Making the Decision to Switch to Envrionmentally Friendly Product Packaging

Innovation Case Study Analysis: ecostore: The Carbon Capture Pak Decision

In 1993, Malcolm and Melanie Rands founded ecostore (hereinafter alternatively “the company”) in New Zealand's Northland coast in response to a growing need for consumer- and environment-friendly personal and household cleaning products. After a decade of consistent growth and sustained financial success, the company’s chief executive officer considered whether to pursue greener alternatives to ecostore’s already environmentally responsible plastic packaging using recycled plastics by switching to innovative plastics made from sustainable sugar cane crops. The purpose of this case study analysis is to provide an analysis of the household and personal cleaning industry in Oceania, as well as an evaluation of the company’s competitive position in this industry. In addition, the collaboration strategy between ecostore and bioplastic manufacturers to introduce green packing called ‘the carbon capture pak’ is introduced together with supporting rationale concerning why the specific type of a collaboration with a specific bioplastic manufacturer is important for ecostore’s eco-innovation strategy. Finally, a critical evaluation of ecostore’s innovation strategy from interdisciplinary perspectives as well as the respective challenges and opportunities the company faces from incorporating an interdisciplinary approach is followed by strategic advice to the co-founder his team to achieve sustainable innovation success in the future. A summary of the case study findings and the important points that emerged from the research are presented in the conclusion.

Analysis of the environment of the household and personal cleaning industry in Oceania and ecostore’s competitive position in that industry

Define where the Oceania region is.

The region of Oceania is comprised of thousands of islands and island chains that are peppered across the South and Central Pacific Ocean. The name “Oceania” is attributable to the fact that the vast majority of this region of the world lies under the Pacific Ocean (Oceania physical geography, 2022). As shown in Figure 1 below, the main landmass in Oceania is Australia, the world’s smallest continent as well as Zealandia which consists of New Zealand and the eastern part of New Guinea which is home to the country of Papua New Guinea (Oceania physical geography).

Figure 1

Political map of Oceania

Source: Nations Online (2022) at https://www.nationsonline.org/oneworld/map/oceania_ map.htm

In addition, the Oceania region includes three main “esia” island regions: Micronesia, Melanesia and Polynesia, the latter of which includes the U.S. state of Hawaii (Oceania physical geography, 2022). Nearly 44 million people live on these Oceania islands and island chains, making this region of the world a significant market for products and services of all types, including most especially household and cleaning products which are discussed further below.

Define the household and personal cleaning industry

The household cleaning industry is comprised of products that are specifically designed for household use, including detergents, soaps, laundry additives and laundry bleaches that are intended for use in either a commercial or domestic setting. Although not exhaustive, the list of household products in this industry also includes products that are used for commercial laundries, dish washing, and textile cleaning (Household cleaning products definition, 2022). The personal cleaning product segment of this industry includes personal care items such as hair shampoo, hand soaps and toothpaste (Household cleaning products definition, 2022). Not surprisingly, this global industry has experienced continued growth in recent years as discussed below.

Analysis of the industry/segment

The global household and personal cleaning industry was valued at more than $221 billion in 2020, and it is projected to increase to more than $320 billion by 2028. The global household and personal cleaning industry is being driven by increasing demand for natural products, with year-to-year increases being identified in the Oceania region (Household cleaning products market, 2022).

Identification of a collaboration strategy between ecostore and bioplastic manufacturers to introduce “the carbon capture pak” and supporting rationale concerning why the specific type of a collaboration with a specific bioplastic manufacturer is important for ecostore’s eco-innovation strategy

Determine what collaborative strategy ecostore have undertaken

The company has a long history of collaborating with industry experts and corporations that could provide it with the timely guidance it needed to develop incremental improvements in its products to make them as effective or even more so than their commercial counterparts based on its “health first” corporate philosophy. With respect to its carbon capture pak initiative, the company evaluated the potential for collaboration with major manufacturers of bioplastics, including Braskem, Fkur and Toyota Tsusho. Each of these bioplastics manufacturers had its respective advantages and disadvantages for the purposes of the company’s goals of “stepping away from the reliance on petroleum-based packaging associated with greenhouse gas emissions” (Balzarova & Castka, 2018, p. 5).

This type of collaborative strategy has characterized the company’s efforts since its inception. In fact, the company emphasizes that it has already made the switch to sugar cane-based polyethylene plastic for its packaging materials based on its discussions with and analyses of the major bioplastic manufacturers in the world today. In this regard, the company emphasizes that, “Since 1993 we’ve been making safer plant and mineral-based products you can trust. Our plastic bottles are made from renewable sugarcane. It’s 100% recyclable at kerbside and takes carbon out of the atmosphere as it grows, for a lower carbon footprint” (Kinder to our world, 2022, para. 3). This environmentally friendly packaging outcome would not have been possible, or it would have been significantly delayed, if the company’s leadership had not recognized the potential opportunity and taken aggressive steps to pursue it as discussed further below.

How is this collaboration important strategic innovation?

Despite its continuous growth and its claim to being a “brave” and “entrepreneurial” company (Balzarova & Castka, 2018, p. 9), ecostore lacks the capacity and resources to manufacture sugar cane-based polyethylene plastics on its own. Nevertheless, the company’s leaders recognize the multiple benefits of making the switch to sugar cane-based plastics, most especially the fact that such materials are completely recyclable and perform the same as their petroleum-based counterparts (Balzarova & Castka, 2018). Therefore, collaboration with a strategic partner represented an essential element in the company’s plans. To its credit, the company also performed its due diligence by researching the main potential collaborators that could help them with this initiative.

Critically evaluate Ecostore’s innovation strategy from interdisciplinary perspectives.

From a strictly business discipline perspective, ecostore’s management decision concerning whether to exploit the peat land that was available for growing sugar cane or not was based on the erroneous presumption that “peat land was not useful to grow anything but sugar cane” (Balzarova & Castka, 2018, p. 7). Indeed, the authors of the case study make it sound like this is essentially worthless land that would otherwise go to waste if ecostore did not step up and use it – and they would be doing the world a favor in the process. As Kegal (1979) reported early on, though, “Plants usually grow well on peat soils, which warm up early in spring because their dark color absorbs heat” (p. 6).

Furthermore, a number of other commercially valuable food crops grow well in peat land, including corn, wheat, barley and asparagus (Kegal, 1979), meaning that many commercial alternatives are suitable growth on peat land. In addition, growing sugar cane on peat land also has some distinct disadvantages that could detail the company’s plans in the foreseeable future. In this regard, Kegal (1979) adds that, “Not only do crops grow well; so do weeds. Weeds start early and have a ready supply of nutrients and moisture all season. For this reason, crops must be tolerant of at least some post-emergence herbicides and must generally compete well against weeds” (p. 6). More troubling still, it is unclear whether the peat land strategy is sustainable. Peat land loses nitrogen rapidly when crops are grown on it, requiring replacement with organic or chemical fertilizers (Kegal, 1979).

Likewise, from an environmental science perspective, marketing the carbon capture pak-based green packaging as a superior alternative to petroleum-based plastics overlooks or at least overly minimizes the massive amounts of fossil fuels that are required along each step of the entire production process and supply chain distribution network. The modern agricultural practices that are used to grow sugar cane also demand fossil fuels whether in the form of gasoline or diesel for farming equipment as well as transportation from the fields to the company’s processing center. As the U.S. Environmental Protection Agency cautions, “Replacing fossil fuels with biofuels has the potential to generate a number of benefits. In contrast to fossil fuels, which are exhaustible resources, biofuels are produced from renewable feedstocks. Thus, their production and use could, in theory, be sustained indefinitely [but] the production of biofuels results in greenhouse gas emissions at several stages of the process” (Economics of Biofuels, 2022, para. 5).

In addition, ecostore’s product packaging became the focus of an investigation by the New Zealand Commerce Commission in 2013 which charged that ecostore was in potential violation of New Zealand’s Fair Trading Act. The company was issued a warning by the Commerce Commission concerning its green cleaning product claims as well as its product packaging (Wilson, 2013). Taken together, it is clear that an interdisciplinary perspective reveals a number of challenges that might not be readily apparent but which will nevertheless have an impact on the decision to pursue the carbon capture pak alternative and these are discussed further below.

What challenges/opportunities does the company face from incorporating an interdisciplinary approach?

On the one hand, the research was consistent in showing that the calculus that is involved in estimating the carbon-reduction strategies that are used to manufacture sugar cane-based plastics is far more complex than the case study suggested. Given the countless variables that are involved in this calculus, incorporating an interdisciplinary approach to the decision-making process about the carbon capture pak initiative means that the company must apply a holistic view of the household and personal cleaning products market as well as its own abilities to achieve this outcome through close collaboration with major bioplastics manufacturers. In fact, it is reasonable to posit that even the most environmentally conscious consumers will be reluctant to pay an exorbitant price for greener cleaning products.

On the other hand, however, incorporating an interdisciplinary approach to the company’s decision-making process concerning the adoption of its carbon capture pak initiative can provide ecostore’s top leadership team with the types of timely information it needs to ensure that its efforts are not wasted or diminished by unforeseen eventualities that may occur due to the vagaries of these innovative technologies. While the company’s laser focus on pursuing incremental improvements in the quality of its product line while achieving concomitant reductions in its environmental impact is a laudable strategy, ecostore’s management needs to evaluate its products and market from an interdisciplinary perspective in order to achieve optimal outcomes in terms of environmental impact and the associated costs of additional improvements.

Provide strategic advice to Pat and his team to achieve sustainable innovation success

What other disciplines are part of ecostore’s innovation strategy?

Marketing clearly plays an important role in the company’s operations. From the outset, the company’s innovation strategy has sought to overcome a stereotypical image among its potential consumers. In this regard, Malcolm Rands emphasizes that, “From a marketing point of view, right from the beginning people put us into the hippy basket--and it's still around today. People would half expect that we were making stuff in a bathtub out the back” (2013, p. 3). In response, the company has created a savvy staff of marketers who routinely evaluate the preferences of their target market while seeking new opportunities to broaden their products’ appeal to a wider range of consumers using the principles of total quality management concerning continuously improving the quality of their offerings. In addition, the case study also made it clear that the top leadership team at ecostore fully embraces the company’s commitment to zero-carbon emissions and environmental responsibility.

Identify the challenges and opportunities this interdisciplinary approach presents to ecostore

Because it is impossible to gauge the carbon impact of any new innovation with any degree of absolute precision, one of the main challenges that ecostore faces today and in the future is performing the cost-benefit analyses needed to estimate this environmental impact based on the best available scientific evidence. Even the most accurate models, however, are likely flawed somewhat due to the multiple variables that are involved, but these same challenges can translate into opportunities if the company continues to conduct its due diligence and rely on the best available evidence before making further substantive changes in its business model.