Hot Trend: Green is the New Black
Ad specialty companies are increasingly greening their operations in an effort to save the environment, lower expenses and appeal to growing sensibilities of their customers. Find out how they’re doing it.
Peter Tu remembers the exact moment of inspiration. At home one night a little more than two years ago, he was watching An Inconvenient Truth – the Oscar-nominated documentary about Al Gore’s environmental passions. It wasn’t Tu’s choice of movie – his daughter was watching it as homework – but it was one that changed his outlook forever. It moved Tu to think about how he could go green himself, and over the next year, he began making small but steady changes within his distributorship, AnyPromo.com (asi/117065).
“It all started with something little,” says Tu.
He and his 12 employees made basic environmental changes, such as turning up the thermostat a degree or two, and using more energy-efficient lighting. They also looked at ways they could reduce paper usage, cutting down the number of boxes they went through each month from five to less than three, with each box containing 5,000 pages of paper (the company hopes to go completely paperless within the next two years). Then, Tu and his company invested in energy-efficient LCD computer monitors for each employee, at $150 a pop, moved from desktops to laptops (yes, laptops use much less energy), and asked staff to power down all computer equipment each night before going home.
Tu, whose company is based in Chino, CA, where the state’s energy rates vary by season, can’t say for sure exactly how much his company, with $1.5 million a year in sales, is saving through these efforts, but he says he and his team feel more satisfaction this year for their accountability toward the green efforts they’ve put in place.
And Tu is not alone. As more distributors and suppliers focus on the environment, they’re doing so not just through the sale of eco-friendly promotional products, but also by changing core operating procedures and manufacturing methods, and making sure that companies they work with are doing the same. What was once considered a social gesture is starting to pay off in a business sense, as well. “We’re getting to a point where it’s starting to make sense to invest in these sound practices,” says Patrick Penfield, assistant professor of supply chain practice in the Whitman School of Management at Syracuse University.
The go-green movement isn’t something that companies are doing just to look good. This isn’t just a brand-building effort in the hopes of appealing to new customer sensibilities. This is a business decision – one predicated on both saving money and increasing sales.
In fact, an early 2009 study by A.T. Kearney Inc., a global management consulting firm, found that companies committed to environmental sustainability practices have enjoyed greater performance in the recent economic slowdown. Why? The study’s authors point to better long-term business practices, stronger corporate governance, and greater risk management, among other factors – traits often seen in eco-conscious companies.
“With rising fossil fuel costs, customers searching for environmentally responsible companies, and a mounting need for greener products, business has jumped on the green initiative and reaped the financial benefits,” says Heather Gadonniex, author of The Complete Idiot’s Guide to Greening Your Business, and principal at Green it Group, a sustainability consultancy in San Francisco.
Though almost none of the distributors and suppliers reached for this article had formulas to prove the monetary value of the green programs they’ve implemented, all are fully committed to expanding their individual company’s operations in eco-friendly ways.
For distributors like Kris Robinson, vice president of PromoShop (asi/300446) and founder of www.ecopromos.com, a Web site dedicated to “growing your brand responsibly,” going green is about more than making changes in the office. “You have to change your lifestyle in your business and personal life,” Robinson says. “A lot of people out there want an order to sell a polypropylene bag, but they don’t know why they’re supposed to be selling it,” he says. “You’re either going to embrace this movement or you’re just out to make a quick buck.”
That’s what Mark Trotzuk, CEO of Boardroom Custom Clothing (asi/40705), decided two years ago after realizing that not only were the environmentally conscious products he was selling deceptively green, but that he could have an impact on processes outside of his Vancouver-based company. “Most of the people in our industry, including myself, buy the finished component and restock it and sell it,” Trotzuk says. “Very little of them actually are involved in the process of getting raw materials, processing raw materials, coloring raw materials, putting raw materials together and getting it over to the U.S.”
But it’s in the supply chain that 90% of a product’s impact on the environment is felt, Trotzuk says. “Therein lies the biggest challenge, because a lot of that product you’re not in charge of.” Certainly, supply chain supervision is beyond the scope of daily operations for the majority of distributors and suppliers. But that doesn’t mean they can’t remotely influence the processes of companies they work with. “All companies should start the conversation with suppliers about their environmental footprint, and ask for data and information when it’s available,” says Andrew Winston, a green business expert and coauthor of Green to Gold.
For smaller distributors, “While the threat of leaving one supplier for another may not carry weight, at least the smaller company can be more informed and make choices when possible to find the lowest footprint option,” Winston says.
When Trotzuk first started pitching Fortune 500 companies whose executives insisted that products be environmentally progressive, not just in materials but in the way they were manufactured, Trotzuk realized his eco-conscious promises could only go so far. “I’m giving my spiel to a large corporation who’s very ethically sound and they say, ‘Thank you for using bamboo and recycled polyester, but come with me, we need to ask you some questions,’” Trotzuk says, recalling certain conversations.
That’s when Trotzuk would be introduced to other due diligence officers in the company who posed much more daunting issues. “Mark, you’re not a chemist. How can you test the waste water leaving the factory to make sure it won’t harm the environment?” – that was a typical question he was asked. At first, Trotzuk didn’t have an answer. They were right: How could a stateside supplier with no access to a Chinese factory’s waste water determine if it was eco-friendly or not?
Pitching and landing the business of the country’s major household brands was so important to Trotzuk that he took measures to answer those questions, going so far as to join Bluesign, a third-party auditing firm for the textile industry, at a cost of $20,000 a year. Trotzuk says this was a sound investment, since he receives quarterly certifications regarding the factories he uses abroad that he can then share with end-users.
|Making A Difference
Want to go green but not sure where to start? You’re not alone. Here are a few tips to help distributors get started.
Start small. Make little changes first – changing lightbulbs, turning off lights and computers at the end of the day – then work up to more aggressive measures, such as going paperless through electronic invoices.
Make it a group effort. Going green is much easier with staff and customers behind your efforts. Make sure employees are on board – some eco-friendly distributors even suggest making the environmental pitch a personal as well as professional effort.
Get support. Virtually no distributor can make an entire supply chain go green on his own. Want to assure clients that your products and their manufacturing processes are green? Auditing firms can do just that for annual fees that, while not always cheap, can pay off by helping distributors land clients like corporate giants who demand spotless manufacturing measures.
Push the process as much as the products. Selling green products has been a smart business strategy for several years. Now, it’s as much about how distributors operate as it is about the products they sell. Distributorships already ahead of the curve are spending more and more time talking up the merits of green supply chains, in-house eco-friendly processes and other moves that help to not only green products but the industry as a whole. – Betsy Cummings
As the movement grows, more distributors and suppliers might develop what Fairware, a supplier in Vancouver, devised – a survey and code of conduct to make sure that every vendor Fairware works with complies with the company’s environmental standards.
What once seemed overly aggressive is now starting to be a more accepted practice among the industry’s suppliers and distributors, says Denise Taschereau, Fairware’s cofounder. Taschereau says the industry is still trailing the consumer marketplace when it comes to making environmental demands, but that’s changing. “When we started this company four or five years ago, we would call vendors and get long pauses” in response to statements about the survey Fairware insisted on giving to every vendor, as well as the company’s environmental code of conduct. “Now, I feel that people have a much better understanding of what we’re talking about” on the environment and issues of social compliance, she says.
With environmental chatter a mainstay of the media and policy-makers these days, it’s no surprise that the ad specialty marketplace is quickly trying to play catch-up.
For industry executives already familiar with environmental issues, the world’s focus on global warming is a rallying cry to do more now. Jordy Gamson, president and CEO of The Ice Box (asi/229395), in Atlanta, took what he knew from his 12 years in the recycling industry and applied it to the renovated office space his company moved into two years ago. “When we designed it we took the environment into account,” says Gamson of the 1940s office building they gutted and revamped near downtown Atlanta.
For starters, the entire building was designed to let natural light into every office but three, so that staff can work without turning on office lights (installed with energy-efficient bulbs, of course). The company, which has 33 employees and does $10 million in annual sales, plans on going completely paperless by 2011, Gamson says.
He won’t be alone. Many promotional product companies we talked to said going paperless was one of their biggest goals in the next few years. At Selco (asi/86230), in Tulsa, OK, they’re almost there, says CEO Mark Abels. Several years ago, Selco had both the fortune and misfortune of taking on a multitude of orders after one of its competitors shut down. Where once the company’s normal load for watch dials averaged 75 dials a day, suddenly that number skyrocketed and “between Seiko and Hamilton, we had something like 10,000 dials in our backlog, probably more than we made all year,” Abels recalls.
Working with a consultant, he and his team began evaluating their order processing methods, including how orders were taken in, tracked and moved through the company’s office. They discovered that most of it was done on paper. Work orders could run as long as 25 pages. “We were spending a lot of time filing,” Abels says. Nothing was viewed on a computer, but instead was printed for review, including more than 100 faxes a day. “It just seemed very wasteful,” Abels says, thinking back.
When staff printed an e-mail “to look at it for two minutes and then throw it in the shredding bin” Abels says, he decided it was time for a change.
In 2005 Selco bought a new computer system and implemented it company-wide so that all 20 Selco employees could view, edit and work on orders through a single computer system, rather than print out and pass along reams of orders on paper. With the exception of production, where orders are still printed out for review – but on a more limited amount of paper – all orders are reviewed via computer. “We’ve probably gotten rid of 90% of the paper” the company uses, Abels says, and with it, hours of filing and waste management, freeing up staffers to focus on other tasks.
The system also extends to outside vendors and customers whose bills, orders and other communications are all now handled electronically. That saves on postage, and makes communications between Selco and other companies faster.
In addition, Selco also allows its production team to work four days in the summer, when orders can be handled in a shorter work week. It not only cuts back on utility costs, since the air conditioning and lights in the production space are turned off when not in use, but has cut employee fuel costs by 25%, Abels says.
It’s just one more everyday trick that companies in the ad specialty market are using to green their operations.
Besty Cummings is senior writer for Counselor.
|Beware Of Greenwashing
As the green movement has picked up speed, many suppliers in the ad specialty market have introduced new lines of eco-friendly items. However, some are just using marketing efforts to say their products are green, when in fact, they’re not any more eco-friendly than other items in their product lines. Here are four tips from Colette Chandler, green product expert and founder of The Marketing Insider (www.marketing-insider.com), for differentiating a supplier of true eco-friendly products from a supplier with marketing claims that could be classified as greenwashing:
1. Look at ingredients. Labels can be very deceiving. There’s a lot of health-oriented products out there like lip balm or lotion that say “organic” on the label, but that doesn’t prove it’s organic – that all the ingredients are sustainable. Ask questions about where products are sourced, how they’re made and what their true ingredients are.
2. Examine packaging. Sometimes the ingredients might be environmentally friendly, but the container itself might not be. Let’s say a product comes inside a hard box, but to keep the box closed, there’s a plastic ribbon around it. Things like that are often overlooked.
3. Review the manufacturing process. Sometimes the process is worse than the outcome. How wasteful was it? Was it harmful to the environment? For things made with bamboo, there are a lot of questions about the process vs. the outcome.
4. Consider shipping distance. How far did each ingredient travel, and how far did the final product travel? If suppliers have products that are sourced overseas, there’s a huge carbon footprint. What are the suppliers doing to offset that, or what can the distributor do to offset that? In this case, maybe using a more local supplier is the way to go. – Shane Dale