Tips on How to Make Your Supply Chain More Environmentally Friendly
If Earth Day has you thinking about making your supply chain more environmentally sustainable, consider the success of Green Toys, a company that produces toys for tots made in the U.S. from 100 percent recyclable materials.
Started in 2007 as a niche brand, Green Toys has turned into a global company with products sold in 75 countries. The company sells through national retailers, including Whole Foods, Pottery Barn and Barnes & Noble, according to its co-founder and serial entrepreneur, Robert von Goeben, who declined to reveal revenues.
When Laurie Hyman was unable to find environmentally sustainable, U.S.-made, non-toxic toys for her two children, she and von Goeben teamed up and launched Green Toys to meet that need. The Mill Valley, Calif.-based manufacturer makes toys out of recycled milk jugs.
The key to selling a green product is not asking customers to sacrifice quality, says von Goeben. "You pull people in by the utility of the product, whatever its main purpose is. Everything else is nice to have," he says. "If you can give somebody a toy that is the right price, fun and safe -- and is green and made in the U.S.A. -- you have a winner."
Here's how Green Toys "greened" its business production:
1. Minimize transportation miles. The production of many goods involves shipping raw materials to China and then shipping the finished product back to the U.S. One of the most energy-saving decisions Green Toys has made is to have its manufacturing facility in San Leandro, Calif., down the road from its warehouse in Mill Valley, Calif. "We chose our manufacturer by proximity [using] Google Maps," says von Goeben.
2. Choose a material you can prove is sustainable. Green Toys products are made out of used milk jugs, a product that resonates with customers who have likely used and recycled the jugs themselves.
Once you have identified a sustainable material, be transparent with your customers about your production process and the environmental savings, says von Goeben. "We don't have this locked gate around our process," he says. Being open about how its production process is saving the environment engenders trust among its consumers, he says. Green Toys also makes easy-to-read infographics to illustrate how much energy is saved for every pound of recycled milk jug plastic that is used instead of non-recycled plastic.
3. Look for new sources of recycled material. Finding a competitive source for a recycled material requires research and comparison shopping, says von Goeben. But a good place to start is at national associations for those industries. For example, consult The Association of Postconsumer Plastic Recyclers to find plastic processors.
Bales of recycled milk jugs are sold to processors that turn the jugs into tiny pellets, which Green Toys buys 50,000 pounds at a time and stores in a silo, large storage bins. In the early days, Green Toys rented silo space to hold the pellets, but it now has one of its own. "The day we got our own silo was a really big deal to us," von Goeben says.
4. Design your product to fit the recycled material. A toy manufacturer using virgin, or non-recycled, plastic does not have the same design requirements that a Green Toys product does. To be able to produce a product that is completely made out of 100 percent recycled material, von Goeben and Hyman needed to design a product with no paint, no screws, no glue and no metal. The solution? Sections of the toys fit together puzzle-style.
5. Don't forget to green your packaging. If you are not ready to "green" your entire supply chain, take a look at your product packaging as a place to start adding sustainability to your business model. Because of its soup-to-nuts sustainability philosophy, the Green Toys products are packed and shipped in corrugated boxes that are themselves 100 percent recyclable. Von Goeben has noticed businesses making small steps, like removing twist ties from their packaging, he says. "Small steps really do matter."
Have you taken any steps to green your supply chain? If so, what have you done? Leave a note below and let fellow entrepreneurs know.
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.