Businesses Find Benefits in Going Green
Incentives to go green have moved way beyond lowering utility bills.
"Cost savings are evolving into revenue generation," says Lauren Kelley Koopman, a director for PwC's Sustainable Business Solutions practice. "Sustainability is next-generation business thinking because it creates value, attracts customers, retains employees and improves capital and funding."
In 2012, an Office Depot tracking poll found 61 percent of small businesses were trying to go greener, while 70 percent anticipated going green over the next two years.
If you're still on the fence, consider how these four companies are energizing their bottom lines.
Launched in 2004 near Albany, Georgia, Enviro-Log manufactures fire logs made from the waxed cardboard boxes that transport produce. The wax is food-grade safe, so the logs burn cleaner than wood, emitting 30 percent less greenhouse gases, 80 percent less carbon dioxide and 86 percent less creosote, while still producing 50 percent more heat per pound. Enviro-Log hauls away the boxes from supermarkets and restaurants for free, whereas garbage haulers typically charge $126 per ton.
"We began by marketing the green attributes of recycling and recovery of waxed products," says founder Ross McRoy. This is significant, as more than 600,000 tons of the water-insoluble waxed boxes wind up in landfills each year.
But he found that people wouldn't pay a premium for green without personal benefits. Enviro-Log refocused on informational marketing and education. "If you provide green with value, people will pay for it," says McRoy. By 2008, the market had shifted in his direction.
Now the nation's third-largest producer of manufactured fire logs, Enviro-Log has annual revenue of $8 million to $10 million. McRoy is considering a second plant and managing his company's growth. "The challenge is matching raw materials to sales and business strategy," he says.
Reinventing the roost
Jesse Laflamme, now 35, didn't expect to be down on the farm again after graduating in 2000 from Bates College in Lewiston, Maine. "My parents didn't encourage me to come back," he says. "They didn't feel there was a future."
Founded by Laflamme's grandfather, the 200-acre egg farm -- now called Pete and Gerry's Organics -- was being muscled out by big agribusiness producers. Such operations, says Laflamme, typically cram 150,000 caged chickens into the same amount of space his family uses to house 15,000 cage-free hens.
Encouraged by his wife, Sandra, who grew up outside Philadelphia, Laflamme took over. "We started by making the transition to local eggs, identifying who we were," he says. "That evolved to organic." Consumer demand for regionally sourced, higher-priced organic foods hatched growth.
Today, Pete and Gerry's, located in New Hampshire's White Mountains, is a regional powerhouse, distributing "certified humane" organic eggs up and down the East Coast. "For the past 13 years, we've had compound annual growth of 35 percent, with revenue north of $50 million," says Laflamme, "although the nature of agriculture means gross margins are pretty narrow." He also works to support family farms by partnering with 40 or so neighbors, some of whom switched to egg production after the success of Pete and Gerry's.
The light bulb went on in July 2008, says David Edmondson, co-founder of eRecyclingCorps. "We got right on it. We knew it was a big idea."
Edmondson, who's also been CEO of RadioShack, was then running an online consignment business based in Dallas. A staffer had picked up an older cellphone for resale and, annoyed, Edmondson complained it had retailed for $29.99 and had zilch value. But the staffer knew the model was fetching $80 on eBay.
That was the stunning business model in a nutshell: Wireless carriers subsidize new mobiles to encourage contracts. Amazingly, says Edmondson, "wireless phones depreciate to unsubsidized new value."
Now booming, eRecyclingCorps refurbishes old mobiles to sell in developing countries or, if irreparable, in bulk to recyclers. Since 2009, the company has collected 10 million retired devices. Revenues hit "several hundred million in 2012, double the growth of 2011," says Edmondson.
About 130 million phones are retired each year in the U.S. as consumers upgrade. "Three years down the road, those devices are worth $300 apiece unsubsidized, retaining $100 billion of value," says Edmondson. Cleverly, eRecyclingCorps forges deals with carriers -- to date, five of the top seven -- to offer customers immediate trade-in credit at points of purchase, usually about $98. No need to stuff envelopes or wait for rebates.
"It's ridiculous and a shame that we in the developed world discard the devices, making an environmental problem," says Edmondson. "Getting a phone in a Third World country is a life-changing event. We want buying a wireless phone to be like a car. You buy a new car and the old car stays behind and has another life."
While most online content enterprises are teetering on the fiscal cliff, Mother Nature Network (MNN), an online social responsibility news site headquartered in Atlanta, reeled in $6 million in 2012, averaging 4 million unique visitors a month. So far, it looks like 2013 could double that.
Co-founded in 2009 by Joel Babbit, a veteran ad agency executive, and Rolling Stones keyboardist and eco-activist Chuck Leavell, MNN covered only environmental news when it launched. "There was a huge void of information," says Babbit. As interest in green has grown, MNN expanded into wellness, food, home, family, travel, technology and more. "We're focused on the responsible consumer market that's connected by a set of shared values," says Babbit.
Shrewdly, MNN sells sponsorships, not advertising. Companies like Walmart, Allstate and Delta pay $300,000 a year for "100 percent share of voice on each of the 12 content categories. For instance, Mercedes-Benz gets 10,000 pages [of green technology transportation] for 24/7, 365 days of marketing," says Babbit. "It's tremendously effective."
Not long ago, the triple bottom line -- people, profit and planet -- was considered hopelessly idealistic. Nowadays, instead of greed, it seems green is good.