Are Greener Big Companies Beating the Recession?
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What do Netflix, Peet's Coffee, and Apple all have in common? Maybe more than meets the eye. First off, each of these companies is defying expectations with stocks that continue to rise-- despite the recession. But how are they doing it? Could it be that the green qualities these companies have are inadvertently helping them beat the recession? Now, these aren't what you'd call truly green companies—but each has some green inherently built into their business models. Is it coincidence that the same companies that are staying above water are the same ones with greener operations? You be the judge.
The entire Netflix business model is structured to work like a giant Product Service System —instead of buying movies, customers know that (as long as they subscribe) they have access to any movie they want. This reduces materials and manufacturing. And the company's own packaging won it an eco-packaging finalist nod. It's beating out rental chains like Blockbuster in part because you don't have to drive to the store to pick out a film—which helps cut back on fossil fuel use some. Its PSS business model has allowed Netflix to operate extremely inexpensively: it costs less than cable per month. In other words, green has been good for Netflix's bottom line.
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Shares of Peet's Coffee are up 10% since last November, when stock in coffee prices fell across the board—everyone assumed that a luxurious morning latte would be among the first thing people would give up when they started pinching their pennies. Looks like they were wrong.
Peet's is pretty decently green—their Alameda roasting facility is LEED certified (which is pretty unusual for manufacturing plants), they offer fair trade blends, and have long had good relationships with their growers across the world (dealing with some for over 30 years). But how does this affect the bottom line? It's worth noting that Starbucks (which also deals in fair trade and treats employees well) has risen since November too, yet Dunkin' Donuts (also famous for their coffee) has faltered. Could it be that consumer confidence is bolstered by companies demonstrating they have good, fair practices? Are Peet's green leanings encouraging investors and retaining more customers?
AppleApple was another stock that tanked last November as recession panic spread. Who, the logic went, is going to buy an iPhone now, or continue to spend around $760 a year to pay for the service? Besides AIG employees, of course. Turns out, the answer is plenty of people: Apple's stock is rising again thanks to strong continued sales and service of the iPhone. And one of the big reasons people continue to use their iPhones is a simple one: efficiency. iPhones and their apps help people streamline their lives—which also helps green them considerably in the process. We've said it before: your iPhone can save you gas, energy, time, and money. It can spare you from hitting traffic with one app, and monitor your fuel efficiency with another. It can snag you precise directions so you don't waste time and gas driving around town looking for the new Sushi restaurant that just opened up. By and large, it's a tool that increases efficiency—and even though its powers certainly aren't used entirely for green—it's a guiding principle most environmentalists can appreciate.
Well, the evidence is hardly conclusive. But what do you think? Is the greenish hue in these companies helping them beat the recession?