Everyday, manufacturers around the world are receiving increased pressure from investors, customers and other stakeholders to go green.
Employees, investors, customers, and local governments are all looking at the leading manufacturers to reduce their carbon footprint.
The idea behind it is simple: companies that take “sustainability” into account are much more likely to be around for the long run.
At this point, it’s common sense. Companies that make sustainable decisions are best positioned to lead for decades to come.
Sustainability mandates are becoming increasingly common in fortune 100 companies, and leaders in every department of large manufacturing companies are looking for answers.
The problem is, there’s no straightforward solution to reduce a company’s carbon footprint.
When we started connecting with manufacturers, we found that there were 3 main paths that companies could take to become more sustainable.
The only problem is, green energy and recycling can be adopted relatively easily, but there is no access to reliable supply chains of bio-based materials.
Because there is no access to sustainable materials, companies have been forced to focus on the traditional solutions: green energy initiatives and recycling programs that could help reduce their carbon footprint on their annual ESG reports. Unfortunately, the impact of these programs didn’t create meaningful movement on the journey toward a sustainable future.
These large manufacturing companies have become increasingly frustrated over the years. As the pressure from stakeholders to go green has increased, the access to viable options has stayed the same.
Many executives, marketers, mechanical engineers, buyers, and sustainability experts at manufacturers have expressed their disappointment to us. Without a reliable supply chain of bio-based materials, they were stuck between a rock and a hard place.
They had the desire to make the transition over to sustainable materials, but there was no solution to their problem.
Naturally, everyone thinks that bioplastics are the solution to the sustainability problem. Our team thought that this was the magic ticket to corporate sustainability. Unfortunately, we were wrong.
When our founders started Heartland, they initially wanted to turn hemp into bioplastic. It seemed obvious: the trend lines and buying power seemed to be moving toward bioplastics as the premier raw material in manufacturing.
But, after dozens of calls to executives in the plastics industry, our team was left scratching our heads. No one wanted bioplastics, and it wasn’t clear why.
After some deep research, many phone calls, and a lot of questions, we started to uncover the answers.
Here are a few of the reasons why bioplastics were a path toward failure.
Manufacturers spend their days optimizing their cost of goods sold (COGS). By lowering their COGS, they increase their gross margin. An increased gross margin allows companies to increase their operating expenses and net profit.
So, when manufacturers are asked if they want to increase their COGS by 20% to 200%, typically their answer is no. If manufacturers didn’t care about their cost of goods, no one would manufacture overseas.
Today, traditional plastics are used because they are strong and cheap. What manufacturers are trying to figure out is how to reduce the weight and carbon footprint of the plastics they are already using.
There are 2 main reason that bioplastics are so expensive:
New materials typically have a problem meeting the demands of large manufacturers. One of the headwinds that new companies face when they’re supplying innovative materials is the lack of supply.
Without large quantities, new materials spend all their time in R&D labs without seeing any application in mass manufacturing. This means that companies frequently waste their time, money, and energy on materials that don’t have the quantities necessary to replace traditional materials that are used in the current product portfolio.
Large manufacturers procure hundreds of millions (or billions) of pounds of specific resins. To replace traditional plastics with bioplastics, a supplier would have to be able to provide tens of millions of pounds per month just to satisfy the demand of one large manufacturer.
Building a chemical conversion plant that turns hemp (or any other bio-based material) into plastic is not cheap. Biochemical conversion is not just an expensive process, it’s difficult to execute at scale.
It is estimated that the equipment required to build a biochemical conversion plant would cost (at least) hundreds of millions of dollars. This is part of the reason why bioplastics are so much more expensive than traditional plastics.
Over the next decade, these facilities will get built. At first, they will start with lab scale, batch based processes. And eventually, they will move into full scale, continuous flow production.
Recyclability and Biodegradability
Not all bio-based plastics are biodegradable. That’s right, just because a plastic is made from a bio-based feedstock does not mean it will decompose in a landfill.
There are many different types of plastics, and only some of them are biodegradable. As bioplastics degrade, they release methane, which is a much more potent greenhouse gas than carbon dioxide.
On top of this, recycling bioplastics can be very difficult. The plastics need to be properly sorted before they are melted down. If they are not properly sorted, a bioplastic could reduce the strength and value of traditional recycled plastics.
Today, our recycling facilities are not set up for bioplastics. Unfortunately, integrating these materials into recycling programs is not as straightforward as we would like it to be.
Today, the price, supply, and capital expenditure required to integrate bioplastics into manufacturing is a massive hurdle. Pile on top of that the complications with recyclability and composability and we have a huge battle in front of us.
Unless you have a 20%+ profit margin on your product, the price increase of bioplastics is not stomach able for most businesses.
One day, bioplastics will be able to compete with traditional plastics. But, today, it is not a viable transition for large manufacturers that want to maintain the strength of their products while reducing the cost, weight, and carbon footprint.
In order to successfully transition from traditional plastics to bioplastics, the price must come down and the supply must go up. Eventually, the economics will get there.
Manufacturers need an intermediary solution that will reduce their carbon footprint while putting them on the right path toward sustainability.
Manufacturers that are interested in reducing their carbon footprints have to focus on materials that are available today.
There are bio-based materials available on the market, but, today, each of those materials will force a business to compromise something.
One of the common materials that can be procured today is wood filler (or wood flour) from saw mills. There is hundreds of millions of pounds of wood filler available today. These wood fillers can be used as plastic additives, or they can be used to make wood composites like Trex.
But, there’s an inherent conflict with the idea of using wood fillers in manufactured products.
People who actually care about the environment would never promote cutting down trees to save it. And promoting the use of wood fillers further drives the lumber industry.
In fact, it’s become clear that wood fillers are the exact opposite of the sustainable solution that manufacturers have been looking for.
Most of the customers who are looking for sustainable, or “eco-friendly” products do not want to cut down trees. Which means they certainly do not want to buy products from people who are using cut down trees and embedding those trees into plastic.
The whole purpose of sustainability mandates is to reduce the negative impact that humans have on the environment. Since trees breathe in carbon dioxide, and breathe out oxygen, cutting them down seems unsustainable.
Every Fortune 100 company on the planet has created sustainability mandates to reduce the impact they’re having on the environment around them.
Companies are putting out sustainability targets for 2025, 2030, and 2050. Each year, they put out an “annual sustainability report” to update their stakeholders on their progress.
In accordance with The Paris Climate Accord, companies are supposed to be 100% carbon neutral by 2050. This means that sustainability for 2025 and 2030 are typically targeting a carbon reduction of 20% – 50% (on average).
As we know, there are not many paths for companies to reduce carbon emissions, but they have created teams and hired consultants who are dedicated to figuring out a path to achieving sustainability targets.
Sustainable materials are one of the clearest ways for manufacturers to lead their business into the next generation.
Alongside the push for companies to become more sustainable is the push for companies to digitize.
The fourth industrial revolution was based around big data, software, robotics, machine learning, and the internet of things. We have seen these technologies boom since the dot-com boom (and bubble) of the late 90’s.
Over the past 20+ years, this automation revolution has played out. Companies have replaced humans with robots and software’s that are perfect for what they do.
Over the next 10 years, technology will continue to streamline business operations. After all, technology is one of the most efficient tools that companies have to create efficiency in their business model.
But, as a society, we have to ask ourselves, what’s next? What will the fifth industrial revolution look like? How will it impact businesses? And, how can we start to embrace this movement today in order to lead our industries and our civilization into the next generation?
The fifth industrial revolution will be focused on sustainable decision-making throughout the value chain.
This next industrial revolution will focus on sustainability because sustainable decisions can ensure that organizations thrive for decades to come.
The idea that sustainability will drive innovation and profitability is not a new assumption. The most innovative products and services are the ones that upgrade the long-term outcomes and capabilities of companies and consumers. At the core of this ideology is the concept of sustainability.
Green energy and recycling initiatives have already become commonplace in our society. It’s time for the revolution in green materials to empower manufacturers across the globe.
For over 10,000 years, there has been one material that has created certainty for civilizations across the globe. That material is hemp.
The history of the strength of hemp fibers has been well recorded for millenia. In recent history, Henry Ford built more than 40,000 cars that used hemp fibers in it during the 1930’s.
Toward the end of that decade, hemp was outlawed in America. This meant that no American manufacturer could procure a reliable supply chain of hemp fibers from anywhere.
But, in 2018, everything changed. When American politicians in Washington signed the Farm Bill in December of 2018, hemp became legalized. This opened the doors for farmers, processors, and manufacturers to benefit from the value that hemp could bring to the world.
For manufacturers focused on sustainability, hemp is a huge opportunity. As a carbon-negative material, every pound of hemp sequesters more than one pound of carbon dioxide. This means, if manufacturers can figure out a way to use hemp, they can systematically reduce their carbon footprint.
Today, most of the world’s raw material supply chains are set in stone. Manufacturers already know what raw materials they are going to be procuring. Some of the raw materials that manufacturers rely on include:
Manufacturers procure these raw materials to create goods that are then sold to larger manufacturers or consumers. Unfortunately, this means that putting hemp into a manufacturer’s raw material supply chain is a bit more complicated than calling them to ask them how much hemp they want.
These raw materials have been “specced in” to the end products that are produced by manufacturers. So, as manufacturers look to create a value proposition for their products while reducing their carbon footprint, they’re forced to figure out how to use materials that don’t totally upend the manufacturing processes that they spent decades to put into place.
Today, the best way to use hemp fibers is as additives in the raw materials that are already being procured by manufacturers. This allows companies to seamlessly “drop in” sustainable materials without compromising performance or cost.
Hemp additives can increase the strength of end products, while reducing their cost, weight and carbon footprint. This is what Heartland’s team is laser focused on.
Heartland is a biotech company that engineers hemp fibers that are infused with polymers. Polymers are the plastics, rubbers, and foams that large manufacturers rely upon every day. Heartland’s hemp additives make these materials stronger, lighter, cheaper, and more sustainable.
For manufacturers, this is a home run. They can keep procuring the same raw materials that they’ve been working with for decades (plastics, rubbers, and foams). But, by working with Heartland, their plastics, rubbers, and foams can have increased performance and reduced carbon footprints.
This is only possible because of how Heartland manufacturers it’s hemp fibers. Heartland’s hemp fibers are processed in a way that allows them to see increased performance benefits while easily bonding with the polymer.
Heartland works with the raw material suppliers of some of America’s largest manufacturers. Frequently, these are plastic compounders (or resin suppliers) that are mixing additives with either virgin or recycled plastic.
These plastic compounders work alongside Heartland’s team to make sure that they are able to easily mix hemp into the plastics that their customers are already procuring.
This ensures that the plastic compounder is able to send out plastic infused with hemp in the same way their customers are used to receiving traditional plastics (sheets, tubes, and pellets).
For plastic manufacturers, this means that there is no retooling required to work with plastic that has hemp additives in it.
In the future, Heartland will be able to use its hemp fibers as additives to building materials, textiles, and other raw materials that are used by manufacturers.
Heartland is working with manufacturers across industry sectors. Automotive, marine, aerospace, packaging, healthcare, and government customers have all been able to work alongside Heartland to make sure that hemp additives easily mix with the polymers they are already procuring.
Here’s how it works:
Depending on how quickly a manufacturer wants to move, our team can work with the plastic compounder to get sample materials into the hands of manufacturers within weeks.
These sample materials can then create a sample product that will go through performance testing to ensure that the hemp fibers don’t reduce the mechanical or impact properties of the product.
Heartland has streamlined this process for plastic compounders and manufacturers. Today, in America, working with Heartland is the easiest way to get a reliable supply chain of bio-based materials into end products.
This is undoubtedly the beginning of the sustainability revolution. Companies who start the product development process today will be miles ahead of their competitors a year from now.
This is why it’s important to start the conversation and reach out to us to see if hemp additives can make a difference in the products you’re already manufacturing.
If you want to lead the sustainability movement in your industry, the best time to reach out to Heartland is now. The conversations we’re having with manufacturers today are the conversations that are creating the sustainable future we need and deserve.
Join us in making a world out of hemp.
— Heartland Team
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