Does sustainability make a good business case?

My Business delves into the world of sustainability and healthy living as a business: Does it make financial sense? Is it just a fad? Are costs actually higher? We profiles several business owners about what it means to operate in this space.

Not all that long ago, sustainability and the desire to live more harmoniously with our environment seemed like the latest fashion trend or fad. Yet here in 2016, it has become abundantly apparent that there is an evergrowing awareness of how our everyday life affects the world around us.

That has led to phenomenal opportunities for business operators and entrepreneurs to capitalise on the demand for products made from eco-friendly materials, forging lucrative careers while also doing their part to reduce our environmental footprint.

Yet there remain many myths surrounding sustainable products and the businesses that produce and sell them. Costs are much higher. Marketing is not necessary as the products will sell themselves. It’s simply a ‘hippy culture’. Small businesses can’t compete in this space. You name it, it’s been debated.

So My Business decided to speak with three businesses operating across Australia about their experience in the world of sustainability, how their businesses came about and the challenges and benefits they have discovered in their respective markets. Here’s what we discovered:

 

Retail Manufacturer

Sydneysider Kirsten Shanks had something of a less orthodox upbringing, having spent a large part of her childhood growing up in the jungles of Borneo.

Yet it was among the concrete jungle that is Manhattan that Kirsten found the inspiration for her business.

“I’m a qualified naturopath, so I graduated as a naturopath in my early 20s, and even through my studies, I had a few businesses,” she recalls.

“And then I set up a private practice as a naturopath, so I had that for a few years, and I guess as a sole trader, definitely running my own business in that way. But I always knew there was something greater than that, something more than just working as a consultant just doing one on ones.

“It wasn’t until I was in New York and came across the juice cleanse concept or the cold-pressed juice concept, and I realised ‘wow, there is nothing like this in Australia’. Or nothing like it at that time.”

Given that she was on New York’s Orchard Street when her epiphany came to her, she decided to maintain that connection by calling the organic cold-pressed juice and cleanses business Orchard St.

The company operates three retail outlets in Sydney’s eastern suburbs, with more planned in the short term, as well as a thriving online business.

“All of our juice, food, everything perishable, we make ourselves in our kitchen. I design all of the recipes and formulas and things like that, and then they all expedite the production,” Kirsten says.

“Because we’re the only certified organic juice company out there, it can be a lot harder – our costs are pretty high. But maintaining that quality and integrity is really important to us.”

According to Kirsten, businesses promoting personal wellness and sustainable living are more than just a fad.

“I don’t feel that can ever reach saturation. For me, that’s the way the business world has to progress. There will always be room in the marketplace for businesses that are solely focused on profit or financial gain, but ultimately for a sustainable future for all of us, it really needs to be the core focus of all new businesses popping up. I don’t see it ever really losing momentum,” she says.

 

Online retailer

Having already operated a successful solar business for a number of years, Adelaide resident Matthew Devitt already knew a thing or two about the demand for sustainable energy.

Yet when he purchased a watch he liked the look of online, little did he know it would lead him toward another business venture.

“I bought a wooden watch about four or five years ago from an overseas company when I saw one online, and I’d never seen one like it before and I thought it was really cool and so I got one of them,” he says.

“Pretty much from day one when I was wearing it, I started getting so many people asking me about where I got it and if they could try it on; they were just really interested to see something like that made out of wood.”

While Matthew liked the idea of having an online store, he admits he had little idea of how ecommerce worked. But the more he explored it, the more he knew the idea was a winner.

“I was really interested in eco-friendly brands, but I couldn’t really find any websites in Australia that had a lot of these different products all in the one place, so I thought there was an opportunity to have a bit of a one-stop-shop as far as that goes,” he says.

“The watches and things were the first thing I wanted, but originally I was kind of planning it as selling homewares and things like that as well. But the fashion stuff was more what I was drawn to, and that was mainly what everyone seeing our stuff was asking about, so once I discovered a few more brands, I thought there’s an opportunity to make it more fashion-accessory based.”

Greenlife Online now stocks a range of products including sunglasses, wallets and phone covers all made from wood, bamboo and other recycled materials.

Matthew suggests that the concepts of sustainability and eco-friendly have increasingly become a marketing ploy rather than a way of life, and he has adjusted his marketing accordingly. However, the demand is still there for such products, as well as the ability to deliver more sustainable products to the broader market.

“I’m aware not everyone is interested in the environment necessarily, but if you can still have products that are better for the environment and more sustainable without them being drastically different from what people are used to […] then that’s still a win,” he says.

 

Primary producer

It’s wrong, however, to presume that sustainability is purely the domain of new businesses. Many small operators are finding new or expanded markets simply by changing the way they operate.

Nor is it wise to assume that innovation is also not confined to the likes of technologists inhabiting our larger cities.

Theresa Robinson and her husband Craig decided that instead of buying fertiliser to improve the pastures in the paddocks of their livestock farm near Gunning in southern NSW, they would instead get some chickens to do the job for them, in a much more natural and sustainable way.

The chickens eat down weeds, remove unwanted bugs and help to break up and aerate the soil, all while fertilising as they go. Yet while doing the job of economically and organically improving their pastures, the Robinsons stumbled upon a new business opportunity – selling the organic, pasture-raised eggs from the chickens.

“It just grew from there with 50 chickens. And from there, we went for another 150, then another 300 and we had the 500. Then when we jumped from the 500, we pretty much went from 500 to about 4,000 very quickly,” Theresa recalls, adding that they are in the process of doubling that number again.

“That first 500 I’d say was a big learning curve, and then after that we had to do a fair amount of planning to expand the business: work out what kind of nesting systems to use, the shed and that sort of stuff.

“So my husband designed the sheds, and they are all solar-panel operated with actuators and lights that will come on in winter for a couple of hours, and that’s just so we can guarantee our chooks will lay through winter.”

The couple devised the business to represent a true Aussie flavour, and called it BumNuts Australia.

“The ‘bum nuts’ is something that my husband’s family had always called [eggs] for years, so it was such an Australian name. We had to toss it up for a little while, because where we’re situated, we’re right next to Canberra with all of the public servants and parliament and everyone is politically correct, and so we weren’t sure whether it was going to go down too well, but we did it anyway!”

The venture has been so successful that BumNuts Australia is now preparing to franchise with farmers nationwide, with several prospective franchisees already in the pipeline.

Mrs Robinson says that despite the perception that it is difficult to make money from agriculture in Australia, there is plenty of demand for fresh, local and particularly organic produce.

“I really do think that the agricultural industry is the way to go – not just from a large scale, but even small plots in your backyard, using your nature strip, all that sort of stuff – because we really need to secure our food economy. It’s always needed,” she says.

“On the organic side of things – I’ve got restaurants asking me for organic products, fruits, vegetables, you name it. If I could set up an orchard tomorrow, I would. If I could have six acres of vegetables, I wouldn’t have a problem selling it. There definitely is a market out there for that sort of thing: people want locally grown, seasonal produce and the market is there, people have just got to grab it.”

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