How laundry detergent became a catalyst for green innovation(Read article summary)
Adam Lowry, co-founder of Method, a company that has pioneered environmentally friendly cleaning products, tells how his small firm is nudging large corporations toward sustainability.
Adam Lowry is the co-founder and “chief greenskeeper” of Method, a small but rapidly growing company that has been a leader in the field of manufacturing environmentally friendly cleaning and personal care products. Indeed, it was Method that pioneered the use of concentrated laundry detergent, an innovation that has been embraced by all the giant brands and has had significant environmental benefits by reducing use of plastic and slashing transportation costs.
Before starting Method in 2001 with his childhood friend, Eric Ryan, Lowry — who has a degree in chemical engineering from Stanford University — worked at the Carnegie Institution for Science developing software to study climate change. By 2012, the pair had grown the business to more than $100 million in sales, placing its products in retailers like Target and Whole Foods. That year, the Belgian-based green cleaning products company Ecover acquired Method, although Method, which is based in San Francisco, continues to sell its products under its own name.
In an interview with Yale Environment 360 contributor Marc Gunther, Lowry discusses how his company has managed to profit from sustainability, why major corporations have been slow to embrace environmental innovations, and how plastic trash in the Pacific Ocean made its way into Method’s bottles of hand soap. Early on, said Lowry, “we recognized that our little business had the ability to catalyze much bigger change.”
Yale Environment 360: Why did you leave climate science to become an entrepreneur and start Method?
Adam Lowry: In the course of working at Carnegie for about four years, I learned that there were really two things that frustrated me. The first was that I was preaching to the converted. We were writing articles in scientific journals, but they were read only by scientists that were already concerned about environmental issues. And at the time I was trying to be a green consumer. This was the late ‘90s, and every brand that I patronized asked me to make a sacrifice for the good of the environment. The products were inferior. They didn’t work as well, they cost more, they were brown, they smelled bad, they were totally uninspired. And I just could not think of a brand in history that had ever been truly successful based off of a proposition of sacrifice.
This is when I started talking to my co-founder, Eric Ryan. I had this idea that you could use business as the most powerful institution on the planet to create positive social and environmental change, but I wasn’t quite sure of what kind of business and where. That’s when Eric started sharing some of his ideas about why this cleaning category is so uninteresting and the brands are so similar. We came up with this idea of a brand that combined high design and sustainability. We started making it in our bathroom and started selling it door to door.
e360: What did you set out to do? I assume the first significant innovation was the concentrated laundry detergent, which is a simple idea, right? You’re just taking out water.
Lowry: That was the first time we radically changed the format of a product. One reason that we did that is laundry is the biggest and the toughest category that we compete in. It’s $5 billion in the U.S. alone. If we were going to enter the category, we couldn’t enter it with a jug just like everybody else. We had to do something different.
We had the idea that the No. 1 cause of consumer dissatisfaction at the time — this was back in 2003 — was the jug. It’s heavy, it’s unwieldy, it’s hard to measure a cup. That was fertile ground for reinventing the product experience. So the first product we came out with was a triple concentrate where we just made it three times more concentrated, one third as much volume of detergent to do a load. That obviously has efficiency savings in terms of packaging, water, materials, cardboard, and fuel.
It was not insignificant given the scale of that category. But what was really interesting is that this is the first time we recognized that our little business — it was really little at that time — had the ability to catalyze much bigger change.
e360: Why? Because others followed?
Lowry: Yes, Unilever owned the All brands at the time. We launched in 2004. In 2005, Small and Mighty All launched as a triple concentrate. Then Wal-Mart really started to key on to the idea of what they called compacted laundry detergent because as a retailer, as you can imagine, taking up less shelf space is way more profitable. They started pressuring other manufacturers to compact their laundry detergent as well. Ultimately, the category netted out a slightly less green position of 2X [concentration], but nonetheless twice as concentrated as laundry detergent has been. Now you can’t buy a non-concentrated laundry detergent anymore. The least concentrated you can get is 2X.
e360: Why do you think the big companies like P&G [Proctor & Gamble] didn’t come up with this relatively simple idea that would save money and have a lighter environmental footprint?
Lowry: Incumbency, in a word. When you have the leading market position, you have the desire to maintain it. That is a disincentive against disruptive innovation.
Sustainability is predicated on progress. It is predicated on taking what makes you money today, and throwing it out the window for something that’s greener and better but a lot less certain. So it’s a tough spot if you’re the incumbent. In order to really disruptively innovate, you have to take far more risks than your business is structurally allowed to take. We killed our 3X laundry businesses even though it was 30 percent of our business. The role an innovator like Method can play is to disruptively innovate and force our competitors to follow us.
e360: You replaced the 3X product with an even more concentrated version, right? In the small pump bottle that dispenses little squirts of detergent?
Lowry: It’s eight times concentrated.
e360: Was that harder to do?
Lowry: Yes, you cannot get to 8X just by concentrating it more and more. The analogy I would use is imagine you like insanely sweet coffee. You can only put so much sugar in your coffee before it settles to the bottom. With laundry detergent, you can only put so much detergent in water. You can’t get to 8X that way. We developed a patented technology to put what would be the equivalent of tiny amounts of coffee on the inside of sugar, or in this case tiny amounts of water inside of detergent. That has the effect of being able to concentrate it to 8X because it’s no longer a water-based solution. It also has great performance benefits; they get a tiny bit technical, but the short version is that the business end of the cleaning molecules are now kind of facing outward towards your clothes. The detergent actually works better.
e360: And the environmental benefits?
Lowry: You save over 90 percent of the plastic packaging, you save over 90 percent of the carbon footprint in the packaging, you save over 40 percent of the total carbon footprint of the liquid, you save over 90 percent of the water associated with laundry detergent, and I’m forgetting the numbers for fuel to truck it around, but they’re massive because it’s more concentrated. But the most compelling thing about the product is you can hold it in one hand and it gives you both a precise dose as well as the control for using a little bit less or a little bit more.
e360: Where else have you innovated?
Lowry: Packaging would be another example. Many years ago we were told it was absolutely impossible to make clear plastic out of post-consumer content. That’s all we do now. We’re 100 percent post-consumer content. Post-consumer recycled content is 70 to 85 percent lower carbon footprint and so we just build that in.
e360: Have others followed?
Lowry: Here, unfortunately, not as many have followed as quickly. Manufacturers have opted to stay with virgin plastic, or make a portion of it out of a renewable feedstock, like sugar or corn. That’s not nearly as good, from a waste or carbon perspective, as simply using the plastic that is already on the planet — post-consumer plastic.
e360: Anything else?
Lowry: You know wipes is a convenient category that is really wasteful. Wipes are made out of plastic, 99 percent of them are made out of polypropylene or polyethylene plastic. We were the first to get in there with a biodegradable, a compostable wipe material that was made out of natural fiber. That was 10 years ago.
e360: Let’s talk about the soap bottles that were made out of the plastic collected from the coast of Hawaii. What was that about?
Lowry: No. 1, I wanted to challenge industry and show them that there is no excuse to not be using the plastic that’s already on the planet to make all this stuff. So Method is a world leader in the use of post-consumer recyclable material. Essentially we make tens of millions of bottles a year and nearly all of it is completely free of virgin plastic. So the idea that big manufacturers can only use up to 25 percent or even not use any at all made me angry. So I said, what if we use what is the ultimate recyclable material as far as thinking about the ocean plastic problem? If we can take that crap and up-cycle it into a recyclable bottle that you can recycle again and again, then we have done the ultimate in recycling and no longer can industry use this excuse that, “Oh, there’s not enough recyclable material or we can’t create high-quality stuff out of it.”
e360: There’s no worse quality, right, than ocean trash?
Lowry: We’re getting plastic that’s been floating in the ocean for 10 years or more. It’s awful, you know, covered in barnacles, and we’re recycling that into a high-quality bottle that can be recycled again. So if we can do it, they can do it. So that is the industry side. On the consumer side, we wanted to give people a little bit of hope. So along with the product that we put on shelves, we did four documentary films and a lot of social media to tell people about the problem, the recycling process that we developed, and what we were doing with our partners in Hawaii.
We’re not going to clean up the ocean by making bottles out of ocean plastic, but that’s not the point. Scientists studying this problem will tell you the best solution is prevention. The point is to change people’s minds about their relationship with plastic and turn it from something they just chuck away to something that is a valuable resource that can be used again and again.
It just so happens that the beaches in Hawaii act as sort of a natural sieve for that type of material. The first bottles that we made we worked with partners and three or four of us went out to Hawaii and over several days we picked up a couple of tons of plastic ourselves. We shipped it to our recycler in southern California, Vision Plastics, where we developed with them a special recycling process. But that is not economically viable. So now we’re taking it to the next level.
We have a 20-foot container that lives on the North Shore of Oahu, and we have expanded our partnerships to include beach clean-up organizations on Oahu and on the island of Hawaii, the Big Island. We’ve got a chipper that allows us to chip this plastic up and make it much more compact, and we’ve scaled the operation so that when we ship it we’re going to be shipping a full container of the stuff — 9,000 pounds. The proceeds of this product we funnel back to our partners in Hawaii.
e360: So you are really trying to create more demand for recycled plastic.
Lowry: Yes, we’re trying to make a thing out of it. And ultimately what I’d like to do is create a commodity that is called ocean plastic, or ocean post-consumer plastic, that anybody could buy. In order to do that we would have to build to a certain scale. I mean, it’s not going at the scale that the plastics industry operates at. Where you want to use it is frankly not in a place like a Method bottle, where the plastic in a bottle is a relatively high percentage of the cost of the item. What you want to do is use it in a laptop computer — fifty cents of plastic in an item that costs $2,000.
e360: How do you think about the tension between growing a business and lightening our collective environmental footprint?
Lowry: I think the answer is moving from products of consumption to products of service. Ultimately we need to get to close to zero resources used in order to get the job done, in order to be truly sustainable. But for me that is not a business that depends on selling more and more liquid no matter how concentrated. It’s a business that makes money every time somebody’s clothes get clean. It’s probably a format where a laundry detergent lives in a washing machine. When dirty, soapy water comes out of the back of the machine, the soap and the water get separated from the dirt and the soap and the water go back in the front of the machine and the dirt that comes out is compost. And we would get a little fee for the usage of the detergent.
The technology to do that is actually not too far off. The key element is getting consumers to adopt those innovations and then having a business that can adapt. The business of the future will be a business that is supremely adaptable.
• Marc Gunther, who conducted this interview for Yale Environment 360, is a contributing editor at Fortune, a senior writer at Greenbiz.com, and a blogger at www.marcgunther.com.