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The founders of Ecovative Design created a new approach in the development of packaging materials. The utilization of agricultural waste feedstock, particularly mycelium, assures complete biodegradation of its primary product. Such innovative packaging meets the requirements of sustainability in business, so Ecovative Design received large investments for further development. However, the partnership with Sealed Air conceals a range of benefits and detriments that must be evaluated.
The main principle of Ecovative Design is to use natural biological materials in the production process of protective packaging. Its co-founders affirm that “their main objective is to ensure the financial viability of Ecovative while maximizing the positive environmental handprint of the company” (Laszlo 6). The concept used in the manufacturing of packaging materials in Ecovative is also associated with biomimicry, but it is bio-adaptation.
A business model of the company implies that its products not only imitate natural regenerative processes, but they also implement biodegradable materials only. Other competitors rely on biomimicry but continue using synthetic materials. Thus, Ecovative Design is a great example of a business with embedded sustainability because it holistically incorporates environmental, health, and social values into its core business processes and activities. Furthermore, companies that utilize EcoCradle packaging also align their values with environmental sustainability.
Even though biomimetic and adaptive innovations have a great potential to promote sustainability in business, very often companies face some difficulties in their implementation. This requires a major transformation in business models, while the primary goal of any enterprise is to stay profitable. Brennan claims that “most companies value those technologies that lower the costs and increase the profits of the products that they have already built” (440).
Meanwhile, some companies, specifically in the niche segments, are concerned about the best quality of their products and are targeted at compliance with the current trends on the market. That is why, a niche application business model has a great potential to bring revenue to the Ecovative, but it is less likely to maximize a positive environmental impact because of the limited target audience. Another option is to consider licensing their technology to entrepreneurs in other parts of the United States. This would ensure protective packaging manufacturing by using agricultural feedstock from regional farmers. This option seems more compatible with the maximization of positive environmental impact.
Realization of the second option requires much effort from Ecovative and individual entrepreneurs because the expansion of production lines is always challenging. Meanwhile, the contract with Sealed Air provides a great opportunity to scale Ecovative’s current operations to a commercially viable size. Currently, economics implies that “co-evolutionary business model development for both niche and mass market players aims at the implementation of sustainability and transformation of markets” (Schaltegger et al. 264). Therefore, being in Bayer and McIntyre’s position, one would choose to sign an agreement with Sealed Air.
Expansion of production allows utilizing agricultural waste feedstock from the local farmers and maximizing the positive environmental handprint of Ecovative. Even though Sealed Air would obtain the right to exclusive manufacturing and distribution of EcoCradle, Ecovative would receive considerable licensing fees. Apart from this, co-founders can look for other opportunities in different countries by establishing cooperation and earning from licensing. Partnerships with such companies as Sealed Air serve as a springboard for spreading environmental sustainability principles and transforming markets.
Ecovative is targeted at complete compliance with the principles of environmental sustainability by utilization of biodegradable materials in production processes. Even though adaptive concepts have great potential, Ecovative needs to take much effort to keep financial liability and maximize positive environmental impact. The contract with Sealed Air has a great potential to bring Ecovative ideas to life and gain profits through licensing at the same time.
Brennan, Patricia L. R. “The Business and Promise of Biomimicry.” BioScience, vol. 65, no. 4, 2015, pp. 440–441.
Laszlo, Chris, et al. “Ecovative Design LLC: A Biological Materials Startup.” Richard Ivey School of Business Foundation, 2013, pp.1-8.
Schaltegger, Stefan, et al. “Business Models for Sustainability.” Organization and Environment, vol. 29, no. 3, 2016, pp. 264-289.