First steps: How the circular economy is revolutionising baby products
The bringing-up-baby business is booming, with a broad and ever-changing audience. But is the industry fit for purpose to deliver the transformational change needed to create a sustainable future? Brad Allen investigates...
The market for child and baby products such as strollers and car seats is a unique one.
On the one hand, the products are used for a short time and then shelved. But on the other, they must be rigorously tested for safety and therefore constructed to the very highest quality.
Dutch multinational Dorel Juvenile recognised that these unique characteristics suited a new kind of business model: a circular economy.
As a result, the company - which generates annual sales of $2.7bn - has unveiled a comprehensive new sustainability plan which it says will require a "complete overhaul" of the its business operations and long-term strategy.
Dorel has established new targets; including securing 10% of its business from recycling or refurbishing products, cutting its environmental footprint by 20%, and generating 20% of sales from ‘sustainable products’ by 2020.
Dorel’s director of innovation Mark Schrooten admits that while sustainability had long been “plastered on meeting room walls” as a core company value, it had never been truly integrated into the business model.
The sudden change in direction, Schrooten says, was precipitated by a recognition that the parents of today look at things in a different way.
“Parents want to keep the planet liveable for their children, so for us to continue to be relevant for our consumers we need to support a sustainable lifestyle and that’s how we started the conversation.
“Right from the beginning, we knew we would need to make a lot of changes to our products, how they are made as well as their functionality. We also wanted to take ownership of our products, not just saying goodbye to them once they leave the warehouse”.
This change of direction also includes developing a new type of relationship with Dorel’s consumers; swapping a one-off transaction for a more circular model where Dorel and the consumer work together to keep products functioning for longer.
Potential schemes included leasing, servitization and refurbishing. One early pilot has seen Dorel rent out special car seats to families of children with hip dysplasia. The rental is for a couple of months until the child is cured, then the company refurbishes the seat for the next family.
“This is obviously a niche,” adds Schrooten. “But the parents are very happy with the system, so it’s a first step. We will have to grow into our targets. This is a small pilot now, and we will have bigger pilots in the next few months."
Another early fruit of the ideology shift is the 'Longboardstroller', a type of skateboard with a child seat at the front, designed to help parents make short trips without using the car. “The longboard is the first of many ideas for sustainable products,” Schrooten explains. “Over the next four year, we will bring out more of those solutions, including maybe a cycle.”
Dorel's long-term goal of a truly circular economy would not be a profitable route for the company based on its current products and their makeup, Schrooten admits. “That said, there are lots of advantages of keeping expensive plastic parts in circulation. So we will probably have to make new products and create a slightly different relationship with our consumers than we have today, but we believe it can be profitable."
Schrooten also believes that Dorel has an inherent advantage over competitors by virtue of having its operations in Europe, close to its market - rather than in China, for example.
"That should allow us to remanufacture and refurbish much more easily. “Sustainability is a new world for us, but we’re doing a lot of collaboration on the supply side and are finding a lot of new partners to help us. We’re very optimistic.”