Patagonia

Last week I did a presentation on Patagonia that I obtained from the Berkeley-Haas Case Series. I prepared a Prezi presentation on it which I link to here. Enjoy.

Patagonia’s Background and Early History

Between 2009 and 2013, Patagonia’s revenue doubled to over $500 million, and by 2015 surpassed $600 million with over 2,000 employees.  However, even with this growth, the company was still much smaller than competitors such as North Face and Columbia who had $2 billion and $2.3 billion in sales respectively.

Patagonia was born out of legendary rock climber, Yvon Chouinard’s inability to find high-quality pitons for rock climbers.  In 1965, he partnered with fellow climbers TOm and Doreen Frost to create the largest supplier of climbing hardware in the United States.

Tensions Between Supply Chain and Sustainability

“When they do cross, very magical things happen.  If we find something that provides a ridiculous performance benefit and also has a significantly reduced environmental impact, that’s the sweet spot for new disruptive innovations.”

Matt Dwyer – Director of Materials Innovation & Development

Durable Water Repellents (DWR)

By 2015 one of Patagonia’s (and the industries) pressing environmental, health, and supply chain problems was the use of Durable Water Relleants on outerwear such as jackets.  Conventional DWR treatments involved the surface application of a long chain of fluorocarbon (such as C8) onto a fabric that was highly effective and durable, but that produced by-products that were toxic and persistent in the environment.

C8 Alternatives

Patagonia has been researching and testing fluorocarbon-free chemistries (a dozen or more) such as waxes and silicones that also allow water to bead up and disperse versus saturating/wetting out.

“I actually expected to have heard from customers by now, but we haven’t heard many performance-related complaints yet. Part of it is that we spent seven years working with key suppliers on our fabrics at the mills doing the trials with the chemistry to make sure we were sacrificing the least in terms of performance.  We’re actually pretty happy with the quality right now.”

Investing in DWR Science: Beyond Surface Technologies

In 2013, Patagonia launched an investment venture arm, “$20 Million & Change,” which invested in responsible and disruptive startups (in food, water, energy, and waste). For apparel, this meant investing deep within the supply chain in search of disruptive technologies and sustainable eco-innovations.

“Blue Sky” Innovation at Patagonia

Beyond Patagonia’s investment in BST, the company also focused on long-term “blue sky” eco-innovation projects. In his role as Patagonia’s Director of Innovation Research, Ohara “built a vision of long-term radical eco-innovation for the company’s product lines and new business.”

Blue Sky DWR Research and Innovation: Biomimicry

Fossel, of BST, argued that the apparel industry was an “old” industry “doing what they have always been doing.” but that “I’m excited about longer-term blue sky innovations.” He said: “there are endless opportunities in textiles for better and smarter technologies.

Scaling Patagonia’s DWR Solutions

In line with other environmentally friendly technologies that Patagonia has developed, new technologies related either to BST or Biomimicry that the company could bring to market would be available for use by other companies and even competitors in the industry. Dwyer said: “We want to use business to inspire and this is about proliferating.

The Future

As the ream of leaders prepared to launch their meeting on DWR, they watched several Patagonia employees trot past the conference room with their surfboards in tow.  They wondered about Patagonia’s DWR efforts that include the company’s own efforts, its investment in BST, as well as longer-term research on cutting-edge areas like biomimicry.

If you would like to review the presentation, please click the link below.

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