Many ethical business owners and conscious entrepreneurs have a hard time accepting this one business reality: in order to survive, you must make a profit.
I have struggled with this very concept myself as I’ve outlined many times in our Transparency Reports.
The money is the root cause of all evil rhetoric probably lodged itself in my fragile mind as an impressionable youngster influenced by my Catholic upbringing where enduring poverty seemed to be exalted, and where wealth was deemed an egoic disease to be regarded suspiciously for its corrupting influence on the heart.
Now I’m not saying that all those who launch a mindful business are financially hopeless. However with many years of dealing with conscious business owners behind me, I feel qualified to say this: making money is usually not the primary purpose for mindful business owners.
Making a profit often comes secondary to a mission which can include any or all of the following:
- helping people out of poverty
- making the industry fairer and more ethical
- offering customers “better” eco-friendly alternatives
- providing sustainable employment to artisans in developing countries
- empowering women and communities
- ending human trafficking, child labour and exploitation
- reducing pollution and environmental damage
And so on and so forth. I’m sure you get the drift. Many just don’t prioritise the financial side of their business.
But this part is equally important because without turning a profit, a business won’t be able to achieve its heartfelt mission. With so many mindful business owners struggling to turn a profit, I wonder, Why do some sustainable fashion brands flourish and others don’t?
Then along came a CEO…
“As CEO of Hessnatur, a sustainable clothing brand which now exists for 40 years we often have to remind ourselves as well – we are not a charity, yes we want to be fully transparent and we have to remain cash positive otherwise we cannot continue on our mission of 40 years – to make the world a better place with every piece of clothing we make.”
When Vivek Batra, CEO of 40-year-old eco fashion brand Hessnatur, left this marvellous comment on our first ever transparency report back in August, I knew I had to learn more. I wanted to gain insight as to how this German business could withstand the test of time, especially in an industry that’s prone to leaving casualties in its insatiable quest for profit, no matter how dirty it did its business.
So in October I emailed him wanting to arrange an interview. Then I waited. I didn’t expect to hear back from him. He’s a CEO of a corporation for crying out loud, I told myself. He’d be way too busy for the likes of me.
Six days later, I received a response from Vivek. He was happy to be interviewed.
Q&A with Vivek Batra, CEO of Hessnatur
Jen: How long have you been the CEO of Hessnatur? What was your background prior to leading the company?
Vivek: I joined Hessnatur on the Advisory Board in 2012, when it was purchased by a new shareholder. I was appointed as CEO in March 2016. I was born in India, and on completing my graduation I moved to Europe in 1988. Since then I have lived in Holland, France, Germany and the UK and have managed fashion, textile and consumer goods businesses in about 17+ countries. The fashion/textile industry is in my genes. I started at the age of 12 to earn pocket money packing t-shirts in my mothers little workshop which she started in the garage and eventually built to a 500 person factory.
The sustainable clothing brand is 40 years old. What do you think has been the secret to your success as a responsible fashion brand?
Hessnatur was founded in 1976 by Heinz Hess. He was in chemical sales and was well aware what kind of toxic chemicals are used in the processing of cotton. He and his wife Dorothea did not want their new born son, Mathias, to wear these toxic chemicals on his body and hence created products which were toxic chemical free. He was one of the four or five pioneers in the world who developed the first organic cotton projects.
In my view the secret of Hessnatur has been that they started with a very strong vision/mission. They identified their ‘Why’ very early on and then also figured out the ‘How’ and ‘What’.
So, why do we do what we do? We want to make the world a better place, with every piece of clothing that we make. This was the founding principle of the company.
How do we do this? By taking responsibility that our products do not harm nature, do not harm the people who wear them and the people who make them. We do this through responsible innovation and by offering full transparency of what we do.
What do we offer? We offer clothes for women, men and children and textiles for their homes.
Defining the ‘Why, How, What’ is a fantastic exercise for any business. I suggest you watch the TED talk from Simon Sinek who has also written a book titled, ‘Start with why.’
Hessnatur started at at time when sustainability was not yet a commonly discussed topic. What influenced its eco philosophy so early on?
Interestingly this company was founded from the love of the parents for their first born child and not because they had a good business idea. The business was founded on a strong desire to make a difference and was led by a person who had a pioneering entrepreneurial spirit who was not afraid to go against the tide.
From an economic perspective, it was 1976, the first oil crisis was subsiding and polyester was all the rage for its cheap prices. However, the founders of Hessnatur were naturalists and understood the long term environmental damage of the oil industry and as a rebellion against these synthetic yarns wanted to offer only natural fibre products. Hence the name of the company Hessnatur. Natur means nature in German. Hessnatur first started with wool and silk products. Then included non-bleached, as chemical-free cotton as possible. Going on to pioneering the growth of organic cotton in Africa whereby the farms had to be first free of toxic chemical fertilizers for three years before one could grow organic cotton. Additionally the founders were influenced by the ‘Anthroposophie’ teachings of Rudolf Steiner who believed in people and nature living in harmony with each other.
These in essence were the key influencers on their eco philosophy so early on.
As a large ethical fashion company how difficult has it been to incorporate ethical practices into your supply chain?
Given the above principles, ethical practices were always an integral part of the core values of the company. They always existed in our supply chain right from the start and form an essential fabric of the company. In fact while officially we have 6 people in our CSR [Corporate Social Responsibility] team, in spirit all 370 people who work for the company make sure that we follow ethical practices in our supply chain.
We were the first company in Germany to officially join the Fair Wear Foundation more than 10 years ago. Although I must admit this was not a big task for us. We were already practicing our own ethical standards but still found it useful to join this well-established and recognised standard so that we do not accept the status quo and remain challenged to continuously improve.
I have been in the fashion industry for 30+ years and I actually thought that it was not possible to offer fashion with responsibility in a value chain with so many hand offs. However, I am delighted to be proven wrong. Hessnatur proves for over 40 years that it is possible to do this for a mid-sized company with limited resources.
As a CEO you shape the vision of the company. With that said, what are some of your goals and priorities that you’re hoping to achieve or address?
My vision is to transform Hessnatur from an ethical business to one which offers ‘Ethics with Aesthetics’. To show that ethics and aesthetics are not contradictory in terms, that in fact you can have both.
We are re-defining sustainability at Hessnatur as ‘modern’ sustainability. In particular where we are allowing ourselves to move from ‘nature only’ products to include modern fabrics which todays’ technology allows us, such as recycled polyester and modal. With our own auditing standards we do make sure that this recycled polyester actually comes from recycled PET plastic bottles and we make sure that the modal we use comes from a closed loop project from the forests of Austria. We are putting in place a Circular Economy Strategy whereby we are actively working on projects in all three categories of ‘reduce, reuse and recycle.
One of the things that often comes up in my regular discussions with sustainable fashion designers and ethical business owners is that “making a sale” is really difficult, particularly online. The internet was meant to democratise business but it hasn’t delivered the customers, sales or interest that small ethical businesses had hoped for, and some business owners are still having a hard time selling their products online. Why do you think this is and what do you think they can do about it?
We have a saying in German – where you have the sun you also have shadows! This can be said about the internet as well. It is the greatest enabler and democratiser of business and allows everyone to set up a business at very little cost. But as the barriers to entry are so low there are now an infinite number of businesses that have come into existence. Now the challenge becomes how to find these businesses in this infinite world. Thus, the ‘Google Tax’ called search engine advertising (SEA) or search engine optimisation (SEO). To drive traffic to your site and convert it into sales now one needs to be able to spend large sums of money on SEA and SEO. Otherwise unfortunately you remain undiscovered!
A few ways to tackle this from the top of my head. I do suggest that all internet entrepreneurs need to have some understanding of SEA and SEO. There are a number of relatively inexpensive online courses and materials available for this. I think social media allows an entrepreneur who has understood their ‘Why’ to build communities who they can reach out to and connect with. This in turn allows them to reach out to multipliers who can help expand their communities and hopefully the virtuous cycle continues. Don’t ignore the largest market out there – Amazon. Amazon with their market platform tools allows small business to set themselves up as sellers relatively easily and inexpensively. This is the largest community of buyers in the world and Amazon offers you a structured way of reaching out to them globally. In fact, I know someone who sells eco-friendly iPhone covers and he shut down his own site and now only uses the Amazon market platform to market his product. All the money he spent on maintaining, building and logistics for his own site he now uses as marketing money on Amazon to get better ranking and hence more sales.
What has been the most challenging thing you’ve had to deal with in your time as CEO of Hessnatur?
My most challenging structural issue is that given our very high sustainability standards our product costs about 25 to 30% more than a conventional product. Now while the consumer loves our products and the feeling she gets when she wears this product she does not want to pay more for it than a conventional product because that is the current benchmark that has been set in the market. The average consumer doesn’t or perhaps doesn’t want to understand this difference or perhaps a little bit of both!
Books such as To Die For and Stitched Up and films such as The True Cost have helped to raise awareness of the detrimental impacts of fast fashion but there is still a huge proportion of consumers who aren’t ‘conscious’. How do you think we can make sustainable fashion more mainstream?
In our case it’s to continue doing what we have been doing for more than 40 years.
“Like I say at Hessnatur, this is approximately week 2,100 of our fashion revolution!”
In general, I think Rana Plaza, was the tipping point for the mainstream population to start getting conscious that there is a real issue with fast disposal fashion. Ethical, responsible, sustainable fashion is not just for the esoteric or the hippies. However, there is still a level of denial that unfortunately they are a part of the problem. They will only become a part of the solution if they actually stop chasing accelerated consumption and start consuming more consciously. Or perhaps while they emotionally understand it, rationally they simply accept the conventional product as the market standard price and therefore are unwilling to pay the price premium for conscious consumption. So while the heart wants it, the head rejects it because it cannot afford it!
I honestly believe social media paves the way for this fashion revolution to take momentum which will eventually reach the tipping point also for consumption. People like you with your ability to reach out to people in a language they understand will eventually start influencing their behaviour. So well done, you are doing your part for this revolution!
What is your one piece of advice for fashion designers and entrepreneurs looking to start a sustainable fashion business?
At the risk of repeating myself, start with the Why. Then make sure you understand your How and What. There are two many ‘me-too’ products out there. Put in the effort to define your USP [unique selling proposition] or in other words identify the difference in your product that makes the difference. If you can tell a story that highlights your uniqueness the better your marketing chances in the big internet jungle out there. Best of luck. You will always have me rooting for you.
A huge thank you to Vivek for taking some time out of his busy schedule to answer some questions for me. You’ve just earned yourself a huge fan and I’ll be rooting for you to continue Hessnatur’s success for another 40 years!
To learn more about Hessnatur, visit their website http://www.hessnatur.com/de/