Jamie ButterworthJamie Butterworth has worked with the Ellen MacArthur Foundation since the initial launch of the 5-year-old nonprofit, which aims to accelerate a transition toward the circular economy. In November, he plans to leave the foundation to set up a complementary venture tied to the circular economy. We spoke with Butterworth while researching our new trend report, which explores what the circular economy is and how brands are adopting its principles. He discussed why businesses are becoming more interested in this alternative economic model, some companies that are role models in this realm and what’s next for the circular economy.

How would you describe the circular economy in layman’s terms?

I would start by looking at the linear economy. In today’s economy, we tend to take something out of the ground, make that into something, take that something into a market, and at the end of its life, we throw that something away. We use a large quantity of resources to make that happen. We’re beginning to see increasing constraint on energy costs, and the circular economy is effectively a way by which businesses can begin to decouple future economic growth from resource constraints.

What are the social drivers and business incentives for the shift to the circular economy?

We see a number of elements that are causing the shift. The first one is economics. Between 1900 and 2002, we saw a century’s worth of price declines as we got better at extracting and processing materials in the economy and energy. In the decade between 2002 and 2012, however, we saw that century’s worth of savings effectively erased, so we’re beginning to see much more volatile commodity and energy prices.

Secondly, we’re seeing a different type of consumer, who is interested in different ownership and business models. We’ve seen many of these spring up in the last few years, like Airbnb or Zipcar. Others have been around for quite some time, but these are all successful models by which we begin to shift from ownership towards access or performance of products.

The third is, we’re beginning to see some increased legislation around topics such as toxicity levels in different materials or landfill taxes, recycling targets.

Continue reading “Q&A with Jamie Butterworth, CEO, Ellen MacArthur Foundation” »

Our latest trend report takes a deep dive into the myriad ways businesses are transitioning to a circular economy, an alternative model that seeks to create a system that’s regenerative by intention. In the food industry, reducing waste is one of the key ways to create a more circular system. Currently an estimated 1.3 billion tons of food is wasted annually around the world, an issue that has steadily gained attention over the past few years (Curbing Food Waste was among our 100 Things to Watch in 2012).

Governments are placing greater pressure on businesses to address food waste. The European Commission has put forward a proposal to reduce food waste as much as 30 percent by 2025 as part of an effort to transition to a more circular economy. And more U.S. states are passing laws that require hospitals, supermarkets and other establishments to separate and recycle food scraps from other waste. In Massachusetts, businesses that produce more than one ton of food waste a week will be banned from sending it to landfills as of October.

Across the EU, businesses are tackling the issue in myriad ways. A new certification in Denmark, backed by Unilever Food Solutions, among others, indicates that a food-producing establishment has implemented at least three waste-reducing initiatives and recycles its food waste. So far 100 establishments have signed up. In the U.K., Sainsbury’s (which has been campaigning to reduce food waste for some time) and Google have introduced an app, Food Rescue, that helps people create recipes using ingredients that would otherwise have gone to waste. The app also aims to bring communities together to cut waste and shows how much food has been rescued at the city and country level.

With more companies seeking alternatives to sending their food waste to landfills, new business opportunities are opening up. H.J. Heinz Co. may profit from the discarded peels, stems and seeds of the tomatoes it uses to make ketchup thanks to a new partnership with Ford, which is researching ways that tomato fibers could be used to create sustainable material for car components. And EcoScraps is a four-year-old American company that collects waste from restaurants, schools, supermarkets and elsewhere, creating garden products rich in organic nutrients. Last year the company struck its first nationwide distribution deal, with Target.

While the transition to a more circular food system will be slow—requiring the development of new recycling and reverse-logistics operations, and a different mindset among consumers as well—watch for more examples of food companies coming up with creative solutions for curbing rampant waste.

Data point_07.07.14

American Millennials are in a financial conundrum, facing crushing student debt and disproportionately stuck in part-time employment. But while their income is 30 percent lower than the U.S. average, Millennials spend just 9 percent less than average on non-essentials (apparel, entertainment and dining out, etc.), according to a recent report on this generation by Experian. In 2013, Millennial discretionary spending totaled $367.4 billion, 21 percent of the U.S. total of $1.7 trillion.

While their financial constraints have forced a record number of Millennials to live with their parents, as Pew reported last year and The New York Times Magazine recently spotlighted, this arrangement may also provide some leeway when it comes to discretionary spending. Looking ahead, however, this generation will likely have to cut back dramatically as they strike out on their own and create families, especially since many expect to spend decades paying for college, per NPR.

Stefan Seidel headshot

Our latest trend report explores the circular economy, an alternative to the current “take, make and dispose” linear economy. It’s an old concept that’s steadily gaining ground as brands such as Puma start to rethink elements of the status quo. As part of our research, we interviewed Puma’s Stefan Seidel via email. Based in the company’s German headquarters, Seidel is deputy head of Puma’s Social Accountability and Fundamental Environmental standards group and has worked on that team since 2001. He discussed why and how Puma is implementing elements of the circular economy and a few of the inherent challenges.

What are the social drivers and business incentives for the shift to the circular economy?  

On a global perspective, we see continued population growth. The percentage of the population in developing countries that is developing a lifestyle comparable to the Western world is increasing. While this is certainly a very welcome trend, it will continue to increase demand and stress on natural resources such as agricultural land and water.

As a consequence, we have already seen increased pressure on commodities such as cotton, for example, from a price point but also from increased competition relating to food crops, which may cause social concerns.

How does the circular economy fit into Puma’s commitment to sustainability? 

With the results of the first Puma environmental profit and loss account, published in 2011, we realized that the extraction or creation of raw materials is responsible for the majority of Puma’s environmental impact throughout the whole supply chain. Based on this knowledge, we looked at options to minimize the environmental impact arising from these raw materials.

In terms of cotton, for example, we can lower the impact of cotton cultivation by choosing more sustainable cotton such as organic cotton. However, even more positive effects can be achieved when using even a small percentage of recycled cotton. We conducted an internal lifecycle assessment study in which we compared conventional, organic and recycled cotton. We found clear advantages to using recycled cotton over organic cotton in all major impact categories.

From a business and common sense point of view, it does not seem to make sense to grow cotton using large amounts of water, fertilizer and pesticides, go through complex ginning, spinning and weaving processes that require energy usage, and then pay for the disposal of the cotton at a landfill, where the material has no use other than filling up landfill space.

Our Puma InCycle collection has shown that cotton recycling of up to 50 percent is feasible, and we are determined to develop our recycled cotton program further.

Continue reading “Q&A with Stefan Seidel, deputy head, Puma SAFE Global” »

Lego Fusion

Augmented reality was touted as the next big thing when mobile apps started using the technology around five years ago, but it hasn’t fully come into mainstream usage. Juniper Research reports that AR apps attracted around 60 million unique users last year—but sees that number ramping up to 200 million by 2018. And with rising interest in immersive experiences, one of our 10 Trends for 2014, more marketers are experimenting with the technology. As The Wall Street Journal reported earlier this year, AR is gaining traction after years stuck in “new-tech purgatory, where ideas loll in the hope of finding mainstream applications.”

Lego is generating some excitement around the upcoming launch of Lego Fusion, which allows users to move real-world creations to a virtual world. In its Milan store, Sephora recently started using an augmented reality mirror that lets customers see how different makeup looks on their face. And a Pepsi Max campaign that outfitted bus shelters in London with screens combining live video of the surrounding street with special effects like tentacles grabbing a pedestrian “might be the best use of augmented reality yet,” as The Verge enthused.

Google Glass and similar devices will fuel further creativity in connecting real and virtual worlds. Epson is marketing its Moverio smart glasses as a “next-generation augmented reality platform.” Leading AR firm Blippar has launched a Games for Glass platform and is working on “real world search” (identifying objects in view and providing relevant information). And Google’s Project Tango—which creates 3D maps of indoor spaces—will pave the way for applications like advanced in-store mapping for shoppers.

Image credit: Lego

Data point_06.30.14

As we’ve noted, the 2014 World Cup will be the first truly mobile tournament, with smartphone-equipped fans keeping up with the action wherever they are. Viewers are also using their phones to discuss the action, a habit that looks likely to help make this World Cup the biggest social media event ever, as Reuters and the AP report today, looking at Facebook and Twitter data, respectively. Even before the World Cup began, Twitter reported there had been more posts about the topic than for the entire 2010 tournament.

According to research by GlobalWebIndex, drawn from a survey of social networkers in Brazil, the U.K. and the U.S. who are watching the World Cup, Facebook is by far the most popular social network for getting updates. Some 94 percent say they’re using it as they watch games, while 59 percent are connecting with Twitter during matches. The chart here, which draws on GlobalWebIndex data from Day 1 of the tournament, found that British viewers are the least social, while Brazilians are most apt to share their views over social media and even take selfies of themselves watching a game.

Naturally, brands are attempting to join the conversation. Many are responding in real time to high and low points of the tournament, like last week’s notorious biting incident, as Mashable reports. And Reuters reports on the social media battle between Adidas and Nike, which includes an Adidas-run Twitter feed for the World Cup’s official match ball, dubbed the Brazuca, which currently has more than 2.6 million followers.

Read our roundups in magazine form on Flipboard, via the iOS and Android app or online; click here to find our magazine collection.

-The Wall Street Journal highlights four takeaways from the Cannes Lions Festival of Creativity, while a columnist for The Drum outlines his five takeaways from the festival.

-The Wall Street Journal notes how the World Cup is shaping up to be the biggest-ever global event for social media.

-A Wired Opinion column analyzes how “Generation Moth,” the generation raised on touch screens, will shape the future of technology.

-NPR breaks down why the new American man “doesn’t look like his father.”

-Business Insider proclaims Millennials are “old news” as Gen Z enters the fray.

-Bloomberg looks at how Millennials’ embrace of e-commerce is changing the retail world.

-In South Korea, luxury brands are no longer as coveted as they once were, via Financial Times.

-Brick-and-mortar stores are still important for male shoppers in the luxury market, but digital is playing a growing role, writes The Business of Fashion.

-Fortune takes a look at why 2014 is “not the year of the wearable.”

-Forbes analyzes why Asia is becoming a hotbed of funding for tech startups.

Continue reading “Weekly Roundup: Butter’s comeback, the new American man and the rise of Gen Z” »

Coca-Cola

Sugar is getting an increasingly bad rap. It’s “the new tobacco,” says one of the founders of Action on Sugar, a recently formed U.K. group. The new documentary Fed Up takes this stance as well, with Katie Couric and the rest of the team behind the film issuing a challenge to go sugar-free for 10 days. Food brands are starting to cut down on sugar, as we wrote last year, and brands are looking for sugar alternatives. Coca-Cola Life, flavored with a blend of sugar and stevia, launched in Argentina and Chile last year and is coming to the U.K. this fall. And PepsiCo is working with biotech company Senomyx on a “taste modifier” that would induce the palate to sense more sugar than is actually present.

Among the more natural sugar alternatives, stevia has become popular in the last few years but has been criticized for its metallic taste, while agave has been discredited as a desirable substitute. Monk fruit extract now appears promising, and In the Raw offers a sweetener made from the Asian fruit, as does Splenda parent McNeil Nutritionals, which sells Nectresse. Both products are zero calorie. New Zealand company BioVittoria, the dominant supplier of monk fruit extract, says brands including Kashi, So Delicious, Bear Naked and Emergen-C are using the fruit as a sweetener. Meanwhile, companies including Nativas Naturals are touting coconut sugar, which has a low glycemic index, and Damhert Nutrition in Belgium is producing Tagatesse, a sweetener derived from lactose.

Although experts disagree on the effects of various types of sugars, the interest in natural sweeteners speaks to the increasingly mainstream “clean eating” trend as more consumers avoid processed foods and artificial ingredients.

Image credit: Coca-Cola

Among some of the world’s top corporate leaders, there’s a growing understanding that traditional business models—built on the presumption of unlimited and cheap natural resources—must be reworked for 21st century realities. Our latest trend report outlines the alternative model that’s taking shape and how brands across categories are becoming more circular, rethinking everything from product design to relationships with their customers. The circular economy is an important topic not only because the approach is far better for the planet but also because tapping into its principles may well be essential to long-term competitiveness.

The circular economy represents a markedly different way of doing business, replacing established practices like planned obsolescence with new approaches to generating profits. Our report examines how brands from Puma and Ford to Ikea and Starbucks are upending various elements of the status quo: leasing rather than selling products, remanufacturing goods, seeking ways to extend the life of products or their components, finding more value in waste, or designing for circular use.

In addition, the report explains how the circular economy differs from the linear economy, why this concept is gaining more adherents now and what it means for brands. The report also incorporates insights from interviews with several experts and influencers.

Click here to download “The Circular Economy.”

Data point_06.23.14

New research by Nielsen finds that consumers are growing more likely to use their purchasing power to support the greater good—or at least, they’re more likely to make this claim. A majority (55 percent) of 30,000-plus people across 60 countries surveyed said they would be willing to pay more for products and services from companies committed to positive social and environmental impact, up from 50 percent in 2012 and 45 percent in 2011. People in the Asia-Pacific region, Latin America and the Middle East/Africa are most likely to say they would pay more, with Latin America seeing the biggest jump in socially conscious consumers since 2011. Nielsen also examined which issues are most important to these consumers, as illustrated here.

It’s increasingly essential for brands to reassess their social responsibility initiatives, committing more broadly to making a positive impact and integrating social issues into their core strategies. This aligns with The Rise of Shared Value, one of our 10 Trends for 2012—the idea that generating a profit and achieving social progress are not mutually exclusive goals. Indeed, as Businessweek reports, a March 2014 year-over-year analysis by Nielsen found an average annual sales bump of 2 percent for products whose packaging carries sustainability claims and 5 percent for products whose marketing programs promoted sustainability actions, compared with a 1 percent increase for 14 brands without sustainability claims or marketing.

New: 2014 iPad App

The Brazil Opportunity

Updates

Sign up for Email Updates

JWT AnxietyIndex

Things to Watch

  • “Intuitive Eating”
    July 29, 2014 | 5:00 pm

    Veggies

    As spotlighted in our 10 trends for 2014 report, people are becoming more interested in Mindful Living, including the notion of eating more mindfully. And with consumers showing declining interest in dieting, the idea of “intuitive eating”—paying closer attention to the body’s hunger signals rather than following a strict regimen—has been steadily gaining traction. Recent media mentions include articles in Fitness and New Zealand’s Stuff, and a Refinery 29 writer is blogging about adopting the practice. With a recent analysis of studies finding that intuitive eating can be a successful strategy for people who are overweight or obese, watch for more consumers to embrace this anti-diet philosophy. —Allison Kruk

    Image credit: Theresa Kinsella

  • Chinese mega-cities
    July 24, 2014 | 1:15 pm

    Tianjin

    China, home to the world’s second largest rural population, is expected to add close to 300 million more urbanites by 2030, when Shanghai and Beijing will likely account for two of the world’s Top 5 mega-cities, according to new UN research. “We are observing one of the most significant economic transformations the world has seen: 21st-century China is urbanizing on a scale 100 times that seen in 19th-century Britain and at 10 times the speed,” notes a new McKinsey paper on cities and luxury markets. China’s wealth will be concentrated in these urban areas: Over the next decade, McKinsey expects Beijing, Tianjin, Guangzhou, Chongqing and Shenzhen, in addition to Hong Kong, to join the list of “top luxury cities.” —Marian Berelowitz

    Image credit: Jakob Montrasio

  • Brands + Google Glass
    July 15, 2014 | 6:09 pm

    SPG

    As Google Glass makes its way into the hands of more people (last month it became available in the U.K.), brands are experimenting with the new possibilities that the platform affords. In March, Kenneth Cole became the first to launch a marketing campaign—the “Man Up for Mankind Challenge”—through a Glass app. Users were challenged to perform and document good deeds for the chance to win a prize.

    Starwood’s new Glass app, billed as the first such app from the hospitality sector, lets people voice-search its properties, view photos and amenities, get directions and book rooms. An array of other marketers have turned out apps for early adopters, from Sherman Williams’ ColorSnap Glass (easily create a paint chip that mirrors anything in view) to Fidelity (delivers daily market quotes for Glass wearers). —Tony Oblen

    Image credit: SPG

  • Ugly produce
    July 10, 2014 | 2:45 pm

    Intermarche

    Ugly Produce, on our list of 100 Things to Watch in 2014, is proliferating in Europe, thanks in part to government efforts to reduce the 89 million tons of food wasted in Europe each year. In France, Intermarché has been getting buzz for creating a produce section dedicated to “Inglorious Fruits and Vegetables”; a whimsical ad campaign reportedly drove a 24 percent rise in store traffic.

    U.K. supermarket Waitrose recently began selling packs of tomatoes that are misshapen or have fallen off the vine naturally. And in Portugal, Fruta Feia (“Ugly Fruit”) is a cooperative launched in late 2013 that sells unsightly produce that would have gone to waste. Per The New York Times, the group already has a waiting list of 1,000 customers. In line with one of our 10 Trends for 2014, Proudly Imperfect, watch for ugly produce to catch on with both retailers and shoppers. —Jessica Vaughn

    Image credit: Intermarché

  • The $1.25 Cube
    July 3, 2014 | 12:30 pm

    As we outline in Immersive Experiences, one of our 10 Trends for 2014 and Beyond, entertainment and narratives are becoming more enveloping in a bid to capture consumers’ imagination and attention. An immersive project from JWT Israel, a winner of the Cannes Chimera challenge, aims to help people experience what it’s like to live in extreme poverty. Once it’s created, the cube will create a multisensory experience that uses tools like augmented reality to simulate sights, sounds and smells and elicit certain feelings. Participants can exit only when the person in line behind them inserts $1.25, a metaphor for the collaborative efforts needed to fight poverty. The aim is for the cube to travel to international events like the Davos conference in order to influence global leaders. —Hallie Steiner

    Image credit: JWT Israel

  • Google’s Android Auto
    June 26, 2014 | 3:00 pm

     

    Android

    The connected car is rapidly becoming a reality. Fast 4G LTE connections are turning vehicles into hot spots that come with a data plan, while Apple’s iOS and Google’s Android are making their way onto dashboards. This week Google introduced Android Auto, with the first compatible cars expected by year-end. Apple’s similar CarPlay, which turns the car into a platform for an iPhone’s content, was announced in March and is included in new Ferrari, Mercedes-Benz and Volvo models.

    Car-based app ecosystems will provide relevant info (traffic, maps, vehicle diagnostics, restaurant suggestions) and entertainment, combined with safety precautions like voice control. As we outline in our mobile trends report, connected cars—complete with Internet hot spots, a suite of apps and sensors that communicate—will eventually link up with drivers’ homes, mobile devices and other gadgets to form a seamless system. —Marian Berelowitz

    Image credit: Android

  • American Eagle Outfitters’ recycling boxes
    June 19, 2014 | 3:45 pm

    American Eagle

    In a bid to create a more closed-loop production cycle, retailers including Puma and H&M are partnering with I:CO, a Swiss reuse and recycling firm that sets up collection points in stores for used clothing and shoes. The latest retailer to link up with I:CO is American Eagle Outfitters, which has added collection boxes in all its North American stores. Customers who participate in the “Live Your Life. Save Your Planet” initiative get a $5 credit toward AEO jeans. Any proceeds gleaned from the program will be donated to the Student Conservation Association.

    “The vision is for all products to be designed with future uses in mind, so materials can be 100% reused in a truly endless cycle,” explains a post from I:CO on American Eagle’s blog. An array of brands are taking steps toward a similar vision, as detailed in our upcoming report on the circular economy. —Marian Berelowitz

    Image credit: American Eagle Outfitters

  • Marriott’s #LoveTravels
    June 11, 2014 | 1:45 pm

    Americans are now largely open to seeing LGBT characters or couples in ads, as recent JWT research confirmed, and thus “advertising is coming out of the closet, with visible and innovative LGBT Pride campaigns from a diverse range of brands,” writes GLAAD’s Rich Ferraro in Brandchannel. One of the more notable campaigns this Pride month is Marriott’s #LoveTravels, featuring portraits of people including gay NBA player Jason Collins, transgender model Geena Rocera and two dads with their kids. The campaign includes print and display ads and building wraps at five Washington, DC, hotels; a microsite details the individual stories.

    “This is one of the most diverse and inclusive campaigns to have ever run in mainstream advertising,” writes Ferraro. Meanwhile, rival Hilton has revamped its LGBT-focused site and is hosting a wedding reception at the Beverly Hilton for the co-plaintiffs in California’s Proposition 8 gay-marriage court case. —Marian Berelowitz

  • Vogue’s shoppable Instagram
    June 4, 2014 | 2:36 pm

    As we outline in Everything Is Retail, one of our 10 Trends for 2013 and Beyond, shopping is shifting from an activity that takes place in physical stores or online to a value exchange that can play out in multiple new and novel ways. Instagram, a platform ripe with potential, is among those new ways. Vogue’s Instagram feed is now shoppable for consumers who have signed up with rewardStyle’s Like to Know service; liking certain images triggers an email with instructions on how to buy featured items.

    RewardStyle tells DigiDay that more magazines will be signing up shortly. Other firms helping brands monetize Instagram include Soldsie and Hashbag. —Marian Berelowitz

  • Ethically sourced electronics
    May 29, 2014 | 10:45 am

    Last year’s launch of Fairphone, an ethically sourced and produced mobile phone, put a spotlight on the raw materials in our digital devices. Currently taking orders for a second batch of 35,000 phones, the Dutch company ensures that minerals come from conflict-free areas so they’re not helping to fund armed groups. Now a two-minute spot from Intel showcases the company’s commitment to using conflict-free minerals in its microprocessors. Intel’s website delves into the issue, and CEO Brian Krzanich also spoke on the topic at this year’s CES.

    Alongside sourcing sits labor issues, another ethical consideration that Fairphone addresses. Expect more tech companies to start improving their track record when it comes to how their products are made. —Will Palley

  • RSSArchive for Things to Watch »