Why sustainability is good for business
“Sustainability” is increasingly a buzzword in companies of all sizes and the IDC is no exception. Around the country, dealers are tapping into the sustainability trend in diverse ways and discovering that it can make a difference not only to the planet, but also to their bottom line.
Eight years ago, Palace Business Solutions, Santa Cruz, California, decided to go solar. Today, the company produces 43,250 kilowatts of solar power annually, accounting for up to 95 percent of its building’s energy use. According to CEO Gary Trowbridge, saving energy was a motivator—but far from the only one.
“California is a green state and Santa Cruz is hyper-green,” he says. “It’s the right thing to do to get off the grid. We want to make a difference and our customers want to buy from a local, sustainable company. We’ve been doing this for years, so sustainability is part of our elevator pitch, our value proposition: ‘Partner with us and you are partnering with a local, sustainable company.’”
While its solar empowerment is impressive, this is far from the only initiative that has earned Palace sustainable bragging rights. “We were the first company to be green certified by the Monterey Bay Green Business program, which is part of the California Green Network,” explains Trowbridge. “We are audited every three years to ensure we are still doing what we need to be doing right.”
And recycling is another thing the company is doing right. “We are lucky to be next door to a senior center that makes its money from recycling,” says Trowbridge. “We’ve been supporting it for over 20 years. The seniors also have a little store where they resell refurbished items and a place they take old technology, like computers and printers, that recycles every part, including wires. Apparently, there’s good money in it, and it’s great for us because we are helping the planet; but not only that, the money goes to help seniors in our community. We also have recycling bins and once a week we remind employees to check nothing is in the trash bin that should be in recycling. We also have done other things, like moving from paper cups to glass in the office.”
BOS Holdings, Tampa, Florida, is a 100 percent employee-owned consortium of American businesses focusing on commercial office interiors, including new, used and remanufactured office furniture. According to chief marketing officer George Lucas Pfeiffer, the different factions provide a sustainable advantage.
“Each business works together,” he explains. “BOS is mostly large furniture and was the first Haworth dealer in 1974. When a company wants new furniture, we talk to them about decommissioning their existing furniture. We help clients understand their options for recycling it. Our AIS business focuses on used and remanufactured furniture; 80 percent of the time, we can find a startup looking for used furniture or a mix of new and used. Commercial furniture has a long life, so a lot of it is still in good shape. Often we can credit or give money back to the original owner. We can also tell our customers a sustainable story: how, when they refresh and choose a new solution, their old inventory will be repurposed and resold instead of going to landfill.”
According to Pfeiffer, the sustainability story doesn’t stop with the dealer: “The manufacturers you pick are also how you create a sustainable story. Haworth is incredibly sustainability focused. We source from more than 300 manufacturers and one important thing to us as an organization is choosing manufacturers with sustainable systems. Knowing manufacturers are aiming for zero waste and practicing sustainable sourcing is important to customers today.”
But at some point, the life of even the toughest furniture must end. “If we can’t reuse it ourselves, we donate it to nonprofits,” Pfeiffer says. “We also try to recycle when the life is over, using the fabric as shipping material and recycling other components.”
Some of the ways BOS has found to recycle these components are both creative and cost cutting. “When I was hired, I was told we needed to become 80 percent waste free and that was my goal for our team,” says Florida warehouse manager Leon Ferguson. “I did some research and was able to get in contact with our local recycle company and add a recycle bin to our facility to save costs and become a green company. But in my opinion, that was not enough because it only covered 50 percent of our waste from wood and Styrofoam. I reached out to many people to see if we could recycle our pallets, wood and Styrofoam. I came across a family that was interested in this waste. So for the last year, I have teamed up with this family and it’s been a win-win. They remove our pallets, wood and Styrofoam weekly. They then take them home and recycle them in many home DIY projects. They have created a privacy fence, planters, bookshelves and a tiki hut; and built the interior of their pool enclosure.” Today, Ferguson says the Florida facility recycles 90 percent of its waste, which has saved the company over $25,000 a year in waste removal costs.
And BOS isn’t the only company with sustainable feelgood stories to share. “HP has a great closed-loop recycling program for its ink cartridges,” says Trowbridge. “In addition, a study found that Haiti puts more plastic bottles in the ocean than any other country: there’s no clean water there, so everyone drinks bottled water; but there’s no trash pickup service, so most of the bottles get tossed in the rivers and eventually make it to the ocean. HP went to Haiti and told the people they would pay X amount in the country’s currency for the bottles and ship them out. It turned out that the plastic made HP’s cartridges stronger. So now some of the poor in Haiti can sustain themselves financially by collecting bottles; HP has a better product; and there are fewer bottles in the ocean.”
According to Trowbridge, sustainability is good both for business and for the planet’s future. “Sustainability is key for next generations,” he says. “Say what you will about public education, but one thing it does well is teaching kids about sustainability and they bring this to the workforce. Many younger people don’t want to work for or do business with a company that does not practice sustainability.”
While Trowbridge couldn’t put a dollar amount on the business that comes directly from the company’s sustainability efforts, he says: “I can tell you that because of our commitment to being a green, sustainable company, and because we offer as many sustainable/green products as possible, I know many organizations in the public sector and schools choose Palace because of who we are and what we offer.”
A sustainable message
FSIoffice, headquartered in Charlotte, North Carolina, has been selling sustainable solutions for some time. “Our motivation to focus on sustainability and green products was based on customer demand,” says executive vice president Beth Freeman. “There was so much demand that in 2000, we held an Eco Expo focused on green products. Over time, we used our sustainability initiative to explore how we could be more efficient and reduce costs. For example, we looked at how we could deliver less frequently. We realized it was more efficient to deliver a set number of times a week versus next day for a box of pens. A big part of sustainability is not delivering things that aren’t vital every day.”
While some believe eliminating next-day delivery can be difficult in an industry that has promoted it for so long, Freeman believes the secret lies in the (verbal) delivery: “When you present it as a sustainability initiative, customers are a lot more receptive to it versus saying we only want to deliver once a week.”
Trowbridge also believes messaging is key to securing sustainable customer buy-in. If what he calls “cause” marketing is done right, he suggests, it can improve your image and bottom line: “The next generation wants to know what you are doing to preserve where they live. For example, we ran a campaign where we planted a tree in the sustainable forest near Lake Tahoe for every case of paper purchased. It’s a great way to clear the air and refresh the forest. The last time we did the promotion, we planted 1,000 trees, using the money the manufacturer would rebate us. In October, we said for every case of paper bought, we would buy 10 meals for the homeless. We paid for 20,000 meals. Customers cared about that more than the $1 they would receive and we sold 20 to 30 percent more product.”
But despite the positive impact that sustainability has both on the planet and on company profits, it also poses some challenges.
“Recycling has become harder in the last three or four years,” admits Gary Molz, co-owner of EZ Office Products, Madison, Wisconsin. “The fact that China is no longer taking any of the U.S. garbage makes it tougher; although ultimately, this is good for the planet since that trash was basically just being allowed to pile up. Believing stuff is being recycled feels good; but at the end of the day, it is usually cheaper to produce products from raw materials. Sadly, too often, it’s more like reduce, reuse, recycle, repurpose, rot.”
Molz maintains that we can all learn a sustainable lesson from the past. “I think sustainability is about producing less waste,” he says. “During the Depression, people practiced sustainability because they had to. In the 1950s and 1960s, people had two pairs of shoes. They cost more and represented a sizeable percentage of their salary. Today, some people have 200 pairs of shoes. As a society, we shifted to disposable. We can shift back. It’s an ebb and flow and a constant struggle; but if the mindset is not to waste, you can find a way. Often people are buying something they don’t need made by a worker who gets paid eight cents an hour in China. They could buy something made in the U.S. by someone earning a fair wage. It may cost more upfront, and some can’t afford to do this, but it is more sustainable. We need a cultural shift. If there is interest in buying more sustainable products, it’s important to set up a sustainable system.”
Molz goes on to suggest it’s the system that reigns supreme. “Sustainability is not all about, ‘Can I buy a towel that is made of recycled material?’” he says. “Customers are looking to be part of something bigger versus a one-time product buy. They are looking at the sustainability of the whole system. A pen made of recycled bottles is nice, but customers are more interested in knowing if the manufacturer’s processes and the supply chain are sustainable.”
In Freeman’s view, customers care about both sustainable systems and green products; and once again, it all comes down to presentation. “Pilot’s B2P pen, which is made out of plastic bottles and is refillable, will appeal more to customers if you can show that using the pens saves X number of plastic bottles from going to landfill,” she explains. “Or take remanufactured toner cartridges versus new: we have a calculator we use to show customers the environmental savings. Put the product in front of customers and tell the story behind it. You can say, ‘It’s green, so buy this.’ But what sells is to put a product and its greener version side by side and show the impact the green one is making. If you can offer customers quantifiable environmental statistics, like, ‘It saved X in emissions compared with the nongreen product,’ they are more apt to buy the sustainable one.”
“Sometimes, the extra cost can be offset by the impact on the planet,” adds Pfeiffer. “It also can attract people with the same beliefs. Sustainability is in our culture, and many people want to work for or buy from a company that cares.”
A lack of motivation
Despite all the talk about the need for more sustainable products, many dealers contend that manufacturers are not buying into the movement—mainly because they don’t feel there’s customer demand, or at least not enough. Yet some dealers report more complex trends at play.
“It might just be FSI’s experience in the south, but we saw the strongest demand for sustainable processes and products from 2009 to about 2014-15,” recalls Freeman. “During that time, we did an electronic ‘green’ catalog with all environmentally better products, such as those with certified recycled content and green-certified cleaners. After 2014-15, it dropped significantly. People were just not interested; it wasn’t included in bids or proposal requests. But interestingly, after COVID-19, the last 18 months or so, we’ve heard more about it than we have for several years.”
According to Trowbridge, the slowdown wasn’t just in the south; and he is less sure how the impact of the pandemic will play out. “Twenty years ago, green was the big buzz,” he says. “All the manufacturers had green lines and customers were willing to pay 10 percent more for these products. Essendant even had a green catalog, which was exciting because sustainability is important to us and a major focus. Then five or six years ago, manufacturers across the country started pulling back. The sales simply weren’t there. Then, COVID-19 hit and customers would take any product that worked.”
Unlike Freeman, Trowbridge does not see demand for green products increasing and believes part of the reason is cost: “The biggest manufacturers are not supporting sustainability within the industry; they have stopped making recycled or green products. Now, one of the biggest manufacturers has only two recycled products in its entire line. BIC used to have five or six SKUs made with recycled products, but they cost a lot more. The rule of thumb is if the cost is more than 10 percent above the nongreen counterpart, customers won’t buy it. In fact, in California, companies have to report what percentage of their products are sustainable, and they have regulations about how much that needs to be. But if the green product costs more than 10 percent above the comparative nongreen product, the entity doesn’t have to buy it. In terms of paper, there are only three large paper mills left and none of them makes 100 percent recyclable paper based on SKU rationale. Universities love the 100 percent recycled, so we would sell out of it even though it costs 20 percent more than virgin. But manufacturers look at their SKUs and stop making those with the lowest margins. In this case, it is probably due to the high cost of making the 100 percent.”
Despite its popularity, especially in schools, Trowbridge doesn’t believe 100 percent recycled paper is the most sustainable. “Manufacturers have to haul all the paper back to the mills and they use an amazing amount of chemicals to bleach the paper,” he explains. “The most sustainable paper is virgin that comes from U.S. sustainable forests.”
When trends collide
“We’ve definitely seen growth in the use of paper with recycled content or that is recyclable versus plastic and Styrofoam for things like plates, cups and packaging,” observes Freeman. “We are even selling plant-based flatware made from sugar cane. But another thing that is at play is what’s available. Supply chain issues have meant that some businesses want to use paper, but it’s unavailable. In these cases, people don’t care; they need to get something.”
Trowbridge agrees: “Five or six years ago, manufacturers started pulling back on manufacturing sustainable products; and then COVID hit and no one cared about sustainability—they’d take any product they could get. Nothing has changed: the supply chain is as bad as it was two years ago. We stock our warehouse, and our supplier used to ship orders 98 percent complete; now, they often send only 50 percent of the order. They just can’t get the product. About 70 percent of our business is schools and we can’t get any write-and-wipe boards, one of our most popular items. Furniture lead times used to be six weeks; now they are 12 to 16 weeks.”
According to Freeman, other emerging trends seem to be conflicting with sustainability, including breakroom specialty items like coffee. “Companies usually want to buy in bulk to save on waste instead of buying single-serve,” she says. “But there’s now the issue of health and safety, and everyone wants single-serve items. They are competing interests, although I believe single use is winning out right now.”
Some manufacturers have responded by inventing products that address both trends simultaneously. “One new way of adapting to the two needs is one company’s flatware dispenser,” Freeman elaborates. “Forks, spoons and knives each come in separate bulk sleeves and are dispensed individually at the push of a button. The dispenser is well conceived and we’ve done pretty well with it.”
And Kevin Baker, BOS Tampa’s market president, contends that health and safety concerns could even help to drive interest in sustainability. “A big factor in sustainability is safety,” he argues. “Especially now, people want a safe environment when they return to work after the pandemic and sustainability enters into that. They want access to natural light and good indoor air quality. A lot of sustainability is about health and mental health. It’s about knowing companies are looking after the planet we live on so it will be around and safe for their kids and grandkids.”
Meanwhile, Pfeiffer is curious about how the country’s economic outlook could impact the sustainability movement. “It will be interesting to see how many organizations keep sustainability as a priority in a touchy economy,” he muses.
Sustainable advice for the future
Looking forward, “I see the trend toward greater sustainability continuing to grow,” says Freeman. “Right now, I think we are seeing the greatest impact in the automobile industry, with all the major car manufacturers saying they are going to stop making gasoline-fueled cars in favor of electric or hybrid. This is getting everyone’s attention. Americans love their cars and think about the electric/sustainability versus gas issue every time they get in theirs. This will drive the sustainability movement more than anything in the past. Many office product dealers are worried that people will stop using paper. They see it as a bad thing for business. The challenge is to look beyond to what the office of the future will look like. We need to think about what will be on those desks that we can sell that will not negatively impact the environment.”
Molz agrees this is key for the future. “Sustainability needs to drive dollars to the bottom line,” he says. “Independent dealers that want to be here in five years need to figure out how they will be able to do it. One idea might be switching to a four-day delivery to save 20 percent on fuel. We’re not there yet as our industry has pushed it, so next-day delivery will die hard—especially with Amazon pushing it. But if the industry wants to slow down its deliveries, this will provide the opportunity to become more sustainable.”
Pfeiffer suggests that for independent dealers, it all comes down to teamwork: “The state of the planet won’t get better without taking action. Sustainability will be important and in the spotlight. As independent dealers, we need to work together. If we can find a home for an item before it leaves a site by networking, it will use fewer resources to transport it.”
Trowbridge advises: “Quit throwing money away; use cause marketing. Customers don’t care about small savings; they care about saving trees and the ocean, and feeding the homeless. If you give them a $20 rebate, they get a check three months later and don’t remember why. Telling someone you are planting a tree or helping someone in need eat is instant gratification. Cause marketing helps your business grow, attracts customers and workers, and helps change the world.”
Lisa Veeck is associate editor of Independent Dealer and owner of Clean Communications, a full-service content-generating firm specializing in the office products, cleaning and maintenance, and healthcare industries. She can be reached at firstname.lastname@example.org or 773-484-7412.