Method: Sustainable Design for the Home as Corporate Strategy

Abstract

This minicase is one of 10 in a series written to illustrate the business benefits companies realize through adopting sustainable business strategies. Method is a successful startup firm in San Francisco that has made sustainable design principles a guiding force its strategy. Unlike other firms, however, Method sells its products on performance, price, and aesthetics; health and environment are simply built into the design from the outset. Backed by venture capital and successful selling through Target nationwide, Method offers a model of what may ultimately become standard practice and strategy.

Excerpt

UVA-ENT-0094

METHOD: SUSTAINABLE DESIGN FOR THE

HOME AS CORPORATE STRATEGY

With $ 300,000 in startup capital in 2003, Adam Lowry and Eric Ryan have caused small-scale “creative destruction” across a $ 17.3 billion industry by emphasizing the health, environmental, and emotional aspects of the most mundane of products: household cleaners. The differentiation? Lowry and Ryan assumed from the start that incorporating ecological and human health concerns into corporate strategy was simply good business. By 2006, the Method company was growing quickly and was profitable with 45 employees and annual revenues of more than $ 45 million.

Method described its mission as “People against dirty.” From the company Web site: “Dirty means the toxic chemicals that make up many household products, it means polluting our land with nonrecyclable materials, it means testing products on innocent animals…these things are dirty and we're against that.”

Method shook up the monolithic and staid cleaning products markets by delivering high performance products that appealed to consumers from a price, design, health, and ecological perspective—simultaneously. From the original offering of a clear cleaning spray, Method's product line expanded by 2007 to a 125-product line of home solutions including dishwashing liquids and hand and body soaps. The “aircare” line, an array of air fresheners housed in innovatively designed dispensers, extended the product offerings. All 125 products were made in alignment with Method's strategy. They had to be biodegradable, contain no propellants, aerosols, phosphates, or chlorine bleach, and had to be packaged in minimal and recyclable materials. Method used its product formulation, eye-catching design, and a lean outsourcing network of 50 suppliers to remain nimble and quick-to-market while building significant brand loyalty. Headquartered in San Francisco, Method sold its products through several national regional groceries, but one of the company's key relationships was with Target, the nation's number-two discount chain in 2007. Through Target's 1,400 stores in 47 states, Method reached consumers across the United States.

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Keywords: Innovation, entrepreneurship, sustainable business, sustainability, triple bottom line, natural environment, environmental, ecology, ecological, strategy, implementation, financial returns, green, greening