Supply chains are critically important facilitators of our global economy, providing crucial resources and materials to companies to produce their products and services. And as we’ve seen recently, disruptions to supply chains can have major impacts.
In addition, People are increasingly expecting and calling on businesses to uphold higher social and environmental standards. Those companies that demonstrate a care for workers, the environment and the communities they serve are becoming top choices for young Americans especially. Clearly, companies need to begin to more fully consider their supply chains, working to make them more resilient, sustainable and ethical.
One company that has been working to improve and internalize the impact of its supply chain is Seventh Generation, a Certified B Corporation that meets third-party verified social and environmental standards. Manufacturer of a variety of sustainably created cleaning and hygiene products and now a member of the Unilever suite of brands, Seventh Generation’s name is a nod to the long-term considerations the company has when it makes decisions not only about the producers and processes in its supply chain, but in its packaging, hiring, and more. This becomes increasingly important as companies like Seventh Generation have seen an uptick in product demand since the coronavirus outbreak, where the impact of their products’ supply chain is magnified and increased in a short period of time.
For my research on creating a more sustainable capitalism, I recently interviewed Joey Bergstein, the CEO of Seventh Generation, about how it handles supply chain management to stay in line with the company’s mission and standards.
Christopher Marquis: On your website, you say that you “hold all suppliers and manufacturers to the same high standards and accountability that you hold yourselves.” What are those standards and what does holding them accountable look like in practice?
Joey Bergstein: We set standards, first and foremost, in terms of the products that we create. Our development philosophy captures the combination of cost performance, which practically every company does, but we also add in the dimensions of human health and planetary health. We’re trying to formulate products that sit at the intersection of those dimensions. We apply the precautionary principle, which means that we won’t use any ingredients or materials that we don’t know to be safe for people and planet.
We set multiple goals around sustainability that guide a lot of the work that we do, such as trying to improve on the kind of plastic that we’re using and our commitments to zero waste, getting rid of greenhouse gases, ensuring that we’re working with safe chemistry, and those that we’ve made around diversity, equity, and inclusion. Then, we obviously work with partners, our suppliers, and our third-party manufacturers to ensure that they hit the standards that we’ve created.
We make sure that consumers get products that are designed to our standards. We then work really carefully and over a long period of time with our supply partners around how we can continue to improve on our sustainability journey together. Those partnerships also go beyond just our suppliers. It also goes to how we work with our retailer partners like Target, Walmart and Whole Foods. We really want to help our partners along our joint sustainability journeys and help them set standards for the products that go into their stores. For example Seventh Generation played an important role with Target in their Target Clean Program, where Target identified the ingredients that qualified products as “Target Clean.”
Marquis: How has the coronavirus pandemic affected your work with your supply chains?
Bergstein: I wish it were for different reasons, but demand is through the roof. Our business is growing at about two and a half times faster than it was last year and last year was growing almost twice as fast as the year before. We’ve got many product lines where we’ve had to double, triple or quadruple capacity and could sell probably double that if we’re able to build capacity.
The biggest challenge has really been how do you flex the supply chain to meet the demand? Most supply chains are built to be able to respond to about a 30% increase or decrease in demand at any given point in time and then you have safety stock that helps create a buffer as well. Nobody builds a supply chain to respond to a double or triple of demand. That would just be incredibly inefficient but that’s what we’re dealing with now.
Throughout increasing production, however, we’ve rigorously maintained the same standards of authenticity that I described before. In fact, our R&D team has shifted much of their work from developing new products to primarily determining what alternative materials and ingredients we can use that still meet our standards. We have kept our lab open and are allowing no more than four employees in the lab at a time, with 15 feet of physical distance, temperature checks twice a day, and masks at all times. All told it has been a huge shift in how we work to continue to stay in supply.
Marquis: Seventh Generation has announced a zero waste goal. How is that going? Advice you’d offer to other companies that are looking to go to zero waste?
Bergstein: We frame our goal as striving to ensure that 100% of our products are recyclable and recycled, biodegradable and degraded, compostable and composted. This is about more than what we make, but impacting the whole system that surrounds our products such as ensuring that the products actually end up in the recycling stream.
One of the areas inside zero waste that we’ve in particular put a lot of attention behind is around plastics. On plastics, we’ve really framed three different steps towards zero waste – better plastic, less plastic and no plastic. The first focuses on better plastics using as much PCR content as possible in everything we produce is our goal. Most of our bottles are 100% post-consumer recycled content. The passion at Seventh Generation runs deep, for example we have an amazing packaging engineer who wasn’t satisfied at converting 100% of our dish bottles to recycled content, but she had to get the last 1%, which is the cap. Nobody had actually created a cap from PCR plastic. It’s a very difficult thing to do, but she cracked it. So, we now have 100% PCR caps as well, which is remarkable.
The second leg focuses on less plastic. We’ve been doing a lot of work on concentration and the best example of that would be ultra concentrated laundry detergent. Instead of that 100 ounce bottle of laundry that weighs about seven pounds, about 18 months ago we launched our “easy dose” laundry bottle. It’s 23 ounces, the same 66 loads as in the 100 ounce bottle. It’s 75% lighter. Its 60% less plastic, 50% less water and so, there there’s a lot less plastic per use.
The third leg focuses on no plastic. To be able to get rid of plastic all together, you need to actually take the water out and so, we’re looking at how to create an effective product for laundry, for dish cleaning, for counter cleaning, and for hand washing that has no water in it. So, you end up with powder forms or tablet forms and we’re running a test with Grove Collaborative, starting in August. We’re excited about the potential of this line that at the moment, are being packaged in a highly recyclable tin can. We hope to be able to get it to cardboard in time – the focus is very easily recycled materials.
In the zero waste work, our focus has really been around the products that we create as opposed to ensuring that there’s zero waste in the manufacturing of the operations. We don’t have much waste at all actually coming through operations. So, the most waste is actually the end of life for the products that we create, which is where more companies should focus their attention.
Marquis: What’s your opinion about the role of business in society and healing the environment?
Bergstein: Our mission as a company is to transform the world into a healthy, sustainable and equitable place for the next seven generations. Business has an incredibly important role to play in creating a better society. We’re all on a journey. We’ll never get to perfect, but we all need to make progress.
Seventh Generation was acquired by Unilever almost four years ago. We were doing well, were independently held, growing nicely, had a strong value and a clear mission. Ultimately, Unilever approached us, and we realized that we could do a better job of delivering on our mission and potentially going from impacting millions of people here in the U.S. to one day billions of people around the world. Since acquisition, we’ve accelerated both our business and our mission. What’s been really amazing for a lot of us is just to see Unilever adopting a lot of the practices that we’ve really held clear and dear.
It is really inspiring to hear the Unilever leaders talk about the impact that Seventh Generation has had on the broader Unilever business. That is especially inspiring as Unilever is already a clear leader in sustainability. I’ve always been an optimist, and I remain incredibly optimistic that there’s a great business case to be made for doing business the right way. The more people reward businesses doing the right thing, the more we will see big businesses doing the right thing.