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UNC KENAN-FLAGLER NEWS


Burt’s Bees CEO on how sustainability is good for the bottom line

5/13/2009

John Replogle, president and CEO of Burt’s Bees, likes to tout that “Green is good business.”

And he has the numbers to back it up. The Durham, N.C.-based personal care company has grown its revenue by a factor of eight in the past three years with him at the helm; its gross margins have jumped 800 basis points.

During this growth phase, the company also has slashed its electricity costs by 40 percent in the past year and decreased the amount of waste it sends to landfills by 85 percent.

Replogle spoke as part of the Dean’s Speaker Series at the University of North Carolina’s Kenan-Flagler Business School on April 22, which was also Earth Day. He urged businesses to take the lead globally on sustainability efforts.

“Business is one of the most powerful forces on Earth… [and] in many ways has become the global governing body,” he said. “Business cannot sit outside of the social contract. It must form a political and moral contract that serves all of us.”

Burt’s Bees has written a manifesto outlining its goals to reduce non-product water use, lower its energy use and decrease the amount of waste that it sends to landfills.

For example, the company has cut the amount of waste water it generates by 30 percent while growing the company by 30 percent. Instead of filling the tanks it uses for making its products with water, adding a cleaning agent and then filling the tanks again with water to rinse, the company now steam cleans its tanks. In addition, Burt’s Bees installed flushless urinals.

“Just by setting the goals, setting the vision, it transformed the way we did business,” Replogle said. “Set audacious goals and visions for your team and they will delight and surprise you every single day.”

“It is a visible reminder to at least half of our population … that we’re in this for a purpose,” he added. “It reminds people of what we’re going after. You do stuff like that as a visible symbol of your commitment.”

In its manifesto the company outlined a plan to eliminate all of the waste it sends to landfills by 2020. Now, the company is planning to reach that goal by 2010. To drive home the message of the importance of recycling, the company saved two weeks of its trash last summer and had a “dumpster diving” event.

All company employees were invited to view the waste, which had been separated into piles of items that should have been reduced but were not and items that were not in a category to be recycled but could potentially be saved from the landfill.

The company also has reduced its electricity use by 20 percent in the past year, he added. It installed meters on each of its manufacturing lines and found that 40 percent of the electricity needed to create its lip balm products went to heating the shrink wrap used to show tamper resistance. However, a team that worked on the manufacturing line suggested that the company eliminate the shrink wrap and extend the product’s paper label to show tamper resistance.

“It absolutely impacts the bottom line,” he added. “We are creating a competitive advantage by getting our [electricity] costs down. You measure and you reward people - make them heroes and you get the heck out of the way.”