Rapanui and the circular economy

Last month I wrote about Patagonia and their experiences trying to be a sustainable clothing company, including how they were trying to encourage customers to recycle their clothing when they had finished with it. Last week the Isle of Wight-based clothing company Rapanui got in touch to say they’ve been inspired by the circular economy concept and that they’ve got a solution to the problem of getting clothes back at the end of their lifecycle. Rapanui have previously pioneered traceability and eco-labelling, so they’re a company to keep an eye on.  I gave co-founder Rob Drake-Knight a call to find out more:

 “What we do at the moment fits in, nearly anyway, with the model of the circular economy. It falls down at the economy bit, in that we don’t currently offer any kind of financial incentive for people to return the product. We say ‘once you’re done with your organic cotton t-shirt you can stick it in the ground and it’ll biodegrade’ and that’s great. But, there’s no incentive involved, and that’s what we’re working on for this summer.

To give you some background, we went to the World Responsible Economy Forum with the Ellen MacArthur Foundation and Vestas (the wind turbine company). They chose to demonstrate Rapanui as being nearly there with the biological nutrients side of things, and Vestas alongside us being the energy production. That was November 2011, and it was the first time that we really got excited about the circular economy. We knew that there was all this other stuff going on, but it wasn’t put into perspective at a macro level for us – not just how we could do sustainable products, but whole economies. It changed the way we’re thinking about Rapanui. We viewed ourselves as a complete sustainable business at the time, but when we learned about it we realised that there was more we wanted to do.

So how will this incentive work?

The idea is that with the new collection, we think we’re going to call it ‘return on investment’ – we’re still working on the specifics of it. It’s going to be a small amount that’s the financial incentive that will be involved when the customer buys the product. It will be included in the purchase price, and there’ll be free returns to send the item back to us. That will be across the whole range that we’re launching in May, and then then we’ll be able to demonstrate ourselves as a circular business on biological nutrients.

We’re also excited about the new products we’re launching that will fill in the other circle, the technical nutrients. These will be technical jackets, insulation made from recycled PET and polyester down, that will close the loop on the technical side of things. We’ll be halfway to this goal of being a fully circular business with the launch of the new range in May.

That sounds great, but other businesses might say this is a cost, it puts you at a disadvantage. Do you think that anyone can do this?

In the current economy, I can understand why that might be the case. That’s because all of these businesses are set up to operate in a linear economy. If they were set up to operate in a circular economy, they can actually save themselves money, and make themselves more money.

A lot of people use the example of the washing machine. What we really want is clean clothes, not a washing machine. If we rent a washing machine, it’s in everyone’s best interests to make that washing machine to last, with parts that can be mended. If you’re renting a product out, it’s in your interests as a business for it not to break down. And there are much higher margins on renting a product than selling one outright.

I’m positive we can make it a profitable enterprise. If you think about it logically, if somebody buys a product from us, it’s much more likely that they’ll become a repeat purchaser, because they’ve always got that credit note in their pocket – or rather they’re wearing their discount. They know it’s worth some money, so they’re not going to chuck it in the bin if they can go and get another one. I see it as a way for us to move towards this idea of renting product, and increasing the amount of times that you interact with a customer, increasing the lifespan of a customer because they’ve always got an interest in coming back to you.

Is there a risk that as you’re the first to do it, you’ll have to explain it all the time? It could be quite a marketing challenge.

Possibly, but I do a lot of our PR, and as a PR story it’ll be an easy sell. What journalist wouldn’t want to write about it? It has a lot of potential for marketing, as a concept. If we are the only person working on that basis, it means that when other stories come out, people will refer to what Rapanui are doing are part of the context of the circular economy.

That’s quite likely, because there are others out there doing this, but mostly pilot projects with a few special items. Puma is perhaps the biggest company experimenting here, but I don’t know of anyone doing the whole range.

It’s different for us. We’ll have about 100 lines when we launch the new collection. When you think about it, that’s quite a lot when compared to a couple of products. At the same time, we’re a small company and it’s easy to be flexible. If you look at the rest of our business, it’s built around sustainability. Mart (Rob’s brother and co-founder) studied renewable energy and engineering and we set out to make a contribution to sustainability before we started the business. Rapanui has always been a vehicle for us to make a contribution, and when we found the circular economy, it fit really well with our founding values. It was a bit of a no-brainer. We always would have been looking to find new ways to make our business sustainable.

We think the circular economy is the only way for us to continue to operate in the future. That’s the definition of sustainability, in the end, to be able to carry on. With a circular economy, it doesn’t say ‘do less, use less’, like the traditional ‘eco’ message. Eco’s dead. It doesn’t work, because people don’t operate like that. Sustainability says you can do as much as you want, as long as you do it in a sustainable way. That’s why the circular economy is great. Because if you can engineer the change (which I realise is a huge task for a whole planet based on a linear model), then you will set up an economy that will fit with the way that we naturally operate.

The question is then whether that can work across every sector.

There are a few examples of things popping up now. Like B+Q. They’re doing ‘rent a drill’. They did this study and discovered that people who buy drills use them in total for about ten minutes. So why not rent them? The CEO of B+Q is really interesting, he’s a champion of the circular economy. Now if someone like B+Q can do that, if they can build on that one thing and move towards that with some of their other products, then it shows what everybody else can do.

• More posts on the circular economy.
• More on ethical fashion.