Green Building Industry Trends

As a marketing researcher and strategist some of my work in recent years has been involved with understanding green building trends. I’ve conducted a number of market assessment projects that have looked into the barriers and opportunities in this growing industry. Today, I’m going to share some of those findings plus what kind of marketing is needed to promote green building materials.

It shouldn’t come as a surprise that the green building industry is growing both in North America and worldwide. Here are some of the factors driving growth in this industry:

  1. Demand for construction is increasing. Capital expenditures in 2014 for construction in Canada were estimated at $909.9 million.[1] The U.S. economy has also rebounded and growing at an estimated 4% which is reviving Canadian exports for construction materials.[2]
  2. The cost of building materials are increasing. Lumber prices are increasing in North America[3] and U.S. housing starts are improving which has effectively increased gypsum prices by 75% in 2014 compared to 2011 prices.[4]
  3. Demand for green buildings is increasing. Growth in this industry has been dramatic in the last 10 years and continues to grow. Global green construction is estimated to grow to a $254 billion industry by 2020, and Europe is forecast to account for half of the growth.[5] Thirty percent of respondents to the Canada Green Building Trends Report in 2014 indicated they use green building material in their projects.
  4. LEED certified buildings are increasing, thereby creating a growing demand for green building products.

Barriers

In general, there seems to be a lack of confidence in the use and performance of green building products. Many still need to be tested for durability and have yet to pass regulations. There is also an issue with the return on investment for these types of products as they can be priced between 5% to 20% higher than traditional building materials. Adding to a slower uptake is the lack of government incentives to motivate consumers to try green building materials.

Opportunities

While the barriers can be many, there are opportunities in this industry. Forming alliances (joint ventures, partnerships, and informal working groups) is important to build a stronger infrastructure for green building materials. The industry is growing; while the need isn’t commonplace yet, there is indication consumers are more concerned about the environment and want to do their part to help.

How to Market in This Industry

When marketing green building materials to either builders, architects, contractors or the end-user (the people who reside in the building) the focus needs to be on “advocates.” This means marketing should be aimed at those who already favour the use green products because they are more likely to accept these types of products.

Builders who are non-green are a harder sell because they need to know:

  • The cost of the product
  • If is proven
  • The esthetic appeal
  • The benefits
  • The specifications

As a result, the market requires both a pull and a push marketing strategy:

  • A pull strategy will serve to educate the end-user (home buyer or company in a commercial building) who will then request the products
  • A push strategy can create greater awareness among builders who can, in turn, inform their clientele

Here are some of the marketing and sales tactics required for the success of companies in the green building product industry:

  • Branding
  • Website development
  • Marketing materials (hard copy and electronic)
  • Tradeshows (attending and presenting)
  • Publicity and Social Media
  • Information sessions
  • Videos
  • Contact databases
  • After sales techniques

Written by Toni Guffei of Ratio Reports. @tonironi

For more information about how you can create your own strategic marketing visit www.ratioreports.com

[1] Statistics Canada, 2015

[2] Conference Board of Canada, 2014

[3] Shmuel, John. “TD forecasts Lumber Prices will Rise 30% by end of 2014.” (June, 2013)

[4] Carrick, Alex. “Some Spine Tingling Increases in Canadian Construction Material Costs.” Daily Commercial News, 2014

[5] Martin, Richard. “Green Building Materials Will Reach $254 Billion in Annual Market Value by 2020.” May, 2013

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