In Episode 79 of The Wendel Forum (originally aired on October 6, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Peggy Cross, founder of Bay Area-based EcoTensil, which produces eating utensils made from sustainable materials.

Peggy Cross of EcoTensil

With a background in packaging and marketing, Cross developed a whole line of certified compostable eating utensils made from “silky smooth” paperboard, similar in mouth feel to a soda cup.  The taster spoons are a particularly better alternative to plastic tasters, which are made from petroleum in China and are used for two seconds at ice cream shops, grocery stores or at trade shows, yet will exist on the planet for thousands of years.  In contrast, EcoTensil’s taster spoon offers efficiencies in storage, shipping and waste management, and companies using it can offer customers something obviously greener.  Interestingly, EcoTensil’s first clients, which still represent 25 percent of her business, were prisons because users can’t hurt themselves or others with a paper spoon.

In launching EcoTensil, Cross learned that everything in the start-up world takes longer than you think and costs twice as much money.  As a result, she recommends not launching a start-up without an abundance of tenacity and perseverance.  She also says that entrepreneurs should not just want to make money, but they must also have a passion for what they do.

Wouldn’t you like to ditch the splintery wooden taster spoon?
Post Links:

Listen to the interview with Peggy Cross: Episode 79 of The Wendel Forum (27:49 mins; mp3)

EcoTensil Website: http://ecotensil.com/about.html

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

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In Episode 78 of The Wendel Forum (originally aired on September 29, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Scott Potter, managing partner of San Francisco Equity Partners, a private equity firm that specializes in consumer products growth companies.

Scott Potter of San Francisco Equity Partner

Scott Potter, San Francisco Equity Partners, in The Wendel Forum studio

Potter’s firm partners with companies that have demonstrated a proven demand for their products.  So while there’s no consumer adoption risk, the companies are usually facing operational and scale challenges to reach the next level. Typically, they are $5-10 million companies poised to scale their businesses, often to north of $100 million.

Identifying these optimal risk-reward companies is more science than art.  San Francisco Equity Partners is particularly focused on its companies’ channel strategy.  That is, a given beauty product can’t successfully be sold at both Sephora and Wal-Mart.  Channels include food (Safeway), drug (Walgreens), mass (Wal-Mart), club (Costco), prestige (specialty retailers and department stores) and direct-to-consumer (online and direct-response TV).  Determining the right channel for products is often a company’s key to success.

A growing channel is the so-called natural channel, as epitomized by Whole Foods, which is separate from the traditional grocery channel.  But Potter’s firm specializes in natural products that are targeted for the mass channel.  Companies targeting this channel should not ask consumers to pay more for an inferior product “just to save the fish,” Potter says.  Rather, the product’s value proposition has to work in and of itself outside of sustainability and natural missions.  The prime example is Method products.

When San Francisco Equity Partners first invested in Method, it was producing just hand and cleaning products.  It has evolved to include bathroom and specialty products and even successfully launched into the competitive laundry space.  Early on, Method knew it would never have the marketing budget of Proctor & Gamble.  So it chose to overinvest in packaging, focusing on the point of sale: when product is on the shelf.  Method’s in-house design team devised a distinctive look, including the bottle molds, and focused on the aesthetic and the user-experience (such as the one-hand laundry detergent dispensing system). With the “design baked into the products,” Method aspired to be like Apple.

At what kind of store are you most likely to purchase natural products?

Post Links:

Listen to the interview with Scott Potter: Episode 78 of The Wendel Forum (27:48 mins; mp3)

San Francisco Equity Partners Website: http://www.sfequitypartners.com

Method Products Website: http://methodhome.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 77 of The Wendel Forum (originally aired on September 22, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Dr. Jay Udani founder and CEO of Medicus Research, a contract research organization for the natural health products industry, including botanical drugs, dietary supplements and functional foods.

Dr. Jay Udani of Medicus Research

Dr. Jay Udani of Medicus Research

Dietary supplements give people choices in their health care. Whenever manufacturers of dietary supplements make formal claims – such as “supports healthy joints” – the supplements must undergo clinical trials and testing, akin to pharmaceutical testing.  Dick and Dr. Udani discuss how both enforcement of and consumer interest in clinical trials for dietary supplements is increasing.  Even major food manufacturers, such as yogurt manufacturer Dannon, have received letters from the FDA about their formal health claims.

Whereas pharmaceuticals are chemicals that interact with the body by targeting a pathway or organ, dietary supplements assist the body in better performing normal, healthy functions.  As a result, clinical trials of supplements must be done on healthy people. Supplements can take longer than drugs to show effects so the best way to test the efficacy of supplements is for the individuals in the clinical trials to track how they’re feeling over time.  Udani’s research program uses iPods to monitor individuals, whose responses may be both subjective and objectively measurable. When evaluating a clinical trial, consumers should examine how the supplement was tested, the population used and the measuring tools.

When taking dietary supplements, does clinical testing matter to you?
Post Links:

Listen to the interview with Dr. Udani: Episode 77 of The Wendel Forum (27:52 mins; mp3)

Medicus Research Website: http://www.medicusresearch.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 76 of The Wendel Forum (originally aired on September 15, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Ben Lee, director of business development at San Francisco-based CircleUp, a crowd funding platform founded in April.

Ben Lee of CircleUp

Ben Lee of CircleUp

CircleUp provides an online mechanism for consumer products companies and retailers to reach out to a broad network of potential investors, who may fund the companies in exchange for equity. CircleUp, which affiliated with WR Hambrecht, takes a commission.

So far, they’ve received 600 applications; they’ve selected 10 companies and four – including a baby skin care brand and an organic food brand – have been successfully funded.  CircleUp’s team serves as a curator for the investors. In evaluating companies, they look for businesses with $1 million to $10 million in annual revenue.  Usually these companies are seeking to raise $500,000 to $2 million to launch new products and achieve the next stage of growth. The typical investment is $5,000 to $25,000 (while each company’s offer is different, these are generally in the form of preferred stock shares); CircleUp assists with larger transactions offline.

While CircleUp streamlines what can otherwise be a year-long funding process, raising money through the platform can still take several months. Although CircleUp selects companies and presents opportunities, investors must do their own due diligence.  Like any private company investment, crowd funding is risky and the investment horizon may be three to seven years.

Lee says CircleUp’s goals include enhancing the ecosystem around consumer products, helping as many small consumer brands get financing as possible, and making sure CircleUp’s platform is a great experience for investors and companies.

Have you participated in crowd funding?  What do you see as the biggest opportunities and challenges to this form of financing?  

Post Links:

Listen to the interview with Lee: Episode 76 of The Wendel Forum (27:56 mins; mp3)

Circle Up Website: https://circleup.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

In Episode 72 of The Wendel Forum (originally aired on August 11, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Arlene Blum, environmental health activist, mountaineer and author of Annapurna and Breaking Trail.

Arlene Blum

Environmental health activist Arlene Blum

Blum works tirelessly to ban flame retardants from electronics, furniture and baby products.  Flame retardants, which only provide a two- to three-second delay if ignited, are similar to PCBs and DDTs, toxic chemicals that were banned decades ago.  They pose serious, long-term health concerns because they alter hormone levels, damaging reproductive organs, impairing thyroids and changing DNA.  These chemicals continuously migrate out of products.  In the case of couches, for example, they emit toxic dust even when no one is sitting on the couch. 

California State Senator Mark Leno introduced several bills that would have both eliminated flame retardant chemicals and increased fire safety.  Though they were sponsored by health organizations, firefighters and even the furniture industry, the manufacturing lobby successfully defeated those bills.  Meanwhile, only food, drugs and pesticides are regulated by EPA.  No other chemicals – not even asbestos – are regulated, even if they’re highly toxic and enter our bodies other than by mouth.

Blum is also the founder of the Green Science Policy Institute, which provides unbiased scientific data to government, industry and non-governmental organizations to facilitate informed decision-making about chemicals in consumer products. Through the organization, Blum taught a class at UC Berkeley about chemistry and policy.

How concerned are you about toxic chemicals used in furniture?

Post Links:

 Listen to the interview with Arlene Blum: Episode 72 of The Wendel Forum (27:50 mins; mp3)

 Arlene Blum’s website: http://www.arleneblum.com/

 Green Science Policy Institute website: http://greensciencepolicy.org/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 69 of The Wendel Forum (originally aired on July 7, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Gary Price, a tax partner at Sensiba San Filippo, one of the Bay Area’s largest accounting firms and a green business certified under the Bay Area Green Business Program

Gary Price

Dick and Price discuss how in the last few years, it’s become economical for businesses to use renewable energy sources, particularly solar and wind, which provide energy without using oil or gas. Because buildings and their occupants produce a significant amount of pollution, even  businesses like accounting, law and other service firms can help the environment by buying clean energy from roof-mounted solar power systems that replace or supplement power from the grid. Even if those businesses occupy just one floor of a big building, they can contribute to lower energy consumption.

Renewable energy used to cost more than electricity purchased from utility companies.  But the 2008 renewable energy credit program helped bring prices down.  Within just four or five years, companies using renewable energy will see the payback, resulting in real cash savings. Using solar and wind energy also has related insurance and bank loan benefits.

A new clean tech trend is that larger renewable energy companies – perhaps a solar company or even a company that produces a part of a solar energy system – have accelerated the use of solar power by become financing companies.  As a result, customers may not need cash at all to buy electricity from roof-mounted solar systems. Solar and wind energy options will continue to grow and experience increased demand, which will further drop the price point.

If a business is interested in switching to renewable energy, Price recommends finding an expert to “put the whole thing together.” Construction and engineering companies, for example, have savvy energy departments. Law and accounting firms also have specialists that put green projects together.

What would it take for your business to buy clean energy?

Post Links:

Listen to the interview with Gary Price: Episode 69 of The Wendel Forum(27:53 mins; mp3)

Sensiba San Filippo website: http://www.ssfllp.com/

Price’s article on Sensible Savings: http://www.ssfllp.com/sustainable-savings-how-businesses-can-profit-big-from-clean-technology/

Bay Area Green Business Program website: http://www.greenbiz.ca.gov/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 64 of The Wendel Forum (originally aired on May 26, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Steve Roth, CEO of Roth Consulting, which helps companies devise and execute a “winning strategy,” whether related to capital, expansion, product development or management.

Steve Roth, CEO of Roth Consulting

Steve Roth, CEO of Roth Consulting

Roth brings his experience as a senior executive and investor in companies in a wide range of industries to green businesses and double-bottom-line companies, those companies for which a social goal — like benefiting the community or the environment — co-exist alongside profit goals.  For those companies, the biggest issue is balance, Roth explains.  Companies can’t forget that profitability is what allows a company to be generous and, therefore, profitability must remain the core operational focus.  Companies shouldn’t become so enamored with a social mission that they lose the ability to fund it.

The average double-bottom-line company devotes about 5 percent of sales to a social mission.  The more profits earned, the more impact the company can have. Ben & Jerry’s was one of the first and most successful double-bottom-line companies.  “On a public relations basis, charitable endeavors are a big part of their raison d’être.”

Companies can also donate employee time – within limits.  In the 1970’s, Xerox was one of first companies to devote its human resources to help the community, and some employees were even promoted on that basis.  But Xerox diverted too much attention from its core business and now no longer exists.  “It’s an educational tale.”

Another business challenge for these companies is making the charitable work relevant to customers.  Many businesses in the coffee industry, for example, donate money back to the cooperatives that grow their beans.  It may be more expensive to source products from those areas.  As a result, customers may need to pay higher prices or the company may have to accept lower profits.  “Corporate communication is critical to justifying the premium” customers may have to pay, especially in a competitive marketplace where consumers have many choices. The customer must be educated about the social benefit of buying that product.

Roth and Dick also discuss socially responsible investing.

What social causes would inspire you to purchase products from double-bottom-line companies, even if the prices were higher?

Post Links:

Listen to the interview with Steve Roth: Episode 64 of The Wendel Forum(27:45 mins; mp3)

Roth Consulting:  http://www.consultroth.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

In Episode 61 of The Wendel Forum (originally aired on May 5, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Rachel Barge, a partner at Greenstart, which is a San Francisco start-up accelerator.  Greenstart helps new companies that use software to solve clean tech problems. 

Rachel Barge of Greenstart

Rachel Barge of Greenstart

Twice a year, Greenstart, which launched last year, sifts through hundreds of applications and offers a handful of clean-tech start ups seed-stage venture capital as well as training in the company’s 12-week boot camp. Specifically, Greenstart invests $15,000 in exchange for a 15% equity stake, it makes a $100,000 convertible loan and it provides concentrated training.  The three-month academy “crams two years of development into three months,” according to Barge. Entrepreneurs learn to validate their technology (proving customers exist for the product), develop a 12-month execution plan (including building the team and honing the financial model), and communicate (to investors, team members, channel partners and customers).  Entrepreneurs are paired with mentors, including executives from cutting-edge companies like Tesla and Pandora. The program’s culmination is “Demo Day,” during which the start ups pitch hundreds of potential investors.

Software, Barge explains, is key to what she calls “clean tech 2.0.” For example, the collaborative consumption trend, which replaces ownership with use and access, requires new software platforms.  That’s why Greenstart selected for its program Scoot Networks, which provides shared electric scooters that customers can unlock with an iPhone. 

Barge explains Greenstart’s unique application for companies that want to apply to the Greenstart program.  The entrepreneurs must state the dirty energy problem they’re solving and explain their technology in just 250 written characters and a two-minute video.  The accelerator is particularly interested in working with fast-to-market products.  The company’s first class included SmarterShade, a self-tinting windows company; Sylvatex, which cheaply mixes biofuels with diesel; Wa.tt, a consumer web app company that “gamifies” energy use on Facebook; and Tenrehte, a wireless system for managing energy flowing through electrical plugs.

Post Links:

Listen to the interview with Rachel Barge:  Episode 61 of The Wendel Forum (27:36 mins; mp3)

Greenstart website: http://www.greenstart.com

SmarterShade website: http://smartershade.com/

Tenrehte website: http://tenrehte.com/

Sylvatex website: http://sylvatex.com/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

In Episode 59 of The Wendel Forum (originally aired on April 14, 2012, on 960 KNEW AM radio), show host Dick Lyons welcomes Morris Shriftman, a brand strategist for natural foods and green products, and CEO of Mozart, Inc. (A classical music fan, Morris’ company name carries the name of the great composer and is a double entendre on his name: “Mo’s Art.”)  He also serves on the board of the American Botanical Council, which provides consumers with credible information about plants and herbs used in natural medicine.

Morris Shriftman of Mozart Inc. visits The Wendel Forum studio

Morris Shriftman of Mozart Inc. visits The Wendel Forum studio

A marketing expert, Morris has been focused on the natural food and alternative medicine industry since 1970.  He began as brand consultant in New York.  In the 70’s, he met the founders of Tree of Life and was hired as vice president of marketing, where, he says, he gained a “360 degree perspective” on the wellness industry, handling product creation, development, manufacturing, packaging, distribution, marketing and retail partnerships.

Tree of Life became both a major national distributor of natural products and had its own line of branded natural products.  Among other things, Morris designed the well-known “Tree of Life” logo.  In 1985, when Tree of Life was sold, he founded Mozart, Inc., which “creates products and builds brands for companies doing the right thing, including using healthy ingredients, removing objectionable ingredients and having the courage to be transparent.”

Dick and Morris discuss how natural products companies can communicate their message to retailers and consumers, a particular challenge for smaller, undercapitalized companies that can’t afford the marketing practices of larger companies, such as product placements, public relations, trade advertising, events marketing or consumer advertising.  Those companies have to be inventive, Morris says.

Fortunately, social network marketing is an inexpensive way to reach a narrow audience of people who share similar values, what Morris calls “narrowcasting” (as opposed to broadcasting). Better than a new logo or slogan, narrowcasting permits a small company to convey its mission directly to communities that will be drawn to the mission.  That happened for Avalon Natural Products where Morris was brought in as senior vice president of marketing. 

He led the company to eliminate allergens and artificial and petroleum-based ingredients, including parabens, a preservative implicated in breast cancer.  Avalon’s “consciousness in cosmetics” mission resonated with The Breast Cancer Fund, an organization that informs women about the environmental causes of breast cancer. Collaborating with The Breast Cancer Fund and networking with other women’s health organizations and green scientists became a major driver in Avalon’s marketing.  That kind of work, Morris explains, can distinguish a company and create empathy with consumers.

Post Links:

Listen to the interview with Morris Shriftman: Episode 59 of The Wendel Forum (27:31 mins; mp3)

Mozart, Inc. website: http://www.mozartinc.com/

American Botanical Council website: http://abc.herbalgram.org/site/PageServer

Tree of Life website: http://www.kehe.com/treeoflife/Home.aspx

Avalon Natural Products website: http://www.avalonorganics.com/

The Breast Cancer Fund website: http://www.breastcancerfund.org/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

In Episode 56 of The Wendel Forum (originally aired on March 31, 2012, on 960 KNEW AM radio), show host Dick Lyons speaks with Paul Baier, Vice President of Sustainability Consulting at Groom Energy.  Paul assists the company’s customers with their sustainability and energy reduction strategies, carbon footprint and responses to supply chain surveys.

Paul Baier of Groom Energy

In addition, Paul authors a sustainability blog called Practical Sustainability and moderates EnterpriseSmartGrid.org.  He is a senior contributor and VERGE Global Advisory Board member for Greenbiz.com and is the primary author of a report on large enterprise smart grid and energy management software called “The 2011 Enterprise Carbon Accounting (ECA) Software Market: A Buyer’s Guide.”  Paul sits at the forefront of issues related to large scale energy use by major organizations.

Dick and Paul discuss how large companies grapple with energy management and reduction – not an easy task.  These companies face many challenging when it comes to energy and carbon measuring, management and reporting.  First, they have to figure out what to track, then how.  Most are responding to regulatory demands, need for better cost savings and what Paul refers to as “consumer compliance.”

Often the first step is trying to put their arms around what energy use really means in their business.  Some companies are surprised that, in addition to improving their sustainability footprint, they can save significant amounts of money by implementing energy management initiatives.  Once they realize that, most are prepared to put significant resources to the task.   For many manufacturers and distributors, powerful companies like Walmart put pressure on them to complete rigorous supplier surveys to explain their strategies and results. 

For single-facility operations it’s hard enough, but many of these suppliers have facilities around the globe, each with different standards, measurement systems, accounting systems and processes for collecting and tracking the information ultimately needed to institute a company-wide program.   Paul helps these companies manage this complex process.  

Helping companies to identify direct effect, indirect effect, and the overall impact in supply chain (Scope 1, scope 2 and scope 3), Paul observes that companies are becoming more sophisticated in identifying the hidden impacts of the entire supply chain. 

Management people have been trying to anticipate cap and trade, carbon tracking, and what will happen as AB32 (in California) and other legislation dictates change for their industries.

As Paul says,

“Energy management is the flip side of carbon management.”

Paul and Dick discuss the types of providers who are stepping into the marketplace and the kinds of risks that various vertical markets must address in their forecasting models. The technologies being developed today will allow greater and greater precision and flexibility in tracking both the carbon footprint and the energy management of our major industries.  And with the rise of cloud computing, the storage and processing options continue to become more affordable for even smaller companies.  Paul suggests that because of the software, data storage and other advancements in recent years, precision energy management is no longer a technical problem, it’s a “willingness problem.”

Certainly the regulatory environmental, as well as consumer demand will continue to influence the willingness of companies to address these issues in significant ways.

  

Post Links:

Listen to the interview with Paul Baier:  Episode 56 of The Wendel Forum(27:44 mins; mp3)

Groom Energy website: www.groomenergy.com

Paul Baier’s blog: http://practicalsustainability.blogspot.com/

GreenBiz.com website: http://www.greenbiz.com

Report link: http://www.groomenergy.com/eca_report_summary.html

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’ online profile: http://www.wendel.com/rlyons