Plastic’s Second Act
BASF had high hopes for its new biodegradable plastic, but success wasn’t simple.
Successfully introducing a “green” product includes challenges beyond ensuring its environmental advantage. The Gore Case Study “Co-Innovation of Materials, Standards, and Markets: BASF’s Development of Ecoflex” explores the development and marketing of a material and offers insights into the green-product innovation process.
From their creation in the mid-19th century synthetic polymers—plastics—were designed to resist nature’s ravages. In today’s world, with landfills quickly reaching capacity and plastic bags littering many locations, the robustness of some plastics exacts a high environmental toll. Against this backdrop work began in the early 1990s to create both biodegradable polymers and recycling systems. By the mid-1990s Germany was testing an integrated approach, including curbside pickup of organic waste, large-scale composting of materials, and transfer of compost to farmers and gardeners.
BASF, a German firm, wanted to enter the emerging market for compostable polymers. Anticipating a modest initial market, in the early 1990s BASF invented new materials that built on existing feedstocks and would fit with BASF’s manufacturing equipment. BASF’s project team included company scientists with connections to academics working on biodegradable materials and product marketing experts who came up with the concept for a biodegradable trash bag suitable for curbside pickup. While managers developed a marketing plan for the emerging product, scientists synthesized and screened new biodegradable polymers.
One material that received particular interest at BASF was a novel butanediol copolyester—the product that would become Ecoflex. Following extensive experimentation BASF modified the crystalline structure of polybutylene terephthalate by incorporating an aliphatic monomer in such a way that the polymer remained stable but was now chemically attractive to micro organisms, making it biodegradable. By 1992 the promising—though still unnamed—compound had undergone laboratory testing and initial compost trials both at the firm and in actual large-scale compost systems. BASF also carried out a variety of other toxicological studies and environmental tests on Ecoflex and its degradation compounds. In each case, test results showed no acute toxicity or accumulation of toxins. This was a concern to the company because of increasingly stringent regulations in Europe that producers track materials through the environment as well as worries that compost made with the breakdown components of synthetic plastics might be dangerous to use for growing foodstuffs.
With the product in hand the team developed a business plan. While the plastic was manufactured using existing infrastructure, a new product team was in charge of sales and of building new customer relationships. A key element in BASF’s approach was collaboration with standard-setting agencies and associations that certify products as biodegradable. According to standards negotiated in Germany and then applied across Europe and in the United States, a compound classifies as biodegradable if it converts to carbon dioxide, water, and biomass via microbial action. The key metric for producers is the conversion of 90% of the organic carbon to CO2 in less than 180 days. Ecoflex achieves this in 80 days.
The long-standing invisibility of the chemical industry to most consumers has been superseded by traceable production chains and consumer interest in the environment.
For BASF, certification proved important to the Ecoflex brand. Each certification required paying fees for external laboratory analysis of the material and for the administrative costs of the certification organizations. In exchange the company could use certification logos in advertising and on brochures. The credibility of Ecoflex—understood by BASF product managers as critical in its marketing—was underpinned by involvement with both standards agencies and voluntary certification schemes. Helping customers and consumers distinguish the category of “green” products from other materials was as important, if not more important, as differentiating a specific product from its competitors.
By the end of 1998 Ecoflex appeared poised for growth. Government policies were driving the construction of new large-scale compost facilities and the separation of waste streams. Standards and certification schemes were in place, promoting awareness among downstream plastic-bag and thin-film producers that new products were available. But the limitations of current technology and consumers who did not properly separate plastic waste proved a major hurdle to Ecoflex’s success. To BASF’s disappointment, the new largescale compost facilities could not differentiate an Ecoflex bag from plastic bags that would not degrade. Such facilities use large fans to blow lightweight materials like plastic bags out of the waste stream before composting; plastics are then separated and either sent to plastics recycling facilities or to landfills. In landfills Ecoflex does not break down in the same way as in large-scale compost facilities. Like other biodegradable plastics, Ecoflex must be removed from recycling processes that convert plastic bottles and packaging into such products as carpeting and polyester fibers or back into containers. Rather than fitting a niche with precision, Ecoflex faced a significant roadblock as a result of unpredictable consumer behavior and compost-facility removal of plastics from the degradable waste stream.
In the face of this challenge BASF reoriented its marketing to focus on two different kinds of end users. In addition to concentrating on supermarkets and individuals buying plastic bags, the firm built sales among farmers who use plastic sheeting to prevent weed growth and to trap moisture in the soil. Farmers can plow the sheeting back into the field after harvest and allow it to compost naturally over time. Ecoflex will not break down in the short timeframe of a sophisticated compost facility but will decompose in a field over four to six months. A second market emerged among organic-food packagers, who were willing to pay a premium to promote packaging along with their specialty produce. This food packaging will also break down, though over a longer timeframe, in large landfills.
Today Ecoflex is used to produce compost bags for organic waste (as originally envisioned), mulch films, transparent or cling films for food wrapping, and coatings for paper plates and other products. And the product showcases a long-term strategy at BASF: even if the specific uses BASF currently advocates for Ecoflex fail to develop into major markets, the company is laying the groundwork for a future competitive position when polyethylene plastic bags are restricted or banned more widely than at present.
Ecoflex also offer insights into the green-product innovation process. Without regulations that put a cost on such behaviors as discarding plastics into landfills, a critical market-pull feature is absent. Likewise, without standards and certification schemes that verify to consumers that products meet the claims of manufacturers, plastics with very different environmental life-cycle and consumer lifestyle features are compared solely on the basis of price.
Consumers can now learn about the source, manufacturing chain, and fate of products and packaging. The long-standing invisibility of the chemical industry to most consumers has been superseded by traceable production chains and consumer interest in the environment. To chemical companies, innovation historically was about the molecules and the diversity of uses that downstream purchasers developed for new materials. Now firms like BASF must add consideration of diverse product uses and the environmental fate of their materials to the innovation process.
Neither mandates for composting, nor standards defining biodegradation, nor the advances in chemistry that produced polybutylene adipate-co-butylene terephthalate account fully for the existence of Ecoflex. Its development instead illustrates the coevolution of a product, standards, and the market. None of the three is static, and the successful innovation pathway forged by BASF proves that actively creating markets rather than waiting for consumer demand to attract new products has become integral to product innovation in a wide array of business sectors. BASF has also shown that the chemical industry—with its scientific expertise, laboratories, and test facilities—can play an active role in developing new systems for recycling and product life-cycle management.