In 2005, Coral Rose helped Wal-Mart become the world's largest purchaser of organic cotton, effectively changing the face of the apparel industry supply chain. SLM sat down with Coral to discuss how a single line of cotton yogawear helped reshape the organic fiber market, and to find out why Wal-Mart initially resisted adding "buying organic cotton" to its ambitious $500 million environmental initiative.

SLM: In 2004, as Ladies Apparel Buyer for Sams Club (a division of Wal-Mart), you were the first big box retailer to stock organic cotton yogawear on store shelves , by all accounts a runaway hit with customers. What was your inspiration for this innovation? Did you anticipate that organic cotton apparel would prove to be such a strong seller?

Coral Rose: First and foremost, I felt good about the items themselves: They were made of better cotton and priced similarly to other merchandise in the ladies activewear category. At the same time, I absolutely believed that buying organic cotton was the right thing to do for Sams Club. Id led an organic lifestyle for years at that point, and I knew the negative environmental impact that a conventionally grown cotton crop can have , its one of the worst offenders in terms of pesticides. So when the opportunity arrived, I jumped. Just looking at the scope of my buying responsibilities (in the millions of units), I knew the potential impact was huge.

Did I know it would be such a hot seller? Again, its all about the item. When you go shopping youre going to buy what you like. Some consumers may go looking for organic cotton/sustainable fibers, but thats not the majority of the population. The majority shop by item , youve got to give them what they want. The yoga tops and bottoms were already in my best-selling category (activewear). Organic was the plus, the value-add.

SLM: Based on the strength of sales, Wal-Mart set up an organic cotton/sustainable fibers environmental sustainability team. How did that fit in with Wal-Marts larger sustainability initiative, announced last year?

CR: As a matter of fact, Id bought the organic cotton yogawear items about six months prior to the corporate-wide initiative being announced. Initially, Wal-Mart had decided that it wouldnt purchase organic cotton as part of its large-scale sustainability initiative. I knew that if we were going to get organic cotton/sustainable fibers back on the corporate agenda, we had to have the business case in hand.

I got together with a coworker, Andrew Fraser, and we drafted a one-page brief to present at the first milestone meeting in March 2005, six months after the initiative was announced. This was about the time the organic cotton yoga sets hit the sales floor (due to the lengthy lead time of the purchase) , and they sold remarkably well. Given the excellent initial sales of the yoga set, [Wal-Mart CEO] Lee Scott allowed us to form the team.

We really were a grassroots effort started by the associates, as were many successful Wal-Mart programs developed during Sam Waltons time. We spent about eight weeks soliciting team members for our first information workshop, putting up posters, sending mass emails, trying anyway we could think of to get people involved. We even handed out invitations that Andrew and his kids created: small plastic bags filled with five ounces of kitty litter to represent the amount of pesticides used to grown enough cotton to produce an average tee shirt. It was difficult at first. It doesnt matter where you work, people feel like its one more thing to do on top of their existing job responsibilities. But I really believe that its part of the core business, that this is a complete paradigm shift from the way business has been done in the past. I believe I was to some degree successful in getting that across.

SLM: Once you had a team in place, what was your first step?

CR: First we had to agree on an overall mission. What does doing the right thing mean? Really I think it comes down to health , of farmers, of customers, of the planet. I personally do not believe that the ability to buy organics should be dictated by economics (can I afford this?). Instead, organics should be available to everyone so that all consumers, if they so choose, can make healthier purchasing decisions. And thats really what retailers like Wal-Mart and Sams Club are about , offering quality products that are affordable for the majority of consumers. In the end, we decided on three core goals or principles:

1. to become the world leader in organic cotton and sustainable fibers, purchasing at price parity
2. to improve, due to the use of fewer pesticides, the quality of life for farmers, their families, and the communities in which they live and we do business
3. to send a clear message that we care about our customers and our members, preserving the integrity of our ecosystems through cleaner water, soil, and air practices, and thereby protecting the health of our children, grandchildren, and the planet.

SLM: Wal-Mart is now the biggest buyer of organic cotton in the world, stocking a range of products from baby clothes to bed sheets. How do you account for their enormous success?

CR: So many people have remarked on how it happened so fast, that it took Patagonia several years and it took us what appears to be less than a year. That might be how it looks, but we certainly benefited from the enormous work of pioneers like Patagonia and Nike, which actively supported us in this project. We also couldnt have done it without the participation of NGOs like Organic Exchange, Conservation International, World Wildlife Fund, and Bluskye Consulting. Thanks to their valued knowledge of the industry, we were able to learn a lot from the market. We also learned the importance of educating associates and customers. Organic Exchange educated us on supply chain issues , the farm to shelf business model. We also organized farm tours here in the U.S. to educate buyers and suppliers on organic farming practices. In addition, NGOs supported the operational efforts of the team. I already had a full-time job and this was another one! Bluskye and Conservational International worked on meeting facilitation, scheduling conference calls and setting agendas, providing meeting recaps, and offering overall support to help us keep this project moving on fast-forward. Beyond the project management roles, they also offered much-needed moral support.

SLM: How do you think Wal-Marts purchasing decisions have changed the market for organic cotton? Have they had any effect on how the companys competitors do business?

CR: A specialty product like organic cotton typically tends to start in the high end/specialty market, filter down through department stores, and eventually will land somewhere like a Wal-Mart. Organic fibers have been selling in specialty and outdoor shops for years, but something has always stopped the larger stores from even considering it (higher cost, perceived lack of consumer interest). When Wal-Mart suddenly started purchasing, there was a huge gap , the specialty stores and the big-box retail market were selling, but the department stores lagged behind. So number one, it created a lot of movement in the mid-tier market, people looking to see if this is something they should be doing.

Secondly, it obviously affected the farmers. There used to be a surplus of organic cotton at the end of each growing season that they either were unable to sell or had to sell below market value. For the first time in years, those same farmers were able to sell their entire crop for a profit. If anything, theres some concern about supply: With a three-year wait for soil to be certified organic, theres a lot of acreage in transition. Part of our supply chain business model for this project was to have Wal-Mart and Sams Club purchasing rotational food crops from the same farming groups that supply our organic cotton, thus giving the farmers economic support year round.

SLM: Wal-Mart has served as a bit of a lightening rod on social and environmental issues over the past few years. Did you receive any feedback on this program that has surprised you?

CR: We understood that anytime Wal-Mart does something like this its going to face criticism from someone. But the bottom line is that this isnt greenwashing , the truth is that thanks to my initial purchase of the yoga sets, Sams Club was already one of the largest purchasers of organic cotton in the world by the time the corporate-wide initiative was announced. Why? Its the value-add. I was able to offer the customers something extra for close to the same price, so knowing that the environmental savings were huge, why not?

SLM: What advice do you have for sustainable innovators seeking ways to green the purchasing and sourcing policies within their own organizations? Whats a solid first step for those just starting out?

CR:

1. Raise awareness through education. When I first approached conventional suppliers about organic cotton they said ok, but why? I had to explain to them the pesticide use issue. These were suppliers that had worked in the apparel market for years, and they just had no idea. So I took them on the Sustainable Cotton Project farm tour in California. It was the first time they had ever gone back past the yarn stage right to the seed/farm level in the supply chain. Showing them firsthand was so much better than telling! After a conventional cotton field has just been sprayed they advise you not to touch it because of the pesticide residue. If you happen to be watching the crop dusters in action spraying the fields at the time, the message really hits home.
   
   Awareness is the first step in creating sustainable change. If you work primarily with other companies, make a presentation to their senior management about the environmental impact of the product in question. Encourage them to evaluate their ecological footprint and communicate with their consumers. When people actually see how their everyday living decisions impact the environment, many times they are called into action.


2. Assess your products total environmental impact. Start by examining its life cycle. (See below: "The Life Cycle of a T-Shirt) This represents a mindset shift beginning at a design level. Hands-on experiences such as farm tours or other site visits connect your business to the source. Interacting with your supply chain network will give you ideas for new innovations, cost savings in your supply chain, and information that can help your negotiations with clients.
   
   
   
3. Focus on your core consumer and where the markets going. When I first considered buying organic, I did industry research (see the Organic Trade Association). Ladies apparel is the top volume category for organic cotton, and at the time it was also the fastest growing category. This further supported my decision as Ladies Apparel Buyer to really go for it! To keep your competitive edge, remember that quality is synonymous with organic.


4. Capitalize on opportunities to create economic value out of the waste stream. Seventy-five percent of all product materials end up in the waste stream; global waste equals 500 billion tons per year, and less than 1% is recycled. Theres a huge economic opportunity here! For example, the wastewater from processing Modal®, a fiber made from sustainably managed beechwood in Austria, can be used as input for the manufacture of xylitol, an ingredient in some sugar-free chewing gum. If needed, you can hire a cradle-to-cradle consulting firm to help you identify these opportunities.

SLM: In 2006 you launched Eco-Innovations, a consulting firm that works with industry leaders to promote sustainable textile product design and development. Whats your next project?

CR: Something Im really excited about is working with Organic Exchange and leading an industry task force addressing the sustainability of non-fiber garment inputs , components like buttons, zippers, dyes, and finishes, as well as labeling and packaging. Our industry partners include Timberland, Levi, Target, Patagonia, and YKK. Im also writing a series of white papers called Making Informed Choices for the Organic Exchange website. Technology moves so fast, its hard to keep up on everything.

What I really enjoy is the educational outreach speaking engagements, presentations, and mapping strategies for retailers, brands, and manufactures that are interested in converting to a more sustainable business model.

SLM: What do you think it takes to be a change-maker?

CR: You have to be passionate¦and unstoppable. When I started this there was no doubt in my mind that it was going to happen.

~March 19, 2007

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Coral Rose has more than two decades of experience in the apparel and retail industry as a merchandise buyer and in product development. Rose is founder of Eco-Innovations, a consulting firm focused on supporting businesses with the integration of "sustainable value" into their core strategies, product design, and development.

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