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October 27, 2009
27/10/2009
 Mr Bruce E Bergstrom VP, Vendor Compliance,Li & Fung |
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"Sustainability is a great concept like liberty. We are in a world with many problems and sustainability is the solution. This is the answer given by Bruce Bergstrom, VP vendor compliance of sourcing giant Li & Fung, who tackled the difficult question of What is Sustainable Fashion? at the first-ever Sustainable Fashion Forum held earlier this month. |
Session One:
Moderating the first session, Michael Lavergne, director-Asia, Worldwide Responsible Accredited Production (WRAP), posed to the panel "What does it really mean to be sustainable and what is best practice?"
Adding to his big-picture view of sustainable fashion, Mr. Bergstrom says economics play a strong role in the current approaches to sustainability, while solutions taken from social and environmental perspectives are sure to come.
"Sustainability is now a retailer and brand-driven initiative, but we need to convince the manufacturers to see the benefits of sustainable operation starting with raw materials,’" said Hong Lee, manager of Asia Pacific, Control Union.
But when widespread consumerism drives disposable fashion, is there really a place for sustainable fashion? The answer is yes, according to Janvier Serrano, creative director and founder of The 091/091’s Eco Couture brand, which features bags made from recycled scraps.
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"Although it is difficult to achieve sustainability right now and it is a big challenge, we must do it. We must be open, we must be proactive. We must educate the consumers to go for quality and not quantity," advised Serrano.
Agreed Amy Small, Creative Director at Green2greener, a b2b trade platform for eco-fashion: "Sustainability is a continuous goal, it is to put back the same amount as what you take out". In her opinion, small companies, successful in sustainable production, can inspire big companies to follow.
"Fashion is not only in clothing but it is a lifestyle and attitude of life. We have to be vigilant on sustainability in day to day operation and living. It is important to impress upon the students of today the concept of sustainable living so that it can be passed down to the next generations", said Mary Yan Yan Chan, director of Style Central Ltd, the exclusive agent of Perclers Paris.
Taking questions and opinions from the floor, the panel and audience agreed that a paradigm shift is needed for the fashion industry to tackle sustainability effectively. There is a need to drive innovation. Governments can also play a part, through education and green policies.
Session Two:
Devangshu Dutta, chief executive of Third Eyesight led the 2nd session panelists to discuss "Is Sustainable Fashion Profitable?" He commented that sustainability is not viable in the long term without financial returns and a good business sense.
"Sustainable fashion can be profitable because shoppers today are looking for something more meaningful. Consumers are accepting the concept of reuse and recycle in a creative way", said Olivier Grammont, founder of eco fashion brand Francs-Bourgeois. He described how his company uses second hand materials for handbags and the finished products are selling well in boutiques.
Concurred James Ockenden, director of publishing house Media Karma which specializes in the environmental technology, energy and finance industries. Ockenden citied the case of an olive oil company that used olive pits to generate energy for the plant. The company has now expanded to processing palm oil waste to produce a power supply to 400 households. Ockenden strongly believes that green legislation is the way forward but subsidy for new technology is necessary. He proposed adding ‘government’ to the three pillars of sustainability, that being economics, environment and social.
 Session 2 Panel: Mr Olivier Grammont, Mr James Ockenden, Ms Cassandra Postema, Ms Dong Shing Chiu |
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Meanwhile Carolina Rubiasih, VP sourcing & product development of the SAK questioned whether today’s consumers, who want value-for-money products, are indeed ready to for sustainable options that generally incur greater costs. The younger generation, however, is adopting healthier lifestyles that will likely encompass sustainable fashion. As time goes by, sustainability will be the norm and a way of life and perspective.
Offering ideas on how to be profitable with sustainable products, Ms Rubiasih advises to produce only what you can sell, improve on the design to reduce wastage, use less packaging layers, increase efficiency in logistics and study the tariff code to tap lower tariff categories with minor adjustments to the material & design. Her privately owned company took such steps and yielded good results, outperforming their previous year’s revenue.
Echoing Rubiasih’s emphasis on the importance of design, Cassandra Postema, director of fair trade fashion brand Dialog said "As designers, we have to design a product that can sell and sustain and compete with the regular products. It took People Tree, an eco-friendly company, 10 years to breakeven."
Some audience members felt that sustainability must be price neutral if not cheaper to sell to consumers and noted that supply chain efficiently is critical to profitability, while innovation and good management can bring costs down. It was also suggested that designers should place attention towards engineering so as to produce more efficiency.
Session Three:
In Session 3 Mr Ockenden facilitated the panel to probe into the question of "Who Wants Sustainable Fashion?" People buy fashion for various reasons, but experts often agree is linked to an emotional element. Companies can encourage sustainable fashion purchases by strengthening its ‘feel-good’ factor.
Sustainable fashion is in-demand among fashion brands, but under the financially low-risk terms of cost and time-efficient production, says Mr. Lavergne. NGOs are nudging the concept of sustainability onto the brands and retailers and the social climate is ripe for them to take such a stand.
Meanwhile Mr. Dutta says that general perception of fast fashion is quite wrong; it is actually not about throw away clothing but a management system that can improve the efficiency of the supply chain. Fashion is by nature not a sustainable concept but how can we make it sustainable? He hopes that in 10-20 years time we will truly have sustainable fashion.
 Moderator: Mr James Ockenden, Direct, Media Karma |
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Summary:
The panelists recognise that sustainable business is still in its infancy, and urge the brands, retailers, buyers and suppliers to take small steps towards sustainability. There is no one answer to the complex and multi-faceted issue and finding solutions will require a collaborative effort. Improvements in education, innovation, technology and government policies will make sustainable fashion possible – and profitable.
Devangshu Dutta
October 8, 2009
Here is a summary of the Sustainable Fashion Forum, and some more pictures from the afternoon.
And here is a previous article on sustainability and corporate responsibility.
Devangshu Dutta
August 18, 2009
Four months ago in this column (“Organic – Hope or Hype?”) I wrote about the need for customers to make themselves aware of the true nature of organic products, and it is time to reopen that discussion.
Food is an emotive subject with us as consumers, food distribution and retail is big business with us as the trade, and agriculture is a sensitive area of governance.
On top of that, studies are seldom exhaustive enough in terms of sampling, duration of the study, establishment of controls etc., and for every study that proves the superiority of organics, you will be able to find counter-studies and opposing arguments.
In recent years brands have tended to make much of their organic certification. Marketers are known for overstatement anyway, and the promotional language used by some implies (or even explicitly states) that these products are superior to other alternatives. Surely, then, the consumer should be willing to pay higher prices for these “better” products?
If only, if only, facts were that straightforward.
In the earlier column I’d written: “We expect organic products to contain more nutrition and be better for our bodies. While this may be true of organic animal products compared to their inorganic counterparts, it has not been demonstrated for plant products, other than anecdotal experience of taste and appearance.” I had also raised the question: if organic foods are no better nutritionally than inorganic and could be as productive for the farmer, are many of the organic brands just skimming the gullible customer while the going is good?
Well, the debate just got messier. Recently a study sponsored by Britain’s Food Standards Agency last month (July 2009) really set the cat among the pigeons. The report was based on review of existing research papers to find out if organic products were nutritionally superior to inorganic products. And their conclusion was that the studies reviewed did not provide enough evidence that organic food is more nutritious.
Well, what the report really said was that on the basis of the limited number of studies that were deemed to be rigorous enough, there was not enough evidence to prove that organic food is more nutritious.
Okay.
Imagine an examiner saying that he does not have enough evidence to prove that a student who has passed did not cheat. Notice, he is not saying that the student actually cheated. But wouldn’t this statement alone raise suspicion in your mind about the student’s integrity?
Unfortunately, newspapers and electronic media sell headlines, and headlines need to be short and snappy. Here are a couple of examples about this study.
These clearly raise questions about any benefit at all from organics.
In the noise, the disclaimers by the team that prepared the report seem to have been ignored. For instance, this one: “It should be noted that this conclusion relates to the evidence base currently available on the nutrient content of foodstuffs, which contains limitations in the design and in the comparability of studies.” The report also states: “This review does not address contaminant content (such as herbicide, pesticide and fungicide residues) of organically and conventionally produced foodstuffs, or the environmental impacts of organic and conventional agricultural practices.”
Like any good research report, it admits that “it is important to recognise the potential limitations of the review process”. And the final line in the Conclusion section of the detailed report says: “Examination of this scattered evidence indicates a need for further high-quality research in this field.”
As a reader or TV viewer, how many of us would be motivated to go to the original source and read these disclaimers as well?
Promoters of organic farming, such as Britain’s Soil Association, of course, have trashed the study saying that it is too narrow having excluded most of the available research papers since they did not meet the review standards, and that it ignored the biggest long-term health impact – that of pesticides and other chemicals used in inorganic produce.
Their opponents, in turn have trashed defendants of organic farming by calling them unscientific and narrow-minded in their own right. They point out that high-output inorganic farming is far more useful to serving the exploding human population, than low-intensity organic farming.
One of the readers of the British newspaper Daily Mail was emphatic that she didn’t “eat organic stuff to get extra nutrition”, but was “happy to pay more to be free from additives”. Certainly that is a significant benefit that motivates most people who are well into organic products. In an unusual open letter, the Chief Executive of the Food Standards Agency clarified: “Pesticides were specifically excluded from the scope of this work. This is because our position on the safety of pesticides is already clear: pesticides are rigorously assessed and their residues are closely monitored. Because of this the use of pesticides in either organic or conventional food production does not pose an unacceptable risk to human health and helps to ensure a plentiful supply of food all year round.”
The other motivation for organics is our attitude towards the environment, which can either benefit us over the longer term or, if we are irresponsible, it could accumulate toxins which only show their impact over decades and generations. But, let’s be honest, are most consumers likely to buy products because of some distant benefit to the environment, or products that benefit themselves immediately?
Possibly the answer lies in the organic sector cleaning up its message.
Are consumers any wiser after this study and the debate? I’m not sure. For now, my take on this issue remains: be aware and make up your own mind about what you want to ingest, because this debate isn’t over yet.
Devangshu Dutta
April 15, 2009
The organic movement has touched a variety of products, including clothing, cosmetics and home products. Possibly the most emotive area is organic food, because food products are directly taken into the body while other products have a limited and external contact.
In a sense, before the appearance of industrial agriculture and the application of synthetic nutrients and pesticides, all farming was organic. In fact, the traditional Sanjeevan system of India dates back several millennia.
Even the existing organic farming movement has been around since its founding in Europe in the early-1900s. This was initially treated as fad and its proponents were seen as eccentric (at best) or insane. However, as damage to the environment and to human health became a bigger concern, organic farming emerged as the healthier option.
Organic farming is based on the following fundamental premises:
The aim is to drive a more healthy approach all around – for the environment, for people, as well as for the animals and plants.
The organic trade (all products) is currently estimated at over US$ 40 billion globally, with an annual growth of approximately US$ 5 billion. Organic production is driven today more by demand than by supply – in many cases supply constraints of certified organic produce is more of a concern than the market demand.
Every year, increasing numbers of consumers consciously buy organic products regularly or occasionally on the basis that it is good for them and good for the planet. Certainly, true organic farms do not use synthetic materials, avoiding damage to the environment and can help to retain the biodiversity. Whether measured by unit area or unit of yield, organic farms are more sustainable over time as they use less energy and produce less waste.
It is not as if, after decades of individual enthusiasts pushing their ideas from the fringes, consumers have suddenly become more environmentally conscious. This mainstream awareness has possibly been pushed up in recent years by the involvement of large companies which have spotted the tremendous growth of a profitable niche. “Organic” is the new speciality or niche product line that can be priced at a premium due to the greater desirability amongst the target consumer group, with potentially higher profits than inorganic products or uncertified products. Today, at least in the two largest markets (the USA and Europe), large companies have the lion’s share. For instance, statistics from Germany show that in 2007 conventional retail chains sold over 53% of organic produce, while specialist organic food retailers and producers lost share during the year. Similarly in the US, after the development of the USDA National Organic Standard in 1997, significant merger and acquisition activity has been visible.
However, as the interest in organic products has grown, so have the noise levels in the market. With that the potential for confusion in customers’ minds has also grown.
In day-to-day conversations, we tend to treat organic as superior to inorganic. But the reality is a little bit more complex.
For instance, we expect organic products to contain more nutrition and be better for our bodies. While this may be true of organic animal products compared to their inorganic counterparts, it has not been demonstrated for plant products, other than anecdotal experience of taste and appearance.
There are studies that suggest that inorganic farming can produce more crop per acre and more meat per animal, and is, therefore, the better option for a planet bursting with overpopulation. (Some proponents extend that argument to genetically modified foods as well, but let’s stay away from that for the moment.)
However, there are also other studies that counter this argument by suggesting that the organic farms can end up being more efficient and productive in direct costs, yield and long-term sustainability.
Then, the big question is: if organic foods are no better nutritionally than inorganic and could be as productive for the farmer, are organic brands just skimming the gullible customer while the going is good?
We might expect certification and regulation to clear the air, but in many instances these leave out as many things as they include. Labelling is yet another concern. Countries where labelling is more stringently monitored allow logos such as “100% organic”, “organic” (more than 95% organic ingredients) and “made with organic ingredients” (over 70% organic ingredients). In other countries logos and where labelling may be less strictly monitored, the use of the term organic is far looser and even more confusing. What’s more, the usage of terms such as “Bio” or “Eco” can also mislead consumers into believing that there is something distinctly superior about the product they are about to buy when, in reality, it is often only a marketing gimmick.
Further, just because something is certified as organic does not mean it is a higher grade of product. Organic produce may end up having a shorter shelf-life, or may also be otherwise inferior to inorganic produce in the store. In fact, as the KRAV (Sweden) website states: “The KRAV logo is a clear signal that the product is organically produced but does not say anything about the quality. That must be guaranteed by the producer, i.e. yourself”. This is similar to saying that the fact that someone has a management certification from a certain institute means that he or she passed the tests of that institute in a particular year, but that does not automatically make him or her a good businessperson.
Countries and regions that have a poor record of environmental consciousness, poor transparency norms, are also not seen as the best source for organic produce even if it is apparently from a certified producer. In some cases, certification may be carried out second-hand and unverified, leading to instances such as the one in 2008 where the US retailer Whole Foods pulled out pesticides-laden “organic-certified” ginger that was shipped from China. The mixing of inorganic ingredients of uncertain origin, especially in blended products such as juices or snacks, can also make a mockery of the organic labelling.
Another visible concern today is the carbon footprint, and some people raise the question whether buying local (whether inorganic or organic) may be less environmentally damaging than importing produce from distant countries. In such instances, the evidence of lax certification, such as the Chinese case mentioned earlier, takes support away from the cause of organic imports.
Arguments have also been raised about whether the larger “organic” factory farms merely follow the letter of the law rather than the principles behind the organic movement? Small organic farmers allege that large organic-certified factory farms – especially those selling animal products – do not really follow the core principles of “natural” growth, and confine their animals in unnatural surroundings.
With all these arguments and counter-arguments flying about, some organic (or nearly organic) producers elect not to be certified, letting their customers vote with their wallets. Some of these smaller farmers may be driven by economic necessity since certification could be costly and cumbersome, while others may just find it more feasible to stick with a local sales strategy where the customers are able to physically see the organic nature of the farm.
It’s clear that all of these questions will take years to sort out – through debate, research, legislation, as well as social and commercial pressure. Meanwhile, most conscientious retailers and concerned consumers will need to do their own studies to educate themselves, and will need to examine each product for genuineness of the organic promise.
And, if you are not quite that savvy, the final message would be: “caveat emptor” (“let the buyer beware”).
Devangshu Dutta
April 11, 2009
RetailWire’s Al McLain has asked, “What changes in consumer spending habits do you see as providing retailers and manufacturers with the most opportunity? Which habits do you think will stick around once the economy improves, and which won’t?”
Well, “the only thing certain (and permanent) in life is death…”
Economic changes – including recessions – are not permanent (unless the society itself collapses), so the market mood will shift towards spending again.
Consumer sentiment may not lead the recovery but is likely to follow it. Given that, value-consciousness will stick, even after the market turns upwards. So my reading is that private label will continue to grow, people will continue to think harder about spending on big-ticket items, deals & coupons will continue to work.
Carol Spieckerman, a RetailWire panelist, made a comment about consumer spending not returning to where it was. To that I would add this thought and question: even in these recessionary days, the average American and European household consumes more (and is more wasteful) than even the wealthier households in the so-called developing or less developed economies. What if the average American consumer begins to find out that s/he can cut back even more than s/he already has? What would that do to the traditional business and economic model?
And once that consumer role model is demolished, what would that mean for the world at large and the developing economies that have been following the “consumption-led growth model”?
Obviously, this is not a foregone conclusion, but it’s a scenario worth pondering and preparing for. And some might say, perhaps a scenario even worth encouraging.
(Here are more thoughts and commentary from the RetailWire Braintrust and others readers on Lessons from the IRI Retail-CPG Summit.)
Moderator: Mr Michael Lavergne
Session 1 Panel: Mr Javier Serrano, Ms Mary Yan Yan Chan, Mr Bruce E Bergstrom, Mr Hong Lee 
Moderator: Mr Devangshu Dutta 
Overview of the forum