Case Study and SWOT Analysis

Toad&Co.Nadalie Logan

Jacob Terzoli

Cris Perla

Kevin Johnson

Connor Schultz

Brian Robey**Responsible for formatting

Introduction/Background/Context: Conner Schultz Jessica Nordhaus started Toad&Co, inside of her garage in Colorado, in 1991.

She began with a vision of handmade, sustainable clothes and provided fleece hats for

the locals in her city. Four years later in 1995, the company was officially founded as a

clothing company and they opened their first shop in the city of Telluride, CO, as their

headquarters moved east to Chicago. Throughout the early 2000’s, the company was

able to survive off minimal growth before finally moving to their present headquarters in

Santa Barbara, California. At the time the company made this move, there were only 6

paid employees. Since this time, Horny Toad has grown as company while continuing

their pledge to sustainability and preserving the world we know and love. They currently

stand as members of the Conservation Alliance and Planet Access Company and have

most recently become members of 1% for the planet. At the end of January of this year,

Toad&Co officially changed their name after being known as Horny Toad the previous

24 years.

Toad&Co is a small privately owned company with roughly 50 employees on

staff. Gordon Seabury, the current CEO of Toad&Co, believes in the bigger picture and

recognizes that it is about more than making clothes. Toad&Co’s mission statement is

as follows: to lead with integrity and weave optimism into meaningful change through

socially and environmentally smart business, to inspire people to live their fullest lives.

They pride themselves on providing a top-notch company culture. They describe their

headquarters to feel more like a family picnic that meets a think tank rather than an

office. By keeping the work environment enjoyable, they are able to receive the most

out of their employees who all remain consistent to the green mindset established by

their CEO. Their suppliers and producers are based out of Turkey and El Salvador.

These suppliers have been working with Toad&Co from the start and continually exceed

their expectations. Toad&Co insists on treating their suppliers as regular employees

providing them with solid wages and healthcare benefits. In turn they provide Toad&Co

with top quality, long lasting, sustainably made clothing. Gordon Seabury is much more

focused on the good the company is doing, rather than the profits it is making. Due to

this, Toad&Co is considered a stage five company. They understand that going green is

financially beneficial, but take part in green business because it is the right thing to do.

Toad&Co incorporates an eco-advantage mindset from their buildings, to their

partnerships and their distribution. Toad&Co’s headquarters uses strictly LED lights,

recycled paper and their employees participate in a compost program. Being members

of the Conservation Alliance, Planet Access Company and 1% for the planet, not only

add impressive eco-labels. These organizations put restrictions on Toad&Co and

provide many activities that employees can get involved with. In many businesses,

distribution is one of the more environmentally damaging things that they can take part

of. Toad&Co recognizes this and although their products still require international

shipping, they have developed efficient ways of packaging their goods. The majority of

Toad&Co’s shipping materials are recycled and recyclable. These methods have led to

cost savings and revenue gains, but more importantly shows Toad&Co fulfilling their

own mission.

The best way that this business has been able to express following through on

their goals is through their actual products. Toad&Co was founded on the idea that you

should never have to choose between living well and doing good, which expressed in

their product design philosophy. Their product design philosophy is rooted in their desire

to make daily life better and to be responsible citizens of the planet. Their products

range from active wear to flannels and everything in between. They believe that their

comfort starts on the inside and extends to what you wear. Their vision is to provide

clothing that is socially versatile, actively accommodating and responsibly built.

Responsibly built means that the materials and processes they are using to make the

clothes should be efficient, sustainable and provide minimal impact to people and the

planet. Toad&Co. markets their clothes to fulfill the four categories of comfort, function,

style and responsibility. Their goal is create low-maintenance, long-lasting clothes that

can be worn in a wide variety of settings. These settings range from hiking in the

mountains to having a beer at the local bar.

The product we elected to analyze is one of their basic t-shirts, the Peter SS Tee.

Toad&Co’s t-shirts are made in factories in El Salvador and Turkey using the most

sustainable fibers including organic cotton, Tencel and Modal to go along with their

popular fabrics like Samba and Foxtrot. Tencel and Modal are eco-processed, cellulose-

based and derived from responsibly managed, sustainably grown forest plantation.

Although only 89 percent of their cotton is organically grown, they have a goal to reach

100 percent organic cotton by spring 2016. They shy away from traditional rayon or

viscose because of their dirtiness in production. Their t-shirts are produced with a high

emphasis on quality and durability in order to reduce waste and increase sustainability.

It is designed to be loose fitting and comfortable enough to suffice whether the customer

is rock climbing or lounging around the house. T-shirts are shipped and distributed in

completely recyclable shipping materials. Although complete sustainability is difficult,

Toad&Co is well aware of their impacts and they far succeed in their attempts to

minimize their impacts at every level of production and distribution.

Stakeholder Map and Analysis : Kevin Johnson NGOs (Leave No Trace)- As a partner in Toad&Co’s 1% for the planet, we

receive a portion of their end of the year profit to go toward our projects. While we feel

lucky to receive the money, 1% is not really enough to do anything significant. With an

increase in the use of advertising, through internet ads, social media, etc., and possibly

a decrease in prices, sales will increase and therefore the 1% will increase, which will

make the portion of 1% we receive larger.

Think Tanks (Resources For the Future)- From its beginnings, Toad&Co. has

fought to be ahead of the game in environmental regulations and competitors in that

area. They have done a good job up to the present and have never had to be fined for

pollution or their carbon footprint. However, they do have a factory in El Salvador, the

smallest Central American country and they could learn a thing or two from attending

one of our conferences about land use and maximizing their space. If they minimize

wasted space on the factory property and create it to be efficient and sustainable, they

could then look to use the remainder of the land to help rainforest restoration projects as

El Salvador’s rainforest has almost completely diminished.

Suppliers (El Salvadorian Partners)- As a main supplier of their Tencel and

Modal fabrics, we have been given numerous opportunities and have been supported

by Toad&Co since the birth of our partnership. We have been offered free medical care

for all of our employees and their families, daycare, and free schooling to more than 500

kids in the community. Corporate Responsibility has become a core concept that Toad

and Co has adhered to throughout their lifespan and it has benefited us and the other

nonprofits that they work with.

Community (El Salvadorian community)- Toad and Co. is a company that

focuses on giving back to the community. As a partner of them, we have benefited from

their corporate responsibility initiatives like giving the factory employees and their

families free medical care, an on-site day care center for children of their employees,

and free schooling to not only the children of the employees, but 500 kids in the

surrounding community. It is a blessing to be associated with a company that cares not

only about profits, but about the environment and humankind as well.

Employees- Toad&Co. is a fairly small company but its message is large. It aims

to have an impact on the community, while looking out for, and preventing

environmental waste and emissions, while attaining a profit at the same time. Since

the company is founded on the idea of never having to choose between living well and

doing good, their values relate not only to the environment and CSR, but also to us as

employees are well. We have a standard Workplace Code of Conduct that is adhered to

by all employers and employees and emphasizes respect, fair pay, concern for the

environment and more. As an employee of a sustainable company it also feels good to

know that the work you are doing is for good in the world for the people and the

environment, and that alone is motivation to go to work everyday.

Academia (UC Santa Barbara)- Being that Toad&Co’s headquarters are in Santa

Barbara, California, we could both be helped out by the formation of a partnership. As a

university, we could advance our study into environmental business, offer case studies,

and give assignments about furthering the reduction of Toad&Co’s environmental

footprint. It would benefit the students because we could probably create an internship

program through the company, and if Toad&Co. decides to expand, our students would

be in a pipeline for jobs there. It would be beneficial for Toad&Co. because it offers

them students and research so they can then focus on the production of the clothes.

Plaintiffs Bar- While Toad&Co. has been ahead of the game in keeping up with

environmental regulations for pollution, waste management, and other areas, there are

issues revolving around their factories. The factories are in foreign countries, which

makes Toad&Co. guests. They have done well thus far making the natives happy, but

continued factory use, could lead to lawsuits. Neighbors have been known to complain

about factories in small, tight-knit communities, and with El Salvador being the smallest

Central American country with the greatest population density, neighbors could flip at

the slightest mistake, and the neighbors are more abundant here making that more

likely to happen.

Competitors (Patagonia)- As the leaders in sustainable apparel companies, we

started the Sustainable Apparel Coalition, not to boost our own name, but to help

companies like Toad&Co. grow in their environmental mission and goals and their goals

for efficiency, planning, organization, and more. The collaboration of our fellow

sustainable apparel companies has helped us all grow. In the main ideas of the

Sustainable Apparel Coalition, it is said that credible, practical, and universal standards

and tools for defining and measuring environmental and social performance support the

individual interests of all stakeholders. These are what we are trying to give to

companies in the coalition, and would love to see companies like Toad&Co. advance to

the levels of sustainability and credibility financially as a company equal to ours.

Kids - the “Future”- Kids are the future, and nobody really contests that. All kids

want is the same chance at life as we got, and that should be something they all should

receive. This is why environmental initiatives and a focus toward reducing the carbon

footprint good environmental practices are so important. Not only do kids have a

sponge of a memory and take things to heart, they are also smart and play a big role in

the future. Now that the current generation is leaning more and more toward

sustainability it is up to the current children to follow in their footsteps.

Banks and Capital Markets- Banks are the purses behind most businesses.

Without the banks, the companies could really never get the funding for projects they go

after. “Going Green” is not cheap and it does not currently always reap the benefits it

should, so many times green companies do not have deep pockets. However, as a

bank it is tough to decide which projects and companies to fund because there is

always a risk of not getting your money back, or even being held liable for funding the

projects in the first place. All we ask is that companies, especially companies who claim

to be green, actually are green and don’t leave the banks, their funders, left out to dry.

Background/Context: Product:The following analysis will focus on the tracing one of Toad&Co’s signature

products: their Peter SS t-shirt. The shirt is made from 100% organic cotton grown and

manufactured in Turkey.

Scope: Brian Robey : We will be tracing the water, carbon dioxide, and deforestation footprints related

to the extraction, production, distribution, consumption, and waste stages of the life

cycle of organic cotton for one Peter SS Tee shirt from Toad & Co. The organic cotton is

grown and harvested in Turkey and the shirt is produced in country. The shirt is then

transported to Toad and Co. headquarters in Santa Barbara via truck and plane and

distributed to the Santa Barbara store where an upper-middle class customer purchases

it.

Flowchart: Jake Terzoli, Cris Perla

Life Cycle Assessment: Cris Perla, Connor Schultz, Jake Terzoli, and Brian Robey

Carbon Emissions

12%

12%

54%

16%

5%

ExtractionProductionDistributionConsumptionDisposal

The majority of carbon emissions come from the distribution phase, with high

carbon footprints associated with transportation. The extraction process contributes

roughly 300 lb. of carbon equivalent emissions per acre of cotton extracted. These

emissions come from equipment used to harvest the cotton.

Although Toad&Co. use a lot of organic cotton, there is still an intensive

production process associated with it. During this process factories emit around 350

pounds of carbon daily.

As mentioned earlier, distribution produces the most air pollution. After the

production phase, products are shipped via plane from their factory in Turkey to the

United States. From there it is distributed to consumers’ nationwide using trucks. Trucks

add around 17,000 pounds of carbon per shipment.

The consumption phase includes all air pollution emitted from consumers during

the upkeep and wash of their t-shirt. 500 pounds of carbon emissions are produced

yearly for maintenance of the shirt.

Disposal contributes the smallest amount of air pollution to the carbon footprint.

Although it may not seem like much, one t-shirt still contributes something to the carbon

in landfills. In a landfill a t-shirt emits around 100 pounds of carbon.

Deforestation

75%

10%

30%

20%

10%

ExtractionProductionDistributionConsumptionDisposal

Far and away the most significant contributor to deforestation comes from the

extraction phase. This includes clearing land to grow cotton. Production also contributes

in its factories. Distribution has to take into accounts roads, shipyards, and airports

between Turkey and the west coast of the United States. A fair amount is contributed by

disposal as well due to deforested areas that are used as landfills.

Water

ExtractionProductionDistributionConsumption

Even taking into consideration the amount of water needed to grow cotton, the

amount of water used to wash and maintain the shirt dwarfs the amount of water

needed to grow the cotton for one shirt. The consumption phase therefore makes up the

majority of the water footprint with very small considerations taken for the water used to

wash equipment, the amount used to run factories, and the water consumed by

employees.

SWOT: Nadalie Logan

Strengths Weaknesses

Internal

Employees

-Employee benefits (gym, dog friendly, ext.)

-Provides incentives for employees to reduce

turnover

Business

-Included in the 1% for the planet initiative,

Search for adventure: vacations for the disabled,

The conservation Alliance, and Planet Access

company

-El Salvador has great community responsibility

by proving day care and free medical for

employees

Energy

-LED bulbs in offices

Water

-Don't have to wash their clothing as often

Biodiversity & Land Use

-They locate their facilities in the same vicinity of

where they grow their crops

Chemicals, Toxins, & Heavy Metals

-Use leftover seeds to make oil that is made

edible

Air Pollution

-Partners up and ships their products with other

big corporations to reduce transportation

emissions

-Turkey plant switched to solar and has reduced

Business

-High Prices

-Smaller selection of goods for consumers

-Limited advertising and marketing

Energy

-Transporting products overseas from Turkey

and El Salvador

Water

-High use of water for crops

Chemicals, Toxins, & Heavy Metals

-11% of their cotton is not organic (not fully

sustainable)

-Although they use organic cotton a

percentage of the world's insecticides are

used on their crops

Air Pollution

-Distribution from overseas factories

increases carbon footprint

-Inefficient distribution by trucks

carbon emissions by half

Waste Management

-Design their clothing to be more durable and

longer lasting

-Composting program (organic scraps)

Deforestation

-Clothing and packaging materials made from

recycled materials

Opportunities Threats

External

Business

-More people becoming aware of green initiatives

pushing a natural market their way

-People with more funds will start to see the

benefit of green business and how it can save

them money in the long run

Community

-By 2017 become a Bluesign System Partner

Energy

-Moving towards 100% organic cotton used for

their products

-Want to be 100% recycled polyester

Biodiversity & Land Use

-Constantly working to make materials more

sustainable

Competition

-Large corporations like Patagonia that have

the same kind of initiatives and larger market

with better access to resources

Climate Change

-Climate change for growing resources

(cotton) for fabric

Water

-Dependence on weather (aka water)

-Droughts

Business Recommendations: Connor Schultz, Brian Robey, Jake Terzoli, and Cris

Perla

Expand product line to include linens and towels: Expanding into the towel and linen

industry would help Toad and Co. to expand its market. As a small company it should

be looking for new market territory to explore. Toad and Co. already has three fabrics to

choose from (organic cotton, modal, and tencel) in manufacturing towels or linens as

well as growers and manufacturers to handle production. They can also distribute the

new products through the same venues. Because of their established facilities,

expanding into other simple cotton products like towels and linens would minimize

additional costs while allowing them to expand their product line.

Take-back program: A take-back program for Toad and Co. products would consist

of returning old t-shirts and other apparel to Toad and Co. at the end of its useful life

instead of disposing of the products. They can then re-use the same cotton to make

new t-shirts instead of harvesting new cotton. Such a take-back program would also

increase the usefulness and life of every cotton plant harvested it also contributes to

their image as a sustainable and highly environmentally conscious company.

Lastly, we recommend they look into local manufacturing. While the cotton growth

will largely need to remain over-seas, local manufacturing would work well with a take-

back program. In order for a take-back program to work right now, they would likely

need to transport old t-shirts back to their manufacturing plant in Turkey which adds to

their footprint in terms of transportation. If they were to establish manufacturing in the

states, they could establish a stronger and more efficient take-back program and

explore possible sources of organic cotton in the western hemisphere.

Conclusion: Conner Schultz

“To lead with integrity and weave optimism into meaningful change through socially and

environmentally smart business, to inspire people to live their fullest lives”. These are

the words Toad&Co lives by and strives to execute on a daily basis. As they have

expanded from the simplicity of hats made in a garage to a relevant green business

company, they have done so by monitoring their actions to match their mission. Their

focus on sustainability and environmental awareness stays consistent up and down the

value chain. They produce top quality products while limiting their impact on the

environment.

Today, Toad&Co. remains relatively small. In order to grow sustainably, they

must stay within their boundaries and continue to monitor their stakeholders and

suppliers in order to maintain steady relationships. Although they have accomplished

many green business goals, just like other companies they are far from perfect. We

have suggested a couple of recommendations including more local manufacturing,

developing a product take-back program and expansions amongst their product line

which could not only improve their carbon footprint, but also grow the company in order

to achieve more profits. As they continue to expand, their relationships between their

NGO’s including The Conservation Alliance, Planet Access Company and 1% for the

Planet will play a vital role in pushing this company further along on their journey.

Sources:

Green to Gold

The New Sustainability Advantage

http://www.huffingtonpost.com/mattias-wallander/the-lifecycle-of-a-tshirt_b_887133.html

http://hom-organics.com/process/process_cot.html

https://www.organicconsumers.org/news/care-what-you-wear-facts-cotton-clothing-

production

http://www.toadandco.com/

http://www.outsideonline.com/outdoor-adventure/best-jobs/best-places-to-work-2014/

Horny-Toad-Activewear.html

http://www.cottoncampus.org/cotton-environmentally-friendly-sustainability/

http://www.epa.gov/climatechange/ghgemissions/sources/transportation.html

http://www.home-water-works.org/indoor-use/clothes-washer