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.


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!


Tony's Chocolonely: Raising the chocolate bar for industry change

For years, I’ve been supporting chocolate – and change – maker Tony’s Chocolonely to create their annual report. My kids and my colleagues love that I work for them. Because I always return from meetings with their yummy chocolate in funky flavors. Their bars are a treat, but what inspires me most to work with them is their commitment to creating positive change in the industry. Here’s my take on their key ingredients for positive change!

Crazy people raising the (chocolate) bar

Positive change usually starts with frustration about an issue plus people crazy enough to doing something about it. And this ccompany started just like that. Investigative journalists were shocked to find out how much child labor and slavery there is involved in nearly all chocolate. In 2006, in an attempt to prove that it could be done, they produced 5000 bars of slavery-free chocolate. As this first batch sold out in just a few hours, they turned the experiment into a company.  The company tagline says it all: “Crazy about chocolate, serious about people.”

Partners towards a common goal

A shift to more sustainable business practices is needed at all steps along the chain. From cocoa farmers, chocolate companies and governments, to retailers and consumers. The people at Tony’s understand they cannot transform the cocoa industry by themselves. Tony’s therefore developed a roadmap towards its mission: “Together we make chocolate 100% slave-free”.

The roadmap engages five key actors in the industry to work towards this common goal:

  • Strengthen farmers to increase their income
  • Engage the largest companies in the industry to take action in their supply chains
  • Encourage retailers to leverage their buying power
  • Push governments to adopt and enforce legislation
  • Enable chocofans to raise awareness and spread the message

Scaling up for real movement

To really engage partners along the cocoa chain, Tony’s knows there needs to be a business case every step of the way. Its own story and success provide lots of inspiration to get different parties to act.

At the launch event for its 17/18 annual report that scale became very clear:

  • Over 5,000 farmers benefit from the special premium Tony’s pays, nearly 1,000 farmers are involved in awareness-raising activities to prevent unwanted child labor and slavery;
  • The Netherlands’ largest retailer Albert Heijn announcedit will use Tony’s principles of cooperation for 100% slave-free chocolate for its very successful private label chocolate brand Delicata. World leading chocolate manufacturer Barry Callebaut supports the change process;
  • 5,000 chocofans joined the party, over 8,500 people support Tony’s mission as Serious Friends;
  • And the brand became the market leader in the Netherlands with a market share of 19%. Net revenue grew by 23% to nearly € 45 million and a net profit margin of 4.5%.

Relentless ambition for chocolate and change

Nice numbers for a company that produced its first bar of chocolate just 12 years ago… But they know there’s still a lot of work to be done. Therefore, Team Tony’s continues to work – and party – very hard to increase its own impact by expanding the business to other countries and continuing to drive collaboration in partnership with many others.


Ready to scale-up? Do you have Category Leadership potential?

Having a social start-up means you want to change the world. Your product or service has the potential to create positive change for many. But to have real impact you need to scale-up.

How do you know if your brand is ready for the next step? That is an interesting question. Luckily The Terrace has developed a tool to assess the health of your social brand and it makes clear what you need to do to reach your goal.

A fundamental aspect you need to look at is the so called ‘’Power in the mind’’ of your brand. We have identified two critical checks to see if you are able to get a positive and prominent position in your market.

How single minded is your story?

To get your proposition across you need an extremely clear and simple story. Too many startups lose traction when their fundamental story becomes blurry. A simple but highly effective test is to check if your message can come from one type of personality.

Likewise, a defined corporate culture and a simple and clearly communicated strategy is necessary. You will be amazed by the high rotation of employees at social enterprises. Many times, this is due to unsatisfied employees, having different expectations of the brand and the company. They are disappointed that it was not clear enough how they could help the brand to have more impact.

Important questions you can ask yourself are: How focused is the brand story and sales pitch? How clear are the company values?

Do you have Category Leadership potential?

  • Most social enterprises are too polite. To have impact, you need to shoot for the stars. You must claim some sort of category leadership and act on it.
  • We loved it when Urgenda was the first social enterprise ever to sue the state. It was bold, it was right, and it was a 100% on brand. The same for the bid of VANDEBRON on the Hemkade.
  • Having a clear definition of your category is mandatory. A short cut to get attention is to point out the deadlock in the development of your category and show what you are doing about it.
  • Two important questions you can ask yourself: How many real category leadership actions have been executed? How fit is the company leadership to climb on the stage?

Keep an eye on our website and soon you’ll learn more about how to assess if you’re ready to scale-up! 


Bioplastics: when innovation empowers abundance, La Coppa

Plastics are indispensable to our daily lives. They come in every colour and shape, light, strong, resistant, tremendously useful for every person and industry. Plastics have come to stay.

The vast majority of plastics are oil-based. Around 4% of the oil that the world uses every year goes into producing plastics. Their composition has been both its strength and its weakness. The challenges of climate change and fossil fuel scarcity are putting the plastics industry under pressure. In addition, the ever-growing and widespread plastic waste problem is no longer possible to ignore.

In this setting, bioplastics are a great alternative allowing both for high-quality performance and widespread use while having a reduced environmental impact.

Bioplastics are totally or partly made from biomass (plants), mostly corn, sugarcane or cellulose plant fibers. Although there are several varieties of bioplastics, only a few are fully made of renewable, natural resources. The 100% plant-based plastics are the only variety that at the end of their useful life will decompose into water, carbon and compost (i.e. are compostable/ biodegradable). Ideally, the decomposition will take place at an industrial facility and will be catalysed by fungi, bacteria and enzymes, leaving no toxic particles or harmful substances behind.

New materials such as PLA, PHA or starch-based materials create truly bio-compostable packaging solutions.

Closing the loop on plastics

Advanced Technology Innovations, a company that provides innovative packaging solutions for food and beverages, developed a system for coffee cups made of plant-based plastics (PLA), namely produced from the residue of sugarcane and sugar beet.

One of our clients, LaCoppa coffee adopted this innovation showing their leadership in sustainable packaging in the consumer goods industry.

The fully compostable coffee capsule can be used in espresso machines, proving that it is possible to replace petroleum-based and aluminium coffee capsules with a fully functional, more sustainable alternative that should be widely adopted.

     

Others leading the change

Many industries are already using bioplastics. Not only traditional industries, such as food packaging but also automotive, electronics and textiles. Several leading brands, such as Tetra Pak, Ecover and Danone are investing in new bioplastics solutions. Unexpected partnerships are also arising: Heinz approached Ford about possible uses for its tomato waste. Ford was already using bioplastics based on soy and coconut for its auto components, carpeting and seat fabrics; why not explore the use of ketchup bi-products to develop a more sustainable bioplastic material? Specifically, it is expected that this new bioplastic could be used in wiring brackets and material for onboard vehicle storage bins.

Work in progress

While great opportunities and fast growth await bioplastics, this is a work in progress.

For bioplastics to become a truly sustainable alternative both the industry and governments need to make technical adjustments to the current waste streams to allow for an adequate treatment of bioplastics. Otherwise these will end up in the landfill.

Engagement with the final consumer is also crucial to promote education on bioplastics and recycling. Consumers should avoid contaminating plastic waste recycling with bioplastics, as it will compromise the plastic recycling process.

Finally, in order to gain widespread support, the bioplastics industry should increasingly use food waste residues (from pineapple fibers to shrimp shells), non-food crops or cellulosic biomass, leading to decreased land-use demand by the industry. Innovative alternatives are endless.

The future of plastics

Biodegradable bioplastics are a growing niche market. According to European Bioplastics, the global bioplastics production capacity is set to grow 300% by 2018. This growth will lead to a new generation of plastics, where abundance of plastics is powered by innovation. Oh, and it is sustainable!


What to do with unexpected clients? - And how not to lose them

“You are not really going to ride that ugly car, are you?” Since I admitted to buying a Mitsubishi Outlander I get overwhelmed by disappointed reactions from friends and family. Because they are car lovers. Petrol heads.

I get their point, but…

The diesel guzzlers they love to drive are not very sustainable and a more environmental friendly car had been on top my wish list for quite some time. The Mitsubishi Outlander seemed the ‘least dreadful’ version of all hybrid cars on the market. A little less ugly and dull than the others, so to say. Take into account the tax benefit on top of that and the choice was easy.

Reluctantly though.

Brands are part of our identity

We all have our preferences for specific brands. Whether it is conscious or unconscious. We search for a brand with features that are in line with our own desired personality. By choosing a specific brand, we are associated with a target group to which we would like to belong. While one person does not want to be associated with a Japanese car at all, the next will not stop talking about the amazing technical features of the same car.

But what if ‘your’ brand does not deliver the kind of product or product features that are very important to you? What if none of the brands you prefer offer a sustainable choice?

That will force you to step out of your comfort zone and look at another brand. This brand then has the challenge to connect with these new, unexpected clients. And to keep them, without losing their existing clients.

11.000 sold cars without test-drive (but “Mit-subsidie”)

Mitsubishi is a strong player in the hybrid car market. A few years ago, the Japanese brand said to have the ambition to focus on the production of sustainable SUVs for an affordable price. In 2020, 20% of their cars will be electric or plug-in hybrid. Electric driving will become one of the pillars of their worldwide sales strategy.

And it is already paying off, so it seems. Last year the brand took the semi-electric Outlander PHEV to the European market. Aided by the significant the tax benefit (the Dutch nickname the brand ‘Mit-subsidie’ – with subsidy) there was a big run on this car. No less than 11.000 cars were sold without the future owners even taking a test-drive.

Awkwardness in the showroom

Mitsubishi is known for its user-friendly cars for an affordable price. The dealers have adjusted their sales pitch entirely to this message. But how do you approach this new group of sustainable buyers? They clearly have no idea, so it seems when I walk into the showroom with my wallet already pulled out.

Dealers seem to be ashamed for the relative high price of the sustainable Outlander. They think it is a waste of money to pay for the extra features and have almost nothing to say about the sustainable qualities of the car. With every unanswered question, I get more uncomfortable.

The green ambitions of the management have obviously not yet reached all layers of the company.

But as long as there are no serious alternatives, Mitsubishi will profit from this situation. However, there is no reason to sit back and relax. Other European brands will follow suit with their own affordable hybrid. And if Mitsubishi’s unexpected clients still do not feel at home with their new brand, they will go straight back to their own familiar brands.

Know your customer

Bringing a new sustainable product to the market has a lot of consequences. One of them is that you may gain a new target group. The group of consumers that makes choices based on the sustainability of a brand is growing. This group is focused on innovation in the market and they like to be well informed.

As a brand you need to be prepared for this. Being the first with an innovation only gets you one step ahead on short term. If you want to keep those customers in the long run, you need to make an effort. You have to understand your customers. What motivates them? What are their wishes?

This means that your sales people should learn how to handle different target groups. Which clients is motivated by price and which clients do you seduce with the technical aspects of the product?

Learn their language. If new clients feel understood, they might (unexpectedly) become a regular client


Baby you can drive my car: business opportunities in the sharing economy

A new economy is on the rise. A growing number of companies are gaining interest in an economy where collaboration is essential. This emerging economy has many names, from Collaborative Consumption to lease-society, from peer economy to maker movement. But it all comes down to the same thing: we share. This exchange is not only limited to tangible objects, but can also include the exchange of skills or services, for example a shared car drive.

Sharing is not a new phenomenon. But due to the Internet and other innovations the scale on which the sharing economy is operating is much bigger today. Where does this renewed interest in sharing come from and what are the opportunities for companies?

From hyper consumption to sharing economy

We live in a predominantly capitalistic society. Our way of consuming is based on a fascinating system. In order to sustain itself, it needs to grow. In order to grow, it needs to be fed with more consumption. Psychologically it works like this: people want to own more as they acquire more, which is of great convenience for business, they’ll produce and sell in an equal pace. Within the past century, we saw the unprecedented rise of individual property, credit, and commercials. Together they resulted in a system of hyper consumption.

Entering the 21st century - certainly after the start of the economic crisis of 2008 - we see a shift from a consuming, individual society to a culture where a growing number of people are starting to collaborate. During the crisis, people began to lose their trust in large organizations who seem to appear only as greedy, hungry monsters only looking for one thing: profits. The new emerging economy offers a new perspective to these people. Shared access overrules individual ownership, reputation is the new credit and commercials are replaced by the quality of the community. These three pillars are the basis of the Sharing Economy.

Shared access

In the sharing economy, it’s about ‘access’ over ownership. We have to make a mind shift, instead of owning a product; we’re using the services a product provides. In other words, we don’t need the light bulb, we need the lumen. Like mushrooms in autumn, companies with a sharing philosophy pop up everywhere. On the popular platform of Airbnb, people rent out their spare room, air mattress or backyard tree house to visitors. On peerby, neighbours lend out their toolkits. Do you need advice on your business plan, or do you want to learn Spanish? Konnektid will connect you to a person who can help. And for easy transport, you can always borrow a car via Snappcar. These platforms offer consumer-to-consumer sharing services. A typical B2B platform is Floow2, where heavy construction vehicles and business equipment are being shared. B2C platforms, such as Netflix, see their list of customers grow. Important in the sharing economy is your community or network. The bigger it is and the more whufffie you have, the more access to goods, skills and services are being offered. Which leads us to explore the whuffie-factor.

 Share stuff, gain whuff!

You probably wouldn't lend your car as easy to a stranger as you would with your garden tools. In essence, the exchange comes down to a relation of trust. Trust is mainly build on the reputation of both the lender and the borrower. In the sharing economy, reputation is your capital: it’s social capital. And its’ currency is called Whuffie. Whuffie originates from the book Down and Out in the Magic Kingdom by Cory Doctorow. In this novel, money no longer exists and people pay with whuffie. Whuffie is obtained through sharing goods, skills or other services. The good thing is: the more you share, the more whuffie you receive. For companies, social image or whuffie is just as important. Examples of companies who have already joined the sharing economy are Bosch, with a leasing model for washing machines and refrigerators, and Achmea, who have started their own sharing initiative: WeHelpen.

Community

Whuffie is a strange currency because it’s not directly visible. It is measured only in your relation to other people. You need to build a community of trust with the people or companies around you. Only trying to sell your product will not work. You will have to reach out to your customers and make a real, long-term connection, for example through a leasing system or after-sales services, so they will come back. But also think of the numerous opportunities there are online. The web is getting bigger and bigger and there are an increasing number of websites and apps that offer sharing opportunities all around the world. The sharing economy is a local community on global scale.

Together, we have created a glocal community where people can share items, save money and have more contact with each other, online but even better in real life. For companies, the sharing economy has created new markets via access versus ownership; it sparked the consumer mind-set of we and together instead me, me and me; it has extended customer relationships from ‘point in time’ to ‘point across time’ and created word of mouth through a user community.

The sharing economy is growing. Not only new individuals, but also institutions as the municipality of Amsterdam (Amsterdam Economic Board) and Brussels have shown interest and discuss the possibilities of how to best facilitate the sharing movement. This shows that the sharing economy is not just a flash in the pan but is here to stay.

Author: Fien, intern at The Terrace. In the coming months, she will submerge herself into the world of the sharing economy.