The Distance Project

The Matrix - Designing a Good Consumer Filter

Posted on May 14th, 2007 by Zach.
Categories: Sustainability, Systems of the World, Industry.

When Socially Responsible Investing (SRI) first started to grow there was inherent challenge that had to be overcome: If a company like Nike was recycling their shoes and a significant leader in waste reduction, but employed 10 year olds for 20 cents a day, were they an acceptable investment? Some people would say; “Yes, the environment is all that matters and Nike is doing a good job innovating on that level.” Others would say; “No, how can you claim to invest in a socially responsible way if you are abusing the labor force that is making the product?” To their credit Nike has made progress on their labor practices over the years, but the reality of these reactions is that both are correct and this ended up being a major barrier for SRI breaking into the mainstream.

The solution that was developed over a number of years was really quite ingenious in a free market sort of way - let the consumer decide what matters. SRI managers have created issue based filters for investing. Care about the environment? Here is a list of companies that are acceptable using that filter. Is labor your issue? There is a filter that fits. In many cases the filters have become even more nuanced allowing consumers to associate different “weights” to each issue based on their own priorities. Combine that with more traditional investing filters (Risk analysis, Diversification, Sector investing, etc.) and you have a very smart approach to the investment process.

This has been incredibly successful, and we have watched SRI fund management grow to exponentially as a result.

I bring this up because Reware is struggling with similar issues as a company. We like to think that we are part of a shift in product creation. We try to integrate concepts that matter in the world - local production, low toxicity, recycled material science, a little environmentalism, minimal packaging, and so on. Basically with every product, we would want a narrative that falls within our vision of next gen product design. This is what we believe is good for the world, and we know this is where the money is. We are after all in in this thing both to change the world and make money, pro-market force peeps that we are.

The annoying thing about being what’s next, is that the systems of the world are conspiring against you pretty much at every turn. As a small company we don’t have the resources to force our vendors to adjust to our needs. And this is a hard thing, something that I am sure Patagonia struggled with in the early days, that Nau is going through, and Arbor Sports has had to deal with. Everyone trying to adjust the status quo in product design runs into these systems like a brick wall.

A tangible example:

Right now we make three lines of solar bag. Our favorite is the ES line. With three styles (Daypack, Messenger, and Backpack) and three or four colors, we sew these bags in Texas. The quality is second to none and that is always an important factor. Plus the best part of this line is the fact that all the fabrics are made from recycled soda bottles. It is a bag that fits all of our goals - Production in the US, recylced fabrics, solar on the front to charge to gizmos - pretty great right?

Thank you, I will accept your humanitarian award, but please hold the applause.

A down side to this fabric is that it is not currently in wide distribution. What this means is that there is a limited supply in the marketplace, production keeps shifting from one factory to another, and the low toxicity dyes and process pieces don’t always work quite right. The company we work with to sew the bags struggles because they too are doing something that has never really been done and these barriers screw up production. This is a problem because often we cannot rely of a steady stream of bags. We then cannot offer these bags to larger clients because we worry we will not be able to supply them. I feel my ulcer flaring up just writing about it.

So problem #1: Production of the environmental fabrics is amazing, cool to be a part of, but sometimes unreliable.

The answer for us has been to use a more traditional system of sewing with a great company in North Carolina. Still in the U.S., but made for the most part from traditional Denier or Ballistic nylon. Still with the solar. So we have lost the recycled fabric piece with this style (we are experimenting with some organic fabrics), but gained reliability of production. This gives us the ability to sell more widely and have more faith that we can deliver. Plus making in the US we have a 4 week turn around for the most part, meaning that our response to the market is fast. Really fast. Speed and reliability comes at a price though and it is a steep one. The bag we sew in NC we could probably make in China for a 1/5 the price. That is a huge price discrepancy and effects the end cost to the consumer as well as our bottom line.

Problem #2: North Carolina is expensive

Anyone who manufactures overseas will tell you that product development is a headache - especially if you are a small company. The reality is, China is just far away and that leads to complications. No offense to Mr. Friedman, whose picture of the flat world is a good one, but in my experience it not so much seamless as navigating the seams themselves. You basically need a person on-site that you know and can communicate effectively with. Or you need to go yourself, and often. But there are huge benefits - the low costs are the primary one. This may seem cold because we all like to think that we would pay more for our stuff. The reality is that we will not. We have an idea about what things will cost and as consumers, we will not deviate from that. This is why China is booming, and industries like sewing are disappearing for the US. It just is what it is, and there is no avoiding it.

Problem #3: Overseas production is complicated for small companies. It has long lead times per order. We have to worry about labor conditions, and environmental usage.

So there is no silver bullet here that solves all of our problems. This is and will become reoccurring theme of the fundamental industrial shift we are going through as a country, as a world. There is no single solution in Energy, in Waste, in Water Conservation - in a every area it will take a basket approach to solve problems.

So our dilemma has been this - How do you quantify the narrative of your products? Is a future bag made in China of recycled fabrics better, or worse than a Denier Nylon bag made in the States? Is the fact that production is inconsistent for astounding products better than average products that are reliably produced?

What do consumers value most in their so-called “green” products?

For a while I have been agonizing over this, and in the end the SRI model that I love so much is a good starting point. We are attempting to create a matrix to products that allow the consumer to weight what is important to them. We will have products from overseas, we will have products made in the states. We will have expensive “Boutique” or “Limited Edition” uber green bags. We will have more traditional fabrics with solar on them.

In the end we will leave it all up to the consumer to work out what is most important. Hopefully we will grow to a level that we can dictate our needs to producers and get everything we want in one product. - and really what is more greenie-capitalist America than that?

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Tags: product design, nau, arbor, patagonia, reware, Sustainable Investing