Sustainability is everyone’s and every company’s business. That much was evident at the recent World Detergent Conference in Montreux, Switzerland. The event, developed by the American Oil Chemists Society (AOCS), attracted nearly 700 executives from around the world who heard presentations from leading voices from a variety of fields, including detergents, petro- and oleochemicals, technology and humanitarian aid.

“We made a promise to deliver a more exciting program and we have delivered,” said conference chairman Manfred Trautman, in his opening remarks. The conference theme, he explained, “Creating Value in the New Reality,” can be segmented into three subgroups with three missions:

• Sustainability—face it;
• Growth—find it; and
• Interaction—fuel it.

Sustainability has been at the forefront of industry’s collective mind for years; so it was no surprise to hear Kaspar Rorsted, CEO, Henkel, tackle the subject in his opening keynote address.

“We have made progress (on sustainability) in the past four years,” noted Rorsted, who addressed the same conference in 2010 in Montreux. “We have taken tremendous steps in the right direction. Sustainability is front and center.
“Economic growth and resource consumption must be decoupled,” he continued. “This is where innovation will be key.”

Other Issues
But sustainability is not the only issue facing the global household cleaning industry, Rorsted noted, calling the consolidation of suppliers and buyers, the shift to emerging markets, and the rapid transfer of information, as other megatrends impacting the industry.

“Global volatility is increasing, but the economic powerbase is moving to emerging markets,” he explained, noting that, emerging markets now account for a larger percentage of the global economy than established markets.

Meanwhile, companies and their legal staffs must grapple with transparency issues like never before, said Rorsted. Social media such as Facebook, Twitter and YouTube, provide unfiltered news feeds in real time that can damage a company’s reputation in hours, days and weeks. Similarly, there are an increasing number of regulations and de-facto standards to get a handle on.

“We need to do a better job,” Rorsted insisted. “Governments are upset with how large companies behave and they are frustrated.”
At the same time, NGOs and pseudoscientists are calling for more regulations of ingredients and formulas. And even when industry does the right thing, there is scant praise, and sometimes, damnation, noted Rorsted.

“The best citizen is the one who reduces the size of their product packages,” he explained. “But if you are the first mover in the market, you often get punished for it.”

For example, nearly every consumer product company executive laments the fact that while consumers are aware of sustainability issues, they refuse to pay more for more sustainable products and they refuse to compromise on performance.

“They want sustainable products, but at the same performance and price,” said Rorsted.

And, too often, great leaps forward are often viewed as providing less value to consumers. To help get the word out about the economic, health and sustainable benefits that industry brings, Rorsted called for more cooperation between industry associations, pointing out that a recent Accenture study found that 83% of respondents that progress on environmental issues can only be achieved through regulations.

“The more that we can coordinate, the more that we can get done,” he insisted. “Let’s get the associations aligned—that will help us with regulators. Each body can’t have its own agenda!”

Getting going and going further on sustainability issues is even more critical when one realizes experts expect the global population to reach 9 billion by 2050. The goal therefore, should be for all people to live well within the limits of the planet, noted Rorsted. But how to get there?

At Henkel, the goal is to become three times more efficient in six focus areas: performance; safety and health; social progress; energy and climate; materials and waste; and water and wastewater. To achieve that goal requires effective products, partners and people, according to Rorsted.  Products must deliver more value at a reduced ecological footprint. Partners are key to driving sustainability across the value chain; and people are critical to make the company better.

One example of how novel materials can help lead to better products is the use of enzymes in Henkel’s Pur Power. Incorporating high performance enzymes can reduce material and energy usage, he explained.

Rorsted also called for a reasonable discussion on product and material assessment within the supply chain.

“Not all of us need to audit the same points on the same supplier,” he insisted. “At the same time, we should work with retailers to encourage sustainable consumption.”

To get there, he encouraged the use of sustainability e-learning methods to simplify knowledge transfer.

“As an industry, it takes too long to react from supplier to marketer to retailer. The company that uses IT best has an incredible advantage,” Rorsted claimed. “Working together, industry can create more value across the entire value chain.”

The City of the Future
As the global population expands, it’s no surprise to learn that cities are growing around the globe, bringing their own unique sets of challenges and opportunities to sustainability, said Patrick Donnelly, CEO of AOCS, who presented a paper on behalf of Héléne Lebedeff of Veolia Environment, France.

The global urban population was 3.5 billion in 2010 and is expected to reach 7.0 billion by 2030, with many living in cities of at least 500,000.

That kind of centralization puts a strain on pollution control and water supplies. In order to overcome those strains requires effective systems such as the Zero Waste House, a concept designed by a UK firm, which move from an input-output model to a systemic cyclical model.

By 2050, these homes will create organic waste that can be used to power entire districts. Waste will be sorted by something called MAGPIE technology and nanobots and move via an underground vacuum network, according to Lebedeff’s predicition. Waste reductions will be aided by intelligent packaging that requires less material and breaks down easily and quickly after use. Similarly, Zero Waste Homes will feature low water-use bathrooms and water-treatment will take place, in part, in homes that feature plant-based technology.

What’s Happening Now?
While many speakers at the conference looked toward the future, Jim Collins of DuPont was focused on the here and now. That’s because his company has just signed a deal to supply cellulosic ethanol to Procter & Gamble’s Cold Water Tide product in the US. According to Collins, BioPDO requires 40% less energy to produce than petrol-based products, while producing 40% less greenhouse gas emissions.

To make it happen, DuPont is building a biorefinery in Iowa to produce ethanol from corn stover.

This move by Dupont underscores four trends that Collins maintains are driving the market: a new value equation, convenience is king, inspiring experience, and clean and green.

The alliance between P&G and Dupont was reiterated by Procter’s Gianni Ciserani, who relayed the Aesop fable about the grasshopper and the ant. While the grasshopper spent the warm summer days lolly-gagging, the ant was busy storing food for the winter. When the cold weather arrived, the ant was well prepared for hard times, while the grasshopper starved.

“Ants work together and they never stop working,” observed Ciserani. “I don’t see ants sitting at roundtables.”

Similarly, P&G is working constantly and preparing for the future; forming effective alliances with its suppliers and making major investments, such as the construction of a new plant in Taicang, China. When completed, it will be P&G’s biggest and the most environmentally friendly plant in Asia.

“The water going out will be cleaner than the water coming in (to the plant),” boasted Ciserani.

China, as well as India, are focal points for P&G, and Ciserani said his company will continue to invest in these regions with new facilities that are environmentally friendly and sustainable.

“Environmental issues don’t have a passport,” he reminded the audience. “What happens in one place, like our efforts in China, can have spectacular results.”

Kao has been recording pretty spectacular results of its own thanks, in part to its corporate philosophy called Yoki-Monozukuri, which translates to “a strong commitment by all members to provide products and brands of excellent value for consumer satisfaction.”

That philosophy was the keynote of Michitaka Sawada, president and CEO of Kao Corp., who reviewed some of the key issues impacting the global detergent industry, including climate change, resource scarcity, aging and hygiene.

The fabric and home care industry can help resolve these issues via three points:

One, engage the consumer at the point of use;
Two, easily provide recognized values to the consumer that surprise and delight; and
Three, make products that are more relevant to the consumer and enable her to live better.

Noble, but certainly attainable goals for Kao and other manufacturers, as long as suppliers and manufacturers remain “a half-step ahead of the consumer’s needs,” asserted Sawada. “We must be appropriately disruptive!”

Examples of appropriate disruption include twistable PET bottles for easy recycling which also reduces raw materials and waste volume; hybrid automobiles and compact laundry detergent powders and, more recently, compact liquids.

Sawada urged industry to work together to develop these sustainable solutions even going so far as to urge companies with patent-protected innovations to open them up to an industry-wide sustainability movement.

“No one company has all the answers,” observed Sawada. “Sustainable change requires all of us.”

Serving Society
A presence in emerging markets is a must for any company searching for growth in a slow-growth industry. According to Nitin Paranjpe, president, home care, Unilever, by 2020, 900 million people will enter the consuming class across Asia, Latin America and Africa. But formulators can’t make the mistake of “dumbing-down” their products to suit this emerging consumer group.

“Just because they don’t have large incomes doesn’t mean that they don’t have large aspirations,” asserted Paranjpe. “You have to understand the people and create brands that mean something to them!”

He explained that the Digital Revolution has given emerging market consumers more information than ever, but they can feel helpless with all the choices available to them and that’s where brands come in; especially brands that make a strong connection and make a difference.

Examples of these brands include Dove, which is working to improve the self-esteem of women around the world, Lif-Buoy, which is focused on infant-mortality issues, and Omo, which devotes resources to child development. They’re all part of the Unilever Sustainability Plan.

“You can’t have a thriving business in a failing society,” Paranjpe noted. “Business must never forget that its purpose is to serve society. Profit is just a portion of the outcome.”

Sustainability means not just doing good; it may mean saving the species. According to Peter White of the World Business Council for Sustainable Development, by 2050, 70% of the world’s 9.2 billion people will be living in cities and putting enormous stress on resources. The goal of his group’s plan, called Action 2020, is to limit temperature change to +2°C and keep carbon emissions below one trillion tons. To do that, industry must rethink the practice of deforestation to grow palm.

“We need to improve the business case for sustainable development,” said White. “We have to change the game from financial capital to natural and societal capital. We are here to make more sustainable companies more successful.”

Walmart doesn’t have all the answers when it comes to sustainability, asserted Alberto Luis Dominguez, senior VP-divisional merchandise manager, household paper goods and chemicals, Walmart. The company’s Sustainability 360 program incorporates input from associates, suppliers and customers to uncover ways to improve sustainability. The company went one step further earlier this year, by initiating its Policy on Sustainable Chemistry in Consumables, which provides a description of what it calls “priority chemicals”— substances with certain hazardous properties that can affect human health, and/or the environment. The policy defines these as chemicals that meets the criteria for classification as a carcinogen, mutagen, reproductive toxicant, or is persistent, bioaccumulative, and toxic; or any chemical for which there is “scientific evidence of probable serious effects to human health or the environment.” The policy covers consumer products such as health and beauty aids, pet supplies, cosmetics and skin care, baby care products and household laundry and cleaning products.

“We launched Sustainable Chemistry, in part, to reinforce consumer trust,” explained Dominguez. “Customers expect us to know great products.”

Now Walmart is going further. In October, at its Global Sustainability Milestone Meeting, the retailer announced its commitment to create a more sustainable food system. The company will reach this goal through four key pillars: improving the affordability of food for both customers and the environment, increasing access to food, making healthier eating easier, and improving the safety and transparency of the food chain.

“We ask you to always put the customer first and to innovate to achieve the policy,” concluded Dominguez. “Let’s commit to voluntary leadership (on sustainability).”

Peder Holk Nielsen, president and CEO of Novozymes, noted that fewer people live in poverty around the world since he attended his first World Conference on Fabric and Home Care 16 years ago.

“But we have lots of challenges; we must accelerate what nature does to make real progress in 10 years.”

One way to do that is through the use of enzymes, which not only replace chemicals, but also save water and energy, according to the speaker.

“Biotechnology holds the key to solving many problems,” Nielsen said and insisted that less than 20% of the world’s plant waste can deliver 50% of the world’s fuel needs by 2050.

“But the fossil fuel business is huge, and doesn’t want the world carbon neutral by 2050,” according to Nielsen. “We need a government mandate.”

Good Chemistry
BASF chairman Kurt Bock, the Day 2 keynote, promoted the concept of sustainability as a driver of growth, but he warned that much work still needs to be done. For example, in order to grow enough feedstocks for plant-based surfactants in Europe would require farmland a third the size of Switzerland.

“There is a lack of land to fuel Ludwigshafen (BASF’s primary manufacturing site),” observed Bock. “You can’t replace fossil fuels with renewable plants.”

He added that sugar as a feedstock is not cost competitive—even in Brazil.

And he doesn’t expect the situation to change any time soon. Today, 94% of the industry’s feedstocks are tied to fossil fuels; 20 years from now, they will still account for 80% of feedstocks, Bock predicted.

At the same time, while consumers insist they want green products, they are unwilling to pay for them. So, what’s a multinational supplier to do? For one, drop the term “green;” BASF doesn’t use it. For another, rethink the issue completely.

“Renewable isn’t necessarily sustainable,” observed Bock. “BASF creates chemistry for a sustainable future. Our goal is increasing the sustainability contribution of our solutions.”

To that end, BASF has purchased two enzyme businesses and spending more on R&D in this segment. At the same time, the company’s Trilon M is an effective replacement for phosphates in automatic dishwash detergent formulas. The company has also created a bio-based acrylic acid for its superabsorbent polymer and is a player in sustainable palm oil production.

“We have a well-positioned portfolio,” Bock concluded.

A New, Old Century
While many speakers noted that industry is moving toward China, Ian Bell, head of home care research, Euromonitor International, suggested that we are not facing an Asian Century, but rather an Aging Century.

“Real population growth is slowing,” observed Bell. “The higher your income, the fewer children you have.”

As a result, while it may not seem apparent just yet, by 2030, purchasers and users of fast moving consumer goods like laundry detergent and hard surface cleaners will be older and have special needs that marketers must address, such as product handling.

“Universal Design is key,” he asserted. “Products must be affordable, recognizable, and easy to handle.”

At the same time, women “are taking over the world,” said Bell (just somewhat jokingly). They are living longer and their incomes are rising. As a result, formulators must ask themselves, “are our products helping women?”

Interestingly Bell predicted that global washing machine penetration will plateau at 70% in 2030; therefore, marketers must not forsake handwashing formulas. Bell noted that while Indian consumers are moving into the middle class at a rapid rate (by 2030, there will be 400 million of them), they will not reach the income level to afford washing machines. Finally, Bell suggested marketers prepare for a new wave of fabric blends—for the simple reason that the world is running out of room to grow cotton.

In a provocative presentation, Nabil Sakkab, managing director, Sakkab LLC, suggested that the industry, indeed much of the industrialized world, has become bogged down by incremental innovation and needs radical innovation to transform itself. He recalled a decades-old McKinsey study that predicted the cellphone market would only reach one million. The consulting group was a bit off in its prediction, as cell phone sales today exceed two billion.

“Radical innovation forms a new dominant design that transforms a market or an industry,” he noted. In contrast, the automatic washing machine that debuted in 1937 has not had a radical design change even after all of these years. Sakkab went on to take a shot at the leading tech companies of the day, noting “I love Facebook, but I wouldn’t give up air conditioning, TV or my car for it. The top 10 value companies in the world, like Facebook and Google, produce nothing!”

Similarly, since Tide debuted in 1946, laundry aisle shelves have become cluttered with incremental, not radical, change. As a result, consumers have little interest in the category or its products.

“How many of you can’t wait to get home to do laundry?” he asked. “The linear model is not effective for creating radical design.”

Radical things are happening in Asia, as a growing middle class aspires for a wide range of products, according to Itsuo Hama, president and CEO, Lion. He urged the industry to apply global lessons learned for better cleaning products, offer innovative green solutions and spread them throughout the world. Some of the innovations that Lion has developed include a cleaning “cloud” to attack bathroom mold and a toilet bowl cleaning foam that can be used with toilet paper.

“Innovation must be shared within our industry, with other industries and with our customers,” he urged attendees.

For more on Montreux, log on to Happi.com