotion actions specific to each of the product groups (see below). These two considerations prove that the promotion actions developed by the Nordiccompetent bodies are not always sufficient to generate a success story. For instance, the analysis presented below shows that the structure of the industrymay constitute an unfavourable context (refrigerators). It also highlights the role of the level of environmental awareness of consumers,which varies from one country to another (the detergent Nordic Swan is moredeveloped in Sweden than in the other 4 Nordic countries). In the case of the detergents success story, a triggering effect has been identified, ofwhich the Nordic Swan took advantage quite fortuitously.

DETERGENTS

Current situation

44 licences have been awarded to 12 companies. Criteria have first been defined in 1992 and revised in 1994 and 1995. The first licence has been granted in 1992. Detergents product group is considered as very successful by the Nordiccompetent bodies because of the high number of holders (12 companies) in thisoligopolistic sector. The three major multinational companies (Procter & Gamble,Unilever and Henkel) hold it. No licence has been granted yet in Denmark. Procter & Gamble and Lever companies have labelled products in Sweden and nonein the remaining 3 Nordic countries. Other companies such as Henkel have labelled products in 4 of the Nordic countries,excluding Denmark.



History of the detergent success

First, a favourable context Detergents have been first labelled in Sweden. In fact, among Nordic countries,Sweden is the country with the highest consumer and industry awareness ofenvironmental concerns (the fact that labelled products are generally moreexpensive than non labelled products shows that consumers are ready to pay forenvironmental friendly products). In this respect, Sweden pulled the four othercountries. One can also mention the general promotion about the Nordic Swan which has beenmade (see above chapter 2.3): in 1995, 97% of the population recognised the NordicSwan. Secondly, preliminary specific promotion actions In Sweden, when this product group has been first launched, information has beensent to all supermarkets explaining that detergents could be eco-labelled and thatthe label could be asked to suppliers. In 1994, a seminar with 300 visitors has been organised (companies, localauthorities, entities responsible for public procurement ...). Information has beenprovided on criteria, on how to apply4... Thirdly, the catalyst In the early 1990s, three Swedish retailers representing 75% of the market and theNSF (the biggest Swedish Environmental Association) decided to launch a privateeco-label for detergents entitled “ BRA MILJÖVAL ” (“ Good choice for theenvironment ”). These retailers pushed their suppliers to ask for this label, which they did. However, Unilever refused to apply for this private label. Consequently, the boycottof Unilever product OMO has been organised by the NSF and Unilever hasexperienced a very significant drop in its sales. Unilever decided then to launch anew product holding a label. In order not to reverse totally their decision, they appliedfor the Nordic Swan and obtained it. In that success story, the catalyst consisted then in a pressure from retailers andan environmental association that succeeded into obtaining a significant boycottof products of one major manufacturer. Eventually, the snow ball effect was amplified by promotion actions Unilever heavily marketed this product which had just obtained the Nordic Swan.This product took a significant market share over a short period of time. Within one year, the SIS launched a TV campaign informing consumers thatdetergents could obtain the Nordic Swan (without referring explicitly to the firstholder).

4 One can also mention that the cost of the tests would vary between ECU 1,672 and 3,344 per

licence for one product, to be compared with ECU 8,361 and 16,722 for the EU eco-label.Moreover, tests take longer for the EU Eco-label than for the Nordic Swan.



TISSUE PAPERS

Current situation

11 licences have been awarded to 6 companies (12 licences, over 100 products). Criteria have first been defined in 1992 and revised in 1996. The first licence has been granted in 1996. This product group is not considered as very successful by competent bodies5

because of the relative small number of holders (6 companies) as compared to thenumber of companies in the paper sector. Not really a success

A favourable context... In addition to the high consumer and industry awareness of environmental concerns(in Sweden in particular) and the large notoriety of the Nordic Swan, one can notice aspecific background relative to the paper industry. The paper industry is one of the most important in Sweden and it plays a key role inthe pollution of the Baltic Sea. In order to address this problem, the NSF (the biggestSwedish Environmental Association) developed in 1988 the first eco-label for paperswhich met an unexpected success to consumers and which required companies tomodify significantly their manufacturing processes. Environmental matters have thusbeen discussed for many years within this paper sector and environmental problemslinked to paper production is well-known by consumers. ... And preliminary specific promotion actions... Ads in the press allowed to raise consumer awareness and explained him that theNordic Swan reduces the environmental pollution due to paper products. ... But limited interest of the industry Although tissue paper manufacturers did take part actively in the definition of criteria,most of them do not apply for the Nordic Swan since they do not feel that they needit (they may consider that the private label developed by the NSF is sufficient). Nevertheless, some industrialists started applying for the Nordic Swan (when thelabel has obtained a good image due to the general promotion activities).Possessing this label was perceived by them as a competitive advantage. Moreover,there is no specific testing for this product group; there are only measurements foremissions and receipts are to be provided by the producer.

5 At the end of the study, we have learned that the situation in Finland has been changing in the last

months: all three main actors in the Finnish tissue sector have swan-labelled products. So thesituation could become a success.



REFRIGERATORS

Current situation

There is no labelled product. Criteria have first been defined in 1994 and revised in 1996. A failure

The negative position of the industry... In the 5 Nordic countries covered by the Nordic Swan, there are few producers ofrefrigerators. In Finland for example, there are only two producers, one Finnishproducer and Electrolux. Most companies consider that they do not need the label,they do no see the added value that the Nordic Swan would bring. Moreover, it should be noted that markets of Nordic countries are rather smallmarkets, not necessarily very attractive for the white goods industry. Headquarters ofthese companies are not located in the Nordic countries, they are therefore far fromlocal concerns. ... despite promotion actions towards the industry The competent bodies did communicate a lot towards manufacturers and retailers. They carried out no specific communication towards the general public.


3.

THE BLUE ANGEL SCHEME


3. THE BLUE ANGEL SCHEME

3.1. FACTUAL ELEMENTS

Creation date 1977 Target Consumers and professionals Number of product groups for whichcriteria have been set up

76

Number of product groups for which thelabel has been awarded

66

Number of labelled products 4135 Number of companies using the label 921 Number of product groups accountingfor 60% of labelled products6

6: paints (32%), recycled cardboard(9%), recycled paper (7.5%), low noiseconstruction machines (4.5%), sanitarypaper made from recycled paper(4.5%), wall paper and ingrain wallcovering made from recycled paper(2.5%)

FOREIGN CONTRACTORS OF THE BLUE ANGEL

COUNTRY NUMBER OF PRODUCTS NUMBER OF CONTRACTS

Austria 70 16 France 145 33 Great Britain 104 17 Italy 74 25 Netherlands 70 19 Switzerland 55 16 Others 141 36

TOTAL 659 162

According to German statistics, approximately 13% of the companies and 15% of thelabelled products come from foreign countries. In reality, these percentages aremuch higher because most foreign companies conclude contracts on behalf of their

6 The 6 product groups representing 60% of the labelled products do not necessarily account for the

majority of the income generated by subscription fees - see chapter 1.


German branch, for example for copiers, computers or building machines.



3.2. GENERAL FUNCTIONING OF THE BLUE ANGEL

THE THREE ORGANISATIONS INVOLVED IN THE BLUE ANGEL SCHEME

• The “ Umweltbundesamt ” (UBA) is the Federal Environment Agency,

• The “ Deutsches Institut für Gütesicherung und Kenzeichung e.V.-RAL ” is theGerman Institute for Quality Assurance and Labelling: certifying institute,

• The “ Jury Umweltzeichen ” (Environmental Label Jury) is an independentpanel with representatives from the scientific, business and environmentalcommunities and from consumer organisations.

CHOICE OF THE PRODUCT GROUPS FOR WHICH CRITERIA WILL BE SET UP

New proposals concerning product groups are collected and commented by theUBA. Twice a year, the Environmental Label Jury makes a pre-selection of thoseproduct groups warranting closer scrutiny. Final decision is made by the Environmental Label Jury.

CRITERIA SETTING UP

Preliminary draft is made by the UBA. Experts hearings (from all interested parties) are made by the RAL. Final decision is made by the Jury. Criteria revision is made by the UBA.

MAIN METHOD TO SET UP CRITERIA

Criteria are mainly focus on the end usage.



SELECTIVITY OF THE CRITERIA

The chosen selectivity depends on the specific circumstances in each product-category. This may be (much) lower or (much) higher than 20%. No averageselectivity should be given.

ORGANISATION IN CHARGE OF AWARDING THE BLUE ANGEL

The RAL examines the application for the use of the Blue Angel label and concludesthe contract with manufacturers.

APPLICATION FEES

Application fee for the Blue Angel product is DM 300 (ECU 152) that are paid to theRAL.

FEES FOR THE USE OF THE ECO-LABEL

ANNUAL TURNOVER INMILLION DM

ANNUAL FEES IN DM

ANNUAL FEES IN ECU

CLASS OFSUBSCRIPTION

Up to 0.5 350 178 1 From 0.5 to 2 700 355 2 From 2 to 5 1400 711 3 From 5 to 10 2750 1396 4 Over 10 3980 2020 5

RENEWAL OF THE BLUE ANGEL LABEL

The criteria document includes the exact period of validity. Contracts can only beconcluded over this period. The criteria document has to be reviewed one yearbefore the end of the validity.



3.3. PROMOTION ACTIVITIES

Decisions made regarding investments in promotion activities for the Blue Angelhave to be approved by three entities :

• the UBA,

• the RAL,

• the Environmental Label Jury.

BUDGET

The budget regarding promotion activities / marketing (DM 200,000, i.e. ECU101,500) accounts for around 20% of total incomes of annual subscription to theBlue Angel.

BACKGROUND

Within the Blue Angel organisation, nobody spends 100% of his time on promotionactivity. In fact, the number of persons working on this promotional aspect is verylimited. According to the interviewed persons, the Blue Angel is known by the public notspecifically owing to promotion campaigns, but owing to the interest of the consumerand companies in environmental matters. One of the key points explaining the success of the Blue Angel for some productgroups is certainly the high level of maturity: the Blue Angel can be seen in manyshops. The Blue Angel needed quite a few years to become successful. After 20 years ofexistence, it is not necessary to advertise as much as at the beginning anymore.

PROMOTION STRATEGY AND EXAMPLES OF PROMOTION ACTIVITIES

Promotion activities are carried out globally for the Blue Angel and notspecifically for product groups. This means that no promotion activity is organisedspecifically for detergents, refrigerators or tissue papers for example. Some examples of general promotion activities are listed hereafter.

• The biggest spending among the DM 200 000 used in 1997 for the promotion ofthe Blue Angel is the internet Blue Angel site.

• Two booklets have been issued, one in English (5,000 copies issued) and onein German (latest version May 1998, 20,000 copies issued). These booklets areentitled “ Environmental Label, German Blue Angel, Product requirements -RAL ”. They provide product requirements for each product group covered by the



Blue Angel.



It presents the institutions involved, the award procedure, the elaboration ofbasic criteria, application procedure and the list of criteria for each product group.The German version gives the names of the holders of the Blue Angel for eachproduct group, it is released every year and sent to Counties and towns. TheEnglish version does not provide the names of the holders of the Blue Angellabel, but it provides the number of applicants and the numbers of products thathave been awarded the Blue Angel label for each product group.

• Gimmicks have been manufactured (products with the Blue Angel logo andname): phone cards, pencils, umbrellas, bags, mouse pads, which are littlethings that everybody possesses. These products are given as presents.

• Over the last few years, every German newspaper has written articles on theBlue Angel. Specialised newspapers (specialising on specific sectors orproducts) also publish articles on the Blue Angel.According to the interviewed persons, public awareness through articles innewspapers has been quite efficient. There is no need for advertising.

• Several films have been carried out by the German TV on the Blue Angel(including interviews).

• Articles on the Blue Angel are also released in leaflets published by consumerand environmental associations.

On the request of consumer and environmental associations, brochures on theBlue Angel are paid by the promotion budget.

• The UBA provides free tools for exhibitions (stands, posters, films, ...). The institutions who promote the Blue Angel label never advertise innewspapers whereas companies sometimes do7. Present advertising is considered as sufficient by Blue Angel marketing people.

SPECIFIC ROLE OF CONSUMER AND ENVIRONMENTAL ASSOCIATIONS

In addition to their participation in expert hearings for each product group indiscussion or for which criteria are revised, the consumer and environmentalassociations contribute actively to the promotion of the Blue Angel. When they promote environmental matters, consumer associations and environmentassociations do use the Blue Angel as one component of their communicationcampaign. These associations tell people how to act in favour of environment.

7 One can notice that it is a totally different approach for the Nordic Swan where advertisements are

paid by the competent bodies.



Consumer associations regularly communicate on eco-labels. We have interviewedtwo consumer associations: Veerbraucher-Zentrale Nordrhein-Westfalen andVerbraucher-Zentrale Niedersachsen e.V. Some of the main promotion activitiesdeveloped by these associations are listed below:

• promotions are carried out in markets; such an event took place for example onthe 1st of July (day of Environment). Over 19 stands have been set up inmarkets to inform on environmental aspects, including labels such as the BlueAngel and the EU eco-label. Within these stands, consumer associationspropose “ quizz ” to see if people recognise some of the existing labels, if theyknow the meaning of these labels ... Leaflets are also available to inform onlabels, by product group, for the Blue Angel.

• for recycled paper (both for private use and schools), one of the interviewedconsumer associations checked which shops offered recycled paper andreleased in the press the availability of recycled paper mentioning where thistype of paper could be found. Results of this investigation have also beencommunicated to the federation of retailers.

• still concerning recycled paper, contacts are taken with federations, roundtables are organised with members. A competition has been organised betweencompanies to see which firm was using Blue Angel recycled products with abusiness oriented purpose (for annual reports, brochures displayed in bigcompanies ...)

• brochures informing on labels and the Blue Angel are available in 25 localadviser centres of the association that we interviewed. Consumers sometimescome in and ask for information on labels.

PUBLIC PROCUREMENT

The success of some product groups such as copiers is partly due to publicprocurement: institutions insist on buying products that have been awarded the BlueAngel.



3.4. IMPACT ON THE DEVELOPMENT OF THE BLUE ANGEL FOR THE

3 PRODUCT GROUPS: DETERGENTS, TISSUE PAPERS,REFRIGERATORS

The three product groups illustrate a contrasted situation:

• tissue papers are a successful case,

• whereas detergents and refrigerators have no labelled product. All of them could have benefited from the large notoriety of the Blue Angel. In fact, this proves that the notoriety of the label is not sufficient and that we have tosearch for other facts explaining the success of a product group.

DETERGENTS

Current situation

Not a single product is labelled. Criteria have first been defined in 1991 and revised in 1997. Two years ago, one company (Lever) obtained the Blue Angel label, but it has notapplied for it again. A failure

It has not been successful for this product group despite:

• the high level of notoriety reached by the Blue Angel,

• the fact that most detergents do meet the criteria (according to the UBA),

• the fact that over the last 10 years, detergents improved a lot in terms ofenvironment.

REFRIGERATORS

Current situation

There is no labelled product. Criteria have first been defined in 1992 and revised in 1996. Two companies had applied (Liebherr and Foron), but criteria changed and thesetwo companies retracted. A failure

Once again, despite the high level of notoriety reached by the Blue Angel, it has notbeen successful for this product group.



TISSUE PAPERS

Current situation

182 products were labelled at the end of 1996 (14 manufacturers). Criteria have first been defined in 1978 and revised several times since that date(last revision in 1995). Tissue papers product group is considered as successful by the UBA because ofthe high number of holders (14 companies) in this fragmented sector. History of the tissue papers success

A favourable context... The context appears to have been favourable for the development of the tissuepapers Blue Angel from different points of view:

• the environmental awareness in Germany and the notoriety of the BlueAngel.

The success of this product group is certainly partially due to consumer demandfor products favourable to the environment and to companies pushing forlabelled products. For example, retailers regularly ask their manufacturers tohave products with the Blue Angel. In fact, a study has been carried out byretailers, showing that consumers do take into account environmental matters intheir purchasing decision. The Blue Angel is one of the tools enhancing product credibility in this field.

• the complete coherence between the criteria (100% recycled paper) and theenvironmental concerns regarding papers in Germany (paper recycling).

In the late 70s, a clear political goal has been set in Germany: put recycled paperback on the market. In the early 80s, the market share of recycled paper inGermany was about 5%. Today, it is around 50 to 60%.

The Blue Angel can be awarded only to 100% recycled products, which is fullyhomogeneous with the political goal described above.

The Blue Angel benefited thus from this general policy in favour of recyclingpaper.

• the criteria: it is also worth mentioning that there are few tests to obtain the BlueAngel (only three minor tests) for tissue papers.

• the structure of the industry: there are many small companies in this industry.It is easier to attract some companies within an industry involving manycompanies than within an industry involving few companies.

... and apparently nothing else According to the interviewed persons, no specific promotion has been carried out infavour of this tissue paper sector. There was no particular catalyst which could have been at the origin of a snow balleffect (as for detergents with the Nordic Swan). The coherence between the criteria and the demand for recycled paper in Germany



resulting from a national policy seems to constitute one important explanation of thissuccess story.


4.

LESSONS TO BE LEARNED FOR THE PROMOTION OFTHE EU SCHEME

4. LESSONS TO BE LEARNED FOR THE PROMOTION OF THE EU SCHEME


4. LESSONS TO BE LEARNED FOR THE PROMOTION OFTHE EU SCHEME

4.1. INTERPRETATION OF THE NORDIC SWAN AND BLUE ANGEL

COMMUNICATION STRATEGIES

As described above, the promotion activities of both the Nordic Swan and the BlueAngel mainly consist in communication actions. However when trying to interpret these two communication strategies, we can noticethat they significantly differ in their aims and thus in the means implemented by thecompetent bodies and the targets towards which the communication is oriented (seediagrams on the opposite page and following page). Let us first recall that due to distinct historical situations, the two national labels areat different positions on the product development curb, which explains that theircommunication strategies differ. Whereas the Blue Angel communication strategy seems to aim at intensifying thepresence (already existing) of the label in the day to day life of the consumers, theNordic Swan strategy seems to aim at sustaining the notoriety of the label anddeveloping the presence of the label on the market. Regarding the means, in particular for the communication towards the consumers,the Nordic Swan communicates through TV advertisements, press articles... todevelop the image positioning and the image content of the label. The role of theNordic Swan competent bodies appears to be more focused on the development ofa large media coverage to various targets (consumers, industry...). In the case of the Blue Angel, the communication is made through actions to ensurethe recall of the logo and the interest for the label (gimmicks, exhibitions,testimonies...) and thus to maintain a high level of psychological proximity. TheBlue Angel competent bodies appears to be responsible for a higher degree of co-ordination with all actors (consumer and environmental associations, manufacturersand retailers).

Time

Intensity ofpresence onthe market

Nordic Swan Created in 1989

1000 labelled products

Blue Angel Created in 1977

4135 labelled products



4.2. LESSONS DRAWN FROM THE ANALYSIS OF THE NORDIC SWAN

AND BLUE ANGEL PROMOTION ACTIVITIES

All the promotion actions carried out for the Blue Angel and the Nordic Swan arecertainly necessary to the success of product groups, but they might not besufficient. As a matter of fact, despite these promotion activities performed, one can notice thatfirst some of the product groups analysed are not successful and secondly thesuccess stories do not correspond to the same product groups for the Blue Angeland the Nordic Swan. According to the concerned competent bodies (see table on the following page):

• two product groups are considered as very successful: Detergents - Nordic Swanand Tissue papers - Blue Angel,

• one is considered with a lower level of success: Tissue papers - Nordic Swan,

• the last three ones are a failure. It thus seemed interesting to try to highlight the reasons explaining this contrastedsituation, on the basis of the analysis of the two schemes and the three productgroups performed during this phase 1 of the study.

THE DIFFERENCES AMONG FUNCTIONAL AND TECHNICAL CHARACTERISTICS WHICH

EXIST BETWEEN THE TWO SCHEMES DO NOT EXPLAIN THAT SOME PRODUCT

GROUPS ARE SUCCESSFUL AND OTHERS NOT

Whether a product group is a success for the Blue Angel and not for the NordicSwan (or vice versa) seems to depend directly neither on the general functioning ofthe labels nor on the kind of criteria or on the selectivity levels. As a matter of fact, the description of the scheme functioning (see chapters 2.2 and3.2) shows that all stakeholders are involved at the key steps of the life of the label.The functional characteristics are thus quite close. Even if some differences exist (level of fees, labelling criteria - see appendix 5), theinterviewed persons never stressed them to explain the situation for a scheme and aproduct group as compared to the other scheme.

BOTH COMPETENT BODIES CARRY OUT COMMUNICATION STRATEGIES, WHICH THUS

DO NOT EXPLAIN THAT SOME PRODUCT GROUPS ARE SUCCESSFUL AND OTHERS

NOT

As detailed above, the Nordic Swan communication strategy combines, on the onehand, a general communication on the label and, on the other hand, communicationspecific to product groups. Moreover, it is aimed at all stakeholders: consumers,



manufacturers, retailers... As far as the Blue Angel is concerned, the communication actions carried out by thecompetent bodies concern globally the label and logo (and not specifically productgroups) and are directed towards consumers, manufacturers, retailers.Complementary communication is performed by consumer and environmentalassociations on product groups. In both cases, when considering all the distinct promotion activities of the twolabels performed by the competent bodies and the associations:

• they are directed towards the notoriety and presence of the label as well astowards specific product groups,

• they aim at informing all stakeholders. The promotion carried out for the two schemes seems thus to consist in mainlygeneral communication and information (and advertisements for the NordicSwan) about the label and the product group criteria towards the differentstakeholders. This strategy could be defined as a “ pull strategy ”. When considering theconsumer, this strategy consists in pulling him to the label, by saturating themediatic environment of the consumer in the same way as commercial brandscan do with advertising. In order to obtain a large and undifferentiated publiccoverage, this pull strategy requires adequate communication means which arecharacterised by general media: TV, newspapers, specialised and non specialisedmagazines.... We give hereafter examples of these promotion activities for the BlueAngel and the Nordic Swan:

• advertisements on TV and newspapers are carried out by the Nordic Swan,

• articles referring to the national label are released in both specialised and nonspecialised newspapers,

• films on these labels are presented on TV,

• products such as pens, umbrellas, mouse pads... are manufactured with the logoof the label,

• .... One can conclude that this pull strategy focused on the notoriety and presence of thelabel and the information about the product groups is necessary but not sufficient forthe eco-label to become a success for a specific product group.



FOR EACH SUCCESSFUL PRODUCT GROUP ANALYSED, A TRIGGERING EFFECT HAS

BEEN IDENTIFIED

For the two success stories analysed (detergents for the Nordic Swan, tissue papersfor the Blue Angel8), we can conclude that the success has been triggered bysomething else independent from the promotion activities described below:

• detergents - Nordic Swan: the indirect9 pressure from the three major retailersand the biggest environmental association.

We can also mention that this labelled product group is more successful inSweden than in the other 4 Nordic countries, certainly because of the higherenvironmental awareness of the Swedish consumers.

• tissue papers - Blue Angel: the adequacy between the criteria (100% recycledpaper) and the environmental concerns regarding papers in Germany.

In these two cases, the product groups benefited either from a favourablecontext or from a catalyst specific to the product group which initiated a snowball effect. It seems that the success of the label for a product group depends moreon the market structure prevailing when the criteria are launched than on thecommunication actions.

4.3. PRELIMINARY COMMENTS FOR THE PROMOTION OF THE EUSCHEME

CONSTRAINTS TO BE KEPT IN MIND

Four main constraints should be kept in mind when defining the marketing strategy ofthe EU eco-label:

• there is not enough regulatory pressure to push the industry to use the EU eco-label since it is a voluntary scheme;

• the available low promotion budget will not allow to organise an extensiveadvertising and information campaign at the European level.

• the key actors (manufacturers and retailers) make their decisions according totheir own industrial and marketing strategy and power relationships, whichneed to be clearly understood before implementing a label in a given sector.

• the label is launched in an existing marketing and historical context (trademarks, consumer information and awareness, distribution coverage, pricepositioning, quality and image...) which need to be taken into account.

For these reasons, potential commercial opportunities linked to the use of the EU

8 Let us recall that Tissue Papers product group is not considered as very successful for the Nordic

Swan by Nordic competent bodies because of the relative small number of holders (6 companies)as compared to the number of companies in the paper sector.

9 Indirect because the Nordic Swan can be considered as having benefited accidentally from thispressure initially put on one major manufacturer for a private label and not for the national label.



eco-label are often not perceived by the industry or not determining for them:companies do not see the benefits of holding such a label10. In that context, the communication efforts are not sufficient to promote anddevelop the use of the EU label. A comprehensive strategic approach isnecessary which take into consideration the strategy of the key actors(manufacturers and retailers) and the market structure.

THE THREE LEVELS OF THE EU SCHEME MARKETING STRATEGY

Owing to the multinational scope of the EU eco-label, three levels should be takeninto account for the marketing strategy:

• a global policy for the promotion at the European level (choice of product groups,level of selectivity, ...).

• define specifications common to all European countries (visual identity,communication chart, ...).

• various strategies for the pragmatic application of the EU eco-label according tothe different countries11 and products group.

The two first levels aim at ensuring a minimum homogeneity with what will be carriedout at a national level.The third level aims at adjusting the marketing strategy and communication to themarket which is specific to each country.

The scope of the study refers to level 3.

4.4. LESSONS FOR THE PROMOTION OF THE EU SCHEME

A COMPREHENSIVE MARKETING STRATEGY

Considering the lessons drawn from the national labels and the constraintsmentioned above for the EU eco-label, the promotion activities to be developed forthe EU scheme have to be included into a comprehensive marketing strategy withthree components:

1. a strategic component, with the objective to identify the power relationshipsbetween the key actors on the market,

2. a marketing component, aiming at taking into account the marketing strategiesof all the key actors,

3. a communication component, directed towards all the stakeholders and at anational level.

10 In particular, the notoriety of this label is today very low and some companies consider that the cost

of tests and subscription is too high.11 Let us recall that the Nordic countries rarely carry out common promotional actions. They prefer to

develop marketing activities on their own territory taking into account national specificities.



The analysis of the Nordic Swan and the Blue Angel showed that the communicationcomponent is not sufficient to ensure that a product group is successful. For thatreason, the strategy for the development of the EU eco-label has to include astrong strategy and marketing component in order to identify, for each productgroup, the appropriate catalyst which could initiate the snow ball effect.

THE STRATEGIC AND MARKETING COMPONENTS

Considering the specificities of each country and each product group, the purpose isto identify what is the most appropriate catalyst and diffusion process in order todevelop the EU scheme.

The leading idea is to use the marketing strategies of the key actors(manufacturers and retailers), by helping them to integrate the EU eco-label as anelement of their marketing strategy. The diffusion process will of course involveNGOs.

THE COMMUNICATION COMPONENT

Regarding the communication component, and particularly the communicationdirected towards consumer, two approaches are possible:

• the ‘pull strategy’ (informing and/or advertising on the eco-label and/or productgroup criteria towards the consumer so as to improve the notoriety of the eco-label)12,

• the ‘push strategy ’ (informing and advertising by retailers within shops todevelop proximity).

Both strategies are complementary actions to sustain the presence of the label in theconsumer’s mind and during its purchasing process. In the push strategy, thecommunication is mainly carried out at the level of the retailer: the sales point oftenbecomes the main communication axis. The specificity of these local promotion actions is that they are adapted to thecharacteristics of the markets, their dynamic and to the purchasing process of theconsumers.

12 The pull strategy is particularly developed by the Nordic Swan and the Blue Angel.



For instance, the following points are taken into account when marketing peopledefine local promotion actions:

• is the affective and cognitive implication of the buyer high or low for a givenproduct?

• are consumers already used to include labels in their purchasing criteria?

• what is the purchasing attitude of the buyer in front of an eco-label versus acommercial brand (hierarchy, positioning, credibility, loyalty…)?

• do well known labels already exist in the country (confusion or reinforcingeffect…)?

• what is the level of the environmental awareness in the three countries for thethree product groups (existence of other actions in the environmental field suchas forest, wild life, recycling, pollution…)?

An efficient local promotion campaign should include a common action with theretailers and if possible involving the manufacturer and consumer associations. Forexample, promotion stands can be set up in shops, advertising can be presented ontrolleys or at cashiers.... The phase 2 of the study will analyse what concretely could be done regarding thesetwo concepts of communication strategy (pull and push strategy), considering theresult which is expected and the available budgets of the competent bodies and theEU Commission.


5.

REVIEW OF THE CURRENT SITUATION IN FRANCE,SPAIN AND THE UK

5. REVIEW OF THE CURRENT SITUATION IN FRANCE, SPAIN AND THE UK


5. REVIEW OF THE CURRENT SITUATION IN FRANCE,SPAIN AND THE UK

The purpose of this chapter is to briefly describe the development of the EU schemein France, Spain and the UK for the three product groups.

5.1. FRANCE

Detergents Tissue Papers Refrigerators Market

Structure of theindustry

Oligopolistic market: - Procter & Gamble(Ariel...) - Unilever (Skip...) - Henkel (Le Chat...) - some SMEs

Fragmented market: - James River (Lotus...) - Kimberly Clark(Kleenex...) - Procter & Gamble(Tempo...) - SMEs (for privatelabels mainly)

Concentrated market: 6 manufacturers produce75% of the sales, ofwhich: - Brandt: 27% - Electrolux: 16%

Sale volume / units13 900 000 tonnes in 1996 1.54 million units in1996 (a renewalmarket14)

Turnover FF 8.76 billion (Ecu 1.3billion)

• Toilet paper: FF3,600 million (Ecu550 million)

• Kitchen rolls: FF1,600 million (Ecu245 million)

• Tissues: FF 0,960million (Ecu 145million)

FF 3.48 billion (Ecu 530million)

13 Source: Euromonitor 1998 14 In France, 98% of households are already equipped with refrigerators.



Detergents Tissue Papers Refrigerators Retail

Structure • The most concentrated retail sector in Europe:super and hypermarkets account for 88% of thesales• When considering the food retail15 sector only, - hyper and supermarkets account for 59.6% ofsales (against 39% for small shops) - 9 retail chains concentrate 90% of the food salesoutlets (Carrefour, Intermarché, Auchan, Leclerc,Casino...)

• Fragmented retailsector: 14 retail chainsgenerate 65% of sales• Sales are mainlyachieved through largespecialists: - large specialists: 59%(But, Conforama, Darty,Boulanger...) - general hyper/supermarkets: 20% - small traditional stores:13% - kitchen specialists: 4% - department stores: 3% - mail order: 1%

Market share ofprivate labels

2% • Toilet paper: 43%• Kitchen rolls: 41.5%• Tissues: 49%

Low today but retailershave planned toincrease it (e.g. FirstLine: Carrefour, Far:Conforama, Baltic:Boulanger)

Eco-labelled products Maison verte (producedby Chimiotechnic forReckitt & Colmann,distributed in about 95%of sales outlets)

• Toilet paper16: - Monoprix vert (ownbrand of Monoprix,produced by DalleHygiène17) - Idées vertes (privatelabel of Intermarché,produced by DalleHygiène)• Kitchen rolls: Monoprix vert (privatelabel of Monoprix,produced by DalleHygiène)

None18

15 The ‘food retail sector’ includes food products as well as cleaning products such as detergents. 16 Lucchese, in Italy, is the third company (with Dalle Hygiène in France and Fort James in UK) which

holds the EU eco-label. They are not selling eco-labelled products in France yet but should do itsoon.

17 Dalle Hygiène produces only toilet papers and kitchen rolls (not other tissue papers such as tissues,paper cloths, napkins which are also concerned by the ecolabelling criteria) and only for privatelabels.

18 Vestfrost, which is the only company holding the EU eco-label, sell its labelled products in Nordiccountries.



Detergents Tissue Papers Refrigerators Main purchasingcriteria

- Cleaning performance - Price (small difference inprice; 15% of sales areachieved under promotionactions; high elasticity ofthe sales to the price)

• Toilet paper: - quality (resistance,absorption) - price (30% of sales areachieved underpromotion actions; lowelasticity of the sales tothe price19)• Kitchen rolls: price(high elasticity of thesales to the price)• Tissues: price (50%of sales are achievedunder promotionactions; high elasticity ofthe sales to the price)

- Price (low elasticity ofthe sales to the price20) - Size - Brand

5.2. SPAIN



Oligopolistic market: - Procter & Gamble - Unilever - Henkel - some SMEs

Fragmented market: - James River - Kimberly Clark - SMEs (for privatelabels mainly)

Concentrated market

Sale volume / units 692 000 tonnes in 199621 0.965 million units in1996 (a renewal market)

Turnover Ptas 119 billion (Ecu 725million)

Ptas 70 billion (Ecu 427million)

19 i.e. a lower price will not systematically increase the sales of the concerned product. Colour, odour...

may prove more important purchasing criteria which can justify to pay more. 20 The consumer budget is defined in relation to the size... 21 Source: Euromonitor 1998




Structure • The market share of French distribution groupshas been increasing for several years and is todaydominant for food products.• The retail sector22 is not as concentrated as inFrance: super and hypermarkets account for 60% ofsales (as against 88% in France) and local shopsfor 34%• In the food sector, there are 5 major retail chains:El Corte Inglès, Continente (Promodès), Pryca(Carrefour), Eroski, Al Campo (Auchan)


Eco-labelled products None23 None None Main purchasingcriteria

- Cleaning performance - Price

• Toilet paper: - quality - price• Kitchen rolls: price• Tissues: price

- Price - Size - Brand

5.3. THE UK



Oligopolistic market: - Procter & Gamble - Unilever - Henkel - some SMEs

Fragmented market: - James River - Kimberly Clark - SMEs (for privatelabels mainly)

Concentrated market

Sale volume / units24 545 000 tonnes in 1996 0.8 million units in 1996(a renewal market)

Turnover £ 942 million (Ecu 1.4billion)

• Toilet paper: £ 750million (Ecu 1,114million)

• Kitchen rolls: £ 170 to175 million (Ecu 260million)

£ 145 million (Ecu 221million)

22 Includes the food sector and the non food sector. 23 Casa Verde is sold by Reckitt & Colmann in Spain but without the eco-label. This product should not

be sold in Spain any more in the near future due to the decrease of its market share. 24 Source: Euromonitor 1998




Structure • The most established retail sector in Europe (interms of relationship with suppliers, logistic, privatelabels, services...)• A concentrated retail sector: super andhypermarkets account for 75% of sales• When considering the food retail sector only, 5retail chains concentrate 75% of sales outlets(Tesco, Sainsbury, Asda, Kwik Save / Somerfield,Safeway)

Fragmented retailsector: - large specialists: 30%(Comet, Curris) - general hypermarkets,department stores:<10% (CO-OP...) - small independentshops: 15% - electricity companies:15% - mail order: 6% - others: 24% (on whichIceland: 10%...)


• Toilet paper: 52%• Kitchen rolls: 70 to

75%

20%

Eco-labelled products Down to Earth (producedby Chimiotechnic forReckitt & Colmann)

Toilet paper and kitchenrolls: - Nouvelle25 (producedby Fort James anddistributed by CO-OPand Waitrose) - private labels of CO-OP and Waitrose(produced by FortJames)

None

Main purchasingcriteria

- Cleaning performance - Price26

• Toilet paper: - quality - price• Kitchen rolls: price• Tissues: price

- Price - Size - Brand27

25 Fort Sterling will probably not apply for the EU eco-label for Nouvelle again (see minutes of the

interview – separate report). 26 According to a recent survey carried out in UK analysing the purchasing criteria for washing powder,

only 24% of customers have expressed interest in cleaning performance and 14% in price. 27 According to a recent survey carried out in UK analysing the purchasing criteria for refrigerators,

only 1% of customers have expressed interest in a product which is environmentally friendly, 2% inenergy efficiency. On the contrary 29%, 16% and 12% show interest in, respectively, the price, thesize and the preference & awareness for the brand



5.4. SIMILARITIES AND DIFFERENCES

When considering the market structure, the industrial and marketing strategy of thevarious actors (mainly the retailers) and the development of the EU scheme, wehave observed many similarities and differences across countries (see abovetables).

SIMILARITIES

The three countries have in common:

• A high market share for hypermarkets and supermarkets in the retail sector28,88% in France, 60% in Spain and 75% in the UK,

• stable and very competitive markets for the three product groups (consumergoods or renewal market), with multinational companies) and concentrateddistribution,

• most companies do not intend to apply for the eco-label (except for Fort Jamesand for two SMEs: Reckitt & Colmann and Dalle Hygiène). Two main reasonswere often stressed during our interviews:

− for the detergent eco-label: the criteria are not considered as ensuringsufficient cleaning performance29,

− for the refrigerator eco-label: in view of the energy label which is compulsory,the EU eco-label would confuse the consumers,

• the holders of the EU eco-label are not only national brands (Nouvelle,Maison Verte) but also private labels (Monoprix Vert, Idées Vertes),sometimes on retailer’s initiative (Monoprix towards Dalle Hygiène) andsometimes on company’s initiative (Dalle Hygiène towards Intermarché),

• the EU scheme is much less developed in these three countries than the NordicSwan in Nordic countries and the Blue Angel in Germany. The historical situationis thus very different and the communication strategies implemented for the twonational eco-labels (see chapter 4.1: to intensify the presence of the Blue Angelor to sustain the notoriety and develop the presence of the Nordic Swan) are notadapted to the EU scheme as such.

28 It is not the case for all the European countries. The structure of the retail system is very different

from one country to another. For instance, hard discount is very specific to Germany (22% of thesales in Germany are made in hard discounters) and to Belgium (13%); besides, local shops arelargely developed in Greece (68%), Portugal (54%) and Italy (45%).

29 Regarding retailers, some of them have indicated that the involvement of the European commissionin the implementation of the detergent manufacturers’ code of good practice does not improve thecredibility of the EU ecolabel.



DIFFERENCES

In the same time, the three countries illustrate contrasted situations in terms of:

• consumer behaviours: the concept of ‘European consumer’ with similarconsumer behaviour and expectations does not exist in practice. Differencesexist between countries on purchasing criteria, choice process, preferences...For instance, the British consumers give a significant place to ethical criteria andloyalty to the brands and retailer’s names when choosing a product. The Frenchconsumers tend to give preference to pleasure and convenience with a relativelylower loyalty to brands,

• retailer’s strategies:

− as indicated in the table above, the retail sector in the UK is generallyconsidered to be the most established in Europe (in terms of managementmethods, relations with industrialists, logistic, private labels, services...). Inparticular, the system is based on retailers’ strong name image (quality,ethical, caring image) which explains at least partly the high development oftheir private labels (about 40% of the sales),

− in France, retailers are in the process of improving their image and theirlegitimacy which have been undermined in the near past (competition with thesmall shops, pressure on manufacturers...). They are developing a caringimage, proposing more intelligent purchasing habits to consumers(information, ethics...). They are also becoming involved in the industrialworld: private labels are developed (they account for 20% of sales today)and managed directly with several sub-contractors selected with a realindustrial strategy (technical specifications and call for tenders...). Besides, theFrench system could be characterised by a low loyalty of retailers to theirsuppliers and thus a higher competition intensity between industrialists tohave their products listed by the retailers.

− in Spain, the Spanish distribution sector is still today largely based on diffuseand individual relationships between retailers and suppliers. With the increaseof the market share of the French retailers en Spain, the retailer’s job willcertainly evolve from the role of a simple retailer to the role of an industrialist,developing a strong brand image and private labels (10% of sales today).


6.

THE STRATEGY RECOMMENDED FOR THE EUSCHEME DEVELOPMENT

6. THE STRATEGY RECOMENDED FOR THE EU SCHEME DEVELOPMENT


6. THE STRATEGY RECOMMENDED FOR THE EUSCHEME DEVELOPMENT

6.1. THE CORE STRATEGY

We suggest the following courses of action:

• use retailers as the driving force, when they are willing to develop theirprivate labels and their market share against national brands (see verso page

56). Therefore they will aim at communicating on criteria whichdifferentiate their private labels from national brands and upgrade theimage of their own brands.

In fact, retailers hold the same position in the development of the ‘eco-label’ productas producers in the development of a product.

• emphasise and communicate on retailer’s initiatives: a snow ball effect canbe created thanks to various actors:

− the industry, mainly SMEs which aim at increasing their market share orremaining listed by retailers. Due to their relative low power, SMEscannot be regarded as the driving force but they can be used to furtherboost the snow ball process. Let us consider a retailer which includes eco-labelling criteria in its technical specifications. A small company willing toremain listed by the retailer will often need to invest in order to comply with theeco-labelling criteria. Furthermore, to make the investment profitable, thiscompany will then find interest in proposing eco-labelled products to otherretailers and abroad. In particular, they will follow the geographicaldevelopment of retailers networks.

A similar domino effect may also occur across multinational companiesbecause they generally produce a significant part of the private labelproducts 30.

− the NGOs (consumer associations, environmental associations) whichhave developed tools and networks to communicate and inform theirmembers and consumers, in order to emphasise the retailers’ initiatives(pull communication strategy: mailing, papers sent to members, articles sentto journalists, TV programmes... and push communication strategy: stands inthe stores to increase the credibility of the retailers’ promotion actions...).

− public procurement and green purchasing, which can also play asignificant role in increasing the demand of eco-labelled products.

30 About 56% of industrialists are participating to the production of private label products in France

(source: ‘Stratégies gagnantes en grandes surfaces’, 1997, Andersen Consulting). Some of themare only producing products for private labels.



What has just been described are the conclusions that we can draw from the 50interviews performed during phase 2 of our study. We have interviewed some of themain actors in each of the three countries (retailers, industry, NGOs, publicauthorities - see the minutes of the interviews in separate report). Before describing how this strategy can be implemented in the three countries for thethree product groups, one should have in mind five limits to the penetration of the EUeco-label for the private label products and keys which could help to overcome them:

• the image effect: the eco-label will probably never be a determining purchasingcriteria (as the price or the notoriety of a brand can be). At best, it can be adifferentiation criteria (for instance among two products having the same price,the consumer will buy the labelled one).

In order to develop this differentiation ability of the eco-label, a minimumpresence on the market is required, both through the share of voice (i.e. for aspecific market, communication on labelled products as a % of totalcommunication for all products) and physically on the shelves.

• the range effect (‘l’effet de gamme’): a retailer will communicate on the eco-label only if there is enough product groups in the assortment of labelledproducts.

Hence the necessity for the EC to increase the number of product groups witheco-labelling criteria, by choosing product groups which are complementary (forinstance several electrical appliances, several cleaning products...) and whereprivate labels have a significant market share.

• the shelf-space presence effect (‘l’effet de présence en linéaire’): labelledproducts need to occupy a sufficient shelf-space in order to be easily identifiedby consumers.

Hence the necessity of local communication and promotional actions in stores.

• the industrial critical mass within a product group: below a certain salesvolume, a producer cannot make profits out of the investment necessary tocomply with the eco-labelling criteria.

Hence once again the necessity for the EC to chose product groups whereprivate labels have a significant market share.

• the supplier effect: most retailers are used to have several suppliers for agiven product for supplies durability purposes (which is particularly the case inFrance); they will then have to require from all of them the compliance with theeco-labelling criteria, in addition to technical and quality criteria.

Hence the interest in constituting a network of manufacturers producing forprivate labels (see appendix 8 where a list of such SMEs is given). For instance,each year, the PLMA (Private Label Manufacturers Association) exhibition inAmsterdam gathers about 2000 companies producing for private labels.

These five elements are necessary to understand the context of the market of agiven product group and to assess the chance for the eco-label to significantlypenetrate the market.



6.2. OTHER USEFUL ELEMENTS

Although they are not directly connected with the promotion strategy to be developedby the EU commission, some general recommendations can be given, some of themhaving been emphasised several times during our interviews:

• nature of the eco-labelling criteria: necessity to have fitness for use criteriaensuring a satisfactory level of quality and performance of the labelled product.They are necessary to guarantee credibility, to develop notoriety and to raiseconfidence. The retailers which are ready to communicate on the eco-label willfirst insist on the quality of the products and then on the benefit for theenvironment (and not the other way round).

• an objective tool: need to communicate on the scientific approach implementedto establish the eco-labelling criteria (cradle to grave approach...). Insist on thefact that certification is carried out by independent laboratories. In fact, threefeatures of the eco-label should be highlighted (which will help retailers toincrease the credibility of eco-labelled private label products):

− the scientific approach,

− the proximity of the eco-label to consumers’ expectations (quality,usage),

− the certification carried out by independent laboratories.

• choice of new product groups: interest to chose new product groups:

− where private labels have a significant market share that retailers arewilling to increase even more and where retailers are looking for adifferentiation effect (for instance, the market share of private labels in Franceis about 60% for rubbish bags, 56% for food bags, 18% for windows cleaningproducts...),

− which are complementary to other labelled product groups (for instanceseveral electrical appliances, several cleaning products...),

− which are perceived as having a real environmental burden.

It constitutes the means to overcome the range effect and the critical massconstraints described above.

• fees for the use of the label: subscription fees must not be too high , inparticular for two reasons. First, retailers margins are very low (the net profit of alarge-scale retailer in France accounts for about 1.5% of its turnover, as againstabout 6% in the UK); they thus try to avoid any additional cost which would notgenerate short term sales increase. Secondly, manufacturers are reluctant to payto be listed by retailers while they already pay commissions for this.

• public procurement : there is today a legal gap : the use of the European eco-label by governments to select suppliers is neither authorised nor forbidden. Inthe short term, the eco-label could be used by governments as an informalindicative criteria of quality, performance and loyalty (not necessarily animperative selective criteria). In the medium term, the European directive aboutpublic procurement could explicitly authorise green purchasing policy basedeither on the purchase of goods which already hold the label or on the use of theestablished criteria as part of the technical specifications.


7.

IMPLEMENTATION OF THE EU SCHEMEDEVELOPMENT STRATEGY FOR THE THREE

COUNTRIESAND THE THREE PRODUCT GROUPS

7. IMPLEMENTATION OF THE EU SCHEME DEVELOPMENT STRATEGY PER COUNTRY AND PRODUCT GROUP


7. IMPLEMENTATION OF THE EU SCHEMEDEVELOPMENT STRATEGY FOR THE THREE COUNTRIES

AND THE THREE PRODUCT GROUPS

7.1. FRANCE

7.1.1 THE FAVOURABLE SITUATION OF THE LARGE-SCALE RETAIL SECTOR

GENERAL CONTEXT

Several characteristics of the French retail sector are favourable to the developmentof the EU eco-label and will allow retailers to play the driving role:

• intention to increase the market share of their private labels,

• medium range positioning of their private labels (and not low range), i.e. anequivalent quality to national brands with a lower price, allowing a higher margin,

• creation of thematic ranges (green ranges such as Monoprix Vert, homogeneousrange such as Auchan which will replace, as from 1999, its fifty or so privatelabels by a single brand, called “Auchan” with the bird from their logo as adistinctive sign),

• necessity to have a differentiating factor in order to increase the credibility oftheir private labels and the image of the retailer’s name,

• being environmentally friendly is not perceived as a short-term fashion or asmore expensive products anymore.

In that context, the EU eco-label is perceived by the main retailers interviewed(Auchan, Carrefour, Monoprix...) as a way to guarantee both a good quality andan environmentally friendly image for private label products, to bring furthercredibility and loyalty to private labels products and to improve the ethical andcaring image of the retailers.

DETERGENTS

A certain number of characteristics of the detergents market seem to beunfavourable to the development of the EU label in France:

• the very low market share of their private labels (2% of sales),

• the oligopolistic market: first, low price difference but high elasticity of the salesto the price (and low elasticity of the sales to the quality and performance of theproducts); secondly, few brands and large advertising budget make it verydifficult for a new actor to enter the market at the expense of well establishednational brands for which loyalty is high.



In that context, retailers have very few interest to develop private labels (because ofthe low price difference) and to use the eco-label as a differentiation criteria(because of the low quality difference between detergents perceived by consumers). However, the main retailers that we met have shown some interest in the eco-label (e.g. Monoprix and Auchan wished to obtain the names of suppliers whichcould hold the eco-label), perhaps partly in view of the ‘range effect’ described above(see chapter 6). For that reason, for this specific sector, it will be necessary to furtherclarify retailers’ position.

TISSUE PAPERS

The following characteristics of the tissue papers market are favourable to thedevelopment of the eco-label:

• a market share of private labels higher than 40% for toilet papers, kitchen rollsand tissues,

• significant price differences between brands and high elasticity of the sales toprice (except for toilet papers) which allows to sell more expensive products byimproving the image and the perceived quality of the products.

In that context, the eco-label is considered by the retailers that we met as anappropriate differentiation tool in order to intensify the credibility of their privatelabels and to improve the consumers’ perception.

In addition, in view of the ‘range effect’, retailers are very interested in this productgroup which cover several products (toilet paper, kitchen paper, tissues, paper clothand napkins). For instance, Monoprix understood the importance of this point duringour meeting and asked to obtain the new version of criteria and the names ofmanufacturers holding the eco-label apart from Dalle Hygiène (which produces onlytoilet papers and kitchen rolls). More generally, it will be useful to provide retailerswith such a database.

REFRIGERATORS

Some retailers (e.g. Conforama, an electrical appliances specialist) consider the eco-label as redundant as compared to the energy label which is compulsory and whichneeded important investments from the industry and retailers (packaging, billing).

Furthermore, the low market share of private labels and the mono-product approach(for a given refrigerator, only one unit is presented in the store, as compared todetergents for instance where several packs of the same detergent are put onshelves) do not allow to implement a comprehensive strategy (problem of rangeeffect and of industrial critical mass).



Nevertheless, several characteristics of the refrigerators market seem to befavourable to the development of the eco-label, characteristics whose importancewas further underlined by Carrefour and Boulanger (Auchan subsidiary specialisingin electrical appliances distribution):

• the development of private label products (e.g. First Line for Carrefour, Baltic forBoulanger, Far for Conforama), even if the names given to these brands aredifferent from the retailer’s name (when selling a refrigerator, a retailer commitsmore its image than when selling a detergent because it sells also after-salesservice with risks of breakdown),

• given that it is a renewal market, customers are more experienced anddemanding and thus the elasticity of the sales to the price is low and criteriaregarding quality and performance are on the contrary determining. Besides,most products are evolving towards a medium range or even a top endpositioning.

Another advantage of the eco-label has been emphasised during our meetings withretailers: the certification procedure around the eco-labelling criteria could be a wayto guarantee the energy class (A, B, C, D...) whereas the energy label is an auto-declaration sometimes overestimated by the manufacturers.

7.1.2 THE AMPLIFICATION ROLE OF NGOS AND PUBLIC PROCUREMENT

NGOS

The NGOs we have discussed with are ready to implement the two kinds ofcommunication that we have already mentioned above:

• pull communication strategy: to inform consumers and association membersthrough the traditional means (leaflets, articles, papers, TV...).

For instance, the following projects or potential concrete actions have beenidentified:− a project to set up a promotion campaign of the EU scheme in the north of

France, involving several NGOs (Association Nationale des Consommateurs,Amis de la Terre...), the AFNOR, 3 Suisses, the ADEME (the French Agencyfor Environment and Energy), the EC. This project aims at training trainerswho will then be able to train and inform people within regionalconsumer and environmental associations as well as students inschools (see minutes of the meeting with the “Association Nationale desConsommateurs”).

− a project involving several associations and the French Ministry of theEnvironment to release a leaflet with product groups that can apply for theeco-label as well as the eco-labelled products and in which shops theycan be found (see minutes of the meeting with the “Amis de la terre”).

− the possibility to dedicate a few minutes to the EU scheme during the “ConsoMagazine TV programme” weekly broadcasted on France 2 and France 3.The amplification process will be all the more important as seventeenassociations are alternatively involved all along the year (see minutes of the“Institut de la Consommation” and of the “Union Nationale des AssociationsFamiliales”).



The EU eco-label could also be mentioned and dealt with through TVprogrammes such as Capital or newspapers such as Les Echos.

• push communication strategy:

− either to organise in the stores common promotion actions with retailers (toinform consumers during their purchasing process),

− or to communicate on the promotion actions organised by retailers (inorder to support them and increase their credibility).

This is certainly one of the most efficient means to develop the EU scheme, asshown by the promotion action performed by a retailer in the UK about the Downto Earth eco-labelled detergent.

For instance, in the ‘trainers training’ project presented above, it is planned thattrainees have a direct contact with consumers on occasions such as events instores...

The involvement of the NGOs requires an initial investment from the EuropeanCommission and the French competent body to give them the appropriateinformation (see chapter 8 - several of the consumers and environmentalassociations that we have contacted have expressed the need and the interest toobtain additional information).

PUBLIC PROCUREMENT

The Green Public Procurement project in France aims at boosting demand of eco-products among French Ministers, local authorities and ‘institutions’ (regions,departments, hospitals, schools/universities…), of course without limiting thepurchase to labelled products which would be very restrictive today (see minutes ofthe discussion with Mr Leblond, from the Environment Ministry). Let us indicate thatthis may create a snow ball effect on chains such as hotels, restaurants… (it isalready the case with the Accor group which asked AFNOR for information regardingthe eco-label).

A catalogue of eco-products is going to be launched in France in 1999, whichconstitutes an ideal occasion for the EC and the French competent body to ask foreco-labelled products to be included.

7.1.3 SMES INTERESTED

In order to make their investment profitable, DALLE HYGIÈNE, CHIMIOTECHNIC,LUCCHESE... are ready to sell eco-labelled products through other retailers inFrance and abroad than those they are used to working with today.

In France, LUCCHESE seems to have been recently heavily investing in productionsites. Its objective would be to sell at least to retailers for their private label, possiblyits EU eco-labelled tissue papers. This company is ready to export to Spain (ALCAMPO is a potential client as it is looking for a supplier).

DALLE HYGIENE (supplier of EU eco-labelled tissue papers for MONOPRIX andINTERMARCHE) is presently trying to convince other retailers to buy its EU eco-labelled tissue paper. They are ready to export to Spain.

TELA AG is trying to penetrate the French tissue paper market. French retailers



seem to seek low prices and a low content of recycled paper.



CHIMIOTECHNIC, presently supplying RECKITT & COLMANN with the EU eco-labelled detergent “ Maison verte ”, also seems to be trying to sell its EU eco-labelleddetergent to retailers for their private labels. CHIMIOTECHNIC supplies AUCHAN,CARREFOUR, LECLERC, PROMODES, ...

PRO BLANC which is producing detergents for YPLON (its parent company) will onlygo for the EU eco-label if YPLON makes this decision. If most retailers put pressureon YPLON to apply for the EU eco-label, they will eventually have to go for it,although they seem reluctant to apply for it today. PRO BLANC supplies AUCHAN,CASINO, INTERMARCHE, LEADER PRICE, LECLERC, PROMODES, ...

VANDEPUTTE sells its liquid detergent to AUCHAN, CARREFOUR, LECLERC,MONOPRIX, ... If retailers ask them to apply for the EU eco-label, they will. Still, theywill not apply for it proactively.

As a conclusion, manufacturers (including SMEs) should be informed of retailerswish to differentiate their private labels by obtaining the EU eco-label for theirproducts. In the same time, for a SME, obtaining the EU eco-label would boost itscredibility.

7.1.4 CONCLUSION

The strategic positioning of the different French actors (mainly the large-scaleretailers but also the NGOs, government, SMEs) is a good opportunity for thedevelopment of the EU scheme in France by using retailers as a driving force.



7.2. SPAIN

7.2.1 THE REACTIVE ATTITUDE OF THE RETAIL SECTOR

The following aspects of the Spanish retail sector could interfere negatively with thedevelopment of the eco-label:

• the distribution sector is more fragmented in Spain than in France with, forinstance, 34% of the sales made in local shops against only 7% in France; as aconsequence, the negotiating power of retailers with manufacturers is lower thanin France.

• some product groups may encounter a critical mass problem: although theproducts with high sales volume benefit from purchasing procedures centralisedat French or even at European level, the other products with a lower salesvolume (e.g. corresponding to local needs) imply negotiating with local suppliersfor which getting a positive return on investment is more difficult.

• the market share of private labels is one of the lowest in Europe (about 10% ofthe sales, as against 21% in France and 44% in the UK).

• the awareness concerning environment is low and concerning the EU eco-labeleven lower31.

However let us remind that the French retailers are the leaders of the large-scalefood distribution in Spain with Pryca (Carrefour), Continente (Promodès) and AlCampo (Auchan). Taking into account the discussions that we had with retailers inSpain, one can expect a snow ball effect in Spain from the decisions made inFrance by these major retailers. For instance, just like in France and in all the countries where Auchan is located,most of the private labels of Al Campo will be replaced over the next months by onesingle brand too (same brandname as in France). Thanks to its high negotiatingpower at the international level (with an international purchasing group), Auchan willbe able to distribute eco-labelled products in Spain that are also distributed inFrance. In addition, for some products, Al Campo is selecting himself the providers,without going through this international purchasing group and may be interested inincluding the eco-label as a supplier selection criteria. As far as El Corte Inglès is concerned, they will probably ask for eco-labelledproducts as soon as competitors do.

31 However, the Spanish eco-label “AENOR Medio Ambiente” has been obtained by quite a few

industrialists (example of carriers bags within Al CAMPO) whereas only two companies hold the EUeco-label for their paintings. “Cataluña” has also set up a local eco-label for its region. This“catalán” label can be hold in parallel with the national label “AENOR Medio Ambiente” and the EUeco-label.



7.2.2 THE PUSHING ROLE OF NGOS TOWARDS RETAILERS

The Spanish NGOs seem to be well informed about the national eco-label AENORMedio Ambiente and about the European one. But for instance the consumerassociations reflect the general concerns in Spain that environment is not to beranked among priorities. However, they are ready to continue with their information actions (information ofconsumers and administrations via congress, workshops... - see minutes of “InstitutoNacional del Consumo”).

In addition, it could be useful to mobilise them in a new role: to discuss withretailers in order to lead them:• to take care of the eco-label,• and to ask their mother company to select eco-labelled products.

The EC and the Spanish competent body would then have to help these NGOsplaying this new role.

7.2.3 THE DIFFICULT POSITION OF SMES

Two constraints have been identified which may limit the role that SMEs could play inthe development of the EU scheme in Spain:• for SMEs, selling to supermarkets / hypermarkets in Spain might not be a

business as profitable (at least in terms of volumes) as in France32 since theSpanish large-scale retailing industry is less developed than in France. Cornershops are still much more developed in Spain than in France. Hence, at least forsome product lines, the market may be insufficient (critical mass) to justify theinvestment necessary to comply with the eco-labelling criteria, unless thisinvestment is not too high,

• for some specific groups such as tissue papers for example, retailers havedifficulties in finding companies (that anyhow will be SMEs) that produce locally.In addition, these SMEs often have difficulties in meeting existing environmentallegislation/ standards. Ask these SMEs to meet the EU eco-label criteria soundsdifficult.

However, sole of the SMEs that we have interviewed have indicated that they couldproduce labelled products for the Spanish market (Dalle Hygiène, Lucchese).

7.2.4 CONCLUSION

In the Spanish context where the environmental awareness is rather low, one canhowever expect the development of the EU label thanks to a snow ball effectinitialised by French retailers implanted in Spain and with a significant roleplayed by foreign suppliers.

Whereas in France the NGOs can usefully amplify the actions of the retailers, inSpain they can play a pushing role towards retailers. 32 For instance, in the very near future, RECKITT & COLMANN is going to stop selling its powder

detergent “ Casa Verde ” (equivalent of the EU eco-labelled British “ Down to Earth ” and French“ Maison Verte ”) since the volume of sales is too limited.



7.3. THE UK

7.3.1 THE UNFAVOURABLE CONTEXT OF THE LARGE-SCALE RETAIL SECTOR AND

OF THE INDUSTRY

GENERAL CONTEXT

The interviews that we have performed in the UK allow us to point out severalcharacteristics of the distribution which are not in favour of the development of theEU scheme in that country:

• integration of the retailers in the industrial sector:

− an historical high level of loyalty from retailers towards existing suppliers(which is opposed to the French situation): British retailers are not used toeasily break off relationship with their suppliers,

− the supply chain is very integrated with industrialists selling a large share oftheir production to a single retailer. As a result, it is rather difficult for a newsupplier (for instance proposing a labelled product) to break-in.

• the market share of the private labels is already very large (the highest inEurope with 44% of sales),

• most retailers (for years, Sainsbury, John Lewis, Waitrose, Marks &Spencer...and more recently Tesco, for instance) have already acquired anethical and quality positioning of their name and private labels image.

Therefore retailers’ image does not need the eco-label to differentiate theirproducts.

Some of the retailers that we met (e.g. Sainsbury) highlighted a major adverseeffect of using the eco-label: it could undermine the trust of the customerstowards a retailer.

As a matter of fact, the result of the eco-label selectivity principle (i.e. only aminority of products can be labelled) is not really compatible with both the highdevelopment of private labels and retailers’ ethical and quality image. The nameof the retailers bring enough image to obtain the customer trust. Hence,awarding the eco-label to some products would only confuse customers andmake them wonder why all products are not labelled.

• environment, as a short-term marketing argument, does not seem to be used byretailers. First, the British consumer is not very interested in environmentalmatters, according to John Lewis. Secondly, environmental concerns areconsidered as already included into a larger and long term ethical approachtowards consumers. This ‘integrative product policy’ (as called by Sainsbury) israther a ‘common progress process’ involving both retailers and suppliers (codesof good practices such as the Forest Safe Council, the Green Claim Code...,close relationships between retailers and suppliers... - see minutes of Sainsbury).

On the contrary, the use of an eco-label have certain similarities to adownstream control process with sanctions, largely incompatible with the loyaltyexisting between retailers and suppliers.



British retailers behaviour is radically different from the French one where theeco-label could easily be included into the suppliers selection procedure.

Eventually, the environmental aspect seems to be addressed by all parties(retailers, manufacturers and consumers) through a defensive approach. Firstenvironmental arguments do not seem to be good marketing argument as theyonly illustrate a preventive and realistic management which should notdifferentiate retailers. Secondly, as stated by the interviewee from Sainsbury, ‘theconsumer interest in those environmental aspects are mainly considered as aguilt gratification, i.e. any mention on a product that shows it is environmentally-friendly would mainly contribute to reduce his guilt but not increase the qualityimage of the product’.

However it would be excessive to generalise these features to the whole retail sectorin the UK. They refer to large-scale retailers which have an historical rigidorganisation (relationship with suppliers...). Smaller retailers sometimes have a moreflexible organisation and different competitive requirements. In a context where the market share of discounters is sharply increasing, andin order to differentiate themselves from large-scale retailers too, smaller retailersmay not choose to fight on prices but rather to increase the quality of theirproducts. For instance, ICELAND (market share: about 10% of refrigerators) showed a realinterest in the eco-label (see the chapter relative to Refrigerators below).

DETERGENTS

The position of the interviewed retailers is often negative regarding the eco-labellingcriteria for detergents:

• the criteria are considered to guarantee an insufficient level of cleaningperformance (many referred to the Down to Earth labelled detergent as anexample of not so good quality product; for instance, John Lewis considers thatJonelli private label product is of a better quality than the labelled detergent),

• the criteria are considered to not enough focus on the real environmental burdenwhich concern the end usage step. For instance, Sainsbury tends to think that itwould be more relevant to educate the consumers on the use of the product:reduction of detergent consumption at high temperatures, reduction of waterconsumption...

On the contrary, the code of good practices developed by the European detergentindustry and supported by the European Commission fits much more with the waythe UK distribution sector is organised (long term ethical policy, close and integratedrelationships with suppliers...). However, let us indicate that Iceland (see below) mentioned that it could beinterested in selling detergents (and thus eco-labelled detergents) through its privatelabel (what is not done today since Iceland is specialised in frozen food andrefrigerators / freezers).



TISSUE PAPERS

The Forest Safe Council initiative seems to directly compete with the eco-label. Itaims at sustaining the trust of consumers concerning wood made products of anykinds through the guarantee of good life cycle management practices. Once again, this kind of procedures fits much more with the way of thinking in theUK. To illustrate what has been written above, let us mention the Waitrose case. Thisretailer, which sells labelled kitchen rolls and toilet paper manufactured by FortJames under Waitrose private label, will carry on selling them in the future. However,if Fort James stops producing them (or at least stops holding the label), Waitrosedoes not intend to change of supplier.

REFRIGERATORS

The refrigerators case may be the most open one out of the three, at least on ashort term period. As a matter of fact, some retailers (not only Iceland but also the two leaders forappliances: Currys and Comet) have developed private labels:

• more than in France for instance,

• less than the food retailer sector in the UK where private labels market share isvery high, too high to make the eco-label a differentiating factor worth of interest.

The Iceland case constitutes certainly the short term opportunity for thedevelopment of the EU scheme:

• one of UK’s top 3 domestic refrigerator / freezer retailer (around 10% of marketshare - around 250 000 appliances sold by ICELAND per year - 6.5 millioncustomers per week33),

• the first UK retailer to launch soon a full range of hydrocarbon (R600) fridgesand freezers called the ‘Kyoto’ range, sold at ‘prices comparable to standardappliances and significantly cheaper than other eco-friendly appliances’ (‘this is apractical answer to all those doommongers who claim that saving theenvironment is only for the well-off’),

• a major press campaign will start on this range in February 1999. Iceland is ready to ask its three manufacturers (Vestfrost34, Whirlpool and Arçelik) toapply for the eco-label.

33 Frozen food and appliances specialist. 34 Let us remind that Vestfrost is selling labelled refrigerators in Nordic countries.



7.3.2 THE NEUTRAL POSITION OF THE NGOS AND THE POSITIVE ROLE OF PUBLIC

PROCUREMENT

NGOS

The NGOs we have interviewed (Consumer’s association, the biggest one and threeenvironmental associations: Friends of the Earth, Greenpeace, Green Alliance) donot intend to be proactive in the development of the EU eco-label, for severalreasons:

• environmental issues are not high on consumers associations programmesagenda; they prefer focusing on what directly concerns the use of the productswhich better corresponds to the consumers expectations (fitness for use,performance, practicability...),

• some of them do not want to be involved in the promotion of something exteriorto them without any control; for instance, the Consumer’s Association issufficiently powerful in front of the industry (as compared with Frenchassociations for example) so they want to remain totally independent,

• the environmental organisations do not always agree with the eco-labellingcriteria defined by the EC.

PUBLIC PROCUREMENT / GREEN PURCHASING

Let us mention two interesting initiatives:

• public procurement: the DETR (Department Environment Transport Region) haspublished a booklet helping suppliers to better understand the purchasing policyof the DETR.

It is worth noting that the British administration has decided to enforce its greenpurchasing policy not only by buying goods which already hold the labelbut also by using the established criteria as part of their technicalspecifications (this may be a soothing answer to some of interviewee’sconcerns, in particular in France, who stressed the risk of being accused ofunfair competition),

• green purchasing: the Manchester School of Economics has developed anEnvironment Chain Forum which aims at integrating environment in public andprivate sector purchasing. This Forum involves 130 companies / entities (bothsuppliers and buyers). Among these 130 entities, 1/3 are public companies, 1/3are large private companies and 1/3 are environment associations, non profitcompanies, the UK labelling Board… Over the last 3 years, through thisEnvironment Chain Forum, meetings took place three times a year. Theobjective is an exchange of views / ideas.



7.3.3 CONCLUSION

It seems obvious that the codes of good practices match the way the large-scalesector is organised with its suppliers. However, the competent body and the ECshould follow with great care the Iceland “Kyoto” refrigerators launch. It may well bea great opportunity for a successful breakthrough of the eco-label in that productgroup.

However, there may well be other opportunities for the development of the EU eco-label among smaller retailers willing to differentiate their products from those of thelarge retailers and other hard discounters.

This is the way that needs to be further analysed by the competent body and the ECin the near future.

7.4. INVOLVEMENT OF THE EU ORGANISATIONS

An EU organisation gathers several entities: three levels can generally bedistinguished depending on the geographical scope, as described in the diagrambelow. The following European associations have been interviewed:

• BEUC and COFACE: consumer associations organisations,

• EEB: European Environment Bureau,

• EUROCOMMERCE: European National distribution federations.

All of them (except EUROCOMMERCE for which promoting the eco-label does notseem to be not part of its activity) are ready to dispatch information to theirnational members which will then inform their local offices and representatives.Generally, national associations communication policy does not depend on theEuropean organisation.

In addition to magazines and information notes that the EU organisations send tonational associations where information about the eco-label can be included (eco-labelled products and shops where they are sold...), the EEB possesses a pressnetwork (journalists all around Europe) that it can inform. For instance, pressreleases could be sent to journalists.

Europeanorganisation

Nationalassociation

Nationalassociation

Nationalassociation

Nationalassociation

Localoffice

Localoffice

Localoffice

Localoffice

Localoffice


8.

CONCRETE ACTIONS TO BE PERFORMED IN THE SHORT TERM

8. CONCRETE ACTIONS TO BE PERFORMED IN THE SHORT TERM


8. CONCRETE ACTIONS TO BE PERFORMED IN THESHORT TERM

Following the contacts which have been taken during our study, the EuropeanCommission and the competent bodies will have to implement various kinds ofactions in the short term. The purpose is to bring to a successful conclusion severalof the discussions which have been opened. The priority actions (to be carried out in January / February 1999) are presentedhereafter. The respective role of the EC and the competent bodies should be defined in orderto be are complementary (some of the tasks can be delegated to consultants).

8.1. SHORT TERM ACTIONS

8.1.1 FRANCE

AUCHAN Met on 11/98 : Mr François CLOT - Quality Department Tel. : + 33 (0)3 20 67 52 94 Fax : + 33 (0)3 20 67 52 90 Should be met in January by members of the EC to further enhance the credibility ofthe EU eco-label. Are probably going to ask for the EU eco-label for as manyproducts as possible, but the EC should also push them to go for it. Should be informed that LUCCHESE is ready to produce for them (DALLE HYGIENEis already one of their suppliers) Animations should be carried out within Auchan to inform people on eco-labelledproducts (not only on the EU eco-label) as soon as AUCHAN has enough productson shelves. Document to refer to:

• minute of the meeting with AUCHAN,

• letter sent to us by LUCCHESE.



BOULANGER

The Marketing Director should be contacted at least by phone to be informed on thistopic of the EU eco-label. Marketing Director : Mr Benoit LEGENDRE Tel : + 33 (0)3 20 41 80 30 Fax + 33 (0)3 20 41 80 37 to be contacted on behalf of Mr Patrick DUPRE that we met face to face. The certification of the energy class is a plus compared with the energy label whichis a self declaration. Document to refer to: minutes of the meeting with Mr DUPRE.

CARREFOUR

Met on the 26/10/98: Mr FERRER - Quality Control Manager - Hardlines, Leisuregoods and Domestic appliances

To meet in January: Mrs Sophie PERRIER - Quality Control Manager - Food goods -Tel + 33 (0)1 60 91 37 37

Following our meeting, Mr FERRER sent to Mrs PERRIER a paper summarising ourdiscussion and his interest in the eco-label and asking her to meet us. Due to anheavy time schedule, Mrs PERRIER preferred to organise the meeting in thebeginning of 1999.

Documents to refer to:

• minutes of the meeting with Mr FERRER

• letter sent to Mrs PERRIER. CORA We received a phone call from Mr WEBER (RECKITT & COLMANN, Manager incharge of “ Maison verte ” - tel. : + 33 (0)1 69 93 17 00) informing us that CORA wasthinking of asking the EU eco-label for several of the products it sells, includingtissue papers and detergents. Mr ABOU from CORA (Tel: + 33 (0)3 20 96 56 19) should be contacted on this point. No document enclosed. PROMODES This major retailer should be contacted.



INC (Institut National de la Consommation) There is the possibility to obtain some minutes of information on the EU eco-label ontwo French TV channels during the TV programme called Conso Magazine. Mrs SITBON from UNAF should be contacted (consumer association. Tel: + 33 (0)149 95 36 17). This consumer association, just as others, is allowed to inform onFrench TV on whichever topic it has selected. Duration is 5 mns twice on France 2and 2 mns twice on France 3. UNAF consider the EU eco-label as a possible topicfor next April. Mrs REISSIER from INC also proposed to make a slightly longer TV intervention onthe EU eco-label (4 mns). The EC should contact her to further discuss thispossibility (Tel: + 33 (0)1 45 66 20 35, fax: + 33 (0)1 45 66 21 50. Address: INC, 80rue Lecourbe. 75732 Paris cedex 15). Documents to refer to:

• minutes of the interview of Mrs SITBON,

• minutes of the interview of Mrs REISSIER. “ 60 millions de consommateurs ” Should be contacted at the following fax number to release information on the EUeco-label in their magazine. Fax : + 33 (0)1 45 66 20 98 Que Choisir? Should be contacted to release information on the EU eco-label in their magazine. Contacts: Mrs LESPINASSE (she is responsible for waste issues but could indicatethe appropriate person) Tel: + 33 (0)1 43 48 55 48 Fax: + 33 (0)1 43 48 44 35 LECLERC

It has not been possible to find a date for a meeting with both Mr Brochen, in chargeof benchmarking, and the person responsible for private labels.

However, Mr Brochen seemed to be interested to discuss about the eco-label.

To be contacted: Mr Brochen Tel: + 33 (0)1 46 62 82 84



INTERMARCHÉ

Met on the 26/10/98: Monsieur GODARD - Purchaser - Paper Products Christine RICHEZ - Marketing Department - Paper Products Elise TRAN - Quality Department - Paper Products

To be contacted: Mrs Evelyne SAUSSET - Marketing Manager of Intermarché - Tel +33 (0)1 69 64 17 50 (via Christine RICHEZ)

When we came back to Mrs RICHEZ to organise a meeting with Mrs SAUSSET, wewere informed that they wanted to be convinced of the positive impact of the eco-label on the sells before a new meeting. We then sent them a fax with theseinformation as well as the description of the attitudes of the other big retailers(AUCHAN, CARREFOUR, ... are interested in the eco-label first as a differentiatingelement for their private labels in comparison with the national brands. The increaseof the sells will naturally follow local promotion campaigns).

Documents to refer to:

• minutes of the meeting with the three persons in charge of paper products,

• fax sent to these persons. MONOPRIX

Met on 10/98: Mr BEYER - Quality and Environment Manager Tel: + 33 (0)1 40 75 12 68 Fax : + 33 (0)1 40 75 12 92

Wishes to be informed on all new products that can apply for the EU eco-label.

Document to refer to: minutes of the meeting with Mr BEYER. CAMIF

Mr Narzul, responsible for electrical appliances, has been contacted in 10/98.Seemed to not be well informed of the EU scheme. It would be useful to contact him again because this purchasing group has a greatpower in France. To be contacted: Mr Narzul Tel: + 33 (0)5 49 34 50 50 CARTIERA LUCCHESE SPA

Today, manufactured labelled products with their private label only.

Interested into manufacturing labelled products for private labels and to export inSpain (not in the UK due to too high export costs).

To facilitate contacts between them and retailers.

Document to refer to: fax received on the 1/12/98 from Mr Filippelli (Export Service).



8.1.2 SPAIN

AL CAMPO Met on 11/98: Mr Javier FERNANDEZ SIMAL Y FERNANDEZ (private label Manager), Mr Javier de GOMEZ SELLES y GARATE (Quality Manager). Tel: + 34 91 730 66 66 Fax: + 34 91 738 91 94 Should be given the contacts of DALLE HYGIENE and CARTIERA LUCCHESEsince they are presently looking for a supplier concerning their private label for tissuepapers. Document to refer to:

• minutes of the meeting with AL CAMPO,

• minutes of the interview of DALLE HYGIENE,

• letter sent to us by LUCCHESE. EL CORTE INGLES Met on 11/98: Mr Antonio GUTIERREZ PEREZ (Deputy general Manager), Mr Rafael BARRIO CALLE (Deputy General Manager), Mr Francisco NUNEZ GAVOLA (Organisation Department). Tel: + 34 91 309 09 88 / + 34 91 401 47 00 Tel: + 34 91 402 81 12 / + 34 91 401 92 00 Fax : 00 34 91 401 31 66 / 00 34 91 402 58 21 Should be provided with the list of suppliers holding the EU eco-label (VESTFROST,CARTIERA LUCCHESE, DALLE HYGIENE, not Fort James which would not be ableto export its production to Spain). Document to refer to:

• minutes of the meeting with EL CORTE INGLES,

• minutes of the interview of DALLE HYGIENE,

• letter sent to us by LUCCHESE.

NGOs

To further discuss with them in order to mobilise them in a new role: to discuss withretailers in order to lead them:

• to take care of the eco-label,

• and to ask their mother company to select eco-labelled products.



8.1.3 UNITED KINGDOM

ICELAND Met in 12/98: Mr Mark BATES - General Manager - Appliance Division Tel: + 44 181 951 1313 Fax: + 44 181 952 35 77 Is to be contacted since will sale in the very near future 100% of HCs refrigerators.Moreover, will launch in February 1999 a major press campaign to support its‘KYOTO’ retailer’s new brand. Would be ready to ask the EU eco-label to its suppliers (VESTFROST -holder of theEU eco-label-, WHIRLPOOL, ARÇELIK, all selling exclusively HCs refrigerators toIceland). This action should be considered quite seriously by the EC as several millioncustomers go to these shops every week (to buy frozen food in particular). The latterwould be a very good promotion for the EU eco-label. Document to refer to: minutes of the meeting with ICELAND. CURRYS To be contacted, bigger retailer than ICELAND. COMET To be contacted, bigger retailer than ICELAND. CO-OP

Interesting in meeting us, but in January.

Contact the UKLB to organise the meeting. CONSUMER’S ASSOCIATION The biggest UK consumer association. Mr Glen BOVNANS met on 12/98. Tel: + 44 171 830 7726 Fax: + 44 171 830 7830 Should be informed more deeply on the EU eco-label (for instance, used to think thatthe EU eco-label was a self declaration). Document to refer to: minutes of the meeting with Mr BOVNANS.



MANCHESTER SCHOOL OF ECONOMICS (green purchasing) To further discuss with them, in particular:

• to exploit the database of 130 purchasers that they have constituted, for exampleidentifying with them which key contacts should be taken in priority.

• to participate in the next forum that they organise (if there is still one to beorganised as the budget for the on-going project seems to be finished). If nomore event is forecast, the EC should consider financing new forums (cost ofaround £ 10,000 per forum) to organise a one day meeting with around 100participants.

To be contacted : Mrs Barbara MORTON Tel : + 44 161 200 3403 Fax : + 44 161 200 3505 Document to refer to: minutes of the discussion with Mrs MORTON.



8.1.4 MISCELLANEOUS

PARTICIPATION TO PROMOTION CAMPAIGN IN STORES Retailers will certainly very appreciate that the EC and the competent bodies offer tothem the help of an appropriately trained person who could go from one store toanother to inform consumers on the eco-label (distribution of the leaflet listing thelabelled products and the stores where they are sold...). This EC representativecould organise a stand which would improve the credibility of the own retailer’scommunication campaign on its labelled products. Materials to be placed in the stores could also be provided to the retailers, such asshow signs placed on the floor or on the shelves... EUROPEAN ORGANISATIONS From a general point of view, an information campaign should be organisedtowards the European organisations (BEUC, EEB, COFACE,EUROCOMMERCE...). The interviews performed during the study have highlightedtheir need for information about the EU scheme. Two documents could be sent to them:

• the triptych leaflet recently prepared by the EC,

• a short paper listing the labelled products and the stores where they are sold. Itshould also focus on the following main features of the scheme:

− an objective and scientific approach to identify environmentally friendlyproducts,

− an independent certification procedure (and not a self claim),

− the guarantee that the labelled products are good quality products. This paper should then be included in the brochures and leaflets of the variousorganisations and provided by them to journalists (e.g. the EEB network - seebelow). BEUC Discussion on 11/98 with Barbara MORETTI Tel: + 32 2 743 15 90 The BEUC should be used as a relay to send information on the EU eco-label to its26 consumer associations present in 15 countries. Document to refer to: minutes of the discussion with Mrs MORETTI.



COFACE Discussion on 11/98 with Mr Noël MOLISSE Tel: + 32 2 511 41 79 Should be used as a relay towards its 70 members. Its magazine (2000 copies)should also be used as a relay. Document to refer to: minutes of the discussion with Mr MOLISSE. EUROCOMMERCE Discussion with Mr FRANKE on 11/98. Key information on the EU eco-label should be sent to the 29 key members (retailassociations all around Europe) of EUROCOMMERCE. Document to refer to:

• this list of retail associations (appendix 9),

• minutes of the discussion with Mr FRANKE. EUROPEAN ENVIRONMENT BUREAU (EEB) Discussion with Mrs TASCHNER in 11/98. Tel: + 32 2 289 10 90

The EC should use this entity as a relay to pass key information through two means :• the “ metamorphosis ” bulletin which is sent to 126 members of EEB 3 or 4 times

per year,• the network of journalists that EEB possesses as a data base to send press

releases all around Europe.

Document to refer to: minutes of the discussion with Mrs TASCHNER. GREENPEACE Sarah BURTON should be contacted (Tel: + 44 171 865 81 00) to check to whichextent GREENPEACE is ready to support the EU eco-label.



PARTICIPATION TO FORUM, WORKSHOPS...

• Environment Chain Forum (see the Manchester School of Economic),

• Congress on Environment, Council of consumers (see INC Spain),

• the Day of Environment in the different European countries (Spring in France, 1stof July in Germany...),

• International Hardware Fair in Cologne (the most important show in thisindustry),

• ... REFRIGERATORS

To be contacted: Whirlpool, Vestfrost, Arçelik which produce HC’s refrigerators forprivate labels.

Same thing for BOSCH in Spain. Contact : José Luis MESQUIRI NAVARRA (Tel: +34 948 42 54 21). SWEDISH NATURE PROTECTION SOCIETY

This entity has developed its own label. Mrs Eva ALUSTROM should be contactedon the advice of Mrs TASCHNER from EEB. Tel: + 46 31 10 55 85 Has developed interesting ideas on the promotion of a private label among retailers. TO SET UP A FOLLOW UP TOOL The EC will have interest to set up a tool to follow up the evolution of:

• the market share of the labelled products,

• the list of manufacturers holding the eco-label. This tool will then help to:

• define and adjust actions in the future,

• identify new potential suppliers for retailers,

• select new product groups.



8.2. THE RESPECTIVE ROLE OF THE EUROPEAN COMMISSION AND

THE COMPETENT BODIES

The respective role of the EC and the competent bodies could be as follows. For the EC:

• Contact some key retailers (AUCHAN, CARREFOUR, ICELAND...) to enhancethe credibility of the EU eco-label, to prove the EC involvement and to proposethem some help (one person informing consumers in stores, materials...).

• Define the strategic orientations:

− which product groups (to be selected on a multi-criteria basis related to thestructure of the industrial and distribution market at the European and nationallevels: number of actors, sales volume, market share of private labels...),

− which actors should be contacted and how to argue,

− elaboration of the content of a message to present the eco-label andadaptation to each product groups (it is necessary to define the image of thelabel before trying to increase its notoriety),

− definition of the means.

• Create a common dynamics amongst competent bodies and to facilitate theexchange of experience between them.

• Communicate towards European organisations (and perhaps major nationalorganisations such as INC in France, Consumers’ Association in the UK...).

• Follow up the evolution of the market share of the labelled products.

• Set up a database of manufacturers which are or may become holder of the eco-label, with the help of the competent bodies which could carry out national-basedmarket analyses.

For the competent bodies:

• Contact as systematically as possible large-scale retailers and also mediumretailers (particularly in the UK).

• Perform push communication, i.e. during the consumers purchasing procedure:to accompany retailers when they organise a promotion campaign (stand instores, materials...). It will be necessary to fit into the merchandising strategydeveloped by the manufacturers for the labelled products.

• Inform national associations (and possibly some major local associations) and todistribute the materials prepared by the EC and by the competent bodies.

Some of these tasks could be totally or partially sub-contracted to consultants (aperson informing consumers in stores, the contact with retailers and associations...).


APPENDIX 1

PERSONS INTERVIEWEDFOR THE NORDIC SWAN AND THE BLUE ANGEL


PERSONS INTERVIEWED FOR THE NORDIC SWAN

SIS Eco-labelling (Sweden)

Name Position Telephone Comments

Mr Ragnar Unge Managing Director +4686103047 Initiated theMarketing Activity ofthe Nordic Swan inSweden

Mrs Kerstin Sahlén --- +4686103045

SFS Eco-labelling (Finland)

Name Position Telephone

Mr Matti Järvi --- +358.9.149.93387

Mrs Sinikka --- +358.9.149.93390


PERSONS INTERVIEWED FOR THE BLUE ANGEL

Name Position Telephone

Mr Henning ScholtzRAL (Certifying Institute for the BlueAngel)

--- +493089033699

Mr Neitzel Umwelt Bundes Amt(UBA) (Federal Environmental Agency)

In charge of eco-labels

+493089033703

Mrs Susanne Wemer(UBA)

Verwaltungsangestellte

+493089033705

Mrs Petra Griner(UBA)

--- +4922441160523

Mr FarsinVerbraucher-Zentrale Nordrhein-Westfalen(Consumer Association)

--- +492113809163

Mrs Petra KristandtVerbraucher-Zentrale Niedersachsen e.V.(Consumer Association)

--- +495119119638


APPENDIX 2

THE NORDIC SWAN LICENSEES FOR DETERGENTS


THE NORDIC SWAN LICENSEES FOR DETERGENTS

Licensees Country wherelabelled products are

sold

Approximatenumber of labelled

products(in 1998)

Henkel Finland OY FI 12

Lever AB S 7

Lilleborg AS N 5

Golden Neo-life Diamite International S, N 1

Procter&Gamble Scandinavia S 2

Cederroths S 2

SC Johnson Professional S, N 1

DAGAB UNIL S 2

Orion Corp. Noiro FI 1

ICA Handlarnas AB S 4

Nordisk Parfumerivarefabrik A/S S 5

Frigg hf IS 1


APPENDIX 3

THE NORDIC SWAN LICENSEES FOR TISSUEPAPERS


THE NORDIC SWAN LICENSEES FOR TISSUE PAPERS

Licensees Country where labelledproducts are sold

Approximate numberof labelled products

(in 1998)

Fort James Suomi Oy FI, S, N, DK 8

Metsä-Tissue AB S, N, IS, DK 37

SCA Hygiene Paper AB S, N, FI, IS 75

ICA Handlarnas AB S 4

KDAB S 2

Hemköpskedjan AB S 1


APPENDIX 4

THE BLUE ANGEL LICENSEES FOR TISSUE PAPERS


THE BLUE ANGEL LICENSEES FOR TISSUE PAPERS

Licensees Approximate numberof labelled products

(in 1998)

Aldi Einkauf GmbH&Co 5

Alsco Berufskleidungs-Service GmbH 1

Apura GmbH 24

Bartling Werke 3

Papier Bunde GmbH 1

Danke Hygienepapier-Vertriebs GmbH 5

Joachim Detjens Inh. Hatmut Wunsch 1

Drospa Holding 2

Edeka Zentrale 2

Egepack Zentrale 1

Formazell GmbH&Co. KG 2

Fripa Papierfabrik Albert Friedrich 8

Hakle-Werke Hans Klenk GmbH&Co 5

Papierwerke Halstrick GmbH 3

Hamburger Waren-Kontor GmbH 2

Hans Hasbargen Werbeartikel 1

Van Houtum Papier 6

Igefa 1

Ja-Lebensmittel Vetriebs GmbH 2

Kimberly-Clark GmbH 44

Papierfabrik Lahnstein GmbH 2

Larose Hygiene-Service GmbH 2

Lidl Stiftung & Co KG 1

Lübcke Papier 7

Dr Mann Pharma 1

Moosmann&Co. 1

NETTO Supermarkt 1


Licensees (ctd) Approximatenumber of labelled

products(in 1998)

Pantos Warenhandels GmbH 2

Pap Star Vertriebsgesellschaft mbH&Co. KG 3

Penny-Markt GmbH 2

Rheinische Papierzentrale 2

Saekko A/S 2

SCA Hygiene Austria GmbH 2

Anton Schlecker 3

Lavold Schoonmaak BV 2

Strepp GmbH&Co. KG 5

Warner Wellcome Consumer Health ProductsGmbH

1

Die Weissen 1

Wepa Papierfabrik P. Krengel GmbH&Co. KG 16

Werra Papier Wernshausen GmbH 2

Wertkauf Verwaltungsge-sellschaft mbH 3

Paul Wöhrle GmbH&Co 1

Würth GmbH&Co. KG 5


APPENDIX 5

THE ECO-LABELLING CRITERIA FOR THE 3 LABELSAND THE 3 PRODUCT GROUPS

7 $ < / 2 5 � 1 ( / 6 2 1 � 6 2 ) 5 ( 6 �&RQVXOWLQJ� BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB��DEVELOPMENT OF A STRATEGY FOR THE PROMOTION OF THE EUROPEAN ECO-LABEL AWARD SCHEME (DECEMBER 1998)


APPENDIX 6

SOME ELEMENTS REGARDING THE STRUCTURE OFTHE RETAIL SECTOR IN FRANCE, SPAIN AND THE

UK


FRANCE


APPENDIX 7

LIST OF ORGANISATIONS INTERVIEWEDFOR THE EU ECO-LABEL (FRANCE, SPAIN AND THE

UK / DETERGENTS, TISSUE PAPERS ANDREFRIGERATORS)


PERSONS INTERVIEWED DURING PHASE 2

FRANCE

RETAILERS

AUCHANBOULANGERCARREFOURINTERMARCHELes 3 SuissesMONOPRIX PRISUNIC

MANUFACTURERS

CHIMIOTECHNIC SAPRO BLANCRECKITT & COLMANNVANDEPUTTE SACONFORAMAELECTROLUXDALLE HYGIENETELA AG

PROFESSIONAL ASSOCIATIONS

FIEE (Fédération des Industries Electriques et Electroniques)GIFAM (Appareils Ménagers)

CONSUMERS AND ENVIRONMENTAL ASSOCIATIONS

AMIS DE LA TERREASSOCIATION NATIONALE DES CONSOMMATEURSCLCV (Association de Défense des Consommateurs)NATURE ET PROGRESUNAF (Union Nationale des Associations Familiales)INC (Institut National de la Consommation)

PUBLIC PROCUREMENT

Environment Ministry


SPAINRETAILERS

AL CAMPOEL CORTE INGLESPRYCA

MANUFACTURERS

RECKITT & COLMANN


INC (INSTITUTO NACIONAL DEL CONSUMO)

THE UKRETAILERS

ICELANDJOHN LEWIS PARTNERSHIPSAINSBURY PLCWAITROSE

MANUFACTURERS

FORST STERLING


CONSUMER ASSOCIATIONFRIENDS OF THE EARTHGREEN ALLIANCEGREENPEACEUK LABELLING BOARD

PUBLIC PROCUREMENT

MANCHESTER SCHOOL OF MANAGEMENT

OTHER PERSONS INTERROGATEDMinistry of Environment France Mr Ventère

Tel: + 33 (0)1 42 19 15 57AFNOR France Mrs Proia

Tel: + 33 (0)1 42 91 59 26UKLB the UK Mr Jones

Tel: + 44 171 820 11 99AENOR Spain Mr Elejabeitia

Tel: +34 91 432 60 00Generalitat de Cataluña Spain Mr Salvador Samitier i Marti

Tel: + 34 93 419 30 85Elf Atochem France Mr Lecouls

Tel: + 33 (0)4 72 39 66 75


APPENDIX 8

LIST OF COMPANIES MANUFACTURING FOR PRIVATELABELS


COMPANIES MANUFACTURING REFRIGERATORS FORPRIVATE LABELS (NON EXHUASTIVE LIST)

ARCELIK

CANDY

NORFROST

OCEAN

RAMBEKO

VESTFROST

WHIRLPOOL


APPENDIX 9

LIST OF SOME MAIN MEMBERS OFEUROCOMMERCE


LIST OF SOME MAIN MEMBERS OF EUROCOMMERCE


TRANSLATION ENGLISH / FRENCHOF SOME KEY WORDS


TRANSLATION ENGLISH / FRENCH

OF SOME KEY WORDS

Buying center or purchasing group Centrale d’achat

Cleaning products Produits d’entretien

Consumer goods Biens de consommation

Imperative or indicative purchasing group Centrale d’achat impérative ouindicative

Large-scale retailing or distribution Grande distribution

Private label Marque de distributeur

Low range Bas de gamme

Medium range Moyenne gamme

Top end of the market Haut de gamme

Range effect Effet de gamme

Retail or distribution sector Secteur de la distribution de détail

Sales outlets Points de vente

Shoping space Surface de vente

Shelf-space Linéaire