Well To Do

Cause marketing is becoming a must-have for retailers and CPG companies alike.

Cause-related spending by marketers this year is projected to grow 3.1 percent, to $1.7 billion across all channels, according to the 2012 Sponsorship Report by IEG Consulting, a Chicago firm that helps brands and organizations find sponsorship partners.

Fiona O'Donnell, senior analyst in lifestyles for Chicago-based market research firm Mintel, says cause marketing is not only increasing, but also becoming a standard business practice for companies of all sizes. "When you have a larger companies latching onto cause-related marketing strategically, they're the leaders," O'Donnell says. "The smaller and mid-tier companies will have to follow."

These days, companies small and large are aligning themselves with causes. Thanks in part to social media, "there are so many causes getting attention now, compared with five to 10 years ago, that there's a good fit or angle for nearly any company — and a platform for getting feedback and taking the pulse of consumer," notes O'Donnell. "While there are still the big causes — like breast cancer research — there are emerging causes like anti-bullying that companies can address with their cause marketing."

Some businesses are using social media to connect with consumers and get their input into what causes to support. "For the majority, the more efficient way to use cause marketing is to choose a cause that aligns well with business goals," O'Donnell says. "A pink ribbon on olives doesn't make sense. However, a pink ribbon on yogurt does make sense. Women eat a lot of yogurt."

In its cause marketing efforts, Galaxy Nutritional Foods selects causes that complement its line of dairy- and lactose-free cheese alternatives. To help raise awareness of food allergies, Galaxy became involved with the Fairfax, Va.-based Food Allergy & Anaphylaxis Network (FAAN) about a year and a half ago. The North Kingstown, R.I.-based company has been sponsoring many FAAN awareness walks around the country, giving out free products and coupons.

"There's definitely a rise in the number of concerned parents and guardians," says Jamie Schapiro, director of marketing at Galaxy Nutritional Foods. "Food allergies are becoming more mainstream. When you sit in front of people and learn that their kids are allergic to eight or nine different things, it's very eye-opening."

With its first cause marketing initiative, Madhava Sweeteners wanted to do something to increase awareness of the plight of honeybees. Ten cents from every jar sold of its new organic honey is being donated to nonprofit organizations working to save bees and solve colony collapse disorder — the disappearance of worker bees. To kickstart the initiative, called "The Sweet Earth Project," the Longmont, Colo.-based company donated $40,000 in honor of its 40th anniversary.

"Sixty percent of the hives are failing," says Kelly Miano, Madhava's director of marketing. "There are theories on why that is happening. Bees pollinate one-third of our food here in the U.S., so you can imagine, with 60 percent of the hives failing, that's a big impact to our food supply."

Organics Unlimited, a San Diego-based produce distributor, created Giving Resources and Opportunities to Workers (GROW) a private nonprofit corporation that helps communities in Mexico and Ecuador where it sources its bananas. The company donates 60 cents from every box of bananas to GROW. Last month, Organics Unlimited introduced new in-store point-of-purchase materials that explain GROW's efforts, and the produce company has been taking its story to social media.

Since GROW Month began in 2007, Organics Unlimited has seen a significant increase in interest in GROW label bananas. "The GROW program means a lot to the communities we are helping, and we are very thankful to all of our customers who share this enthusiasm," says Mayra Velazquez de Leon, president and co-founder of Organics Unlimited and GROW. To date, 38 students have graduated from college, and the monies raised have helped fund eye and dental clinics and build community centers.

The Price is Right

Cause marketing doesn't necessarily translate into bigger sales for the brand. It's not enough to sway most consumers to open their wallets, but it could be a tie-breaker in a competitive category.

For 55 percent of consumers, cause marketing affects their purchases, Mintel's O'Donnell says, citing Mintel research. Yet only 20 percent are motivated to buy a product based solely on charitable endorsements. One-third of the Mintel survey respondents said they ignore cause marketing and only buy products they want based on product qualities; 28 percent said they'd buy cause-marketed products if the price were right.

"It's nice to have the feel-good feeling attached. People like to feel good about their purchases," O'Donnell says. "And they want the charitable contribution to come out of the company's profits."

Women, more so than men, show a tendency (34 percent) to buy a product that supports a cause they believe in, but only if the price is right. "Women do most of the shopping," O'Donnell notes. "Coupled with the fact that women are more empathetic beings than men, a lot of cause marketing has been directed towards women."

When it comes to marketing to younger generations, the Gen Y or millennial generation has grown up with a greater awareness of social responsibility and has come to expect cause marketing in every product. "It's not a marketing ploy to attract them, but it is necessary to compete," said O'Donnell. At the same time, she adds, Gen Y is "less swayed" by claims of cause marketing than are older generations.

A Hairy Proposition

One of the "emerging trends" in cause marketing is pairing men and men's products, O'Donnell notes, such as water-saving campaigns where men are encouraged to give up shaving for a day or two. In the United Kingdom, she notes, cause marketing campaigns targeting men to grow facial hair are increasingly popular.

While it remains to be seen if U.S. males will stop shaving for a cause, other cause marketing models have caught on like wildfire, such as the buy-one-give-one model pioneered by Santa Monica, Calif.-based Tom's Shoes. "So many companies are now using that idea for cause marketing that it's no longer unique," O'Donnell says. "It has become a standard way of campaigning."

Of the retailers doing successful cause marketing campaigns, O'Donnell points to a recent effort by Chicago-based IGA: Ten cents from specially packaged private label bottled water and other products benefited Wounded Warrior Project, a Jacksonville, Fla.-based nonprofit that provides support for injured soldiers. "It's a win-win," O'Donnell says, "and very patriotic."

"It's nice to have the feel-good feeling attached. People like to feel good about their purchases. And they want the charitable contribution to come out of the company's profits."

—Fiona O'Donnell, Mintel

Keeping it Local

Children's Miracle Network (CMN) raises money for 170 children's hospitals in the United States and Canada. One hundred percent of the money raised stays in local communities.

Back in 1994, "we had 100 consumer product goods brands participating," explains Clark Sweat, chief corporate partnership officer for Salt Lake City-based CMN. As the grocery industry consolidated, the charity's fundraising efforts evolved. "We're not working with as many brands on a national level. The driver has become the retailer, not the CPG company."

The charity has many long-standing partnerships in the grocery industry, including Food Lion, Publix, Giant-Carlisle, Schnuck Markets and some Kroger divisions. Together, they've raised tens of millions of dollars for CMN through Miracle Balloon sales and outside fundraising events such as golf tournaments, bowl-a-thons, car shows and children's games.

"We are unique in how we raise our funds," explains Sweat. "We don't rely on government grants. Our money is raised one dollar at a time."

Charitable contributions at the register have increased. "In this economy, we haven't seen programs suffer, we've seen them increase. Some of our best stores are in the poorest neighborhoods," says Sweat. "People like to give, even if it is only a dollar."