In the continuation of our series to stay in touch with the global and local trends in the industry, the AIMS Global Automotive & Mobility Practice, headed by Olivier Legrand, met up with Laurent Houvenaghel, leader of the iWip-ecosystem.
Because of the ever-increasing demand for sustainability, we actively searched for innovative companies that find the balance between industry and sustainability, and immediately contacted iWip, that is at the touchpoint of sustainability and production in a rather traditional industry.
iWip, which stands for “integrate waste in products”, is a unit within Mobivia Group (3 business lines, 9 brands, 18 countries, 28 start-ups, 2.060 stores and 23.000 employees, representing a turnover just shy of € 3 billion), responsible for developing sustainable business : caring for eco-responsible product development, collecting recyclable waste, sorting and recycling.
“We focus on the 12th Sustainable Development Goal of the United Nations – contributing to responsible consumption and production. We do so by focusing on the 3 R’s; reduce – reuse – recycle, which we ACT on. ACT stands for Advise – Collect – Treat.” Not only do they help their customers by offering advice on how to implement the 3 R’s, unlike competitors, they also manage waste collection for their customers. And it doesn’t end there; iWip has set up partnerships so they can treat the collected waste as well.
“The best way to reduce is of course, not to produce it. We reduce our packaging, but also share the knowledge with our suppliers in the concept phase of a product, to eliminate any excessive packaging.” Reuse focuses on the prolongation of product lifetimes; by reusing them as a secondhand product, or even by transforming it into an entirely different product. If it’s no longer reusable, it should be recycled. While burning is a popular (and economical) way of recycling materials in the industry, iWip only burns 25% of waste – much lower than any of its competitors, especially considering they produce less waste to begin with.
“The circular economy is accelerating,” Mr. Houvenaghel adds, “in the UK, for instance, 4 million secondhand tyres are sold per year. If we project these numbers onto the European market, we can easily achieve 15 or even 20 million.” Refurbished tyres are on the rise once more – it was popular 25 years ago, but the quality at the time was subpar. “I remember driving on refurbished tyres, back when I was 23. It was a real safety issue – it was dangerous because of the poor quality.” Unfortunately, people aged 50 and over still think of safety hazards whenever refurbished tyres are mentioned. “They still have this image of cheap, low-quality tyres – there’s a reason why they weren’t available for a long period of time. We have done everything we can to improve the quality, as safety is a big concern for us. People under 40 aren’t familiar with the existence of retreaded tyres – so they have fewer objections, and we notice that the younger generation actively welcomes retreaded tyres.” Market research shows they have no objections, as the quality label is reassuring enough for them.
“We’re lucky our management strongly believes in our cause. When we pitched the idea of refurbished tyres, the members of the board asked us if we were sure – so we replaced the tyres on our Managing Director’s car, as a demonstration. He can assure you they’re safe.” Fabien Derville, president and son of founder Eric Derville, aims to achieve 25% of the group’s turnover out of the circular economy by 2025. As of today, the circular share is only 2% – but resources are being allocated accordingly.
Nevertheless, iWip and the overarching group face challenges – both on a market-wide and on the internal HR-level. First of all, the new product requires a lot of attention on a business development level; the change in mindset is important – while the sustainable segment is a relatively new segment, people have become more acceptant of it in recent years. Currently, they’re conquering market share on the lower end of the segment, but they strongly believe in refurbishing middle- and high-end products as well.
Another challenge is legal; while French and European law is on their side for the time being, it’s important to continue lobbying for sustainability. It’s not an easy or fast process and it requires both very good negotiating skills and a strong network. As a French-native company active in 18 countries, it’s difficult to tailor to local realities, taking legal matters and cultural differences into account – even when doing business with neighboring countries like Germany and Spain.
One of the major issues is probably the network; currently the ecosystem thrives on collaboration with small businesses – we’re talking 1 to 3 people – who consider themselves to be direct competitors with their peers. iWip wants to move away from that mindset and create a sustainable environment that transcends barriers.
In order to do so, they’re constantly in search of talented individuals. While they have little trouble finding young people, who share their purpose and are attracted by iWip’s “why”, they are in need of attracting more experienced people, who can aid them with the “how” – supply chain is one of the biggest issues; managing and reducing the cost of supply chain is where the biggest wins lie, as it currently amounts to almost 50% of the costs associated with the process.
“We’re in need of people with an entrepreneurial mindset. We like to try things in a small market – if they catch on, we expand it to a broader audience, if it fails, we learn what we should improve on and try again in a different way. We’re constantly starting up new projects, to see what sticks.” Mr. Houvenaghel concludes.
iWip is a long-term project that is now rapidly accelerating; the team is embracing the change in culture, Mr. Houvenaghel mentioned: “It is traditionally difficult to find a balance between hard finance and contributing to a greener, cleaner world – but both are necessary factors we have to take into account in our decision-making process. Our CEO is a decisive factor in moving the line; according to Mr. Derville, we need to move away from the old focus of being profitable in order to be sustainable, and focus on being sustainable in order to be profitable.”
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Author: Olivier Legrand