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Case Studies
Case
Study: All or Nothing At All
| Case Study
Nike
Outdoor clothing and equipment manufacturer
Patagonia has taken the goals of creating a profitable, environmentally
responsible business farther than most companies.
In the early 1990s, they brought recycled synthetic
fleece (Synchilla) to the market and began specifying recycled
and tree-free papers for their million-plus circulation mail
order catalogs. After company founder Yvon Chouinard saw for
himself the devastating environmental impacts of California
cotton production, he decided the company would switch to
organic cotton fibers or shut down its cotton sportswear business
altogether.
An extensive education program was launched
to communicate the importance of organic agriculture to the
entire staff and their wholesale customers. In 1996, after
four years of trials, the company introduced a one hundred
percent organically grown cotton sportswear line. After two
seasons, production teams ironed out quality issues, (which
were due more to changing suppliers than to using organic
cotton fibers).
To accommodate the higher price of using 100
percent organic fibers, Patagonia took a three-tiered approach:
they stream-lined product offerings, decreased their profit
margin and increased retail prices.
The switch to organic cotton has motivated and
energized the company, and the focus on a novelty fiber has
enhanced Patagonia's ability to create higher quality, more
innovative fabrics. This has all resulted in a market advantage
and brand differentiation in the competitive business of high-quality
active sportswear.
Patagonia's Director of Fabric
Development Recommends:
1:: Start with a few items in organic cotton
and gain experience about sourcing, production, quality, pricing
and marketing.
2:: Appoint one
production person to spearhead the organic project.
3:: Identify products
where organic cotton can add value to the customer, such as
intimate apparel, kidswear or quality items with reasonable
price elasticity.
4:: Educate the
entire company about why organic cotton is important.
5:: Work with existing
suppliers who understand the level of quality you
require.
6:: Factor in the
year-in-advance lead time necessary to order sufficient
quantities of organic cotton.
7:: Assess the
results of every trial, continually increasing the
number of items and styles with organic cotton each season.
Case Study: Just
Put in Your Two Cents
| Case
Study Padagonia
Nike's foray into organic cotton clothing
flowed out of company-wide environmental goals aimed at reducing
air and water emissions and designing footwear, apparel and
accessories according to principles of sustainability and
industrial ecology. The Sports Graphics division, responsible
for producing Nike's 40 million annual units of printed and
promotional T-shirts, was deemed the most logical department
within the company for introducing organic fibers into products.
Sports Graphics consumed a high volume of fiber.
After analyzing the market and crunching
the numbers, Nike decided to blend some of their conventional
5.4 ounce jersey T-shirt fabric with three percent organic
cotton, an easy-to-arrange production step that would add
just two cents F.O.B. per unit to the bottom line.
A spinner was identified to purchase organic fiber for yarn,
which was then blended with conventional cotton for the finished
product. As Nike's organic project progresses, the company
plans to add styles and vendors each year to increase their
commitment to organic cotton.
Their goal is to blend all cotton fabrics
with a minimum of three percent organic fiber by 2003. Interestingly
enough, had Nike chosen to convert to 100 percent organic
fiber rather than blending, they would have devoured the existing
supply of organic cotton in short order.
This is all the more reason to analyze your cotton needs in
terms of the overall organic cotton industry, and plan well
in advance to procure fiber.
Nike's Environmental
Action Team Recommends:
1:: Analyze
your cotton business: consider the volume of cotton
you purchase; identify environmental goals (such as meeting
clean air and water guidelines) and consumer preferences or
pressures that would make organic cotton a logical extension
of your sustainable design objectives
2:: Select
a point person with political influence within the
company who can advocate for an organic program.
3:: Create
potential options for business managers to choose
from to incorporate organic cotton in product lines.
4:: Identify
the benefits of pro-active efforts, such as market
advantages, brand image enhancement or environmental objectives.
5:: Choose
and act on some easy-to-achieve successes, such as
blending targeted items with up to 10 percent organic cotton.
6:: Provide
continual education for all departments within the
company.
7:: Blend
with up to 10 percent organic cotton fibers; it should
have no impact on product quality whatsoever, and minimal
impact to the bottom line.
8:: Probe
all aspects of garment production for environmental
impacts, including raw materials, dyeing and finishing, air
and water emissions, and develop a company-wide policy to
reduce them.
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