May 24, 2009

The Evolution of Laundry Detergent

People are very entrenched in the way they do their laundry,” says Adam Lowry, the co-founder and chief “greenskeeper” at Method. And that’s a problem, as we’ll explain in a moment.

Method is an 8-year-old company that makes “environmentally-friendly cleaning products that are safe for every home and every body.” Started in a San Francisco bachelor pad by Lowry -- a former climate scientist! -- and his friend Eric Ryan, privately held Method now has more than $100 million in annual revenues, about 100 employees and a good deal of buzz for its style as well as its green products.

Although Method was the first company certified as a Cradle to Cradle company in the U.S., it’s probably better known for its packaging aesthetic than for its commitment to sustainability.

“If your brand position is, 'hey, we’re the green alternative to the toxic stuff,' and everyone else offers green products, you’re no longer differentiated,” Lowry says. “It’s also not very interesting.”

“We’re trying to create broad appeal, way beyond the green consumer, for products that have ‘green’ as one of their qualities,” he says. “There have been far to many green things that have been designed to be green, and they suck.”

Lowry spoke Tuesday at the Greener By Design conference in San Francisco, hosted by my friend Joel Makower and run by Greener World Media. (I’m a senior writer at Greenbiz.com, a GWM media property.) He’s an interesting guy -- 34, with a chemical engineering degree from Stanford, who worked for the Carnegie Institution before starting Method.

Method is at the forefront of changes sweeping the home cleaning business. (No pun intended.) Premium brands like Method, Seventh Generation and Restore are growing. The big players in the industry, meanwhile, are introducing green brands, like Clorox’s Greenworks and SC Johnson’s Nature’s Source. All tend to talk about themselves as plant-based, biodegradable, natural, non-toxic, chlorine-free and the like. I confess, I can’t even begin to sort out the competing green claims.

Method, though, was the first cleaning company to introduce a triple-concentrated laundry detergent back in 2004. That was a simple and very good idea -- it reduced packaging, appealed to retailers because it saved shelf space and shipping costs and was easier for consumers to shlep home. At first consumers balked -- they weren’t sure they were getting enough detergent for their money -- but with a big push from Unilever, which introduced a product called Small & Mighty All, and an even bigger push from Wal-Mart, the idea caught on. Now most laundry detergents are compacted.

“We thrive by making the market change and getting our competitors to follow our innovations,” Lowry says. “You now can’t buy at Wal-Mart or Target a non-concentrated laundry detergent.”

Even so, there’s lots of waste in the laundry biz. Most customers fill the cap on the bottle to the brim. More is better, they figure. Lowry says Method would like to find a way to get people to use only the detergent they need, and to deliver it with less packaging.

“We have a quandary.” Lowry says. “We make a lot of plastic bottles. I’d rather make a refill system.”

If consumers were willing to bring their empty containers back to the store and refill them, they could eliminate the packaging associated with each purchase and, presumably, save money. Restore is trying out a refill system for its products in cooperation with Whole Foods Markets in the Midwest. (Here’s a link to the Restore website that explains how it works.)

The problem is, it’s inconvenient. “If you don’t bring consumers along with you, the most wonderful innovation isn't useful,” Lowry says. Plus have you ever seen how much coffee is spilled on the floor in supermarkets where people grind the beans themselves? The aisles could get pretty sticky once people start dispensing laundry detergent.

Method is working on the next big idea in laundry detergent, Lowry tells me, but he won’t say much more than that. “It will bring fundamental change to the category,” he says. He will say that when he thinks about the future of laundry detergent -- and it’s a good thing someone is -- he sees an evolution from plastic bottles to a refill model to a subscription model to a service model.

“We want to get paid for cleaning people’s clothes, not for selling liquid. The business model has to change,” he said.

No, I don’t know what he’s talking about either, but one can envision a smart washing machine that would dispense exactly the right amount of detergent and no more, then clean your clothes, separate the rinse water from the detergent and the dirt, and then recycle the water and detergent and do it all over again. A closed-loop system, if you will.

“When I think about Method in the future,” Lowry says, “I want to be able to revolutionize every product category in which we compete.” Continuous improvement is the name of the game. Method is worth watching. And it’s clearly about a lot more than pretty bottles.

By Marc Gunther - Marc Gunther
http://www.reuters.com/finance/greenBusiness
5-20-09

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