The North Face -- whose outerwear can be seen across college campuses in the northern areas of the U.S., especially during this time of year -- has been semi-quietly working to wring out efficiencies in its products, without compromising their performance on the slopes.
(You might say the company's new mantra should be, "Never Stop Exploring...Your Supply Chain.")
She brought along Jeff Nash, TNF's director for materials development.
What ensued was a lengthy roundtable discussion on how one company is diving deep into its supply chain to refashion its immensely popular products to be more friendly to the environment -- with a look at the pain points, tradeoffs and existential crises along the way.
SmartPlanet: How does sustainability fit into strategy at The North Face?
LW: The North Face has always been passionate about the environment and sustainability. It's obviously in our DNA, for being all about the outdoors.
Five years ago, we needed more focus. So we integrated sustainability into the four key pillars of our business strategy: product excellence, exceptional brand experience, outdoor participation and corporate sustainability.
We had four key sustainability goals:
- Achieve a 100-percent sustainable product line.
- Reduce energy and greenhouse gases.
- Achieve sustainability with regard to waste.
- Foster community and promote sustainability efforts.
We're trying to focus on the big impact. For example, our energy footprint: our 800,000 sq. ft. distribution center in Visalia, Calif. is one of largest greenhouse gas emitters in our North American operations. So we installed a one-megawatt solar panel system at the distribution center and reduced emissions by 25 percent.
We're also reducing our energy footprint at retail stores and corporate offices.
SmartPlanet: And we haven't even discussed products yet.
LW: Product really is king. That's what we're about.
In order to have a quality product, we also have to consider how it's made and what it's made from.
Our products are petro-based because they're synthetic. So we have to look at their chemical makeup. That's why we signed a partnership with BlueSign, a materials certification organization.
We just did a lifecycle assessment of three products: a jacket, a backpack and a shoe. We found that, on average, 50, 60, 70 percent of the footprint of that product is on the manufacturing side, specifically around materials.
SmartPlanet: Which is your speciality, Jeff.
JN: We learned a lot from other people in the industry. For example, another major [environmental] impact is the aftercare of a product.
If you have a cotton T-shirt and it's laundered after every use, the impact is skewed toward after-consumer care. Our products are not laundered as frequently.
We'd love to go out there and look at product design [for sustainability], but we realize that the root of it for us is materials.
The CPSIA [Consumer Product Safety Improvement Act of 2008] was a mandate for hazardous substances in consumer products. That really mandated the country to step up its act on chemical compliance, which is positive for consumers and the supply chain itself.
It's almost impossible to test your way out of it. You can't test every item, every lot. We wanted to get back further into the process, and that's where BlueSign comes in. They manage EH&S [Environmental Health and Safety --Ed.] at the mill or factory level. They're looking at consumer safety, environmental safety around the mill, energy usage and wastewater, and worker safety.
The number one goal is to put safe products on the shelf.
Most of our impact is at the material level. The raw material itself is a major impact, but so is the dying process -- a lot of energy, a lot of water, a lot of chemicals.
We also have products that do require high performance. We didn't want to sit there and compromise. If that jacket lasts 20 years, there's a lot of sustainability that comes from that model in and of itself. Through all this process, we've never once compromised the durability and quality of our products. In fact, I think we've enhanced them.
SmartPlanet: Let's talk specifics, if you don't mind.
JN: There are solvents to be used. Reactive chemistries to create finishes. Take waterproofing -- we're using the best technology that's available, but we're actively managing it. The workers have the proper safety gear -- masks and ventilators. That the solvent is being captured by a hood hanging above. Then it has to be treated -- burnt off or forced back into the energy system or even recycled.
We have enough chemical engineers on staff to make that assessment between one chemical and another. BlueSign has their start at the chemical supplier level, and rates them with blue -- "in control" -- gray -- not the best, but properly managed -- and black, not allowed. We look to replace those.
LW: There's a baseline. That's where BlueSign comes in -- to make sure that we're managing our risk and that we're a good corporate citizen.
There's a flip-side though of the value proposition of our products. It's not just about performance, but how the product is made. It's adding a tremendous amount of value in the supply chain. It's making people in there -- mills, factories -- ask questions and push. We at The North Face are able to push it a little bit because we are able to ask those questions with our [large] scale.
JN: The main reason we got into this is not to impact our business but to make sure we stay in business.
This is a process. This is not a light switch. We're in a pretty aggressive scale-up in adopting it, and right now the bulk of our mills -- maybe 80 percent -- have been certified as BlueSign. Those mills would not have converted without our business. Now we're working on that second tier.
The other ones we're targeting is trim and accessories. If you look at the youth problems for lead...we're now targeting all of our buckles and snaps and webbing.
Our goal is 100 percent. Honestly, it will be hard to hit that, because you always have new suppliers. But you can definitely hit 90 percent.
SmartPlanet: Let's talk about the supply chain and leverage. How has The North Face been able to throw its weight around?
LW: We started ticking off very strategically things we could control. The Paramount pant is a large-volume product and we knew we could get that certified. It's long conversations of committing to one another about that effort.
One of the ways we can do that is [by putting it in a new perspective, so] that environmental waste is financial waste. It costs the mill to actually sign up and do this, so the mill needs a commitment from us that we're going to be a long-term partner.
They find efficiencies left and right and start reducing their cost. The mill suddenly understands that they're going to be more profitable. They're able to become a much more efficient business. It's a cascading effect. It becomes a real win-win situation, this positive feedback loop.
There have been long dialogues internally about how much we should speak [publicly] to [these efforts]. And frankly, I don't think we speak about it enough. We're a little conservative on that. We're really proud of the work that we've done.
We do think the consumer will respond -- they're asking us, we've done research. Sixty to 70 percent of our customers want to hear about it.
JN: The supply chain is not sexy. We're in the process of figuring out the amount of solvent that we save and calculating it in terms of the amount of railcars it takes up. We went hard on adopting, without necessarily being able to track things so much.
The Denali jacket -- arguably the most successful product in the outdoor industry -- we converted that to BlueSign and 80 percent recycled content. Based on the nature of that fleece, next year, we'll be able to switch over to 100 percent recycled content, because they've finally figured out the yarn.
SmartPlanet: What's the biggest challenge you face?
LW: The big thing? It's all at price parity. We get push-back from designers and others: price, price, price. Margins.
We've definitely brought some products to market that are phenomenal -- one backpack called the Tree Hugger -- the Denali, sleeping bags, Adventure jacket. But the thing that we've struggled with is [that] it's tough from a communications standpoint to show the overall value that we're bringing. Going back to the chemical level -- that's game-changing.
We've got to change how our products are made.
A lot of people want us to do the right thing. The hardest part is knowing what the right thing is. Organic cotton versus bamboo versus wool -- it's knowing what to do. People can become paralyzed by the decision-making process.
JN: It's a new industry. Making it commercial is new. Making it cost-feasible is new. There are a lot of tradeoffs. There are a lot of small things we can do that are really great design that we can bring to market but will never drive the business.
We have the buying power to meet the challenges. We go after the big products and try to make the biggest impact possible. There is some collaboration within the industry, but it's relatively new. Outdoors is one of the leading industries for this.
LW: If you look at Nike, their approach to sustainability in the beginning was a very creative approach. They did their iconic looking shoes -- the Considered line -- but they didn't sell. They flopped. But they were one of the first.
Our approach is more pragmatic, less sexy, but asking: how do we commercialize this? [So] that we ensure that, in 10, 20, 30 years, we're making products that sell -- and oh by the way, they're made really well?
JN: For us to be a longstanding, profitable business, that's what people know us for -- to fit, feel good, and perform. I don't think we could ever replace the Denali with green hemp Denali. But we made it recycled and BlueSign. The footprint of that product is much smaller than that of five years ago.
We're not giving you a choice. We use a polyurethane coating on the backside of the Venture jacket to make it waterproof. Now, 50 percent of that coating is castor oil -- a renewable commodity chemical that has no detrimental effect. It actually improved the performance and the durability. In one year, we cut out 50,000 lbs. of petroleum.
LW: There are assumptions being made with the consumer. The consumer trusts the brand that we don't use child labor, that we don't treat employees cruelly, that we don't trash the environment. They don't want to buy products that do that.
We don't necessarily give themselves enough credit, and they don't give themselves enough credit. But if we begin to communicate the choice that consumers have…but we have to make it easy and relevant for us. And we have to put it in a price parity situation.