Posted: February 15, 2012
Being green and making green
Innovation in an emerging industryLarry Turner and Doug Phelps
Eco-Products (www.ecoproducts.com ) is a food service disposables manufacturer and wholesaler of sustainable disposable products that are earth-friendly. The Boulder company produces two lines of products, all of which have environmental benefits - cups (hot and cold), lids, food containers, utensils, plates and bowls - in combinations made from either renewable and compostable plant materials that can be grown again and again, or made from post-consumer recycled resources that have been repurposed.
Founded in 1990 by Kent and Steve Savage, the company initially provided products to businesses throughout Colorado made from recycled materials. As the industry gained traction and competitors, Eco-Products narrowed its focus to a niche market of food service providers. The company grew steadily through 2007, when Eco-Products started manufacturing their own products under their own name, using a new technology that replaced traditional petroleum-based plastic with "corn plastic," or PLA.
Over the last several years, Eco-Products has performed well, completely resisting the fluctuations of the economy. 2008 was a huge year for the company, with a 400 percent jump in annual revenue over the year before. The addition of the new technology was unique in the marketplace, positioning Eco-Products as a leader in this emerging environmental industry.
Growth also was helped by the up and down volatility of the price of oil that impacted competitors doing traditional petroleum-based plastic, in addition to a heightened awareness of environmental issues in communities everywhere. Growth for Eco-Products continued in 2009 and each year since.
The company, with annual sales in 2010 of $62 million and in excess of $66 million for 2011, was slightly insulated from the recession since they were the leader in a growing market. Issues and opportunities during this time:
The industry is growing and maturing, with new competitors entering the market. The company‘s attention has been in building its green brand, pushing for ongoing innovation, and investing in efficient processes and people. Manufacturing of their 175 SKUs is in Asia, with distribution points in various USA locations. Costs to produce, ship and distribute products are increasing. In response, they will be manufacturing more products in the USA in the second half of 2012. A Toronto warehouse opened in 2010 for product distribution throughout Canada.
With the unprecedented growth of 2008, funding it to stay ahead of demand was challenging. The company met the challenge through a private equity investor, Greenmont Capital. Since that time, Eco-Products has been completely self-sustaining and very positive in cash and cash flow. Greenmont Capital continues as an equity partner.
With the rapid growth, Eco-Products found themselves investing in three systems conversions in five years. The lesson: purchasing for the present day, instead of the future, is unwise and unnecessarily expensive. Their current Enterprise Resource Planning (ERP) finance system is robust and has greatly improved visibility of data in all parts of the company. The system also provides better support to the marketing and sales functions.
Marketing & Product Development
Eco-Products is very intentional and brand focused on continuing to be the industry leader in environmentally conscious disposable products, offering a full range for the food service industry and leading the movement to zero waste communities. Products go to market quickly; improved and perfected along the way as innovation occurs.
Pushing the boundaries of an industry that is petroleum based, the company recently added the world's first post-consumer recycled polystyrene hot cup lid that is made from 25 percent recycled materials. The company vision is to permanently shift the direction of the disposable products industry towards products made from recycled materials or renewable resources.
Buyers of Eco-Products are distributors of food products to customers who prepare meals away from the home. Two of the largest distributor partners in the U.S. are Sysco and US Foodservice. These distributors and others, such as Tundra Specialties in Boulder, serve colleges and universities, corporate campuses, hospitals and restaurants throughout the country, supported by a twelve-person Eco-Products sales force.
The marketplace is growing and changing with opportunities to reach individual consumers on both a domestic and international basis with specific products offered via traditional and e-commerce channel outlets such as Staples and Costco as well as the Eco-Products website store.
Growing and Thriving
The strength of the business is in increasing consumer awareness to being earth friendly that will drive the industry and ongoing innovation. Eco-Products strives to lead the industry of making disposables better, offering new and improved products, moving fast enough to stay ahead in the industry.
Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations. Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value by managing pain, growth and owner exits. Larry is a consultant, public speaker, and the author of two books “Owner Exit Planning: Leave On Your Own Terms” and “Mapping Your Recovery: Grow sales in difficult times”. For additional information visit www.RoundhouseAdvisors.com
Doug Phelps is Vice President of Business Development at Roundhouse Advisors, Inc. and has executive experience in worldwide Services and Products Management, with an extensive background in domestic and international operations and business development, marketing strategies and sales, and productive relationship building for small to midsize companies and non-profit organizations. He is on the Board of Directors for the South Jeffco chapter of Thrivent Financial, serving community needs for residents in the area, and also serves on a committee for Lutheran Family Services of Colorado, supporting the fund-raising activities for the organization.