In addition to improving the industry standards through valuable vehicles such as the Sustainable Apparel Coalition, innovation is the next step for the industry. However, fashion is a ‘low tech’ industry consisting of companies that mainly compete on price and lead times, but hardly on product or process innovation, fiber use or innovative business models. However, the future looks brighter, now new business models are starting to appear within the clothing industry.
Take for instance award-winning startup DyeCoo. In 2009, this Dutch company launched the world’s first ever industrial dyeing machine that uses high pressure carbon dioxide (CO2) as a replacement for water to dye polyester. In the ‘regular’ way, dyeing a kilogram of textiles takes approximately 70-150 liters of water. DyeCoo reduces it to zero. The CO2 used in the process originates from other industrial sources and is 95 percent recyclable. On top of that, the technology uses less chemicals and about half the energy of conventional dyeing techniques.
"The benefits are huge,” explains Reinier Mommaal, co-founder and former CEO at DyeCoo . “There is no water consumption, no use of chemicals and no drying. Although the investment costs are high, the lower operational costs and the faster processing than traditional dyeing illustrate great advantages."
With an estimated 39 million tons of polyester dyed annually, the massive market opportunity for DyeCoo was reason enough for Nike to become a shareholder in the company. Late 2013, Nike celebrated the opening of its first water-free dyeing facility at one of its suppliers featuring DyeCoo’s machines.
The Super Bowl 50 Nike Gold Collection, a special collection in honor of the Super Bowl’s 50th anniversary in 2016, featured DyeCoo’s water and process chemical free textile dyeing technology. In the meantime, DyeCoo also attracted other suitors such as IKEA, that became a co-investor in DyeCoo, and Adidas, which used DyeCoo-technology to launch its proprietary DryDye concept.
The complex supply chain that DyeCoo is operating in, results in many constraints for its business model. Scaling up is a basic prerequisite for DyeCoo in order to create the societal and financial impact that the company’s shareholders aspired to. To date, DyeCoo’s worldwide capacity of 32,000 liters and growing makes it a small player in a huge global market, but the future looks bright.
Next to Nike and Adidas, Swedish outdoor apparel brand Peak Performance has also launched products using the DyeCoo technology. Furthermore, DyeCoo launched the DyeOx 4, the latest version of its machinery at the end of 2016, and the company continues to develop new applications including yarn, elasthane, cotton and nylon. Combining efficiency with speed and flexibility, operational costs are up to 40% lower than water dyeing. As such, DyeCoo ensures there is no longer a compromise between sustainability and profitability.
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A previous version of this article appeared on INSEAD Knowledge.
Image source: Nike