Patagonia | energy | green products | organic products

All that product development didn't come cheap, and the resulting fabrics aren't cheap either. Patagonia customers opening their newest catalogs to look for some ski underwear are experiencing sticker shock, as the Capilene-line prices are 10 to 15 percent higher than they were the year before.

Eventually, though, the premium won't be so high. Patagonia has gone through this process before, with organic cotton: After the company switched to 100 percent organic cotton in 1996, its fiber costs were two to three times those of conventional materials. "We wanted consumers to understand the magnitude of the decision [to go totally organic]," Dumain says. "As a for-profit business, we had to pass our costs along."

Buying Green with Less GreenDanny Seo, environmental-lifestyle columnist and author of the Simply Green book series, recommends these shopping strategies for going green on a budget. 1. Watch your supermarket's sale circular. Stock up on organic products like dry goods and frozen fruits and vegetables when they're on sale. 2. Buy store brands. Many national grocery chains now have their own organic products, which can be significantly cheaper than the name brands.

3. Create a co-op. Get together with friends and neighbors to buy green products in bulk, perhaps online. Cleaning products, compact fluorescent lightbulbs, and many other items can be had by the case for a lot less, and you can buy grass-fed beef by the side directly from the farmer.
4. Shop around. Try discount or low-end retailers for good-quality green products at lower prices.
5. Read labels. Sometimes green doesn't cost more. Method detergent, for instance, comes in a smaller bottle, but it's highly concentrated, so it costs less per load - and thus requires less packaging and less energy to ship.


What's the Payoff?
Refrigerators are the energy hogs of home appliances: The average refrigerator uses 1,383 kilowatt-hours of electricity per year. That's $125 annually, based on the national average cost of residential electricity. Buy a brand-new GE Energy Star fridge, which will save you about $100 annually, and the appliance will pay for itself in savings in less than eight years.

A Toyota Prius pays for itself even faster. When comparing it with a similarly equipped Honda Civic Sedan EX, the Prius has an up-front cost of about $2,700 more. But with a gas mileage of 60 mpg in the city versus the Honda's 30 mpg, the Prius costs $775 less per year for every 15,000 miles driven - which means the price difference is made up in about three and a half years.

The biggest no-brainers for a going-green payoff are compact fluorescent lightbulbs, which cost about $4 for a 100-watt equivalent. You can get a standard 100-watter for about 50 cents, but the compact fluorescents will save $4 in energy in one year and about $30 during their life span.



Patagonia took a hit to its profit margins in order to keep prices for its T-shirts and pants down-to-earth. Over time, the company became more efficient at working with the organic material and managed to get its margins back to normal while still keeping prices reasonable.

Organic, recycled, sustainably produced, energy efficient ­- these are words we're hearing often these days, now that green is, as they say, the new black. They're also buzzwords that lead people to expect higher prices.

But buyers are not necessarily thrilled at the price premium. In fact, sometimes the difference is regarded cynically. Of course it costs more, the doubter sniffs. It's trendy.

Patagonia's recycled-polyester saga is instructive, though, in that it reveals a few good reasons why it can be more expensive to buy an environmentally friendly product than one that is not. Many green companies are smaller than their conventional counterparts, so they lack the buying power and economies of scale that can bring the cost of materials down. Their components may just be more expensive, period - like sustainably grown, fair-trade coffee beans or the hybrid engine in a Toyota Prius. And the simple laws of economics help too. Once other apparel manufacturers start buying recycled-polyester fabrics and organic cotton, for instance, production will go up and prices will go down for everyone.

"Supply and demand," says Nicole Goldman, an interior designer in Cape Cod who's opening an all-green building-products store this month. "For years, solar-slash-photovoltaic was very expensive. The market was so small that only a few suppliers made it. Now it's matured as a product. We'll see the cost come down because demand is up, so more people are willing to produce it."

Companies selling everything from organic milk to recycled-glass countertops to furniture made of reclaimed wood each have their own "why it costs more" story to tell. Taylor Maid Farm's certified organic coffees and teas cost more in the raw, so they have to cost more on the shelf; the company buys tea from small organic farms at $1.95 a pound, whereas conventional tea is available from big suppliers at 35 cents a pound. Zwanette Design, a sustainable furniture company in San Francisco, pays $179 per four-by-eight-foot sheet of fast-to-regrow bamboo, while a sheet of maple costs only $120. Stonyfield Farm - whose president and CEO, Gary Hirshberg, has been a poster boy for the organic movement - explains in its publications that it's not just the higher per-hundredweight cost for unprocessed organic milk that makes its yogurts, cheeses, and other dairy products more expensive. It's transportation too. "We are able to pick up conventionally produced milk from neighboring farms, often just a few miles down the road from one another," reads the company brochure A Practical Guide to Understanding Organic. "Our organic dairy farmers may be as much as 50 miles from one another, so our organic-milk transportation costs are double that of the conventional." Earth Weave Carpet Mills, which makes environmentally friendly, pure-wool carpet, spent big bucks developing a non-urea-formaldehyde adhesive for its carpet backing, so its cost of doing business is higher than that of others in the carpet industry that are still using the readily available urea-formaldehyde adhesive.

"When I look at the companies in our network, they're charging a premium if ingredients or the cost of doing business is more," says Deborah Nelson, executive director of the Social Venture Network, a coalition of socially and environmentally conscious companies. "If they can do their business at a better price, that's a competitive advantage."

Nelson gives the example of New Leaf Paper, which makes a range of green paper products. "Today, given the way the industry is structured, it costs more to create postconsumer recycled paper than it does to use virgin wood," she says. "If you want to be part of the solution, and you don't want to be involved in the destruction of old-growth forests, you have to pay a premium for that."

Not every single manufacturer touting an environmentally sound product has similar grounds for explanation, however. Goldman cites one carpet maker that sells a "green" line of products that cost more than those in its conventional line but aren't much more sustainable. "They slapped the label on and charged more," she says. "It happens."

Then there's the old line item on a balance sheet called goodwill. Upscale brands are able to charge more for their products because of that ethereal, intangible price booster: prestige. Consumers who look for their bamboo sheets at Neiman Marcus shouldn't be surprised that they are more expensive there than the equally green bamboo sheets at JCPenney are. "Take soy candles, for instance," says Danny Seo, an environmental-lifestyle columnist and the author of the Simply Green book series. "There are some fancy-schmancy versions out there for $30, $40. But you can get one at Target for five bucks."

"You're seeing some green products trying to appeal to a totally different group of consumers to position themselves in the luxury market," says Steve French of the Natural Marketing Institute. "They're selling the notion of a full experience, with the fundamental idea that less is more - which is what environmental products should be [about] in the first place."

There are other, more quantifiable variations on the old “you get what you pay for” argument. The state of California created a task force to analyze the costs and benefits of building green, and it found that while green buildings did cost more up front — by an average of $4 per square foot — the long-term savings in energy, water, and waste, as well as the increased health and productivity of the workers inside those buildings, led to a 20-year benefit of about $50 to $68 per square foot. A superefficient washing machine or refrigerator will cost hundreds of dollars more than an inefficient one, but the eventual payback in energy savings is definite. A hybrid vehicle is thousands of dollars more than a nonhybrid, but with gas prices at record highs, it gets cheaper very quickly.

While a pair of recycled-polyester boxer shorts might not pay their buyer back, the production process for the filament used in those boxers is comparatively energy efficient, and the textile company pays less for the raw materials needed for recycled polyester than it would for the petroleum-based chemicals that go into virgin polyester, notes Patagonia’s Dumain. Meanwhile, rising oil prices are pushing the cost for those virgin materials up further. “At some point, there has to be a point of intersection, and recycled will end up costing less than virgin as recycling increases and volume increases and the feed stock grows,” she says. “That’s what needs to happen to take it out of the specialty realm. It’ll take years, but we have to start somewhere.”