Gunther Pauli Cleans Up

The big companies won't do that. Their factories are organized around economies of scale. They produce huge batches of standardized products. Which means, for cities like Amsterdam, that they engage in chemical overkill.

To us, Amsterdam represents an opportunity. We've created a special detergent, just for the city, that eliminates 12% of the ingredients in our standard formula. We think it is going to capture 10% of the market. The packaging is beautiful; it includes the Amsterdam coat of arms.

Go ask Lever Brothers if it would assign an R&D team for three months to create a specialized detergent for 500,000 families. Go ask P&G if it would make special production runs for one city.

Can you build a company with this sort of customization?

It's a piece of our strategy. We live and work in a global economy. But people still want to consume based on their needs. People in Amsterdam will go to the store, look at Ecover, see the coat of arms, and say, "This product was made for me. It is meant for my water." That's a real marketing advantage. We are about to do it again. The Pacific Northwest, from British Columbia to northern California, has some of the softest water in the world. We may eliminate 30% of the ingredients in our standard formula.

I want the big companies to explain to the people of Oregon, Washington, northern California, and British Columbia why their detergent should include 30% more petrochemical ingredients than they need. Are 15 million people peanuts? Are 5 million families, doing several loads of wash every week, not a market worth serving with products tailored to their needs?

It sounds like you want to replay in the detergent industry what's already happened in cars and computers: the death of mass production.

It's not just mass production. Flexibility also applies to marketing. Ecover's principle of Not Tested on Animals is very important to people in the UK. It is much less important in the United States. So we push the message very hard in the UK and not so much in the States. Germans are very concerned about the environment. But they are also very concerned about the international drug problem. So when we talk about Ecover in Germany, we highlight our fair-trade initiative in Colombia, where we create incentives for farmers to stop growing coca and start growing cash crops we can use in our products.

Isn't it hard for a small company like Ecover to manage so much complexity on a global scale?

Absolutely. That's why, as we grow, we have to maintain an open economic system. We are a company of young people. The average age is 28. We are committed to the environment and social justice. We move fast. There are no layers, no hierarchies, no secrets. When we have a problem, we face it honestly and solve it immediately. There's no bureaucracy.

Where does the United States figure in? Don't you have to take the battle to the world's biggest detergent market?

We are going to build a factory in North America next year, and we are going to build it in the Pacific Northwest. I just spent a week in Vancouver, Portland, Seattle, and Sacramento meeting with the political leaders, describing our marketing plans, explaining what we need. Our break-even point on a factory is $10 million in sales. We were at $2 million in the US last year, but we are on an incredible growth trajectory as we move into the supermarkets. We will cross $10 million by the end of 1994. The factory must be up and running by then.

Let's move from the Pacific Northwest to South America. Why have you been spending so much time developing a supplier base in Colombia?

It comes back to sustainable development. Fair trade between the rich countries and the poor countries will be a huge issue for the rest of this decade. Capitalism has won everywhere in the world. But the game is rigged. Fifty developing countries depend on three or fewer commodities for 70% of their exports. The terms of trade for these commodities have deteriorated by 25% over the last 10 years. In places like Colombia, people are working harder and harder for a smaller share of the rewards. We want to make a contribution to changing that dynamic.

Can Ecover possibly influence what happens in Colombia?

We are one of Europe's largest consumers of essential oils - natural perfumes. People just don't feel their clothes or dishes or toilets are clean unless they "smell" clean. But we won't use synthetic perfumes. So we buy essential oils from a processor here. Some of the fragrances we use cost more than $2,000 a quart, and we buy 3,000 quarts a year. To deliver a lemon scent - everyone wants their dishes to smell like lemon - we use essential oils from lemon grass. Today, our European processor buys its lemon grass from France, Greece, and Morocco.