AKRON (July 3, 2013) — Tire dealers who "go green" may see benefits other than the good feelings that come with being more environmentally conscious.
Results of a recent survey indicate that selling green products and services may translate to a "greener bottom line" for businesses.
Of the 1,305 small businesses that responded to the survey — conducted by Green America, EcoVentures International and the Association for Enterprise Opportunity — three out of four reported that sales of green products and services actually increased during the economic downturn.
About 58 percent of businesses surveyed said they expanded their products and services with green offerings during the recession, with 84 percent of that group reporting increased sales as a result of their investment.
In addition, companies with the "greenest" practices among the group also reported the highest sales. About 79 percent of respondents strongly agreed that offering green products and services gave their businesses a competitive advantage, and 75 percent said they plan to expand their green offerings.
"In the three decades since Green America first started promoting sustainable practices in business, the market has clearly shifted dramatically," said Russ Gaskin, chief business officer for Green America.
"We believe that the market preference reported by the small businesses in this study is just the tipping point. Sustainability is clearly becoming a competitive imperative in business."
For tire makers and dealers alike, the potential competitive advantage that goes along with the trend toward sustainable practices is one that can't be ignored.
On the manufacturing front, many tire makers have been focused on reducing traditional raw materials in their products—both on the commercial and retail side—in favor of new, more sustainable technologies. Many of the changes are being driven through regulations, such as changes to Corporate Average Fuel Economy (CAFE) guidelines for vehicles.
"CAFE regulations are getting stiffer, which means we've got to be working on it for OE, which means it's going to have to come into play when we sell replacement tires," said Rick Brennan, executive director of product strategy for Falken Tire Corp., in a recent interview with Tire Business.
"It's going to be driven by CAFE regulation, and it's just going to be driven by the fact that tires, overall, have to fit into the environment better. The consumer's not asking for it right now, but he's going to need it."
Dan Guiney, director of technical services for Yokohama Tire Corp., agreed that vehicle-related regulations "certainly are a driver for our industry" in the development of eco-friendly products, but the economics in the marketplace — specifically the cost of fuel — is the biggest driving force for consumers.
"Regulations have an impact, but so does the cost of diesel fuel and the cost of regular fuel," he said. "It gets people's attention, and if they believe that companies are retailing products that help them do that, there's certainly some dialogue and some interest in trying those products."
Yokohama notably has incorporated the use of orange oil into several of its product lines, the most recent being its AVID Ascend all-season touring tire, which launched in 2012. The Ascend is the first Yokohama replacement tire to fall under the company's BluEarth family of eco-friendly products, which offer lower rolling resistance and better fuel economy.
"I think everyone is focused on improving energy efficiency of their products," Mr. Guiney said. "As new generation tires are being designed, the energy efficiency of that product both in manufacturing and in use are a primary focus along with the safety attributes and the longevity of the product as well. There've been more things put on the engineer's list for sure."
Jeremy Smith, manager, community and corporate relations for Bridgestone Americas, said in the last few years the tire maker has seen "robust growth" in its Ecopia low-rolling-resistance and high-mileage tires. Prior to the recession, tires focused on reduced rolling resistance "served a narrow, niche market," he added.
"Consumers are holding companies to a higher standard with regard to sustainability practices and product development," he said. "A 2013 Bridgestone Americas consumer survey found that individuals are cognizant of being green as they shop, with 92 percent indicating a manufacturer's operational sustainability or a product's sustainable attributes have some impact on their purchasing decisions."
According to Bridgestone's survey results, the top three ways companies can show they are environmentally responsible are: creating a product design that minimizes energy and water usage; minimizing generated waste; and minimizing carbon emissions tied to waste.