Sustainability Leadership

Marvin Klein

PortionPac Chemical Corporation
Co-Founder and Chairman

 

Interviewed by Will Galloway, Foresight Design Initiative

As founder of a strongly sustainability-focused company in 1964, Marvin Klein was way ahead of the competition. For many years, the human safety and environmental attributes of PortionPac's products were looked at as irrelevant. While all that has changed in recent years, the company's principles remain its formula for success. Marvin sat down with Foresight and shared some insightful answers to our probing questions.

FDI: How has the concept of sustainability and the environmental movement changed since PortionPac Chemical Corp. started?

MK: Back in 1964 we founded PortionPac as a responsible company because we knew that it was inherently the right thing to do. It was common sense really. The term "sustainability" didn't exist then. While the environmental movement had begun, it certainly wasn't a part of business. We got laughed out of multiple companies after mentioning the environmental and human safety components of our products.

Since then, there have been several turning points such as the release of Natural Capitalism that have brought the environmental movement into the boardroom. Now, companies are forming with similar goals in mind and are doing it because it makes sound business sense to do so. Today, I put a lot of faith in our country's younger generations as they find themselves in meaningful careers and leading the charge towards more sustainable businesses.

FDI: Can you explain how your customer base has responded to your sustainable business practices and how has that changed over the years?

MK: Our institutional and corporate clients have typically been with us for many years because we improve their productivity and effectiveness. Many of the benefits of PortionPac were framed to their bottom line rather than the environment; for instance, safer formulations lowered their workman's compensation costs and portion control lowers the amount spent on products. Only recently have our clients specifically required environmentally friendly products as new mandates and accreditations become mandatory for purchasing managers. For instance, the national prison association recently passed a standard to become more sustainable as a means to conservatively save $1,000 per inmate per year. PortionPac is perfectly aligned with this requirement as we can help prisons use less water, less detergents and less energy.

FDI: Can you explain how the "shared savings" method of purchasing is used to the benefit of PortionPac and its customers?

MK: It goes back to the primary goal of PortionPac, which is to always do the best thing possible for our customers. Shared savings is having our customers purchase solutions instead of the product. If you're a car manufacturer, would you rather pay for your paint based on the amount of painted cars or by the barrel? By working with the customer to use products correctly we limit waste, and with a shared savings program, the customer pays less, gets more value and we make more profit. But the goal is to improve cleaning, productivity and safety and to form an enduring and mutually beneficial relationship with customers. This is a long-term strategy that has significantly paid off. Less is more!

A good example of the possible savings is with a major Library System. Instead of requiring the purchasing manager to go through the traditional purchasing procedures for each order (bid requests, quotes, purchase orders, invoicing, etc.) we sit down with the purchasing manager once a year and decide on a fair price for an entire year's worth of cleaning supplies and service. We receive one purchase order and issue one invoice. This is much more efficient and puts both parties on the same side of the table.

FDI: PortionPac recently received the Illinois Governor's Sustainability Award for the 4th time in its 25 year history. Can you please explain what this award means to PortionPac and its customers?

MK: When we went into this business, people laughed in our faces. Back then, I told our staff "don't listen to those people, the only thing that matters is what we know." Well, now I say something similar to our people regarding the awards we've won; "don't pay attention to all the awards we receive, the only thing that matters is what we know." It's important that we do the things that we do because they are important to us, not because other people tell us that they are important to them. Now that's not to say that we aren't incredibly grateful for the recognition and we appreciate that in order to earn the recognition we must continue to work hard and make substantial improvements.

FDI: What are your thoughts on the competitive landscape of your industry and competitive advantages that can be had through sustainability?

MK: The future of our world is to use less. The future of this industry is in portion-controlled applications and safety focused products. These are things that PortionPac has been doing since 1964, so it's only a matter of time until our competitors get on board with what we are doing. You're seeing it more and more in commercial and home cleaning. It's a good feeling to know that our competitors are imitating our pre-measured packaging and concentrated formulations and together we are going to help a lot of people around the world reduce their impact on the environment.

FDI: How do you see the landscape of certification and environmental labeling taking shape in the next 20 years?

MK: Oh boy, that's a huge topic these days! There are currently enormous changes taking shape and it's got a momentum all its own. PortionPac works primarily with the Green Seal standards which are the most difficult to obtain but there are seemingly dozens of other standards and labels popping up. One of the big problems as a small business is that the roughly $25,000 cost of registering and certifying any single product is a much larger percentage of our sales than it would be for a company 10 times our size. This has led to a reduction in the number of chemical companies in the U.S. because they simply can't keep up with the costs to certify and register all of their products.

The other serious issue in this field is "greenwashing." When some companies tout false environmental claims and bogus certifications, the consumer just gets more and more confused.

I'd like to see one standardized certification system so that people can compare products on an even playing field and the confusion can be stripped away. This is an issue much larger than PortionPac but having a standardized program would clarify the rules of the game for the producers and the consumers as well.

FDI: What kind of impact can the thousands of MBAs entering the job market each year have on the "sustainability" movement?

MK: Unfortunately, I think business schools have been part of the problem that has gotten us to where we are now. Too often they teach students to maximize shareholder profits at any cost without incorporating the societal aspect of business. An education is not enough to run a successful business; it takes a strong moral compass and common sense. I'm afraid that the MBAs today are only concerned about what is good for their pocketbook and not at all concerned about what is good for the country and for our planet.

I've said it before, but being in business for the sole purpose of maximizing profit won't work. When I look back on my career with PortionPac, I can feel good about the impact I've had on the janitors, housekeepers and food service people who work with our detergents and the people whose facility they clean. Our goal is to have everyone be a winner: the worker, our customer and the environment.