The distributors need to get moving
by Ralph Bianculli, Paradigm Group
When we began Paradigm Group in 1999, we conducted a lot of research that showed us the sales potential of green products. But we also discovered that end-user interest in environmental-preferable products was often derailed by a lack of information on the part of distributors. So, in order to position ourselves in the supply channel as a provider of green products, we realised we needed to provide education as well.
We’ve not only developed green products that can be easily integrated into facilities channels but also educated supply channel providers (distributors) on their environmental and financial benefits.
It has been something of a challenge, but we believe we can drive the message through the supply chain directly to the end-users of those products.
We recognised early on that being proactive in the marketplace is a necessity because a lot of channel providers are unaware of the green options out there.
A good part of our marketing resources are devoted to collecting information on innovative green products that are now available.
Channel suppliers today are in no hurry to restock or remanufacture or retool for a marketplace that has to be proactively sold to.
So they’re very complacent. It is the end-users, their customers, who are going to have to drive the real changes. The bottom line is, if the end-user is looking for these green products, the distributors will have to start reacting.
And we’re seeing a big shift now. Companies have decided they need to clean up their act when it comes to environmental impact. On the facilities side, a lot of green mandates at the senior executive level are being driven down through to janitorial and the breakroom.
Facilities products like cleaning agents, paper towels, cups, plates, copy paper make up 25 percent of the corporate waste stream but it’s easy to switch to recycled-content paper. This is low-hanging fruit.
In some cases there’s an illusion that going green costs more. Again that’s misinformation that is disseminated by distributors that don’t necessarily want to take in these additional products.
When you put all the stats in front of the consumer, there’s almost never a financial reason not to switch to a greener alternative.
These decisions are definitely being driven from the top down.
We’re seeing executive-level directives force middle managers to change their business-as-usual purchasing practices.
Traditionally a lot of these facilities product purchasing decisions were made at middle-management level. But today we’re seeing CEOs and CFOs telling their middle management: "We want to move toward buying greener products." That’s never happened before. It’s a change in the way directives are coming.
Channel providers stock tens of thousands of products. They manage their business by the number of SKUs they have in their system and by the amount of dollar inventories that go in and out of their warehouse centres. If they start adding more SKUs, it becomes a financial burden.
For instance, lets say a distributor stocks a virgin-pulp paper towel, and some of his customers start asking for recycled-content paper towel. Now he has to stock two types of towel, because he’s still got customers who want the same virgin-pulp product that they’re used to. He’s got to take another SKU into his system. Multiply that by tens of thousands of items and you can see why the wait-and-see attitude is, "Ok, when I see a real demand here I’ll add that SKU."
That’s the transition going on in the supply chain right now, but it is going to be slow.
That’s where an organisation like Paradigm has to come into play. When those end-users want to move into purchasing greener products, we want to not only give them the information but also the opportunity to purchase those products. We’ll suggest that end-users switch to supply channels that carry our own recycled-content products, but we’ll also offer those products to their existing supplier if they want to take those SKUs in.
In any case, there’s an economic upside for us because we are delivering the new wave of green alternatives alongside the standard products customers have been using for many years. It’s not just buying recycled products but also seeking out products that create less waste to begin with, like reusable cups, for example. It requires a combination of approaches. In addition, we are now seeing a huge bump in end-user demand for our Emerald brand of B2B brand of green products for commercial facilities.
When we started the Emerald category it represented about 3 percent of our product mix. Today it represents around 35 percent. That shows how quickly it has overtaken traditional non-green SKUs. The difference is substantial.
Ralph Bianculli talking to Sustainable Life Media, its Sustainable Brands ’10 event takes place 7-10 June.