Right now in the chemical industry, it’s innovate or die. Innovation in sustainability is one way big companies can help the environment. These days, people are driven by consumerism which results in more resources being used. Companies need to provide a solution where less is used and innovation plays a key factor there. Whether it’s innovation in technology or in marketing, the chemical industry needs to have that goal. Join Victoria Meyer as she talks about sustainability innovation to the CEO of P2 Science, Inc., Neil Burns, the CEO of VOID Technologies, James Gibson, and the Chief Sustainability Officer at Epsilyte, Jon Timbers. Learn what each of their businesses does, from making green cosmetics to plastic reduction. Discover how they leverage technology to help innovate the industry. Find out how they are contributing to a more sustainable and greener environment today.
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Neil Burns, James Gibson, And Jon Timbers On Creating A Greener Planet With Sustainable Innovation
We are featuring a topic and a panel on green and sustainable innovation. I have Neil Burns, CEO of P2 Science, James Gibson, who is CEO of VOID Technologies, and Jon Timbers, who is Chief Sustainability Officer at Epsilyte. We’re structuring this as a dialogue and a panel discussion. I’m going to ask each of our guests to provide a quick overview of your company. John, I’m going to start with you.
Epsilyte is the second-largest producer of VPS in North America. We’ve grown quickly through acquisitions in 2021. We have three manufacturing locations and about 300 employees. We’ve had the vision of building the company from the beginning around sustainability beliefs. It’s been a fun venture.
You provide a bit of the old school in a lot of ways because your company’s products, EPS, have been around for a very long time. Neil, how about you? Can you give us a quick overview of your company?
P2 Science is a green chemistry company. We’re selling ingredients to the cosmetics and the flavor and fragrance industry. We’re a fairly new company. We got spun out of Yale University several years ago. The two cofounders of the company are Professor Paul Anastas, who’s quite well known in the field of Green Chemistry, and one of his students, Patrick Foley. We’re a little bit smaller than the previous company. We’ve got 25 employees, one manufacturing location, one R&D and headquarters location. Both of those are in Connecticut.
This is not a typical spot for chemicals, but I think that creates some unique value as well.
There are a few of us there, but not many.
James, how about you?
VOID is a material science company. We’re based in Neenah, Wisconsin, in the US, where we have our polymer labs, the facility, and compound manufacturing. We have a technology that was spun out of Kimberly-Clark. It’s a plastic reduction technology. It comes in an additive form. What it enables us to do is create nano and micro-scale voids or cavities, or air pockets. However, you want to think about it in plastics to create lighter, stronger, and more sustainable products. We’re very focused at the moment on polyethylene films and packaging, consumer-based packaging, agricultural, industrial, those sorts of applications.The best way to extract value from technology is to manufacture and market it yourself. Click To Tweet
I’m going to ask you guys this. What’s the significance of sustainability to you and your business? James, maybe let’s start with you since it seems you are founded on a principle of sustainability.
That’s right at the heart of our business. There are two parts to your question. What does it mean to me, I suppose? How do we approach it from our business? From my perspective, especially in Western societies, we’re driven by consumerism at the moment. Fast fashion is the ability to order products almost instantly and have them delivered to us. I feel that this is meaning we’re using more and more resources, and we have to start thinking about ways of using less.
That’s the most impactful sustainability strategy that you can have. The challenge with that is it’s very difficult to change behaviors. It takes a long time and is a big challenge. I think what you can do while people’s behaviors start to adapt is you can start to look at innovation and technologies that make materials and products work harder. They become more sustainable and use less materials, which drives towards greater sustainability. From VOID’s perspective, our mission is to accelerate the transition to more sustainable plastics that are integral to our business. We do this by developing less plastic products that are easier to recycle. That’s how we’re approaching it.
I suppose that was Kimberly-Clark’s mission when it was looking into identifying technologies since obviously they’re a big user of plastic films and other plastics.
I think that was a big part of how the invention came about. Kimberly-Clark is a company that thinks a lot about sustainability. They were trying to find ways to use these products, but with much less plastic.
How about for you, Neil, you and P2 Science?
We offer two things to our customers. One of them is sustainability. The other is performance. We lead with performance. For the folks we’re talking to, it’s mainly consumer products companies, folks like Unilever, P&G, and Henkel at the top end down to literally two garage formulators. Coming to the market with sustainability and green products is good. They want to hear about them, no doubt about it.
If we can bring that along with superior performance, that’s great. Without sounding flip, we want to be great to be able to differentiate ourselves because there’s a lot of activity around green and sustainable ingredients. Many of these consumer products companies have set fairly ambitious goals for the near term. 2030 is not that far off. Unilever, P&G, and L’Oreal have committed to reducing greenhouse gasses by 2030 by 50%, 40%, and 50%, respectively. That’s a big deal.
As a result of that self-imposed goal, which they’ve imposed on themselves fairly publicly, there’s a lot of activity looking for sustainable solutions. That goes all the way from basic ingredients to packaging, the processes and logistics, and all that stuff. We’re right in that mix, but we definitely want to be able to bring performance as well. Both of those things were at the beginning of the company while we focused on brand new chemistry.
In most cases, brand new process technology to make that chemistry. With the benefits of sustainability and this new chemistry, we saw the build-in right at the very beginning superior performance, depending on the application. It could be things like skin moisturization, transepidermal water loss, or the haircare applications, things like anti-frizz, heat protection, and all this stuff. This is all very much part of the package that we bring to the market. It’s those two. In many cases, as I said, we’ll lead with performance and enable people to dig into the sustainability and the metrics we have for our ingredients.
Consumers expect performance, and companies expect performance first. Sustainability, while it may be supercritical to a consumer, if a product doesn’t perform, they don’t want it. They don’t want the most green and sustainable product if it doesn’t deliver the performance and value they’re expecting.
The segment that we’re in, Victoria, I think you probably know it as well. The wrap on green and sustainable products has been, “Yeah, but you have to sacrifice performance, cost, or both.” That has been the reputation that’s been acquired. To avoid having to dance around that, as I say, we lead with performance. There are all the things that these ingredients do. Here are the performance metrics. Try them for yourselves and, by the way, naturally derived below carbon footprint, etc.
How about you and Epsilyte, Jon?
We use the word identity a lot when we think about sustainability. We formed our company in late 2020 and went through this process of what our goals are, what our mission is, and what’s our value. For us having sustainability at the center is defining a non-traditional stakeholder in that process. Traditionally, companies would say, “Our customers are an important stakeholder. Maybe our employees are an important stakeholder.”
We’ve tried to step back and say, “The whole world is a stakeholder for Epsilyte. Who are we in the world? Where do we fit in the world? What are our values and our beliefs?” That’s been what sustainability means at Epsilyte. That’s been very interesting. It’s taken us down the path of not thinking about making more sustainable products, but we believe energy conservation is critical to a carbon-neutral future.
We make products that go into the installation. That’s one of the cores of our beliefs, but it’s also led us into other areas of sustainability, like community involvement, diversity, and inclusion. We put in our application to become a signatory to the UN Global Compact. It opened us up. As we say, “It’s not about our products, but it’s who are we as a company? Where do we fit in the world? What purpose do we serve in the world?”Sustainability needs to be that mixture of both innovation and marketing. Click To Tweet
A lot of individuals, and maybe from a chemical industry perspective, the customers and the customers are looking at those seventeen UN sustainable development goals as they define sustainability more broadly. Often, we keep it within a smaller box and think about it from an environmental perspective. Obviously, there are things about helping people’s communities, reducing poverty, and other things that go into that broader bucket of sustainability.
As we went down the ten beliefs of the UN Global Compact, it says, “This is something we should become a signatory to as a company.” For us, it was like, “This is who we are. This represents our values. We’re in on that.” It was pretty easy.
Let’s talk a little bit about innovation because I think innovation plays a big role in where the chemical industry and where the world is going to become more sustainable to meet some of these ambitious targets about greenhouse gas reductions, etc. What role does innovation play in your company? Neil, why don’t we start with you?
It’s a central role. There’s no doubt about it. It’s funny. I was putting together a presentation for a fairly major customer, and one of our guys said, “We should mention some of the patent numbers we have around the things we’re talking about in this presentation, the product, process, what have you.” It ended up being festooned with numbers. It looked a little ridiculous. I took some of those out. The point being is we do invent a lot of stuff and patent it all. The company having been spun out of Yale University, out of the Center For Green Chemistry and Green Engineering by a professor and a PhD student, one would expect innovation to be fairly central.
That hasn’t changed from day one. We started the company in late 2011. We had one patent application working its way through the system at that time. We’ve been filing and innovating ever since. In fact, 2021 was our most prolific year for patent filings, and the pace doesn’t seem to be slowing. That’s great. I guess it’s part of the value it adds. Part of what we bring to the market is we’ve got new stuff. It’s new materials, processes, and approaches. The reason we’re doubling down on innovation, I’ll throw out another stat. I think I said we got 25 employees and 12 of them, almost half, are in R&D.
That ratio probably won’t change. I think it’s going to continue to be half even as we continue to scale up manufacturing and add people in the manufacturing area. We’re going to be adding people in R&D as well. That’s still super important for us. The base of the inventorship is spreading as well. In the beginning, the company was two people. It was Patrick, my partner, who is the inventor and still the most prolific inventor of P2, and myself.
We’ve broadened the base of leading vendors. As other folks have joined the technical function here, they have started to take the initiative and lead inventions that are patented. It’s what we are known for. We are also very conscientious that whatever technology we’re developing or inventing, the default is to make and manufacture ourselves. It’s not a licensing business model, although we have ended up licensing one piece of technology. Our idea is to take it all to market ourselves. We believe that’s the best way to add value and extract value from technology.
You started with an external innovation that you brought in to form the company. The majority of it’s been internal innovation. James, how does that play out for VOID? VOID similarly started as a spinoff based on some novel technology.
Technology and R&D are right at the core. We brought around 35 patent families and around 360 individual territory patents, so we’ve got a large patent state. When I think about innovation, I looked at your question before, and I thought the first thing is around the team. Everyone in our business, about twenty of us now, will have a real burning desire to create positive change in the world where they think they’re making a real difference. They all seem very passionate about sustainability. It’s integral to who we are. For us, that means developing plastics that use less material and are easier to recycle.
Number one, we’ve got a team with a real hunger for innovation. The second thing is you have to create a culture where innovation can thrive. Within a business, you need an environment where people have the ability to be brave, explore new ideas and fail as well without horrific repercussions. If you get the right people in your business and create the right environment and culture, innovation will naturally thrive. That’s how we’ve approached innovation within our business. It’s been successful.
Especially as a relatively new company, it’s easier to embed that in the DNA upfront versus in companies that have existed for a long time.
I think that’s true because it’s difficult to change behaviors and cultures. Even for VOID, we’ve had to evolve over time. In the very early days, we were more willing to try lots of things in a bit to find out where our sweet spot was, let’s say. Now we are starting to come much more disciplined in our approach. That doesn’t mean that we’re preventing people from sharing new ideas and trying things, but as you start to get your product much closer to market, you start to come very focused on executing effectively against clear technology plans.
It doesn’t mean that you can’t still approach those challenges with innovation in mind or creativity in solving challenges in a new way. I often think of a startup, it gives you a bit of permission to challenge the industry and how they’ve done things in the past. You have to be respectful and look at the wisdom that’s come before, but with fresh eyes, you may sometimes spot new ways of doing things. I think that gives you a real opportunity to be disruptive.
Jon, how does that fit you? I think of Epsilyte and your products. EPS is a pretty old-school product. It’s been around for a very long time. Epsilyte is taking a different approach or maybe a broader approach to it. Is that true?
I would align a lot with what James was saying about innovation. I will give a plug for a book called Presence. I don’t know the author, but the picture on the front is like a drop of water. It talks about creating a culture for innovation. The most important thing within an innovation organization is to create a culture where people can talk. This ties back to sustainability. If you think about diversity and inclusion, often we think about diversity and inclusion as hiring people from other backgrounds. Maybe that’s the diversity.
The inclusion part comes when you include those people of different backgrounds. You create a safe space for people to talk, innovate, and throw out crazy ideas. I think that one of the most important things for innovation is to create a culture where people feel completely comfortable adding to the meeting, throwing their ideas out and giving different ideas. You don’t make them feel other for saying, “That’s something that we don’t talk about here.”In the chemical industry, time and scale are challenges that take time. Click To Tweet
You include people and let them talk. Creating that culture for innovation is important. I could see what James was saying. The other thing I would say about innovation at Epsilyte, which also ties to sustainability, is I often think about sustainability and maybe, particularly for those of us that are on the more mature side of the commodities business. There’s a temptation for sustainability to be a marketing program. People don’t understand how sustainable our products are. Let me do a marketing program to explain that to them.
I think sustainability needs to be that mixture of both innovation and marketing. You got to come up with new and different ways of doing things and explain that to your stakeholders. This isn’t a mathematical exercise, but let’s keep our sustainability about 80% innovation and 20% marketing. Let’s focus on finding new ways of doing things.
When we figure it out, we do that to communicate and market that to our customers and our stakeholders. There’s always a risk. I see a lot of sustainability people going down that path of heavy on the marketing, light on the innovation. Where we try to sit is heavy on the innovation and light on the marketing in our sustainability efforts.
You touched on the fact, and I guess I’ve touched on it. All three of your companies are bringing in new and novel approaches to chemicals and chemistry and applications that they’ve been around for a long time, surfactants, plastics, EPS, or other things. What challenges have you faced in your new technology development as you approach this? I think maybe in both the development and the acceptance of these new products that you’re bringing to market. James, you look like you’re ready to answer.
I think you’ve covered it off. The plastics and packaging sector is a mature industry. It’s been around for a long time. You’ll know yourself, Victoria. I think with that comes quite a big degree, in my opinion, of a conservative approach. People want to stick with what’s already working in their minds. What this means is innovation cycles are typically, in my opinion, slow. New developments are often incremental as opposed to big leaps.
It means things can move quite slowly. The other challenge that we find from our perspective is you often need to prove your technology out at scale. What you can do in the lab or on a pilot scale is great, but until you can prove it out at a large commercial scale and commercial throughputs, you haven’t de-risked your technology enough, and gaining regular access to those commercial-scale assets can be challenging.
It can take time to get access to those things. One of the things that we’ve started doing is the first step is we put a lot of that capability in-house. We set up our extrusion labs and testing capabilities, all in-house. We can accelerate a pilot scale now, bigger than a lab, our own developments, and our customer developments. What we’ve seen is that it’s been a real accelerator for both our own R&D but also our customers’ projects as well. It’s not only an R&D asset but also a business development asset for moving our projects along.
Neil, I know you’ve been in the surfactant industry for the majority of your career. You’ve seen multiple facets. How does this play out for P2 Science?
Honestly, my answer could map directly to James’. It’s a challenge. Scale is a challenge, and the timing of the scale is exactly the same experience. That’s life in the chemical industry. Chemicals take time. Uses of chemicals are conservative, and so the change takes time, all those things. I’m not going to repeat James’ answer. I wish I’d said it myself, but what he said is all true. These are the things that we’ve wrestled with as well. I think there came a point to address the scale question, where we said, “We’re going to have to build a plant, regardless. Let’s build a plant.”
We’ve tried messing around with contract manufacturers. We’ve tried gradual piloting and so forth. At the end of the day, nothing speaks louder than having people come around and look, “Here’s our plant. There’s the steel in the ground.” We are operating at a certain scale and have that credibility. We’re in it for the long haul. One thing that did help us was in February of 2017, we raised equity, and at that round, we brought in VASF as an investor.
Having this big chemical company as an investor visibly says to the rest of the market, “They’re backed by an investor who gets chemicals.” That’s pretty clear. That spoke volumes much more than the money they put into the company. It made a statement to our customers that we were associated with people that were like-minded to them and us. That was a big deal.
It’s one of the things that I’ve been talking to people about. That’s come up in conversations as it relates to sustainability in green is this aspect of collaboration. As an industry, we have to collaborate to have solutions and standards, but it also sounds like the whole collaboration with value chain partners. Somebody that’s willing to commit, collaborate and invest in your case to help move the needle and bring forward these new technologies. Do you see that as being critical?
It’s helpful to be able to leverage other folks’ strengths. As I said, having VSF was great. We brought in a little later on after that, Chanel as an investor. That spoke volumes to the end of the supply chain to our customers’ companies. The collaboration there has been excellent. The other one I would highlight because it’s in the public domain is our collaboration with ADM, Archer-Daniels-Midland, which is obviously a huge part of the supply chain of vegetable feedstocks.
Having a pretty visible and far-reaching collaboration with them has been helpful to us. It signals to the market the seriousness with which we’re approaching what we do. These types of collaborations have been great and customer collaboration getting with customers early and working cooperatively to develop products is obviously valuable. We do a lot of that.
How about for Epsilyte, Jon?
Collaboration in sustainability is an interesting one to me. As you’re asking that question, I could think of three completely different ways that it’s manifested for me in working in sustainability in the chemical industry. One is what I call the Walmart method of achieving your goals. You set a goal and tell your supplier, “You gotta hit this goal.” If you’re in the chemical industry, you’re upstream.In the chemical industry, every material and decision you make in life has carbon and environmental impact. Click To Tweet
Let’s say hypothetically, Walmart sets a goal and tells their brand owners, “You’ve got to help me meet this goal.” The brand owners turn around and tell their packaging converters, “We’ve got to meet this goal.” The packaging converters tell the resin supplier, “We’ve got to meet this goal.” That’s sometimes interesting. As a plastics manufacturer, you don’t have anyone to turn around and tell, “Help me meet this goal.”
You’re at the union of the chain. I think that’s one way that collaboration can manifest itself in sustainability in the chemical industry if you’re the low man on the totem pole, as far as your distance from the consumer. You’re sometimes struggling. You don’t know how to help Walmart meet the goal that they set. The other way, I worked on a recycling technology. We had a limited volume. We had this great technology and had a limited volume.
We go to customers and say, “We’ve got this great new product, but we got a limited volume.” It was Goldilocks’ problem of finding a customer that could collaborate with you at the volume you needed when you had a limited volume. The third way I’ve experienced it here with Epsilyte is we’ve got a technology to convert all our materials to biodegradable. We want to convert it all. It’s the opposite of having a volume limit. We’d like to convert everybody. That’s also a challenge as well.
You start finding out that you got customers using the material for all these different applications, markets, medical, and FDA. You say, “I’ve got this new invention. I’m going to supply everybody with the new resin.” You start getting a lot of customers to say, “I’ve got a process. I’ve got a contract. I’ve got a customer that I’ve got this commitment to.” In the chemical industry, I think we sit in this unique space for collaborating. Either if it’s a circular collaboration or an upstream pushing down or downstream pushing up. There are different dynamics of how that collaboration comes together.
Timing is a big part of it. I’ve heard this a lot. There are some aspects of it, “Hurry up and wait.” It’s like, “We want this biodegradable cup for fast food packaging or whatever.” We want it there, but we’re not necessarily ready to buy the materials or the technology. Our timeline is different. We’re not seeing the same consumer demand, etc. It’s a complex timing issue to support the development cycles at the right time and be ready at the right time with the right capacities for when somebody is ready to say go.
I’ve had that experience as well. We went all-in on a biodegradable technology partially because our view is the recycling system for plastics is a long way from being very good. I hate to say that. There are a lot of people working on it doing a lot of good work. It’s decades away. We’re recycling about 10% of all plastics in the US. We sat down and said, “What are we going to do?” We said, “We’re going to go all-in on the biodegradable technology.”
We go to a customer and say, “Big brand owner, we got this way. You can ship your perishable food to your customers in a biodegradable cooler.” They said, “We’re more focused on recycling.” It’s not that recycling is bad. Our view is probably decades away versus the customer’s view of “That’s what we want to focus on now.” Sometimes you come across another customer who is right in the same space where you’re at now.
I’m going to jump that into one of my questions around this whole end-of-life management. I think one of the challenges is the durable or the physical materials that are easier to see, plastics, EPS, etc. Neil, I think with the molecules and the products you’re going into, we see this a little less, but this end-of-life management, the life cycle management as it relates to sustainability.
There’s a lot of consumer pushback. The limelight has been shining on sustainability because consumers and individuals are recognizing some of the challenges of having products in the environment. Do they biodegrade? Do they not biodegrade, etc.? As you think about products, how are you guys approaching this whole life cycle and end-of-life management? How do your technologies fit into that? James, do you want to jump in?
We think of this from two perspectives. First, it’s important that every material and almost every decision you make, almost in life, has a carbon and an environmental impact. We have to be thoughtful when we start. What material am I going to use for a specific application? Is this the most appropriate material with the lowest environmental footprint? There’s a lot of talk about transitioning away from plastics to alternative materials, but what’s important is people need to stop and pause for a moment and say, “What’s the environmental cost of that material before I even start?”
Once you’ve determined what you think is the best material for the job and a lot of applications, plastic is the best material because it has an incredibly low carbon footprint. You have to think about the end of life. You have to think about: how will this material be recycled and collected? What will happen post that process? Where we’re very focused is in polyethylene films. The industry is shifting from what was a few years ago, even further back, to very complex multi-material structures.
You might have a polyethylene laminated to polypropylene or polyester. Those materials are very difficult or can’t be recycled. It can be incinerated, which isn’t necessarily ideal. They’re very difficult to recycle. The industry has now shifted to all polyethylene structures. Our technology fits well with laminates or polyethylene or all polyethylene products. That’s where the larger side of the recycling supply chain exists.
From our perspective, we fit very well into that. There is a lot of talk about biomaterials. They have their place in the world, but I think people need first to be mindful of what is the feedstock source. If we’re using large amounts of agricultural land to produce these bio-based materials, what is the consequence of food poverty, for example? Where is this land being used to grow these materials?
The second thing is going on to what I was saying earlier about the environmental carbon footprint of these materials. It’s often much higher than maybe an alternative material that you can select the final thing with the bio-based materials, which I’m not against at all. I think they absolutely have that place, but at the moment, there aren’t necessarily many recycling streams for them. A lot of them head off to the landfill.
While they say they’re biodegradable, the truth is they typically need to be degraded under industrial compost conditions. Unless they are collected in a formal recycling stream, their proper purpose in life of being biodegradable isn’t realized. That’s not to say they’re bad. We need to be thoughtful about the materials we select and how they’re treated at their end of life.
Neil, how does this life cycle management fit into your business, the products, the chemicals, and the technologies you are developing?Plastic is the best material because of its incredibly low carbon footprint. Click To Tweet
It’s a part of the picture. From a consumer point of view, I’ll first say that it’s not directly related to P2, but it used to amaze me how the simple act of getting a cup of coffee every morning could generate such incredible amounts of waste. After a year of buying coffee at Starbucks or Dunkin Donuts, you accumulate enough waste for a modest-size landfill. With the cup, the lid, the steerer, the little thing that the milk comes in, and the packets of used sugar, which I don’t because sugar is bad, but people do. There are a lot of ways. I’d get that little message in there.
As the consumer, it’s incredible when you think about it. From P2’s point of view, the first thing after a performance that we always measure for our products is biodegradability. It tends to be the first sustainability-related question we get from users: we check the biodegradability. What is it? This is the realm now. We test that across the board and keep a close eye on that.
With respect to our cosmetics business, we’ve received a pretty significant short-term boost because of an end-of-life biodegradability issue. That relates to silicones, which are widely used in haircare and skincare and have come under a lot of scrutinies with respect to their biodegradability because of their persistence in the environment.
In fact, certain types of cyclic silicones have been severely restricted, resulting in an essential curtail on the views in the EU and that focused alight on the part of our business and has been a great boost for our businesses as people look for silicone alternatives. At the root of that is the biodegradability question. Compared to the guys in polymers, the end-of-life question is not as big a deal for us, but it tends to be one of the first environmental things that we have to look at, definitely the biodegradability data.
The products in the markets you’re selling into potentially get into the waterways. Certainly, when you’re thinking about things going into personal care, they’re touching people’s skin. There’s a lot of importance. It’s important to have those issues understood.
For my coffee, I use this every day. It’s a little brown on the inside, but it’s supposed to wash up properly, and it’s great. It last forever.
I will jump in on that coffee topic. A number of years ago, I had read that if you went and got a cup of Starbucks, let’s use them every day. You were contributing one and a half pounds of waste to a landfill each week if you were going Monday through Friday. I didn’t believe it. I did the math. I took home a cup, and I weighed it and was like, “Holy crap, you do.” I would bring my mug to Starbucks. I take my mug to my own coffee machine and don’t have that same issue, but it’s interesting. I don’t think people realize it.
You have to be mindful. We had an officer at work who decided to ban all plastics. Everybody was given a metal cup similar to yours. The problem was, within about four weeks, I think the majority of people lost their metal cups. People cram around for metal cups, and someone does the math. You needed to use two and a half thousand plastic cups to make up for the environmental impact of having a metal one. It’s great if you can hold, and the better thing is to reuse as much as possible, but it has to be done in a way where people can retain their item and regularly use it. Otherwise, it starts to become unmeaningful, and the consequence is bad for the environment.
It’s like the straws. Everybody was getting reusable straws for a while. We’ve had plenty in our house, and they get pretty gross and disgusting. Skip a straw, do something different, but expect people to carry around their own straws and keep them clean, maybe not.
I think when it comes to the end of life, the most important thing we can do is give the consumer options. Sometimes I get frustrated when I see these debates within the sustainability circles about whether this is better or better? I come down on the same way when it comes to energy production as well. We need options or diversity in that space. We need to have reuse and recycling options. We need to have composting and biodegradability options.
For different materials, probably the best solution is different. It might be the best solution for paper to the recycling system works pretty well for paper. Recycling works. That system’s pretty well established. It’s easy to make paper products that are recycled. EPS, for example, in our space, it’s 98% air. The whole system for recycling that’s set up for recycling paper doesn’t work that well for EPS. If it’s 98% air, does it make sense to drive trucks around and collect it, bring it back, densify it, and reuse it? If it was 98% air, does it make sense to put an additive in there and have it anaerobically biodegrade in a landfill?
Maybe that makes more sense in some applications. There are applications where it makes sense to replace plastic. I like to be careful. We’d like the plastics industry to say, “All plastics got the lowest environmental footprint and everything,” but maybe there are. I can’t think of any obvious ones off the top of my head. I can think of one if a customer was making a water heater. There was a packaging system for a water heater. It was originally all EPS protective packaging around this water heater.
They went through the science. They wanted to have the most sustainable packaging solution and came up with, “It makes more sense for fiber on the top where it’s not load-bearing.” It worked out well. It was more recyclable, and at the bottom, we need the load-bearing and something that can get wet. Fiber won’t work on the bottom.
They came up with a hybrid solution, but I thought that customer was a great example where they didn’t say, “We don’t want plastic. We’re going to all fiber.” They did the science, and it turned out the top half went to fiber, and the bottom half of packaging that made the most sense was EPS. That’s the type of thing we need to be doing when we look at the end-of-life options.
Banning a product can have negative effects. You have to choose the right product for the right application and recognize that plastic has great use in many applications, EPS, other products, and surfactants, but it’s picking the right product for the right circumstance. Here’s a question that somebody has submitted. Sustainability can be overwhelming because it can encompass so much. What do you advise companies trying to be more sustainable and don’t even know where to start? Where do you start on the sustainability journey?
I think that is a great question because I’ve struggled with that myself. I have a little bit of advice to offer on that. It’s a little bit cliché. I hate to pull answers off the shelf but doing your materiality exercise is an important first step. If you’re going to go through a certification process or a formal sustainability program like GRI or SASB or something like that, it often starts with that materiality exercise of what is important to my company?When it comes to the end of life sustainability, the most important thing you can do is give the consumer options. Click To Tweet
If you’re in the chemical space, you probably come up with a different answer to what’s important than if you’re in the finance or retail sectors. That’s important. Those of us in the chemical space probably should be working on different things in sustainability than people in the banking sector, for example. Your question is right. There are so many things. Should I be focusing on diversity and inclusion or end of life or product design?
There are a lot of things, but go through that materiality exercise for your company and figure out which ones are the most important for your company. If you’re in the chemical space, you come down to safety emissions and product design maybe are more important areas to focus on. For example, maybe human capital, because a lot of our facilities are automated. We have a low number of employees per dollar of revenue, typically in the chemical industry.
Maybe human capital isn’t as important. We don’t have products that require a lot of labor and hands-on production, for example, but maybe if you’re Nike, human capital is the most important thing to be working on in your sustainability space. I think that materiality exercise is the way to get to that. I put a plug-in. SASB has some pre-populated materiality exercises on its website.
James or Neil, is there anything you would add to that?
No, I think Jon gave a pretty full answer. There’s not much more I’d add.
One thing I like to do when I arrive at the lab, especially, I’m picking on the lab guys, is look in the wastepaper bins and look around the flaws. There always seems to be so much stuff in there. Packaging around lab supplies and equipment, I’m thinking, “We’re supposed to be a green chemistry company. Come on.”
The waste, for a few weeks after that, disappears. They’re hiding it around the back in plastic bags, but nonetheless, it gets us to think about simple and common-sense stuff. Anyone can do that. You don’t need any particular expertise. You need a bit of a thrifty mind to look at things like that as a first step for anybody at all, anyone in the workforce.
I think the other piece that I tie back to when we think about chemical companies and the chemical industry is inherent, and our process designs are designed to be sustainable in many ways. There’s a lot of reuse and recirculation. There’s an efficiency built into chemical processes and chemical manufacturing to basically one it’s economical. Nobody wants to have waste streams of great products exiting their plant, whether it’s through flares or emissions, etc. It’s the whole environmentally sound piece.Polystyrene and styrene are the most misunderstood molecules on the market. Click To Tweet
There’s that whole level of clarity in mindfulness that goes into the design. That’s a piece that certainly, when chemical companies are starting, it’s also looking at what’s already inherently there from your sustainability and your environmental profile. Go from there, look at the materiality beyond that.
I still have several questions, so they may have to be follow-up questions. Back on this whole topic of innovation and collaborations, it seems to Neil and me that I’m going to target you with this one. When I look at what’s going on certainly in green surfactants and bio-based products, there seems to be that the innovation is coming from smaller independent companies. The larger chemical companies are partnering, whether through distribution agreements or a manufacturing investment. Do you see the same thing? What do you think is driving that?
Yeah, I definitely see the same thing. There’s been a whole flurry of those with the Locus Performance Ingredients aligning with Dow is their channel to market with Holly Firm partnering with Sasol, where Sasol is essentially buying the bulk of the output of their first plant. I think Pilot Chemical, my alma mater, partnered with Integrity Ingredients.
It’s similar channel the market arrangement. It’s quite marked in the past. I think it’s the classic story of this small agile technology-based startup innovating something that is truly valuable. They lack scale, and perhaps its scale or market reach. They lack something that the larger company has developed over the past many decades.
Dow and Sasol and Pilots are over 60 years old now. All those three companies have spent multiple decades honing their channels to market and establishing customer relationships and so forth, logistics and all that customer service and all that stuff that does take a while to build up, not just money, but time again.
Combining that with the innovative nature of what guys like Holly Firm are doing makes sense. It makes sense on paper. I’m rooting for those guys. I hope it makes sense in practice because the combination there is great. There’s a factor here that the larger company, like a Dow, may not want to take the type of technology risk that the smaller companies are prepared to do with venture capital backing.
It’s a traditional venture capital model where those companies will take an outsize risk and the expectation of an outsize return and maybe typically outside of the investment thesis for a Dow chemical or Sasol. It’s something that the small guys can do that at the appropriate time makes sense for the big guys to partner up with. You’ve mentioned surfactants, and that’s clearly something that’s gone on in surfactants. I’m sure it’s going on in other areas. Maybe I haven’t been paying enough attention to those areas because the model itself is product diagnostic.
That trend speaks to where we’re at and the need to innovate. If you look at some of the other industries where it’s innovator dies, biomedical or pharmaceutical, we wouldn’t think that’s abnormal at all. That’s the model of the biomedical industry small startups innovate, and the big pharma companies buy them. That’s how that industry has always worked because they’re in this innovate or die space. They need that constant flow of innovation. The fact that you’re seeing that type of market behavior in the chemical industry now tells you we need a lot of innovation in the chemical industry.
James, you guys are obviously a spin-out from a major consumer products company. How does that play out as you guys look at bringing your product to market? You are getting closer to commercialization and getting into the markets. Is working with KC helping you? Is that making it harder to get into some other companies? How do you see that playing out?
It’s great to have KC as a major shareholder in our business. We also have SABIC Ventures, which is a great supporter for the industry support both from the polymer end of the supply chain and the consumer goods. We have a lot of demand for our products and technology because, as already mentioned several times, a lot of the retailers, the consumer goods companies, but also the packaging industry as a whole have made very public plastic reduction and sustainability pledges and announcements, but also governments are starting to think around regulation and taxation on plastics.
In Europe, taxations are coming in on the use of virgin plastic. This is measured by weight. There are some strong market polls for our technology, which is effectively reducing waste or plastic. In terms of our product launches, everything takes longer than a startup would like. We’d like to think in days and weeks. The industry optimized thinking quarters and years, which can be a frustration. I think we’re on course to launch by the end of 2022, our first products in North America. It was an exciting time for us.
I’m going to give you guys one final question as we work to wrap this up. It’ll be open-ended. What else do you want people to know about your business, innovation, chemistry, and sustainability? I’m going to start with Jon.
I sometimes say that polystyrene and styrene are the most misunderstood molecules in the market. There’s a lot I would want people to understand. The main thing for me would probably be for people to better understand what markets our products go into. We’re the second-largest EPS producer in North America, and 67% of our products go into durable applications. People think of EPS as a food service application because that’s where they see it. By 2025, 80% of our volume goes to durable applications, installation, bicycle helmets, or geofoam. We’re largely in the building construction industry. That’s part of our strategy. We got this material. It’s efficient.
What are the most sustainable and appropriate applications for us to use this material in? We’re emphasizing both insulating and perishable shipments, insulating medical supplies, insulating homes, and insulating your head if it’s a helmet on your head. That’s probably the one thing I’d want people to understand about where we’re going in the industry. We’re not a material used in foam coffee cups or in installation, medical shipments, and safety helmets.
James, how about you?
First of all, from a technology perspective, we’re able to help companies achieve their plastic reduction targets, so driving for sustainability. If companies want to be able to use less plastic, we have a credible solution that doesn’t make a small change. It makes a big impact, with 30% and 40% material reduction, which is significant. The second part of our business is our R&D capabilities because you have to combine both technology and R&D capability. We’re able to have our customers come in, run trials, and our capability. This is what we’re saying is accelerating their R&D and innovation programs. That’s valuable.
Some of that goes back to being a startup. We’re able to move quickly where we’re able to be creative and problem solve. This combination of exciting technology that can make a meaningful difference in the world combined with R&D capability is what we’re offering out to the market. It’s not just the technology, and it’s a whole package that we’re able to offer.
Thank you. Neil?
There are two things. One is we’re making ingredients that you put on your skin and hair every single day. If you care about what you put on your skin and your hair, you should take a look at sustainable ingredients. Your consumers are increasingly aware of what they put on themselves. That’s what we care about and what we develop. That’s where we innovate. That’s the first thing I would say.
I would say that if you’re in and around New York City, you should visit the New York Society of Cosmetic Chemists Suppliers’ Day. It’s at the Javits Center. It’s the largest gathering of cosmetic chemists in North America. It will be the first big event after the pandemic. We’ll be exhibiting there. Anyone that’s interested in this space should come along, and you’ll get a snapshot of the whole industry. You’ll also get a chance to try some finished products made with our ingredients, including lipstick, mascara, foundation, deodorants, and hair detangler. Check it out.
That is going to be a great conference. Thank you, guys. I appreciate you taking the time to join us. Thank you for joining the show. We’ll talk to you again soon.
Thanks so much.
Thank you, Victoria.
About Neil Burns
Neil Burns is the CEO of P2 Science, Inc., a green chemistry company and managing partner of Neil A Burns LLC., which co-produces a series of conferences on the business of surfactants. His background includes over 30 years in specialty chemicals, based in the UK and US and he has served on the boards of P2 Science, Pilot Chemical, Sivance LLC and American Track Services.
About James Gibson
James Gibson is the CEO of VOID Technologies, a materials science company accelerating the transition to more sustainable plastics and packaging. He is passionate about commercializing technologies and innovations that deliver meaningful positive change in the world.
James has spent 17 years working in early-stage technology businesses and corporate innovation consulting. Most notably, he led a multi-year collaboration with Kimberly-Clark to further develop the patented VO+ plastic reduction technology which resulted in VOID’s formation in 2015. Today, several major manufacturers and brands are preparing to launch new flexible packaging using VO+.
James previously worked for the investment arm of Whatif, a leading innovation consultancy. He was also a sales and marketing director for Byotrol PLC, a speciality chemical company, where he significantly grew revenue and launched multiple product lines in European, Asian and African markets.
A British National, James is based in London. He was recognized among Business Week’s Best Young European Entrepreneurs in 2006, and has won awards for new product development.
About Jon Timbers
Jon is the Chief Sustainability Officer at Epsilyte, the second-largest producer of EPS in North America. He holds degrees in both Chemistry and Chemical Engineering from the University of Michigan. Jon has been in the petrochemical industry for over 20 years, focusing on innovation and sustainability for the last six years.
He sits on the PLASTICS Industry Association Sustainability Advisory Board and the American Chemistry Council’s State and Government Affairs Committee. Jon’s passion is leveraging technology and innovation to bring new end-of-life solutions to the market for hard to recycle plastics. Jon lives in the Chicago area and has two teenage daughters.
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