Happy Earth Day 2014! For this week’s Marketing Sustainably blog post, I welcome Adam Freedgood as a guest blogger. Adam Freedgood is a sustainable business advisor and co-founder of Third Partners, a New York-based firm that helps organizations implement strategies that create new revenue opportunities, reduce waste and improve environmental performance. He is also a sustainability expert on the DMA Ethics Policy Committee. —Chet Dalzell
Sustainable Product Companies Benefit From New Breed of Big Data
When marketers laud the advantages of big data, it’s usually in the B-to-C marketing context. Sustainable fabric company Thread LLC takes a different approach. By using granular supply chain and social impact data, Thread helps customers improve brand integrity and increase the marketability of core products. For this special Earth Day blog, I sat down with Thread CEO Ian Rosenberger, Director of Community Development Kelsey Halling, and Director of Marketing Frank Macinsky to learn how Thread is using big data to unlock new sales opportunities through positive social and environmental performance.
Q: What Does Thread Do?
Rosenberger: “Thread recycles trash from the poorest neighborhoods on the planet and transforms it into fabric. We then sell the fabric and the story of how it’s made to companies that are trying to be more responsible.”
Q: Other than recycling, what about your business model makes you sustainable?
Rosenberger: “In addition to holding ourselves to the highest supply chain standards on the planet, we’re a certified B-Corp, which means sustainability is in our corporate DNA.”
Halling: “Traditionally, the fabric business is linked to environmental and social problems, not solutions. Beyond being a recycling company, we are also interested in social impact.”
Q: What are some of the problems associated with the typical fabric supply chain?
Rosenberger: “There are huge problems with textiles. From labor practices to environmental pollution, many brands’ supply chains don’t measure up to their marketing. For example, last year at this time thousands of people died and were injured in the Rana Plaza factory collapse in Bangladesh. Thread exists because we think brands need a more responsible source of raw material.”
Q: What do you mean by “more responsible source of raw material”?
Halling: “We use ‘responsible’ as the overarching term covering social and environmental concerns. Today there’s a lot of greenwashing out there. A recent study from Rank a Brand shows that hundreds of apparel companies talk about sustainability, but only a fraction follow through with real action or data. It’s a big deal to be able to put proof behind the claims.”
Q: There are many companies recycling plastic from various sources for various products. Why did you focus exclusively on fabric as the end product for your material?
Rosenberger: “We saw an opportunity to conduct good business while solving an enormous global problem. First off, we believe fabric can end poverty.” The textile business is one of the dirtiest on the planet, both socially and environmentally. We offer a 100 percent transparent supply chain solution. By giving data to other companies, we are creating a new market for getting a billion pounds of trash off the streets. In Haiti and Honduras we have already pulled 70 million plastic bottles.”
Macinsky: “The great thing about the fashion brands we are speaking with is that the industry is a trend setter in a lot of ways. As more brands get involved and interested in this transformational shift in the way we do business, a lot of people will benefit worldwide.”
Q: Big data typically refers to marketers using consumer data to target marketing messages more effectively. How does Thread’s outlook on big data differ?
Macinsky: “Our key differentiator is powerful stories involving people. We are tasked with finding qualitative data about how people are impacted positively by our product. We think in terms of ‘triple bottom line’ metrics: positive impacts on people, business and the environment.”
Halling: “We’ve been tracking data since the very beginning. As we are setting up supply chains, we are measuring financials, efficiency and the impact we are having socially and environmentally. We track job creation, training hours, pounds of trash, and even the lifecycle carbon emissions associated with each step in our supply chain.”
Q: That’s a huge amount of data mixing qualitative and quantitative units. How does a Thread customer digest it all?
Macinsky: “As a fabric company, our product goes into consumer goods. Our job is to give our partner brands a very simple distilled story so they can turn that around.”
Halling: “It changes from company to company and from consumer group to consumer group. From the list of bragging rights we provide, brands choose the attributes that are most in line with their marketing strategy. Our impact report summarizes some of the data insights.”
Q: How is the data Thread captures different than leading supply chain tracking mechanisms in the apparel world—for example, Patagonia’s supplier tracking tool?
Halling: “We have a saying that we track everything ‘from ground to good.’ When we say we know our supply chain, it means we are literally on a first name basis with the people involved. Some apparel companies claim to know the factories where stuff is made. They run audits, verify codes of conduct, etc. We take it way further than that, back to the moment bottles are picked off the street.”
Q: What positive social impact can Thread show so far?
Halling: “To date we are supporting 2,000 to 3,000 income opportunities for the poor in Haiti and Honduras. In the first quarter of 2014, our supply chain supported 221 jobs and about 2,700 income opportunities with $100,000 paid to small businesses, and we have huge growth opportunities ahead.”
Q: What data would you like to have that you do not have today?
Halling: “We think our partners and consumers would respond well to more real time data like GPS tracking, so they could actually see movements as they are happening. Even the data we have is groundbreaking. Environmental impact tracking is not widely done in the developing world. It’s a real culture shift.”
Macinsky: “I’m most interested in tracking outcomes on how Thread is benefitting people in their homes, workplaces and actually proving what jobs and income opportunities mean to people. For example, do cleaner streets mean fewer health problems?”
Q: Can we expect to see your use of big data in products on store shelves soon?
Macinsky: “You sure will. Our first partnership is with a bag manufacturer called Moop. That product will be available in May.”
Q: Will Moop be talking about specific social impacts?
Macinsky: “For the first launch, the focus is on some of the more digestible tidbits of data we have to offer. We are starting with the basics like the number of plastic bottles that go into a product, jobs supported and similar stats. Long term collaboration will increasingly focus on the social storytelling side.”
Q: Who do you want to connect with in the marketplace?
Macinsky: “Our focus right now is on talking to brands that want to be more responsible in their supply chains.”
Halling: “We are excited about the larger impact that happens at volumes to help disrupt the textile industry. The industry is this multi-billion dollar force in the world, but it is still murky and hard to get data on supply chains. There is still tragedy happening. It doesn’t have to be that way.”