So, the team created a framework for evaluating how they would consider changes to make, called “Adopt, Adapt, or Invent,” which set forth the following guidelines: Adopt—practices that are a good fit for their company and can be adopted as is from Clorox to Burt’s. The new CEO of Clorox, Don Knauss, was interested in creating a more environmentally sustainable company. “We’re just moving with the consumer to make our natural products available to them in the places they typically shop.” As a subsidiary of Clorox, Burt’s Bees enjoys the market reach of a corporation without sacrificing any integrity. “We have adopted a strategy that’s maybe not as robust as theirs, but its head and shoulders over what we’ve done in the past. But the bigger question was mission alignment. In fact, Clorox’s signature sustainability goal for our IGNITE strategy aims to reduce by 50% the virgin plastic and fiber in our packaging by 2030. The company is a subsidiary of Clorox that describes itself as an "Earth friendly, Natural Personal Care Company" making products for personal care, health, beauty, and personal hygiene. That segment comprises dressings and sauces, water filtration, and natural personal care. 1. The employees, clad in coveralls and gloves, dove into the waste with vigor. P&G has a group that actively seeks out opportunities such as the one with Clorox to make Burt’s Bees … Burt's Bees is committed to making its website accessible for all users, and will continue to take all steps necessary to ensure compliance with applicable laws. The sale seemed to come out of left field, but both companies had been deliberate about the partnership and had thought the strategy through carefully. We avoid over-packaging, limit mixed materials and use innovative recycled materials. Burt's Bees manufactures products … The research indicated that consumers are very concerned with their health and wellness and that of their families, and though they also value sustainability, it is of secondary concern. The learning has also gone the other way. “Burt’s Bees has really embraced this concept of … Its products are distributed globally. All Rights Reserved. The predominant attitude across the industry had been to take responsibility for what and how a company was producing their product, but to not ask too many questions about what the upstream suppliers and vendors were doing. From 2000 to 2007, Burt’s Bees… Their “One Sustainability” program calculates a sustainability score for every new product. They were winners of the inaugural Natural Launchpad competition to identify 10 exciting companies looking to make it big in the … After the acquisition, Burt’s was granted a great deal of autonomy. Given the new resolve to be a sustainable company, and upon the acquisition of Burt’s Bees, the Clorox CEO thought it was important to establish an internal ecostrategy office. We believe our short- and long-term success lies in our focus on one thing: good growth. The same-size tube of ChapStick, which uses synthetic ingredients, costs $1.69. Burt’s Bees products made it to New York City by the late 1980s, where its natural ingredients list appealed to hip SoHo boutiques. The highly fragmented U.S. natural personal care market represents about $6.4 … Culture was another concern. We choose high-integrity materials that are more readily recyclable. Adapt—practices that are helpful, but need to be adjusted to meet the particular context. On Halloween 2007, a room full of employees waited for a secret announcement. With his partner, Roxanne Quimby, they started Burt’s Bees, a personal care product company, in 1984. Additionally, Clorox is considering exchanging less-sustainable ingredients for more suitable ingredients in their products. Prior to the addition of the new responsible sourcing manager, the primary focus of increasing sustainability in the Clorox supply chain was focused on how Clorox’s own factories could be more sustainable in their production practices—the operational footprint, manufacturing, distribution footprint, and product portfolio. Burt's Bees Case Analysis 1449 Words | 6 Pages. This virtuous cycle of sharing best practices, adoption, and refinement is a great model for social enterprises that are acquired into larger companies to follow. Burt’s Bees CEO John Replogle believes the company’s sale to Clorox makes a lot of sense. In taking over Burt’s, Clorox understood that its customers expect a natural product that is sustainable. But it is also essential that these events are not just one-off events, and the next day have life return to normal. The company was growing fast and Clorox knew that its massive distribution and marketing capabilities could greatly accelerate that growth. The program will reward ten health and well-being entrepreneurs with a $10,000 grant, a day of coaching at Burt's Bees headquarters in Durham, NC, and access to a community of peers. The questions and anxieties were certainly present. That way, we can help reduce the footprint and resource intensity of our products. When Burt's Bees sold to the Clorox Company in 2007, many said the company had "sold out." This not only makes sense from a purpose perspective, but also from a profit perspective. Burt's Bees lip balm. Clorox began to make strides in that direction. In the next six, seven years we can make great strides here, and that’s our commitment.”. The company was growing fast and Clorox knew that its massive distribution and marketing capabilities could greatly accelerate that growth. They’ve come a long way since 1984. It turns out that natural lotion is notoriously liquid, which inhibits its ability to moisturise. They knew the company could learn a great from Clorox, but they also knew they couldn’t just copy and paste from the conglomerate. Once our packaging has served its initial purpose, it can be recycled either curbside or through our partnership with Terracycle to help us close the loop. Clorox was just setting up the Eco Team, and they had spent a good deal of effort reaching out to sources outside the company to learn best practices. We try to avoid new materials and unnecessary packaging, and make sure all of our packages are recyclable or reusable. Burt's Bees is an American personal care products company that markets its products internationally. Our lip balms aren’t shrink-wrapped; instead, they have a slightly longer label that prevents tampering. This one-day event is a tangible and effective tool that sensitizes the employees to become experts in waste management, all pulling toward the goal of zero waste to landfill. OAKLAND, Calif., Oct. 31, 2007 – The Clorox Company (NYSE: CLX), as part of its strategy to grow in and beyond its core in fast-growing, higher-margin consumer-product categories, today announced it will acquire Burt's Bees, a leader in the natural personal care category. At Burt’s we actually started adopting the rest of Clorox’s goals in those areas because they’re quite aggressive,” says Paula Alexander. By acquiring Burt’s, they were acquiring one of the world’s leading experts on sustainable sourcing. How DonorsChoose.org Uses Dashboards to Drive Impact, California Court Decision Affects Startups Using Independent Contractors, How Embrace Listened to Users and Pivoted to Design a Life-Saving Product. The differences may lead to mistrust that Burt’s Bees will continue to be authentic and stand by its original brand values after being acquired by Clorox. They were all in the parking lot, a crowd was gathered to watch as the dumpsters of the plant were upended and the nasty, smelly contents spilled across the parking lot. Will Burt’s Bees get diluted over time as it becomes part of a larger company? Burt’s Bees had never been satisfied with that standard and committed to taking responsibility for not only its own activities but how its suppliers and vendors were acting. There is often a negative response when a Colgate comes in and buys Tom’s of Maine, or Unilever buys Ben & Jerry’s or when Clorox comes in and buys Burt Bees. Invent—when practices exist, but completely do not work in the given context, Burt’s had to invent its own processes. *Truly Glowing 10% Off offer is valid January 22, 2021 12:00 am ET through March 31, 2021 11:59 pm ET on BurtsBees.com using the code GLOW10. One example of how Clorox has learned from Burt’s is in adopting a practice Burt’s uses to reduce the waste it sends out into the world. The Durham, N.C.-based manufacturer of natural personal-care products -- best known for its popular lip balm -- sees sustainability as the starting point for its innovation process. Of … Natural lotions are notoriously very liquidy, which inhibits their ability to moisturize. That is to say that they prioritize the safety of their children in their daily routines at home over concerns about the impact of products on the environment. So the employees meet that same day to devise action plans for further reducing waste. Clorox later bought it in 2007 for almost $1 billion. At the same time, the CFO is proclaiming that Burt’s Bees is the fastest growing, highest margin part of the company. The focus on R&D and the sharing of knowledge between Clorox and Burt’s Bees has also made the Burt’s Bees products more natural. Clorox has taken a page from its book in working toward its own waste-reduction goals. But they still had a long way to go in that area. There have been examples of the social and environmental impact being diluted or completely stripped out. The company also wanted to invest in and acquire companies that aligned with the new strategy. Additionally, Burt’s Bees has influenced The Clorox Company with the addition of an eco-team.12 “We’re not a chemical com- pany. on our website or on our other electronic platforms, please call us at We’re always trying to find ways to reduce the overall volume of materials, increase the sustainability of our materials, and minimize the impact left behind after our consumers use our products. an alternative method. The major problem I foresee Clorox facing is the possible sales decline of Burt’s Bees due to the differences in the brands. Burt's Bees Case Analysis 1449 Words | 6 Pages. Burt’s Bees is committed to making its website accessible for all users, and will continue to take steps necessary to ensure compliance with applicable laws. On Dumpster Dive day, all the employees sort through the trash in the parking lot to separate out recyclables and waste that can be composted. Clorox has helped the company work toward this goal by creating an innovative evaluation tool for making decisions about the sustainability of everything from ingredients to packaging and manufacturing. We put an average of 30% post-consumer recycled (PCR) content in our plastics […] In 2003, he was bought out by Roxanne for just $4 million. Like most natural-products companies, Burt’s Bees has the luxury of charging enough for its goods to pay for such causes. The Burt’s Bees R&D team was able to tap into liquid salad dressing technology to create a good 24-hour moisturizing cream. In addition, Clorox was turning 100 years old that spring and the executive management wanted to craft a forward-looking strategy that would refine, and to some extent redefine, what Clorox stands for. It allows the product development teams, at both Burt’s and Clorox, to get hard data about the impact of all materials, ingredients, and packaging, and to compare their options on an apples-to-apples basis. Since Burt's Bees was sold to Clorox in 2007 for nearly a billion dollars, the formulations of MANY tried, trusted and true products have been reformulated. Would this acquisition alter the composition of the Burt’s Bees product from natural to non-natural ingredients? After the acquisition, Burt's was able to increase the size of its R&D budget by 50% and invest more in creating innovative products, not only with the additional cash, but by tapping into Clorox technology and expertise. Burt’s Bees was a good candidate. Burt’s Bees is a personal cosmetic company offering products such as lip balm, lotions, makeup, facial wipes, and more. The men in the bee costumes were a senior vice president from Clorox and the general manager of Burt’s Bees. We’re always trying to push the limits of our packaging to include more PCR and be easily recyclable without compromising the safety or quality of the products you love. Our Lip Balm packaging is 50% PCR and we’re moving towards 100% PCR, including the addition of bio-resin upcycled from potato processing waste. There is a substantial disconnect in the story. In the Fairfield plant, the employees had the idea of placing big recycling bins in seven different parts of the plant to make it convenient to sort the recyclable material and keep it out of the dumpster. As Morrissey says, “We have been nothing but supportive of getting Burt’s Bees to more natural, because that’s their brand, that’s what they are about. First, it could be that Clorox vastly over-paid. Choices like these help us limit our footprint and cut out unnecessary plastics. Denise Lepard started this petition to Clorox Burt's Bees. It’s simply good business for Clorox. After studying the research, Clorox decided to place a new focus on creating healthier and more environmentally friendly products, which they had determined would differentiate them from their competitors and increase their market share. At 9:00 a.m. on a weekday, the Clorox Fairfield Bleach plant is usually humming with activity, in full-on production mode. Burt’s has a goal that by 2020, 99 percent of the ingredients in the products will be natural. management team.11 Since the merger, Burt’s Bees has increased the natural content of a variety of products and also sends zero waste to landfills and composts most its own waste. Burt’s Bee’s revenues have grown by double digits every year (except for 2009) since the acquisition. 1-800-227-1860 so that we can provide you access through The purpose of the Burt’s Bees SBU is to increase company 's sustainability. Was Clorox going to stay committed to this mission that they had established? That’s what they are going to be successful.” The results have been quite successful indeed. If you have difficulty accessing any content, feature or functionality Who would have thought Clorox's salad dressing would hold the key to making better natural skin lotions? Could adopting business practices Since 2010, Burt’s has sent zero waste to landfills; the company is recycling, repurposing, or composting all of its waste. So she acts as a sort of internal management consultant to help reshape the sustainable supply chain practices across the company. One move was to create the Green Works product line of all-natural cleaning products. On its current double-digit growth path Burts Bees is set to achieve sales of $170m in 2007, which is around five times less than the price Clorox paid for the company. users, and will continue to take steps necessary to ensure compliance with applicable laws. In 2006, prior to the Burt’s acquisition, Clorox had already dialed up its focus on sustainable sourcing. by Rick Smith — July 10, 2019 DURHAM – The Clorox Company is expanding its information technology presence in Durham, building around it’s acquisition of Burt’s Bees in 2007 for more than $900 million. I think there are two possible explanations. We put an average of 30% post-consumer recycled (PCR) content in our plastics and 71% into our paper. When we formulate, manufacture and package our products, we keep people and our planet in mind. The Clorox Company is expanding its information technology presence in Durham, building around it's acquisition of Burt's Bees in 2007 … Burt’s Bees The Beauty of a Circular Economy We think a lot about all the materials we use—and the ones we don’t. Ultimately, our goal is to deliver high-quality products that make everyday life better, every day and minimize the impact on our planet. Burt’s Bees was a good candidate. Cause marketing, which is especially important to millennials, is … Note: Burt’s Bees performance asked of all consumers who indicated they have purchased at least one Burt’s Bees product; for all other competitors, each consumer was asked about one other random company from which they had purchased personal care items; Core is a weighted average of Tom’s (n=81), Kiss My Another way in which Burt’s has helped Clorox advance its sustainability goals is in bringing expertise in a natural supply chain management. The company started setting new goals to mandate a set of sustainability standards known as the Sustainability Vector for their top 200 suppliers, with the goal of the improving the sustainability of their suppliers by 80 percent. And after hearing about Clorox’s new standard, Burt’s Bees decided to apply a stricter standard in its own plants. "Nature Becomes You" is more than just a marketing tagline for Burt's Bees. We try to avoid new materials and unnecessary packaging, and make sure all of our packages are recyclable or reusable. Burt’s has benefited from the Clorox acquisition in other ways as well, and management has been careful to adopt practices and tap the new resources in ways that are true to the original mission. Though there was some trepidation from the Burt’s team, every- one was certainly aware of the potential for growth and expansion of the brand after acquisition. Burt’s Bees was sold to Clorox for $970 million. Its operations are water conscious and carbon neutral. View Essay - Case Questions - Burt's Bees(1) (2).docx from BADM 520 at University of Illinois, Urbana Champaign. Clorox announced Wednesday that it will pay $925 million in cash for privately held Burt's Bees. © 2021 The Clorox Company. Currently, half a dozen are very close to achieving that goal. A 0.15-ounce tube of Burt’s Bees basic lip balm, for example, costs $3. He tapped   an internal environmental champion, Bill Morrissey, to lead the newly established office. Join 25,000+ intelligent subscribers to the Weekend Briefing. That includes aluminum, steel, paper, glass, and plastics like PETE, HDPE and PP, with as much PCR as possible. A possibility for Burt’s Bees only coming in at 54% could be down to the fact thatthey do not rely heavily on marketing communications and advertising to promote their brand.Although this is not a major factor when it comes to the natural market however it is somethingthat will be need to be considered if entering into the mass market.Once again the colour scheme is thesame as above; Burt’s … His weather-worn face, thick beard, and conductor’s cap continue to be the visual image of the brand. Of course, there’s no charge for our first conversation. One of the initial personnel changes after the acquisition was moving the sourcing manager from her role solely working on the Burt’s Bees supply chain to her new role as a shared resource between Burt’s Bees and Clorox as a whole. Clorox competes with P&G on some home care and laundry products. The question was how could Clorox make sustainability improvements to their products and production. Burt’s has also benefited greatly from the research and development resources and expertise Clorox has provided. Most of the marketing practices were adapted for Burt’s. When it comes to the amount of materials that go into our products and packaging, we believe that less is more. We strive to use ingredients and packaging that are more sustainable, including materials that are recyclable and compostable. The company also wanted to invest in and acquire companies that aligned with the new strategy. Mary Joy dela Cruz Management Case: “Keeping the Buzz at Burt’s and Bees” I. Our packaging is only getting more sustainable as we push ourselves with more ambitious target setting.”. Clorox has been extremely efficient on its own manufacturing sites. (Photo credit: SeongJoon Cho/Bloomberg.) But the bigger question was mission alignment. There were many employees in that room on Halloween that were very concerned about how things would change after this small startup was acquired by a huge multi-national. Clorox was willing to pay almost $1 billion for Burt’s Bees because big companies see big opportunities in the market for green products. The average employee tends to be surprised at how much can be diverted from landfill, how much can be recycled, and how much can be composted. But Burt’s Bees would prove to be an especially valuable resource. Many of the supply chain practices could be adopted directly and Burt’s was able to take advantage of the economies of scale and systems in place for sourcing and manufacturing. Our facial towelettes are made from repurposed cotton tees, and their package has a sticker rather than a plastic closure. Yet, this morning, not an employee was in the building. Knauss commissioned a study to assess how Clorox could respond better to its customers’ needs as well as to the needs of the environment. They were announcing Clorox’s acquisition of Burt’s Bees for the cool price of $925 million. Burt’s Bees, which Clorox acquired in 2007, is the only personal care and cosmetics brand in the company’s portfolio. If a product will have a positive impact on the environment—or less of a negative impact—that’s considered by most a nice plus. We think a lot about all the materials we use—and the ones we don’t. But there were actually positive consequences too. Bill looked at how Burt’s had been operating since its inception and very quickly came to the conclusion that Burt’s could serve as an internal exemplar for sustainability at Clorox. The Clorox Company is committed to making its website accessible for all Burt’s Bees is another SBU in the Clorox portfolio. We now have almost 60 percent of our products at 100 percent natural. By Ken McLellan, Global Partnerships Leader – Clorox R&D Ten natural product startups recently descended on Burt’s Bees headquarters in Durham, North Carolina, for a day of mentoring, networking and building entrepreneurial buzz. Burt's has a record of being an eco-minded company, even after they sold to Clorox in 2007. Clorox knew this was an area that they needed to improve on. Burt's Bees is part of the CLX family of brands including Brita, NeoCell, Rainbow Light, Renew Life and Natural Vitality. In addition, the winners will have the right to use a Burt's Bees Natural Launchpad Seal on their marketing communications and product packaging. “So I would say that Burt’s has been a great influence on sustainable sourcing,” says Morrissey. As the Clorox Eco Team continued to work toward the zero-waste goal, they determined the company should set a standard that 90 percent of the company’s waste would be recycled or composted. Background Burt's Bees is an American personal care products company that describes itself as an "Earth friendly, Natural Personal Care Company" making products for personal care, health, beauty, and personal hygiene.As of 2007, they manufactured over 197 products for facial and body skin care, lip care, hair care, baby … It is not alone, however, in the lifestyle business segment. Some practices have a strong core concept, but cannot translate well from Clorox to Burt’s Bees, so the team had to spend time adjusting and adapting the practice to meet their context. (“Except for the fact that they’re from Clorox, they’re nice people,” he told The New Yorker’s Tad Friend.) Burt's Bees manufactures natural personal care products … ...Buzz at Burt’s and Bees” I. The “Dumpster Dive” was a long-standing established tradition at Burt’s, and Clorox has adopted it. Natural is becoming mainstream,” he told The Associated Press. “When you consider water and energy usage as well as green house gas release. From 2009 to 2012, we went from 97 percent on average in terms of all natural to 99 percent. “We have more than 200 global IT employees, with half of them now based in Durham, plus an additional workforce of contract employees,” says Jay McNulty, Senior Vice … We buy our chemistry and our plastics from other supplies upstream, but our responsibility doesn’t end at our loading dock; we need to assume responsibility for the holistic product footprint from raw material to store shelf.” Clorox has followed Burt’s lead by making a commitment to ensure that its upstream suppliers are operating and sourcing in a sustainable manner.

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