Growing a Green Business Without Compromise
Sugar and mint cleanser. Green apple moisturiser. Pomegranate masks. Years ago, consumers who wanted natural skincare products based on renewable ingredients had to search for the small number of specialised natural-products retailers who carried these alternatives. Now, environmentally friendly health and beauty products are readily available at the nearest local mass-market pharmacy or large beauty retailer.
Over the past few years, organic and sustainable skincare brands have gone mainstream. According to a report by the business research firm Organic Monitor, sales of natural beauty products amounted to $7 billion (£3.9 billion) worldwide in 2007. That number is expected to climb to $10 billion (£5.7 billion) by 2010.
As these once-small green businesses grow, they face a variety of challenges - many of which are common to businesses across industries. In an industry dominated by small companies, one key challenge is maintaining stable, controlled growth in a market that is seeing demand expand rapidly. Another, more complex problem that many green companies are facing is how to maintain a sustainable supply chain as production increases. In an industry based on image, such as skincare, growing a green company also means finding a way to balance luxury with responsibility.
At the heart of these challenges lies perhaps the most complex challenge: how to stay true to the green promise in a way that is feasible on a large scale and provides the level of meaningful contribution to green causes that sustainable-brand loyalists expect. The lessons from sustainable skincare companies provide valuable insights on how to stay green in everything from operations to packaging.
Having a strong corporate philosophy that emphasises key sustainability concepts is vital to staying green during periods of growth. What most sustainable skincare product lines have in common is a belief that simplicity, both in terms of the kinds of ingredients used, and the number of ingredients, is key not only to product effectiveness, but also to overall sustainability. A pared-down ingredient list reduces waste from a complex supply chain.
In addition, a significant percentage of the ingredients used by natural skincare companies are derived from renewable resources - primarily foods and herbs - adding to the sustainability of their production. Using fewer ingredients than conventional products usually means sourcing ingredients that serve several functions, and eliminating ingredients that are simply fillers. " Each and every ingredient serves a purpose, from the basic rice, which super-softens and has huge amounts of vitamins E and F, to pomegranate that regenerates the skin and boosts the effect of SPF 15," explains Florence Sender, founder of BeFine Food Skincare.
BeFine Food Skincare is a perfect example of how these companies are growing. The trend-setting Newton, Massachusetts-based company supplies its paraben-free and naturally derived products to CVS/pharmacy, the United States' largest retail pharmacy chain. Other mass-market chains carrying BeFine include RiteAid and Duane Reed, the New York regional giant. That major retailers now stock a leading food-based brand is an indication of how much consumer demand for natural products has grown over the past decade.
As demand grows, the company has seen a variety of the challenges typical in this sector, many of which will be familiar to business leaders in other rapidly growing markets. "Our challenges are not unlike any small company's as demand for products expands. First, we need to be diligent with inventory forecasts and not anticipate growth before it actually happens," notes Douglas Palmacci, BeFine's Director of Marketing, adding, "You cannot afford to be sitting on inventory for long periods of time. Second is building an infrastructure to support the growth, whether that be marketing, sales, or support staff."
In the green consumer goods sector, these challenges are especially prevalent, as bracing for growth becomes ever-more complex in the face of far-flung supply chains for sustainable ingredients. The companies profiled depend on exotic natural ingredients from around the globe, and strive to source the products from sustainably-farmed lands. Relying on such components can be challenging for a small to mid-size company.
One important piece of advice from Doug Palmacci: "We used an outsourced model to start the company and slowly build infrastructure as the company expands." By not investing in and committing to a full manufacturing line from the get-go, companies can be more nimble, responsive to customer demands, and choose outsource partners who share their green beliefs.
A complex part of staying green for a skincare brand involves sustainable packaging, which is a special challenge in the beauty sector. As sustainable products go mainstream, the need is greater than ever to package products in a way that is consistent with expectations set by mainstream brands.
In an industry where lavish packaging is the norm, companies need to find ways to blend environmental commitment with the need to meet beauty consumers' demand for imaginative product presentation. All of these companies are meeting the challenge in several ways, from minimising packaging to using recycled materials. By incorporating artwork, colours and materials that reinforce their plant-based philosophies, green companies are able to use packaging that minimises environmental impacts while maintaining strong branding and broad appeal.
Pangea Organics has found some innovative solutions to the packaging issue. Its distinctive moulded fibre boxes stand out on store shelves - important in a field where consumers prize creativity - yet are not only recyclable, but compostable. For the holiday season, it takes this concept one step further by packaging gift sets in "plantable" boxes, from which spruce trees can be grown.
Stepping back from the packaging angle, a company's overall operations is where truly green businesses distinguish themselves from the masses. The sustainable giant, Hain Celestial Group, which owns organic brands JASON, Alba, and Avalon, powers its Personal Care headquarters entirely with solar energy, and uses only high post-consumer waste paper in office operations. The Boulder, Colorado-based pioneer Pangea Organics conducts environmental audits every year, with a goal of offsetting 100 per cent of its carbon usage. And London-based Aveda is developing Cradle-to-Cradle-certified ingredients for its products and urging customers to recycle bottle caps into new packaging.
Focusing on green operations can have benefits that expand from headquarters to the community at large. Hain Celestial aims to foster sustainable farming and forestry with its purchasing practices. Pangea is investing in far-ranging sustainability research, dedicating a portion of its profits to building the Pangea Institute, which will develop sustainable living solutions ranging from green business practices to green housing. Each of these kinds of actions serves not only to further showcase a company's commitment to the environment, but also to help its products in both customer perception and environmental performance.
As more and more consumers are seeking skincare products that are sustainably produced, natural health and beauty brands are poised to become an ever-larger part of the cosmetics industry. By focusing on renewable, plant-based ingredients, these brands are meeting a growing consumer demand for lower environmental impacts and high performance in their skincare products, and at the same time showing a sustainable model for growing a green business.
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