To accelerate sustainable chemistry, steal this model

Collaboration accelerates innovation. Time and again, Change Chemistry has seen companies advance their sustainability and innovation goals by coming together in precompetitive spaces. 

However, “industry is not set up to collaborate on a broad scale,” says Homer Swei, the Environmental Working Group’s senior vice president of healthy living science. Companies are incentivized to compete and, in some cases, restricted from collaborating without nondisclosure agreements in place. As a result, brands can have a difficult time talking with one another, collaborating, and co-innovating. 

These barriers to collaboration can pose a problem in the face of technology challenges, such as when a product needs to be replaced because of safety concerns. Consumer pressure can spur the removal of materials of concern from the products, but that alone doesn’t result in safer or more sustainable products. For that, “you need a combination of external incentives and collaboration within firms and across the value chain,” Swei says. “This value chain collaboration to achieve mutual goals is the part we’re trying to figure out.”

To support this idea, in 2016, Change Chemistry (formerly the Green Chemistry & Commerce Council – GC3) set up a challenge to engage major retailers, brands, and chemical suppliers in a collaborative effort to identify and commercialize new preservatives. This was chosen as a priority by companies as there was a shrinking palette of available preservatives given market and regulatory pressures yet a need for safe and effective preservatives given their important function in protecting against microbial contamination – a risk to consumers - and increasing shelf life. 

The challenge coordinated by Change Chemistry comprised two parts: an innovation hub focused on identifying and evaluating new preservatives for consumer products and a commercialization hub that focused on bringing together companies that needed new preservatives and start-ups with solutions that were ready to market. 

Swei, who helped to conceptualize and participated in the preservatives challenge when he was global product stewardship director at Johnson & Johnson, says the preservatives challenge was an exercise in facilitating the back-and-forth that happens between companies and suppliers. “Change Chemistry represents a unique opportunity because all the parts of the supply chain are there: governments, suppliers, brands, and retailers,” he says.

The resulting model for collaborative innovation can address other ingredient-related challenges. For it to work, you need a big problem that companies can’t handle by themselves, clear requirements, and trust.

Facing a problem together

To fit the criteria for collaboration, the problem has to be something that an individual company cannot solve on its own using existing models and methods. Pulling together financially must represent an opportunity to increase efficiency or efficacy. 

In this case, brands had been looking for new preservatives on their own for more than a decade. “What’s holding back systemic change in preservatives? Not just one company getting better preservatives, but a plethora of preservatives available for all companies,” says Joel Tickner, executive director of Change Chemistry. 

Preservatives generally have a long regulatory runway, low volume and accepted price, all of which extend the time it takes for a product to enter the market. “We still see personal care trade associations defending the incumbents because the alternatives aren’t available at sufficient scale or cost, or recognized as better by authorities or the marketplace,” Tickner says. Mounting health and safety concerns and the restriction of certain preservatives by governments and major retailers have created a pressing need for alternatives.

Coming together allowed companies to learn from their peers and customers about their needs, how they evaluate new technologies, where they have succeeded and failed, and more. “

“When you work on replacement strategies and don't try to involve as many perspectives, outside your company as possible, you get a tunnel vision”, says Günther Schneider, who was a principal scientist at Beiersdorf at the time of the challenge. “Therefore, it’s really good to have this exchange.” Tickner says a broad range of companies, “from front-runners to fast followers,” assembled to push the innovation envelope toward innovative, safer options without compromising on performance.

Getting clear on the needs

Early on in the innovation hub, Change Chemistry created a blueprint for new preservatives development. These specifications included health and safety criteria as well as qualities such as performance, supply chain costs, and qualitative parameters such as smell and color. It then used those criteria to request a solution from the market.

Having clear requirements “unlocked the conversation because all of a sudden, people who are not familiar with our industry can get engaged in our industry,” including academics and companies outside of the personal care industry, Swei says. Chemical suppliers now use the collaboratively developed requirements as design specifications.  

More recently, Change Chemistry undertook another challenge—to develop safer, more sustainable silicones—which was less successful because the requirements weren’t as clear. Silicones have a wide application area and thus lack a clear function and testing parameters. It is not always clear to an untrained person why certain silicones are used in a formulation, and this trade secret is not something generally disclosed to third parties, Schneider explains.

Collaborative innovation works well “when there’s a clear functionality that everyone is trying to achieve, and you’re trying to focus on innovation in the function, rather than getting rid of a particular chemistry,” Tickner says.

Building trust

To ensure that companies are willing to work together, some type of advance intellectual property agreement is needed to establish trust. Change Chemistry established ground rules in the first meeting of the preservatives project to ensure that no company would take a solution until the final judging was complete. The rules also governed when and how information could be shared and in what context companies could contact the innovators. The companies were interested in collaborating and amenable to these rules. 

Establishing ground rules early on can also allay concerns about antitrust. “We’re not trying to pick winners and losers,” Tickner says. “We’re trying to bring the ecosystem together. And that’s not an antitrust issue.”

Challenges such as these show that industry “can self-assemble and self-direct our resources,” Swei says. “We can put all our money in a pool, and it can work,” even in the absence of an outside force such as government pushing the industry in a particular direction. He suspects additional funding from a federal matching program would raise the challenge’s profile and increase participation even more.

It’s unclear whether ideas from the challenge have made it to market—but Swei says that that wasn’t really the point. “It created all these channels of communication that weren’t there before,” he says. “Once you open a funnel, lots of great things can happen, even if it’s not directly related to what you’re trying to do. Just putting attention on something—opening lines of dialogue—is really key for that.” The second part of the preservatives challenge, the Commercialization Hub, which focused on more market ready solutions, provided additional evidence of the interest of companies in collaboration to address technology challenges, and resulted in some one on one joint development agreements.

The challenge also elevated and communicated the need for preservatives and the state of innovation in that space. “Before the preservatives challenge, nobody really knew this was a problem except for people in our industry,” Swei says.  

“We can move innovation faster when companies collaborate together to solve problems,” Tickner says. The insights, new connections, and other opportunities that resulted far outweighed the difficulties of convening the challenge. The challenge demonstrated that companies not only are willing, but want, to come together to address mutual pain points. It can lead to innovative win-win solutions faster and at lower cost. Collaboration is key to innovation and companies know the boundaries between pre-competitive and competitive activities.  

This collaborative innovation model “is sound for just about any ingredient you want to go after,” Swei says. “So long as the prerequisites are met, it should work. You just have to have enough critical mass and interest to start something like this.”