The TH Interview: Eric Henry of TS Designs
What do you do when you lose 90% of your business due to globalization and the North American Free Trade Agreement? If you’re Eric Henry, President of TS Designs, which we have previously covered here, you spend $30,000 on erecting a solar array, you completely redesign your core service, namely t-shirt printing, along ecological principles, you adopt aggressive energy efficiency targets, you set up a biodiesel co-op, and you aim to source American-made organic cotton t-shirts. In this interview we hear how TS Designs, a successful apparel company dealing with major brands like Nike and Gap, chose to adopt a sustainable business model, and how they went about implementing it. We also hear about Eric’s views on fair-trade versus domestic production, and we discuss the potential for business to change the world.
In the interests of full disclosure, we should point out that Sami Grover, who conducted this interview, is part of The Change, a company that works with TS Designs on marketing and brand strategy.
Treehugger: TS Designs’ mission is ‘to build a sustainable company that simultaneously looks after the People, the Planet and Profits’. Can you tell us a little about how you balance these considerations?
Eric Henry: I guess it started when we were a really successful business, dealing with brands like Nike, Gap, Tommy Hilfiger etc, and then NAFTA [North American Free Trade Agreement] came along, and within two years we lost about 90% of our business. That was an awakening to us in terms of global trade, and in terms of competition. We realized that the clients we were dealing with, even though they talked about quality, and they talked about delivery, ultimately they were driven by price. Fortunately I had a friend, Sam Moore from Burlington Chemical Company, who was years ahead on this sustainability stuff. He came to my partner, Tom, and I, and he said ‘you need to develop a triple-bottom-line business model’. Neither of us had any idea what he was talking about. But Sam knew us. He told us we had all the components in place. We already had a care for our employees, and we’d always seen them as our greatest asset. It was very troubling at that time when we lost all that business. We went from having over 100 employees to as few as 14, so we had to do a lot of lay-offs, and we got close to going out of business. We’re back up to 23 employees now. I don’t exactly know for what reason, but we’ve also always had an interest in caring for the environment, my partner says it came from an Earth Day event I went to back in the early 80’s. And then finally, we’re a for-profit company that has obligations to bank loans etc.
So we had all the 3 elements in place, but we’d kept them as separate entities. When Sam came to us, and he presented us with this concept of a sustainable business model, I then spent a year reading up, and I went to hear great speakers like Amory Lovins, Paul Hawkins, Ray Anderson etc. And that’s now what drives me. It’s not so much that we’re in the t-shirt business, but that I want to show people that sustainability is the business model for the future. As a society, we already understand the financial bottom line. But there are two other things we have lost track of, but which are starting to come back around. Firstly, how we treat our employees, and not just our employees, but our customers, our suppliers, and anyone else that we have a relationship with. We have an obligation to treat them fairly. And it’s the same thing for the environment. We are having a tremendous negative impact on the environment, so how do we turn that around?
So it’s evolved from elements that have always been there – Tom started the business over thirty years ago. Every time we make a decision in our business now, whether it’s making a purchase, or taking on a new employee, we now have to answer questions as to what impact that decision will have. It’s a continual evolution, but it has really helped us understand our business better.
TH: The REHANCE® printing process is one of your unique selling points, both in terms of environmental performance, and product quality. Can you tell us a little bit about what it involves?
The best way to start, is by looking at how most t-shirts are made. The fabric is first dyed, then the T-shirts are cut and sewn, and then they come back and are usually printed using an ink called plastisol. Plastisol is normally made out of PVC – polyvinyl chloride. PVC is very hazardous to the environment, both in terms of manufacture and disposal. So when we came to look at a more sustainable business model, we really had to address that plastisol part, and there really wasn’t an alternative out there. Not only did we want to come up with a process that is more environmentally sound, but we wanted to produce a better final product, and we wanted a competitive edge in getting our product to the market place faster.
The way REHANCE works is we have stock undyed organic t-shirts. And then we put it through the REHANCE process. REHANCE was developed using the green chemistry model, and our friend Sam Moore which says we are not going to produce anything on the front end, that we have to worry about on the back end. It’s a water-based technology. We print the shirt while it’s white, and then we garment dye the whole shirt. So with REHANCE the print is in the fabric, rather than on the fabric. Then we garment dye the shirts, and we use a low-impact bi-functional reactive dye - it has no heavy metals, no formaldehyde etc. With REHANCE, the dye is repelled in the areas where the print is. It essentially keeps the dye from getting into the shirt. So the print is in the fabric, it won’t crack, it won’t flake and it has breathability. Plus, with garment dying, we’ve totally eliminated shrinkage. So, ultimately, the customer gets a much higher quality product, with a much lower environmental impact.
Also, in the old days, the customers would send their shirts in. Originally they were made in the US, but increasingly they were coming from, Mexico, Central America and now Asia. We had no control over how it was made. Now we’re involved all the way back to the organic yarn purchase. I know where that yarn is coming from. We work with two mills – American Apparel in LA, and Moretex, in Windell, North Carolina. They purchase the organic cotton yarn, which lately has been coming from Turkey, but we’re trying to get it back to the States. So we know everything that has been done to that yarn.
TH: Aside from the specific benefits of REHANCE, what other environmental projects and initiatives have you established at TS Designs?
EH: We have a number of initiatives. We’ve started asking questions about where our energy comes from, where our materials come from etc. The first thing we did, about three years ago, was we put in a 3kw tracking solar array. I’ll never forget talking to our accountant about this. Back then, we were on the verge of going bankrupt. We had no money. And we were having our monthly meeting, and telling our accountant that it would cost us something like $30,000 to install this. So when we were looking at that cost, and the cost per kilowatt hour for electricity from Duke Energy, my accountant just said that there was no way in hell we could justify that. But we told him, that if we were going to participate in this market, then we were going to have to walk the talk.
Apart from putting in the solar array, we’ve been constantly looking for ways to reduce our consumption. We’ve got automatic set-back thermostats. We’ve been in our building 16 or 17 years, and it’s a 20,000 square foot building. It was fairly typical for that age building. It had a 20ft high ceiling, and they put all the lights up there in the ceiling. It’s just not a particularly efficient way of doing lighting. So what we’ve done is we’ve dropped the lighting down to create task-specific lighting, and we have less lighting in areas like warehouse space. We knocked out about 25% of the fixtures right off the bat. We’ve been trying to use the most efficient lighting possible, including a couple of LED fixtures that we’re playing with. We are also a member of NC Green Power, which means we give a certain amount per month to our utility to fund renewables, and we’re involved with groups like Terrapass who offset all of our business travel.
Then we’ve set up a small biodiesel co-operative onsite that produces between 100 and 300 gallons a week. I got into biodiesel about 4 years ago. I knew that the car I drive, and the miles I traveled, were going to have the biggest impact of almost anything I do. I bought the first FuelMeister, which is a 45 gallon biodiesel reactor, and after a few months my wife realized that we didn’t have to go to the gas station anymore. So I got a 2000 VW Golf TDI, and she got an older model Mercedes, and I had a couple of friends who bought Jettas, so it just evolved into this co-op. Then we set up this compost heating system for our co-op. So we have a giant compost pile, and inside that pile is a 250 gallon oil tank full of water. The great thing about compost is that it doesn’t matter what kind of weather you have, it’s always about 160 – 170 degrees. So we take the water from that tank, feed it into the waste vegetable oil to wash excess water out of that, and to heat the oil up for the reactor. We also pull air off of that process to heat the co-op space. The great thing about all this is we get the woodchips for free, we get the leaves for free, and then glycerin, which is one of the main bi-products of biodiesel, also gets fed into the compost pile.
TH: TS Designs is very proud about the fact that it is an American company, producing American made goods. In fact, you’ve gone as far as to say that products that could be made here, but are not, are inherently unsustainable. Where does this leave fair trade, or trade in general, as a potential development tool?
EH: It’s interesting, and I don’t know the answer for sure. We are of the opinion that if you go outside your market to create a product that could be produced within your market, then it’s not sustainable. We’ll make organic shirts in China when we sell shirts in China. But on the same token, I understand what fair trade can do for Third World countries. I gave a presentation at a big apparel show recently, and many companies were getting into sustainable fibers, but they were getting their products made in India, China, Mexico or wherever, and then shipping them back to the States. Now I can see the benefits of giving people jobs, supporting sustainable farming etc, but you have to weigh that up against the climate change impacts of transporting these products. I had just bought a pair of jeans that are made in Tennessee, from conventional fibers, and I was asking the question at this show: which is more sustainable, these American-made, conventional cotton jeans, or a pair of organic jeans produced in China? Now I don’t know the answer for sure, but I always advocate local if you can get it. There are enough commodities that you pretty much have to buy globally. In North Carolina alone, we lost hundreds of thousands of jobs as a result of the North American Free Trade Agreement. I just don’t want to be one of these companies trying to sell someone a pair of organically grown jeans made in China, when they used to have a job right here making jeans.
TH: You go to great lengths to identify your ‘allies’ in sustainable business. How important is it to you to be part of a community of like-minded organizations, and can business really change the world?
EH: There is no question that business can change the world. And by participating in a community of businesses that are trying to do that, we can help each other to do the best we can. We regularly discuss the issues we’re facing, and we help each other understand our markets. Much of our business comes through referrals from partners, like Piedmont Biofuels for example, or Larry’s Beans, and we also refer people back to them. It’s basic networking, but it’s hugely powerful. And then, of course, it’s also just a relief to be among like-minded people. It can be tough to talk about sustainability, or a triple-bottom-line business model with a conventional business person. They are just so focused on return on investment that they can’t see the bigger picture. But when we are working within these networks, we are mixing with people who are reading from the same sheet of music.
And with the particular threat of climate change, it is great to be among businesses that recognize it, and are doing something about it. At TS Designs we are now looking at how to make our own business completely carbon neutral, from the materials that come in to the products that come out, from our employees commutes, to our own energy usage. We are looking at partnering up with a whole array of offset providers, using different offset techniques, so we can support as broad array of carbon reduction technologies as possible. With awareness of climate change at an all time high, it just makes good business sense to show that you know about this issue, and that you are acting on your knowledge. Businesses like ours, and those of our allies, used to be marginalized, but increasingly, we are proving to be in the lead in terms of addressing the most important issues of our time.
TH: How do we raise the bar so that every business, even those that are not motivated by environmental and social issues, address sustainability?
EH: Ultimately, it’s about educating the consumer, and turning them from consumer, to citizen. We vote with our dollars so we have a responsibility how we spend those dollars in determining the community we want. If we can raise awareness of the problems, get consumers to ask questions, offer solutions and to demand answers, then businesses will be forced to respond. So the power does not really lie with legislation, or with business, it’s the consumer who will decide what kind of business model will thrive in the future.