On this episode Josh speaks with Christopher Bodkin, Co-Founder and CEO of Circular Blu. They discuss what a “circular economy company” is.

Christopher Bodkin is the Chief Executive Officer for Circular Blu and recipient of GreenBiz 30 under 30 for 2018. Christopher is an expert in the circular economy, healthcare and corporate sustainability.

Christopher is also the Data Coordinator for Sector Performance at Practice Greenhealth where he analyses trends on healthcare sustainability.

In today’s episode you will learn:
  • What a circular economy company actually is?
  • A real-world example of how circular economy company might work?
  • What sort of products you can create out of this waste?
  • What is the biggest challenge that this type of business is facing?


Transcript

Narrator:         Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.

Josh:                 Hey, how are you today? This is Josh Patrick. You’re at The Sustainable Business.

My guest today is Christopher Bodkin. Christopher has a really interesting company, doing really interesting things. He has a bit of jargon around his business so I’m going to have him talk about it and explain to us first what it means. Then, we’re going to go into the challenges that he’s had with his business getting some traction because I’m going to bet there’s been some real challenges along the way. It appears to me he’s cracked the code a little bit. Let’s bring Christopher on.

Hey, Christopher. How are you today?

Christopher:   Hello, Josh. I’m doing great. Thanks for having me.

Josh:                 Well, thanks so much for being with us today. Tell me, first of all, what is your business and what does it actually do?

Christopher:   I’m the CEO and co-founder of Circular Blu. We are a circular economy consulting and sustainability firm based out of Bradford, New Hampshire. What we primarily focus on is working with institutional partners such as hospitals and corporate partners on diverting waste streams from the landfill and taking those materials and turning them into circular products to be sold back into those markets.

Josh:                 First of all, can you give us a definition of what a circular economy company actually is?

Christopher:   A circular economy company is a company that is created to, first of all, create solutions for institutional partners. If there’s materials or waste streams that are going into landfill, creating solutions to keep that material out of the landfill and circularize the material by creating new products out of it – creating secondary markets. The circular economy is also about product design and that is working with companies that create products to ensure recyclability and the ability for once that material’s used, from its primary purchaser, that it can be re-used or reconstituted into new products to create further commerce. That’s a short view on what a circular business is.

Josh:                 Can you give us a real-world example of how that might work?

Christopher:   Our primary material that we work with is a material called sterilization wrap. It’s used in hospitals. It’s polypropylene #5 nonwoven material, that’s used to wrap surgical kits, prior to surgery, to keep the utensils within them sterile. There’s over 277 million pounds of this material going into landfill throughout the United States.

We work with the hospitals to train the staff to segregate the material so it’s kept sterile, and collect, and re-purpose that material. The most important part about what we do is interacting with the hospitals – the users of the material, to train them on proper segregation techniques. And then, working the logistics to be able to understand what businesses are going to the hospitals at frequency needed to collect the material. And then, we process the material in a few different ways.

We’re based out of New England but we help facilitate the movement and collection of this material all around the country. able to create high-quality products from this material that re-define the value of the waste and create sustainable products to be sold back into the healthcare market.

Josh:                 What sort of products do you create out of this waste?

Christopher:   One of our main products is the patient experience tote bag. If you can imagine, this material is a nonwoven, polypropylene material. It almost looks like a fabric. We take that material and we have a cut-and-sew operation. We turn it into sustainable tote bags that the hospitals can give to their patients after they visit. We also have maternity bags where they can give new mothers these products.

One of the main portions of the circular economy is to convert unhealthy, unrecyclable products into products made from this material. We’re working with a hospital out of New York City. They buy thousands of garment bags for their patients to put their clothes in. They’re made from an unhealthy plastic that is thrown into landfills. We’re working with them currently on how to redesign the product and make it from our material so then it can be recycled as well as be a higher-quality product.

Josh:                 What is the biggest challenge that your business faced to get off the ground? What’s your biggest challenge that you’re facing today?

Christopher:   One of the biggest challenges, initially, was conveying the importance of keeping this material out of landfill. When we first started, I started this business when I was 22 – with my brother, many of the hospitals as business as usual. We’re just throwing this material out. It was going with their municipal solid waste into landfill. Convincing them that– which is happening now, landfill costs and hauling costs are going to increase. It’s going to affect their bottom line if they continue disposing of this material. And then, conveying the value of the material and secondary products. We’re replacing low-quality products made in China with high-quality products made in the United States. Initially, going into the hospitals and saying, “You have all this material, we want to take it and turn it into products to sell back to you.” That was an initial hurdle.

One of the other hurdles in the hospital is the cleanliness. Obviously, when you’re in healthcare environment, regulated medical waste, hazardous waste is prevalent and it needs to be disposed off in a very specific way. Going into the hospitals and training the staff on the segregation, taking the material pre-incision and working with their environmental services staff to segregate it and collect it, that was an initial hurdle as well.

And then, on the product sale side, ensuring to our clients that this isn’t medical waste that has a negative connotation to it but our material is as sterile as a material can get because it’s used to keep utensils sterile. Those were some of the initial hurdles.

Moving forward, logistics. Logistics is an issue. Logistics is a problem impacting the current waste management and recycling businesses out there – figuring out how to pick up this material, how do you bale it and condense it to a state where the shipment of the material isn’t cost prohibitive. So, working out individual programs with hospitals on how to collect, bale, and working with logistics partners on the collection and then the purchase of that material continues to be an issue but we’re seeing a lot of companies realize that they can go in and sell their services, whether it’s confidential document destruction, other recycling services, and subsidize the collection of this material with other services offered to the hospitals. Logistics, moving forward, is always the issue as with the whole waste system currently.

Josh:                 My suspicion is that the other companies who are collecting waste probably don’t care about it unless there’s an economic win for them.

Christopher:   That’s absolutely true. There are some very interesting macroeconomic and international things going on which are putting pressure on them to innovate and change how they do business. Historically, material streams like cardboard are very valuable for waste haulers to go in and collect those materials. Precious metals, other things like that where the market is established and firm.

At the beginning of 2018, there was a program called The National Sword Program implemented by China because, historically, the vast majority of the waste that was collected here was shipped to China to be processed. There was around a 20% contamination rate allowed in that material going to China. At the beginning of 2018, the National Sword Program dropped that contamination rate all the way down to 0.5% which is a virtual elimination of their intake of United States waste.

Josh:                 What is the National Sword Program? I have no idea.

Christopher:   The National Sword Program is a Chinese domestic program that was implemented. As the Chinese economy was moving into a more middle-class economy, they realized that they no longer wanted or needed to take the plastic, mixed plastic waste, mixed paper waste from the United States where – in certain portions of the country, historically, they had whole towns sorting through plastics, and re-palletizing, and recycling to create resins. As the Chinese economy has evolved, they have not seen the need to do that.

That’s put the United States in a very tough position because waste haulers, about a decade or maybe more ago, began to do something called single-stream recycling. Single-stream recycling is where the users of the materials could throw in all of their plastics and the haulers would take them and ship them to China at around a 20% contamination rate. What we’ve seen is waste haulers – it was almost a race to the bottom. Single-stream recycling made it easier for the people using material to throw away their trash. No on-site sorting needed.

That created an environment where the whole market was based on single stream. That’s a larger contamination rate. When the contamination rate was dropped by the National Sword Program and they no longer take these contaminated or mixed loads from United States, it made it so that domestic recyclers have no outlet to sell their single-stream recycling. It’s putting a lot of pressure for companies to innovate on how to segregate material and re-process it domestically.

Josh:                 Right now, we’re on the cusp of having a landfill problem in this country, from what you just told me before we started. I see no reason to disagree with that. I have a lot of reasons to agree with it. Let’s say that’s a truism, my suspicion is that landfill costs are going to start going through the roof. Does this start making it more economically feasible for companies like yours to prosper?

Christopher:   Absolutely. With landfill costs and hauling costs from typical waste haulers, always being seen to increase, it creates a need for businesses like ours where we hone in on a high-volume, high-quality material and create domestic solutions, and create jobs around that. The environment where things are going to get more expensive and the users such as hospital are going to see those cost increases. That difference creates a justification for companies like mine to create circular solutions domestically. It’s only going to get worse. There needs to be hundreds of more companies like mine that are material-specific and that create high-quality products from these materials. You’re absolutely right. The need and the growth potential, for circular businesses, is very apparent right now.

Josh:                 I don’t think it’s even just a growth potential, I think it’s the growth arc of your industry is going to be – starting three, four, or five years from now, on a very fast basis because the big guys are going to have to get into the game and do something with it because the economics start getting to be untenable.

Christopher:   Absolutely. We’re already seeing waste haulers that have been around for 50 years closing shop because their revenue was based on shipping these containers to China, to Southeast Asia. They don’t have the infrastructure, or the knowledge, or the processing capabilities to react to that, in time, to be able to continue to stay viable. You’re absolutely right.

Josh:                 Christopher, how long has your company been in existence?

Christopher:   We’ve been in existence for about eight years. We started way back – after I graduated from college. We started with a small workshop in Worcester, Massachusetts where my brother and business partner taught himself how to saw. And then, we hired people with disabilities to sew these bags to be able to sell to companies like Johnson & Johnson, Harvard University. Those were some of our first orders. In that workshop, we set out to have a completely circular model. That means, not only utilizing material that is being thrown away but utilizing work forces that have been overlooked. Hiring people with disabilities was a big part of our business.

Back when we first started, we were called Blu2Green. As we’ve grown, we’ve realized that the volume of the material that we’re getting, having the workshop where we hire people with disabilities was no longer feasible, we needed to connect with a larger manufacturing operation – which we have. We still kept our dedication with people with disabilities with, ever year, we donate a portion of bag sales to a nonprofit in Massachusetts called Work Without Limits which seeks to find jobs for people with disabilities. That’s how we started. We re-branded, in 2017, to Circular Blu. We’ve been growing year over year ever since.

Josh:                 I’m going to ask you the embarrassing question. Are you ready for this?

Christopher:   Yes.

Josh:                 Are you profitable?

Christopher:   Initially, and over the first couple of years, we grew 100% every year. In the past two years, we have grown 200% every year. This year, already in Q1, we’re looking to see our 200%-growth model eclipsed just in the beginning of this year.

It’s taken a while to become profitable, but now we’re doing larger sales to hospitals of 25,000 units, given to every patient. We’re also innovating in our manufacturing techniques to be able to lower our prices and compare with reusable tote bags made from China. That innovation is seen in the form that we’ve created a partnership with a couple of processing groups where we take large amounts of this polypropylene material. We pelletize it and we create a unique resin – a completely circular and sustainable resin.

Now, just recently, we’ve been able to turn that resin back into nonwoven polypropylene fabrics. What that does for our manufacturing process, historically, this material comes in sheets, either 45 inches x 45 inches, 58 inches x 58 inches. We would have to process the material, tear off this tape that is used to fasten it, sort it, stack it by size, and manufacture it out of squares. This innovation, in being able to pelletize and then turn back into nonwoven, allows us to have rolls of material that’s made from a blue wrap which is another name for the material. That allows our manufacturing process to be much more streamlined to create our products which allows us to make larger volumes of products and drop our prices. We’re really excited about innovating and making larger sales.

Josh:                 Are you all private funded or did you get outside funding, like venture capital?

Christopher:   We are an organic growth company.

Josh:                 I love you [laughs].

Christopher:   We have not accepted funding yet. We are very proud of holding onto equity. We’ve been able to navigate relationships – already existing relationships, with processors and logistics partners, to create mutually beneficial programs that are low cost to us and can make our margins on our products extremely high. With that being said, our growth projection is going to need funding soon. We are in conversations with different funders that focus on domestic, sustainable infrastructure as well as a couple of multinational companies that are looking into plastics, in general.

We are in the planning phase of building a plastics processing facility in southern New Hampshire that will be state-of-the-art sorting, processing and manufacturing facility to be able to take in material from all across the country and create sustainable resin as well as sustainable non-woven polypropylene. We are moving in the direction of funding but very proud that we’ve been able to grow exponentially, organically.

Josh:                 We have time for one more question. How did you get entry into– I’m assuming you’re doing business with Mass General, Dana-Farber, and the big medical organizations in Boston. Those are not known as the most forward-thinking groups in the world. To get their attention, to get them to actually talk to a startup like yours, how did you go about doing that?

Christopher:   When I was in college, I worked on transcribing a book for some very smart people. One was a CEO of a health system in Virginia. The other two were two brilliant women inspiration for our businesses. They were talking about healthcare sustainability from a leadership perspective. In getting the C-Suite to understand that sustainability is not just cost expenditures on capital projects like solar and things like that but sustainability is process improvement. It’s streamlining that which is coming in, that which is going out, and saving money for institutions.

Learning about that leadership is beginning to understand that sustainability is cost savings, not cost expenditure, created something in me that thought that multiple businesses can be made from sustainability. And then, working with those colleagues, they brought to me that this material – polypropylene is a high-quality plastic, is going out of hospitals sterile by millions of pounds. They suggested that we create a business to address that. With guidance by people who knew that they were doing, that were established, we were able to carve out a niche around the material and create these products.

When we’re talking to hospitals, it’s that mantra that sustainability is not going to cost you money. You’re going to see your hauling costs grow exponentially. You’re going to see landfill tipping costs grow. Utilizing these solutions which, by redefining the value of the material and creating products that they’re already purchasing out of their waste, is a homerun for some of these executives. Having those conversations, you need to talk money. No one’s going to work with you just out of good feelings. They need to see the bottom line. Through understanding national data and identifying the trends, we can come up with a very convincing argument that working with us and buying these materials are mutually beneficial for these organizations.

Josh:                 Christopher, unfortunately, we are out of time. In fact, we’re a little bit over out of time. If somebody would want to find you or your company, or learn more about what you’re doing, how would they go about doing that?

Christopher:   Sure. Well, they can visit www.circularblu.com. That’s blue without the E. That has my contact information there, my email address and phone number. They can reach out to either I or some of my other executive team and we can talk about circular solutions.

Josh:                 Cool.

I have an offer for you also. Last year, around this time, I published this book. It’s called Sustainable: A Fable About Creating a Personally and Economically Sustainable Business. You can buy it at Amazon and either get the Kindle or print version. If you like your print version, same price as Amazon, just go to www.sustainablethebook.com. If you buy the book there, you get a bonus of a free 20-minute coaching conversation as well as a 37-page cheat sheet I wrote on how to create a sustainable business – economically sustainable business.

This is Josh Patrick. We’ve been with Christopher Bodkin. You’re at the Sustainable Business. Thanks a lot for stopping by. I hope to see you back here really soon.

Narrator:         You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around a hundred years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at jpatrick@askjoshpatrick.com.

Thanks for listening. We hope to see you at The Sustainable Business in the near future.

Topics: sustainable business podcast, Sustainable Business, christopher bodkin, value of waste, circular economy company, organic growth, circular blu

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