Seventh Generation [Formerly SGN – Delisted] has reached an agreement with Wal- Mart Stores Inc. [NYSE: WMT] to distribute the brand’s environmentally conscious consumer cleaning and paper products in 1,500 of the retailer’s locations. It represents a major change of direction for Seventh Generation as well as a possible shift of reputation for beleaguered Walmart, which has been widely criticized for what critics see as a blatant lack of corporate responsibility.
The development comes after negotiations between the two businesses were finally able to find some middle ground. Previously, Seventh Generation Inc. co-founder Jeffrey Hollender had been quoted as saying that “hell would freeze over” before his company’s would do business with Walmart.
Financially, the partnership is likely going to be a boon for Seventh Generation. The company produces consumer products with a focus on environmentally conscious practices and sustainable materials. The extra exposure that they garner by aligning themselves with the world’s largest retailer is invaluable, and the brand is remaining focused on expansion. They are currently investing company resources into a large scale marketing campaign including television ads, which are a first for Seventh Generation. Luckily for the manufacturer sales of environmentally friendly household products have held up well in the face of the recession, a fact that has certainly given the company room to maneuver.
When asked to explain the sudden 180 degree shift in sentiment towards Walmart, Seventh Generation representatives explained the move as the culmination of a half-decade worth of work by Walmart management to reform the company’s tarnished image. Over the past few years, the chain has taken measures to reduce energy consumption and unnecessary waste, and stock their shelves with a wider variety of sustainable products. It also has formed a program with the Environmental Defense Fund to screen products the stores carry to avoid those containing potentially harmful chemicals.
Striking a truce with Seventh Generation seems to be the next step in Walmart’s plan. “We’re not just putting products on the shelf, we want their [Seventh Generation’s] help in developing a category that’s more sustainable,” said Al Dominguez, Wal-Mart’s vice president of household chemicals and paper goods.