At Van Houtum the Cradle-to-Cradle Model is the New Black
Tissue paper company Van Houtum has created the first Cradle-to-Cradle (C2C) certified product and process in the industry of hygienic paper. By engaging its suppliers in process innovation, Van Houtum closed the loop on the Satino Black complementary product line in just 3 years, getting one step closer to its goal of converting the whole company to a C2C business model.
The Cradle-to-Cradle (C2C) philosophy states that waste is food. Instead of the take, make, and dispose business-as-usual or cradle-to-grave model - where materials are harvested, shaped into products and discarded after being used - the C2C model suggests that every material, process, or emission serves as fuel in a larger ecosystem. Waste is to become obsolete, so that, instead of ending up in a landfill, a discarded product can be broken down into non-toxic technological or biological nutrients to supply a new production cycle.
New way of thinking at Van Houtum
Van Houtum is a family-run business, whose core activity is toilet paper manufacturing. In addition, the company offers a range of other washroom products. Their production is aimed exclusively at the business-to-business market, using wholesalers as distributors.
In cooperation with their suppliers and under the guidance of EPEA Germany, Van Houtum created the product line Satino Black after the cradle-to-cradle principles. The toilet paper is made out of 100% recycled fiber, all additives are non-toxic and/or bio-degradable, and biogas is used as energy source in the production. The assortment also includes soap dispensers made out of recycled plastic (former dispensers). Both the liquid and foam soap are cradle-to-cradle certified, in cooperation with their suppliers.
The management seeks to scale the processes and operations used for the Satino Black assortment to cover the entire business at its plant facilities in Swalmen, The Netherlands.
The Managing Director of Van Houtum, Mr. Bas Gehlen explains its company’s development strategy: 'We are working on our footprint, we are working on creating products that are 100% safe, 100% responsibly produced. Satino Black is just a start, we’re trying to make it bigger and bigger and more beautiful. Looking at energy, looking at water, looking at the raw material in it, to make a lot more progressions.'
Gehlen explains that, their C2C collection is a long-term investment. To reach the point they are now, they had to invest approximately 80% of their innovation efforts into the Satino Black product development. Mr Gehlen is aware of the costs involved, but Van Houtum's perspective on the product's potential is what keeps the project going: 'It may seem more costly now, but in the future it will be very cost effective, because waste and energy cost money. So if you can turn that around into a positive agenda, and you don't talk about waste but you talk about renewable energy and reduction of CO2 emissions, you can also talk about cost benefits.'
The following steps are meant to condense some of the lessons Van Houtum has gained over the years by working to re-design its way of doing business according to the C2C model, and the company’s approach to re-positioning itself in the market.
Step 1: Challenge your company’s values
According to CEO Bas Gehlen, the C2C model employed in designing and manufacturing the Satino Black assortment has been perceived by the management as a natural fit with the already existent company’s culture: 'Our founders didn’t talk about sustainability at that time , but they had respect for people, they had respect for the village they were working in, and this is a basic value around sustainability.'
The management realized that innovation based on C2C principles could potentially change the way they do business. Having the senior management’s support, they started out by setting up the project team in charge of running a C2C trial at Van Houtum, which was formed by a technology specialist, a chemist, a buyer and the Chief Operating Officer at the time, Mr. Gehlen. The next step was to involve their suppliers: in doing so, Van Houtum discussed with them what would be the mutual benefits out of implementing a radical change to business processes and operations.
Step 2: Think differently about your stakeholders
Emphasizing the business case for all parties involved, mainly creating products that were new for both Van Houtum and their suppliers, the management succeeded in getting people on board with their project. They addressed it step by step, looking first at the core of their business- toilet paper, later on looking at ways to create recycled soap dispensers and non-toxic soap products, together with their suppliers: 'We involved all our suppliers to discuss the concept of cradle-to-cradle, why we want it and why we think cradle-to-cradle is a good business opportunity; then we asked them 'why do you think it’s useful for you?' So we did this with every supplier. And then we asked them to cooperate with us on creating a cradle-to-cradle product, and this process led to everyone accepting it.'
But the management team anticipated a future threat: the need to import recycled paper from USA or other European states meant a significant increase in its carbon footprint, not to mention the transportation costs incurred. Instead, they chose to develop a local-for-local model, closed-loop system to retain recovered paper in their region, by convincing their customers to have their paper collection company deliver their recycled paper (i.e. shredded paper from the archives) to Van Houtum, which in turn would manufacture their Satino Black toilet paper: 'We try to approach new sources of recycled paper and make closed-loop deals by asking them 'Hey, may we use your recycled paper to make your toilet paper?''
In order to improve the visibility of Satino Black, Van Houtum not only built a commercial concept around its product line, but it also took the initiative to organize an annual event meant to train distributors’ sales staff to market sustainable products.
Converting the whole company to a C2C model is a long-term goal at Van Houtum, but steps are being taken in that direction already. In 2012, the company invested in improving the manufacturing capacity to scale up production of C2C-certified toilet paper. The decision to change Van Houtum’s business model was taken at a managerial level, but the leaders made sure all their 200 employees understood the principles of cradle-to-cradle manufacturing. Discussions were run in small groups to get everyone's attention and opinion on the matter. Additionally, as part of their Christmas gift, employees were offered DVDs containing a documentary film on cradle-to-cradle, accompanied by a questionnaire, which needed to be filled in to register for a prize. The goal was to motivate their employees to reflect on the meaning of the C2C model.
The positive attention they received after launching their C2C certified products on the market created a sense of pride within the organization, which reinforced people’s motivation to further embed the sustainable model at their core business, so much so that the management committed to further investments in scaling up the production of C2C products.
Step 3: Avoid “green” communication
Van Houtum created a whole commercial concept around C2C. Rather than communicating about their C2C products as an add-on to their customers’ business, they chose to talk about values.
Three years into developing their product, the management team realized that sharing in the Cradle-to-Cradle story was only one part of their product's story: making a breakthrough on the tissue market with Satino Nature, a green, C2C certified product, became the next challenge. How to stand out from the crowd of green products? As Mr Gehlen tells it, Van Houtum 'noticed that people would say it is interesting but that was it. It didn’t make a difference in the market place.'
In addition to furnishing completely the office washrooms of their end-customers, the company has designed a black tile which can be used to highlight customers’ contribution to minimizing their CO2 footprint i.e. percentage of water usage, electricity saved by choosing a sustainable hygienic supplier. The information provided on the tile is tailored to each individual office, following an assessment tool developed by Van Houtum and audited by Loyds.
Choosing to create a whole marketing campaign around its Satino Black C2C product was a strategic move. Their goal was twofold: first, incite customers on the unusual choice of colour and of pictures with punk hair-styles or tough-looking boxers, all under the marketing tag of 'Dare to be Black', and second, to introduce a whole assortment for washrooms, from toilet paper and hand towel to soap, foam and black soap dispensers- an entirely sustainable line of products designed to stand out from the crowd.
As Mr Gehlen explains, good communication on sustainable products is crucial in commercializing it: 'It’s not only sustainability, it's also design. Sustainability should not be something about less quality, it must be about top quality.'
Van Houtum's story is not challenge-free: finding enough raw material and enough bio-gas fuel to increase the Satino Black product line is now on its priority list; coming up with viable, cost-effective solutions is Van Houtum's next strategy in scaling up the C2C process, by looking at its innovation processes. In relation to their paper supply, the company is testing few options, still in pipeline phase, to escape its dependency on recycled paper, which poses significant challenges as most sources of recycled paper are found in USA, China and in the Middle East; one of that options is using new sources for fresh fibers, an innovation Van Houtum is currently looking into. Regarding the renewable fuel supply, the company is working on various scenarios; one of these implies the use of upcoming new technologies, such as geothermal energy. Another option would be to rethink ways to use their own materials as fuel in the future.
Despite the overwhelming amount of free publicity they got due to their sustainability efforts, distribution through wholesalers is key in selling their products; they take it as part of their job to teach their distributors how to present the Satino Black to their end customers, and continuously look at ways to do things differently in order to meet customer demand for more sustainable products.