What the Oatly-controversy teaches us about the demand for transparency

What the Oatly-controversy teaches us about the demand for transparency

The Oatly-controversy

You probably heard already, Oatly has made the decision to sell a stake in the company to a consortium that includes Blackstone, a powerful private equity firm headed by Trump donor Stephen Schwartzman. Blackstone, in its turn, is allegedly investing in projects that link to deforestation in the Amazon rainforest. This hit me quite hard, as I am actually a great Oatly enthusiast myself. Oatly was the first plant-based alternative that has made me ditch milk. And just like every first relationship, it holds a unique place my heart. And I can't disagree with Oatly choosing Blackstone as an investor to be controversial, but, from a consumer point of view, I do not think that it is just this partnership that is making Oatly fans to call out to 'cancel’ the brand. I believe this comes from the consumer demand for radical transparency.

Transparency of investment matters too

Of course, similar to the Unilever buying Ben & Jerry’s and The Vegetarian Butcher and Alpro joining Danone, these shifts make people uneasy. This comes along when sustainable brands move from niche to mainstream. There are definitely more ethical investors I wish Oatly had chosen for, but it can be true that in this case these lacked the punching power that Blackstone has and Oatly needs. But consumers are interested in (read also: critical of) how these mainstream investors are willing to change their portfolios and position themselves as ‘a force for good’. In this regard, I disagree with the words of Nick Cooney, Managing Director of Lever VC quoted in Justfood.nl: ‘Who a food company receives investment from is not one of the things that consumers seem to care about.’. I think the case of Oatly proves that actually, consumers care. According to several brand studies, over 90 percent of consumers say transparency by a brand is important to their purchase decisions. Financial transparency is just as much part of this as the traceability of key ingredients. Consumers want to know how the profit of Oatly – which comes from their purchases - is reinvested responsibly.

Transparency means owning up to mistakes

I believe that Oatly has underestimated the expectations for radical transparency by consumers, especially coming from their key audience: sustainability minded people that try to shop consciously. After all, Oatly itself actively advocates for consumers to think critically about the dairy industry and to expect transparency. In big letters on their packaging it says: ‘Hey, food industry show us your numbers’. The lack of communications up front and the lack of clarity on the agreements between Oatly and Blackstone is why Oatly’s biggest fans now start to doubt the brand. It also does not help that as the critique explodes online, the tone of the company strikes many as too defensive and seems to blame the critical consumer as ‘unable to see the bigger picture’. See below a snapshot into the discussions.

From the bad to the promising

So, did I lose my belief in first love Oatly? Well, no. In our work at The Terrace we believe successful positioning of a company’s sustainability is all about covering ’the good’, ’the bad’ and ’the promising’. Oatly so far been an example of a brand that shows what’s not going well; their 2018 sustainability report stated on the front cover: ‘Slightly worse than last year’ for instance. I don’t think that 'canceling’ the brand will help in any way. I see the current discussion as part of a positive development where consumers ask questions and hold corporations accountable for their actions. And whilst I will open up my monogamous relationship status with Oatly, I hope that the brand will learn from it, comes back with more transparency on their financial decision-making and then keeps making waves in their industry. In other words: Hey Oatly show us your numbers!

I am curious what you think though: are you still on board the Oatly revolution? And do you believe the investor-relation itself or the lack of transparency is an issue? Show me your opinion about this article by sending me an email.


Why we believe that brave brands will lead the Fashion Revolution

Yesterday the Fashion Revolution week ended. The Terrace reflects on this global movement for transparency in the fashion industry.

The fashion industry calls for a revolution

It’s Fashion Revolution Week and yes, a revolution is what the fashion industry needs. Fast fashion is the second most polluting industry in the world, next to oil. Apparel and footwear industries currently account for 8 per cent of global greenhouse gas emissions, only in 2015 the fashion industry consumed enough water to fill 32 million Olympic-size swimming pools and the dyeing and treatment of garments makes up roughly 17-20% of all industrial water pollution. Next to this environmental impact, apparel also comes at a social cost. According to the ILO, about 60 millionpeople are employed in the textile, clothing and footwear sector worldwide, and three quarters of these workers are women. In this way, the industry has served as ‘a stepping stone to development’ in many countries. Yet apparel also became widely known for its bad working conditions in factories, a lack of earning a living wage and even human rights violations. The collapsing of the Rana Plaza building in 2013, a building that hosted factories that worked for the world’s biggest fast fashion brands, was the final straw that accelerated a movement for change. The Fashion Revolution was initiated, an initiative that aims to accelerate collective action with worldwide campaigns that request/demand? more supply chain transparency of fashion brands.

Luckily, brave brands are taking the industry by storm

Well, that was quite some depressing news all at once right? Well, the good news is that many great things are happening. Entrepreneurs are stepping up worldwide, making a positive and sustainable impact the ‘purpose’ of their brand. At The Terrace we have worked with multiple ‘fashion revolutionists’ on strengthening their strategies for positive change. Whether they integrate sustainability in their business from the get-go or whether they turn their business model around, brands are getting serious about sustainability, and they are taking the market by storm. And to be frank, we believe the brands that change the status quo to be the only brands that will stay relevant. Why? Because consumers engage with the purpose of a brand more than ever and dedicating your business to the severe challenges the sector is facing, makes you matter more to your audience. Some brands that we believe are leading by example:

  • Good on You– This app rates thousands of fashion brands on sustainability
  • Mud Jeans– Innovative business model with circular jeans that you don’t need to buy
  • The Next Closet – Second hand designer products
  • Armed Angels – Challenges consumers on the true cost of fashion and incorporates sustainable textiles only
  • Veja– A brand continuously making their shoes more sustainable showcasing that sustainability does not happen over night
  • Reformation– Reaching the next generation of consumers with on trend recycled collections
  • Patagonia– Outdoor clothing brand that vows for anti-consumerism.

From individual commitments to an industry-wide movement

Brands play a huge role in turning the tide for the Fashion Industry, but alone they can only go so far. With the growing need for change in the sector, pre-competitive collaboration between companies, civil society and governments continues to grow. The Sustainable Apparel Coalition (SAC) is one of these examples, uniting retailers like Walmart and Patagonia and 200 other companies to assess their environmental and social sustainability throughout the value chain. The Fair Wear Foundation (FWF) enables member companies to assess and? improve workplace conditions. In 2017, The Fashion for Good centre opened in Amsterdam, which enables international brands, producers, retailers, suppliers, non-profit organisations, innovators and funders to work together in changing the fashion industry for the better. But also at country-level industry stakeholders are coming together to change the fashion business for the better. After the Rana Plaza collapse, the Dutch Agreement on Sustainable Garments and Textile  was initiated, a shared commitment  initiated by industry associations, trade unions, NGOs, and the National Government of the Netherlands to collaborate on many environmental and social issues in the garment sector.

Are you a company working in or with the apparel sector and want to create positive change?

There is a lot you can do. Addressing the challenges in the apparel sector and strengthening your business go hand in hand. Not sure where to begin? At The Terrace we are always happy to help brave organizations find their focus in becoming more sustainable, for instance with our Brand Purpose workshop. Get in touch with our team here if you want to know more.


Are you brave enough to take a stand?

Being brave can be terrifying: standing up for what you believe in, exposing yourself to the danger of being laughed at and criticized… That is why, when we support our clients to build a brave brand, we always start with a small but incredibly important step: creating a safe space to take a stand.

Brave starts small

A great way to encourage people to be brave is through the “Take a stand” icebreaker. We often use this exercise in our workshops or stakeholder dialogues, with the goal to support a safe conversation, where people open up to each other and feel comfortable to show what they stand for.

We get the room off their seats, clear the space and place colored dots on the floor. Green stands for “I totally agree” and red for “I totally disagree”; everything in the middle is an imaginative spectrum. The most important step is carefully preparing and selecting provocative statements. We present the statements one by one and participants physically move along the spectrum to the spot that best fits their own stand. The moderator of the session moves around the room and asks people to share why they have chosen this position. This often leads to an interesting exchange of different arguments. After a few statements the group starts feeling comfortable to take a stand. The atmosphere is set for the rest of the session.

Taking a stand is easier than it seems

What often gets in our way when we want to be brave is that annoying voice in our head: “What if I’m not right? Will they judge me? What if I fail?”

As it turns out, what goes wrong here is that we focus too much on ourselves – on our own feelings and what others might think about us. But if we picture any of our childhood heroes or role models, one thing they most probably all have in common is their focus on something bigger than themselves. They have a purpose in life: from saving the world from evil villains, to extinguishing fires and rescuing kittens.

The big secret: don’t be selfish

So, shifting your focus to the outside might help you to be more brave and courageous, not only to take a stand, but to turn this stand into decisive action that makes real positive impact.

Brave Brands on the rise

Self-focused people might survive; self-focused companies won’t. Increasingly they are in the spotlights, with nowhere to hide. Brands can no longer afford to simply focus on selling; they are expected to solve real problems for their consumers and society as a whole.

A large brand report by Nielsen (2015) – where 30,000 consumers in 60 countries around the world were interviewed, shows that 66% of consumers would spend more on a product if it came from a sustainable brand. For millennials this percentage is even higher. Moreover, according to Horizon Media’s Finger on the Pulse study, 81% of millennials expect companies to publicly commit to sustainability.

More and more brands take these expectations seriously. For example Ben & Jerry’s (Unilever), an ice cream company that takes a stand on issues as peace building, refugees, climate justice and the LGBT community. Another great example is DSM, a food and materials multinational company that strives to contribute to the Sustainable Development Goals for zero hunger and affordable and clean energy for all. And have you heard of Tony’s Chocolonely? A Dutch company that sells delicious chocolate bars as a means to fight slavery in the cocoa industry.

What do these brands all have in common? They all focus on something bigger than themselves; they show bravery; they make bold decisions that are guided by a bigger vision; they have clear purpose of making meaningful, positive impact.

Bravery pays off

In a recent interview in the FD newspaper, Unilever Europe’s president Hanneke Faber reveals that Unilever’s brands that take a stand grow 46% faster than the rest of the company. In the US, Ben & Jerry's market share is now more than 35%! “By taking a clear position you might antagonize some customers,” says Faber “but the rest become your fans, and that pays off.”

So let’s start encouraging brave

Research carried out for the Brave Brand Rankings shows that brave companies are more likely to be innovative, have great work environments with supportive managers and engaged employees and have organizational structures that promote cooperation and break down barriers.

To encourage bravery we need to create safe spaces where people dare to take a stand; no matter which stand they take. Our tip: start small and encourage bravery around you. Why don’t you try out our “Take a stand” icebreaker during your next team meeting? You can download more detailed instructions here.

After practicing in your team meeting, have your brand take a stand. What is your positive impact? What is your purpose? How can you ensure everyone in the company is aware of that purpose and prepared to fight for it?

You can find out in these cases how we have helped some of our clients to take a stand: Ecover-Method “Brand strategy for the people against dirty”; Dopper “Crystal clear positioning for crystal clear water”; and Nutricia “Define the societal relevance of a baby food company”.

Ready for your next brave step? Sign up for our Brand Purpose Training. Or just pop in our office for a cup of coffee!


Top tips for greenwashing: communicating sustainability in horticulture

In October 2017, The Terrace was invited by the MPS-group to lead a workshop for and with leading growers of flowers and flowering plants from the Netherlands. This was part of event in preparation for an international horticulture trade fair. The focus of the workshop was on how to best communicate on sustainability in the horticulture sector. Here's what I had to say about conviction, focus, collaboration and... greenwashing.

Tip #1: Start from your personal conviction

The trouble with sustainability is the lack of a common definition. It may include topics like environmental protection, labor conditions, community engagement, economic impacts and/or governance. There are so many terms floating around, like CSR, responsible business conduct, future-proof, thriveability... Whatever term you prefer, it needs to be relevant to your core business and your key stakeholders. Most likely, this will be a function of the industry, the cultural/national context and the conviction and focus of senior leadership. So before communicating your sustainability efforts externally, first consider what sustainability means to you. For which parts of sustainability do you care most deeply? Why did you get started with organic flowers? What made you integrate sustainability into your business model?

Tip #2: Focus on what matters

Sustainability is multi-faceted, so your sustainability strategy probably is as well. But while all those facets may be relevant and understood by people within the industry, they won't all be equally relevant for different stakeholders. So when communicating your sustainability strategy, think first and foremost from the perspective of your audience. For different target audiences, focus your sustainability story in different ways. While keeping the overall story the same, differentiate the key topics to highlight for different audiences. Not everyone knows as much about sustainability issues in horticulture - or whatever sector you're in - as you do.

Unilever uses a very powerful analogy to further strengthen its sustainability communications: the sword and the shield. The sword is a strong message that you pro-actively want to share with your target audience. And which is very relevant for that target audience. The shield contains other topics which you are working on in your sustainability strategy, but which are less relevant to your audience, or less easy to talk about as an individual brand or company.

For example, for Lipton's sustainability strategy includes both social and environmental elements. In consumer communication, the social elements are emphasized like a sword. Most consumers realize that picking tea leaves is hard work in tough locations, so this context helps Lipton tell its story about the programs it has in place to make life easier for tea pluckers. The improvements Lipton is making to reduce pesticides is more like a shield. Something to work on very actively, but as most consumers are unaware that nearly all tea in the world contains pesticides, communicating about this as an individual brand is more challenging. So while this may be a great topic for a sustainability website or report, we'd not recommend putting that same story on the pack.

Tip #3: Some stories are better told together

Some topics are difficult to raise, even if you feel it is high time the world knew about the issues and your solutions. This is where sector-wide collaboration and communications may be needed. Just like for tea, for the horticulture sector, pesticides might be such a topic. As an individual grower of flowers, this is a topic you might be able to raise with expert buyers in retail. But with consumers, this is not so easy. If you try to mention this on your packaging, consumers might just link your name to pesticides in general, rather than the reduction you've achieved. To raise awareness of the issues around pesticides, it would be better to collaborate. With industry bodies and certification providers, but potentially also with NGOs and consumer organizations.

Tip #4: Always be honest

Good communications about your sustainability efforts and performance can build trust in your organization and its products. But even if you're selling plants and flowers, and you'd like to make the world a greener place, what you're communicating has to be true. Only balanced communications - sharing both successes and challenges - builds trust. If what you're sharing is not true, then it's merely greenwashing. That word might have a nicer connotation for the horticulture sector than for others, but it will simply erode trust.


In search of purpose for Fairphone: the power of purpose for brands

To really connect with consumers, brands can no longer present a facade and sell. To thrive, brands need to create an emotional connection with people, stemming from a clear brand purpose. A purpose that addresses a real societal issue and that strives to create a movement to resolve this issue. In May 2017, we organized an event about purpose marketing at Fairphone, a social enterprise that makes the world’s first ethical, modular smartphone. The event was organized by the Nyenrode Business University Alumni Circle for Sustainability, in collaboration with the Alumni Circle for Marketing & Digital. Here are some of the key outtakes from the event on purpose marketing.

Creating a fair phone isn't easy

Lina Ruiz, Fairphone's strategic partnerships and events manager, kicked off with an introduction to Fairphone's mission: making a positive impact in how phones are made, used and recycled. Interestingly, she used a video by Milton Friedman  to explain the complexity of supply chains. She then shared Fairphone goal of creating positive social and environmental impact from the beginning to the end of a phone’s life cycle. They do this in four ways.

Fairphone's long-lasting design creates products that last and that are easier to repair. The design helps people understand how to get more years out of the device and move away from the mindset that consumer electronics are semi-disposable objects.

Fairphone traces where the parts come from and therefore creates demand for fair materials that are good for people and planet. One material at a time, Fairphone strives to increase awareness and source better ingredients for their devices.

Fairphone wants to improve working conditions in the electronics sector. With experts, NGOs and other partners, they develop innovative programs to improve worker satisfaction and representation. 

 

To progress towards a circular economy, Fairphone encourages the reuse and recycling of electronics. Withspare parts and recycling programs, they support both consumers and producers. 

The power of purpose for brands

Consumers are increasingly oversaturated with advertising messages. Brands constantly try to sell themselves with beautiful messages, but not all of them are authentic. No wonder the Edelman Trust Barometer shows an implosion of trust in business. At the same time, people look to business to be drivers of change for a better society. From brands, people demand something they can relate to, authenticity and higher ethical standards. The brands that succeed are therefore those that offer shared value for both society and business. That have a purpose that truly connects their business to societal issues in a relevant way. Some companies, like chocolate maker Tony's Chocolonely and transportation company AirHunters, had a clear societal purpose from the start. Tony's wants to abolish slavery in the cocoa industry. Airhunters wants to decrease the carbon footprint and congestion caused by suboptimal transportation. Their brands, therefore, radiate their respective purpose very clearly. Other older and larger companies, like Unilever and Heineken, seem to have veered further from their original purpose but are redefining purpose for their brands with great success. Year on year, Unilever's purpose brands like Dove, Lifebuoy and Ben & Jerry's, outgrow the other brands by 30%.  And Heineken's responsible consumption campaign with DJ Armin van Buren created a global movement of DJs urging people to dance more and drink slowly.

Guiding brands toward purpose

Using the purposeful positioning model developed by The Terrace, the participants then got to work on Fairphone's positioning. The model helps companies and brands find their purpose through an outside-in approach.

1) What are external societal issues that a brand can or should address, such as environmental problems, social issues, latent consumer needs, stakeholder issues and true customer needs?

2) Through the lens of those key issues, how can a brand create shared value? Where are the opportunities for impact or societal value? And how can it create business value in parallel?

3) Who are the people to engage and keep in mind? Through the shared value angle, who are the people that will use the brand? With whom would the brand compete? And which parties are potential collaborators striving for the same societal value?

4) What does the brand really stand for? What are the brand's key benefits, personality, promise and the reasons to believe? This is often more comfortable territory for the marketer.

5) Why is the brand really here? What is the brand's true purpose? The heart of the model brings together the input and perspectives from the previous steps. Once that purpose is distilled and chosen, then go back from the inside out to refine all elements in the model.

Collaboration for positive change

Combining the forces of Nyenrode's sustainability and marketing alumni and their guests, the group came up with various alternate business models. Each stemming from a different angle on the purpose that Fairphone could adopt. Therefore each leading to quite different engagement strategies and tactics. The conclusion of the evening was that there are many opportunities for Fairphone to further focus its purpose and marketing tactics. Even with limited time, the group came up with very actionable ideas, which were gratefully received by the Fairphone team. The other conclusion was that crafting purpose takes more time than the 30 minutes we had available in the context of this workshop - and that is was incredibly inspiring for all involved! Over drinks, the participants continued to talk for hours, sharing how they could put more purpose into their own brands and lives.

A big thank you to Fairphone for hosting this event, to the many people who participated so actively and to the many people involved from the Nyenrode Alumni Circles for Sustainability and Marketing & Digital. Interested in finding out more about purpose marketing, please contact Marjolein.

This blog was originally written by Marjolein Baghuis (@MBaghuis) and Tim Mazajchik (@tmaz85) for the Nyenrode University Alumni website. It has also been posted on the websites of Heartbeat Strategy and Change in Context.


Brand Purpose Model: what is the most beautiful thing you can do with your brand?

As a marketer your goal is to win fans and keep them. You do that by making a difference. And by showing what moves you. What you stand for. But what is the best way to get to the core of your brand?

Brand positioning models

Brand positioning models come in many different forms, from the brand diamond, the brand propeller, to the brand sun, etc. All magnificent one-page models that try to cover the essence of a brand. The truth about the brand, meant to be brief and guide colleagues and external contacts. Most are inspired by the brand key: the model developed by the Unilever Marketing Academy to consistently manage their brands internationally. Just one A4, containing all important information in nine clear bullet points. As a marketing strategist I see them in many shapes and forms: from boring Word documents to inspiring works of art. Accurately defining your brand is no easy task. It requires many decisions. Those decisions together define the strength of the brand.

Marketers and brand managers recognize the need for choosing a cutting edge position in the market. Who is the brand, for which target group are you always the best choice, and of course a razor sharp consumer insight. We can’t live without it.

Stand for something as a brand

If you ask me, the brand key is hopelessly worn out. In times like these, where what used to be rattles, we need the courage to let go of the old and embrace the new. The brand key is not sufficient anymore because it doesn’t take into account the world around the brand. Both the internal organization as well as the external stakeholders need to receive adequate attention. Next to the functional and emotional advantages consumers increasingly expect “like-mindedness”. Choosing for a brand that shares their values. A brand that doesn’t just stand for something, but also cares about something! And I’m not talking about a briefing that was sent to the advertising agency ordering to “come up with an authentic campaign”.

I believe that brands should decide on how they can improve and enrich people’s lives. How they can expose and contribute to social issues. Current position models fall short in addressing this.

We need an inspirational model that helps marketers to proudly carry their profession and helps companies to create true value. Brands have the power to encourage people to make better, healthier and more sustainable choices every day. Brands can help to redefine our vision on quality of life. Brands can guide us, by hitting the sustainable route. Brands can enthusiasm people for this route. They can trigger positive change in the behavior of people.

The Terrace’s ‘Brand Purpose Model’

As a warm-up we start with the question: “what is the most beautiful thing you can do with your brand?” Bam! It provides food for thought and breaks with the laws of conventional marketing mechanisms. This is your chance to think something about something, to be opinioned. Stand for something. And that is exactly what customers expect from you. That’s how you create preference.

The “Brand Purpose Model” by The Terrace offers companies a holistic view on their business to sharply define the purpose. In that process the marketer doesn’t just need his or her own team, but also colleagues from PR/PA, Sales & CSR are needed. Of course having the general director at the table is highly desirable. Without connecting these different disciplines, no shared “purpose” will arise in the organization. Any social activity will just be a little something on the side. Your customers will see right through it.

How it works

We work from the outside-in. Based on insights and needs from different angles we determine the business value and the social impact that fits the brand. The target group and competitors follow next.

Of course you have to know who you’re up against in the market. However, successful brands create a cooperative environment. Take for example cooperation in the supply chain; for marketers, the transition from a linear to a circular economy means that your products will come from two sides, from you and to you. That’s not something a company can manage on its own. Cooperation is crucially important. This includes your target group, who has become more conscious and can arrange more things themselves. Granting others something is the key.

Everyone knows it, character can’t be copied. Why do so few brands of today show what they really stand for? A strong brand purpose provides focus for successful collaboration and innovation.

What does your brand stand for?

Leontine Gast