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Forgetrecycling

Upcyclingis a trea sure

trove for greenbusiness ideas

and the forcebehind a fresh

new industry

Like every-thing aboutLooptworks ,the signatureon CEO and

eo-found er Seott Ham lin's e-mail is a call to action: Didyou know that it requires more than 400 gallons of waterto make one organic eotton T-shirt? Upeyele.

If you're not up on the green lingo, the best way tothink of upcyeling is that it's like a sexier, even greenerversion of recycling. When something is recycled (or downcyeled ), it 's broken down into something of lesserqualitya process that consumes energy. Upeyelingadds value by transforming or reinventing an otherwise-disposable item into som ething of higher quality. It 's theultimate in reuseand a whole new industry sector isshaping up around it.

Looptworks personifies the upcyeling trend. Hamlinlaunched the Portland, Ore.-based company with partnersGary Peek and Jim Stutts in September 2009. The threeapparel industry veterans were inspired by the sustainablemanufacturing methods of outdoor gear companies likeRoyal Robbins and Patagonia, but they wanted to take it

even furtherall the way to what Hamlin ealls elose dloop manu facturing. L ooptworks was one of the firstplayers to truly close that manufacturing loop and m ake a

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There's a plethora of people look-ing into different angles in differentindustriesthe opportunities in upcy-cling are fascinating, Ham lin says.

Eor its part, Looptworks uses

wha t it calls pre-consum er excessas source material for its accessories,gear and apparel. Most of that is fac-tory textile waste that, if Looptworksdidn't intervene, would be headed forincineration or the dump. The result isa collection of bright and stylish offer-ingslike the Hoptu, a neon orangelaptop sleeve made of leftover wet-suit material ($30), and a patchworksweatshirt-fleece hybrid Tranquillavest equipped with rescued buttonsand tags ($120). The fact that pro-

duction is limited based on availablematerials ups the items' productionpriceand their appeal.

Upcycling has proved to be greatbusiness for Looptworks, thoughHamlin is more likely to brag aboutthe 16 million gallons of water he'sconserved by upcycling and the factthat he's only bought five brand-newitems for the business (including ahard drive, cables, a stamp to makebusiness cards and some signs). Afterless than two years, the companyemploys 12 full- and part-timers andcreates nearly 50 retail offerings.Hamlin says factories have started toapproach im for ideas about howto deal with their excess.

UPCYCLING IN HISTORYBefore the Industrial Revolution, when new technologies made it more cost-effective to create new (often nonbiodegradable) things rather than reusethem, upcycling was a fact of life. Fabrics were separated into fibers like wool

and cotto n, broken down again and spun into new products. Henry Ford evenpracticed an early form of upcycling. using the crates car parts were shippedin as vehicle floorboards.

Upcyc ling's resurgence in the business wor ld can be trace d to the 1992publication of Cradle to Cradle Remaking the Way We Make Things a book(printed on a synthetic paper made from plastic resins and inorganic fillers)by architect-and-chemist duo William M cDonough and Michael B raungartproposing the idea that manufacturers were practicing a cradle-to-graveproduc tion approach, which recycling just wasn't goo d enough to counteract.

McDonough, who also co-founded McDonough Braungart DesignChemistry, a cradle-to-cradle consulting and c ertification f irm, agrees thata growing number of companies are prioritizing the benefits of upcyclingand enjoying its business advantages. Sm art manufacturers unders tandtha t thinking of use cycles means thinkin g about a custom er's long -termrelationship with a produc t and brand, he says.

The challenge of course is making sure the application of cradle-to-cra-

Ou r goa l, he says, is to influenceconsumer awareness and figure out away to promote this non-mass-pro-duced approach on a large scale.

GREEN MOVEMENT GOES VIR L

Upcycling is ushering in an entirely newwave of entrepreneurial innovation.Its popularity is particularly clear inonline artist marketplaces like Etsy andArtEire, which offer an abundance ofupcycled goods: colorful jewelry cuffsmade from old vinyl records ($10 to$28), chairs constructed out of usedbaseball bats and hockey sticks ($299),dinged-up suitcases made into pet beds(around $70) and trendy suitcasescrafted from jerrycans ($140). Eor

artists, the materials for upcycling cancost next to nothing. The number ofproducts on Etsy tagged with the word upcycled rocketed up from about7,900 in January 2010 to nearly30,000 a year lateran increaseof 275 percent.

Even luxury-goods firmslike Herms are in on theact, repurposing leftoverscraps from their sig-nature scarves andBirkin bags for a homefurnishings and ac-cessories line dubbed petit h. (It debuts inthe states in October.) Andcelebrity chefs like Mario

LESSONS INT ILINGREEN

Small retailers are also findingsuccess with upcycling. The Re-Inspiration store in Atlanta's WeDesign District is one of them.

Housed in a loft-like space, thstore is stocked com pletely withupcycled or recycled items thatowner Brooke Schultz consignsfrom independent artists eco-whimsy, she says, po intin g outbobby pins from old Scrabblepieces, lamps made with Kahluabottle handles and robot-like

garden decorations composed owelded wrenches and pipes.

I look for original objects,where it's clear more care wasput into making them, Schultz

says. Being one-of-a-kind ispart of the appeal.

But even in a recoveringeconomy, there's more torunning a specialty retailstore than finding coolstuff to sell. It's only beea year and a half, and

Re-Inspiration is alreadprofitableand Schult

says the store is gettingready to go bigger.

Here are a few of Schultz's rules for success:

People are interested in going green, so we've taken that

idea and really exe cute d it, shesays. Re-Inspiration also offersan interactive component, with

workshops that teach customershow to upcycle their own stuff. Our store is

dynam ic , says Schul tz , whoevery few months does a mas-s ive reorganiza t ion tha t makesthe space look comple te lyfresh , with d ifferent vendorsand new products .

Schultz has seen similar retailersfold due to customer service is-sues. Have service right out ofthe gate, and offer the type ofcaring you can't get at a big boxshe says. It's all ab ou t how yo u

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rto

WAYS TO UPCYCLEWhen it comes to collecting recyclable and upcyclable materials, the businessopp ortun ities are amaz ing, says Gal Raz, associate professor at the University ofVirginia Darden School of Business. There are so many ways to incorp orate reuse inyour business model and branding approach, but you have to figure out how it fits.

No kidding. Check out all the different ways businesses are upcycling. W

W H A T T H E Y U P C Y C L E B R I L L I A N C E

Equator Coffees

and Teas

Hammer S Hand

Hello Rewind

Herms

looptworks

Patagonia

Coffee waste to grow protein-rich mushrooms indeveloping countries

Home construction and repurposing materials for furniture

1 Customers' favorite old T-shirts are turned into laptopsleeves; profits help sex-trafficking victimsLeftover material and damaged goods tor a new line ofaccessories and dcor

Overproduced textile waste to create a new retail line

Fleece made of plastic bottles

Trash to make new retail products

Promoting sustainable farming-and good coffee ^ KsS

Saving jobs with a new revenue stream ^ ^ ^ ^ 1 ^

A selt-sustaining social enterprise that capital izes on a s e n t P ^mental , one-of-a-kind product

Proving that luxury can be sustainable-yet equally expensive

Going straight to factories and rescuing raw materials (for agreat price)Spawning a clean manufacturing movement among outdoor-clothing manufacturers

Turning trash into treasure, literally

Batali have teamed with upcycling com-panies to m ake lotions and soaps ou t ofwaste grease from restaurants.

That scale that Looptworks' Hamlinis aiming for is already happening onthe post-consumer end of the upcy-cling market. If Etsy is considered theepicenter of do-it-yourself upcycling,then N ew Jersey-based TerraCycletakes on that same function in massupcycling. The company turns actualgarbage into hundreds of products, likeOreo wrapper backpacks and bicyclechain picture frames. With a large-scalecollection infrastructure developedover the past 10 years, TerraCycle nabsabout I billion pieces of garbage everyquarter that ultimately end up on theshelves of big-box retailers like Targetand The Home Depot.

Tom Szaky, founder and CEO ofTerraCycle, started the operation as ahumble provider of worm poop whilehe was a Princeton University fresh-man. But over the years the company'sincreasing fortunes have mirrored theburgeoning opportunities in the greenmarket. In 2009, sales revenue hit $7.5million; in 20 fO, it jumped to $20 mil-lion. Since January, Szaky has addedoperations in nine more countries,bringing the total to 20.

There's also serious behind-the-scenes innovation happening. Terra-Cycle employs polym er scientistswho are immersed in figuring out ways

to m anipulate paper, organics andplastics into materials like a new plasdchimber and textile made from Capri

of designers are figuring out how tomake jackets from Doritos bags andluggage from energy bar wrappers.

The market is ripe for moreinnovatio n, Szaky says. (Valued] at$12.5 million, TerraCycle is, withoutany debate, the biggest upcycler in theworld. But compared to other indus-tries, that's smalland that meansthere's way more opportunity.

REUSING AND DIVERSIFYINGUpcycling can be a boon to existingbusinesses as well. For Hammer iHan d, a Po rtland, Ore., design-buildconstruction firm, upcycling became ajobs-saving revenue stream during therecession. It began a decade ago, whenco-founder and president Sam Hager-man quit using dumpsters.

I was writing the garbage man a$10,000 check every month, and I re-alized that could support a living wageand a half, he says. So he bought atruck and started an in-house recyclingsystem in the yard of the office build-ing (which boasts flooring made fromrecycled bleacher seats).

From then on, Hagerman tookreusable parts from construction sitesframing components, light fixtures,appliances and lumber. I realized wecould get a beautiful pile of lumber forfree, he says, and turn around andadd value to it.

When the construction industry

got a walloping in 2008, Hagermanweathered the downturn by enteringthe upcycled furniture market, along

man business. We saved the jobs of 4people, he says. We got creative bynecessity, but we changed our businessbecause it also makes financial sense.

If there is a downside to upcycling,Hagerman says, it's the inefficiencies related to organizing, moving and storingthe supply. Regardless of how cheap anreclaimed materials are , they can rep-resent a huge waste of energy and timeif you don't already have a purpose inmind when you take possession of themPlus, there's the danger of running out. You can't develop a line of something,because there's no guaranteed way to gmore of the ma terial, he says.

Changing consumer attitudes arecontributing to the upcycling boom,says artist Justin Gignac, who startedthe NYC Garbage project in 2001,when he made a bet that with the righpackage design, you could sell any-thing, even garbage. These d ays, therea waiting list for his prettily packagedclear plastic cubes of M anha ttan-scavenged trash ($50 a piece), and he'ssold more than 1,300 of them to buyein 29 coun tries. Gignac believes th attoday's consumers are more aware ofwaste and appreciate the ingenuity ofpeople creating new stuff from old.

As Hamlin of Looprworks pointsout, success is mostly about quality andstyle, not just green. The product hasto be best-in-class, and it has to be coolinnovative, stylish, fit rightall of thos

things, he says. And at the end of it, ihappens to be upcycled. That's the wayit should w ork. To me, it's a win-win fob d h

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