Ecostore head green, keen and seeing red

By Ben Chapman-Smith

Botulism scare has ecostore founder fuming over NZ's carelessness about nuturing its pure image

Malcolm Rands, chief executive and founder of ecostore, describes the company as "a capitalist beast with ethics". Photo / Dean Purcell
Malcolm Rands, chief executive and founder of ecostore, describes the company as "a capitalist beast with ethics". Photo / Dean Purcell

It's late morning at a quiet cafe in central Auckland and ecostore founder Malcolm Rands is fuming. In between bites of a large scone covered with jam and cream, Rands vents his anger about the Fonterra botulism scare. The whole affair is yet another "disaster" for New Zealand, he spits.

"I'm actually more angry with NZ Inc. We've got so many places where we're not bloody living up to our clean green image, this just leaves us wide open. That's the worst thing you can do - over promise and under deliver."

When Rands founded ecostore two decades ago, it was nothing more than a humble mail-order business. The company is now a leading New Zealand manufacturer and retailer of sustainable household and personal care products.

Its range is in thousands of stores all over the world and the company reported sales of around $30 million last year.

Ecostore has built its reputation on a guarantee that its products - made predominantly from plant and mineral-based ingredients - are healthy and safe for people and for the planet.

A core part of that brand is New Zealand's clean, green image.

"You can go into the supermarket and get a lovely bottle of bubbly now for probably about $15," Rands says.

"If that same bottle comes from a small province called Champagne, then you can put another zero on the price. That is New Zealand's potential - clean, safe and pure - and it's a world-beating proposition. And we're f***ing it up."

Rands has just turned 60-years old but there are no signs of his passion abating. He's no longer a long-haired young hippie earning peanuts. These days he's balding, wears trendy classes, cool jeans and a suit jacket. But that doesn't mean he cares any less about saving the planet.

His book Ecoman is being released next week, telling the story of how he's taken ecostore "from a garage in Northland to a pioneering global brand".

Rands describes himself as a serial entrepreneur.

"I've always started things up. I mean, we started New Zealand's first eco-village which still exists today," he says.

That eco-village in Northland, called Mamaki, is where Rands and his wife spend half of their week.

They load up the Toyota Prius and leave their Freemans Bay house on a Thursday night, making the long drive to Matapouri, north of Whangarei. Rands wakes up on a Friday and spends the day making Skype calls to clients in Australia.

"And then on Saturday and Sunday I go back to what's good for my soul, being a peasant farmer again. We usually come back on Sunday nights and on a good week we bring back organic eggs and vegetables for everyone in Auckland."

A shy "geek" at school, Rands had read Lord of the Rings by the age of eight. He was on track to follow in his father's footsteps as an engineer but then realised he had no interest in it.

Instead, he was drawn into the world of rock and roll. His high school boy band was called Beavershot. Later came glam-rock band Rueben. "I was actually a full-time, paid rock musician for about four years."

In typical Kiwi fashion, Rands took-off travelling for about four years and then returned to Auckland as a 26-year old lacking direction.

He came up with the idea of digging a garden for his mum, walked into the local library and immediately saw a book about organic farming.

"I started reading it and thought, 'Why would you go any other way?' It just made so much sense. It just resonated with me."

This is one of many moments Rands refers to in his book as kismet or synchronicity. Picking up that book was part of his destiny, he believes.

It awakened in him an obsession with organic gardening. It was the first step onto a path that led to founding the eco-village and ecostore.

Rands gained his business skills during a 15-year career at the Whangarei Community Arts Council.

"I was particularly good at events organisation. I was putting on festivals and shows and it really taught me a lot about the financial side of it. You have to do all the PR and do it all on a complete shoestring," he says.

In 1985, Rands and a group of friends found a pristine block of land on the coast and poured themselves into making it a long-term home.

They saw it as a place to grow food and called it Mamaki, which means 'spirit of the fertilising waters'.

Rands studied the history of communes, looked at why so many had failed. He and his friends decided there would be no gurus and no leaders.

Rands writes in Ecoman: "It's not that we got it perfect at Mamaki. We didn't. We made lots of mistakes. But we have also had a lot of successes, and when we go up there now it's just very easy."

Once Mamaki was established, Rands set about sourcing products to sell which contained "no nasty chemicals".

The first 20,000 copies of his first full catalogue came out in Spring 1993. As the mail-order business slowly grew, Rands, wife Melanie, and their two young daughters moved to Auckland to develop their own products.

They hired a chemist, worked hard on the marketing and started getting space on supermarket shelves.

Within 10 years ecostore was turning over $1.5 million. The business entered a time of huge growth between 2004 and 2010, increasing turnover to $24 million a year. That has risen by another $6 million since then.

Ecostore's products are now sold throughout New Zealand, in Australia, United States, Hong Kong, Singapore, Taiwan and Malaysia.

The company was named the New Zealand Sustainable Business of the Year in 2009. Even so, ecostore has only just started turning a profit in the past 12 months, Rands says.

"To grow a business fast, you're putting it all back into it. There's no spare capital in a fast-growing business. Especially in FMCG (fast-moving consumer goods) where you're working with the supermarkets and you might not get paid for two or three months," he says.

Rands describes ecostore as "a capitalist beast with ethics".

He says many people from his quarters - the arts and eco scenes - see money as being evil in some way. But his belief is that to change the world, you need to make money.

"You actually use commercial success to drive change rather than telling people, 'You should be doing this', or through regulation.

"The smart companies of tomorrow are doing what we're doing - being completely ethical, completely transparent. Ecostore is a complete capitalist beast but it's the new model of that."

If you don't make money, there is no tomorrow, he says.

If you don't make money, you can't hire the best people in the world to work for you.

One of those people is New Zealand's highly-regarded scientist Sir Ray Avery, who Rands hired in 2005 to re-formulate many of the ecostore products.

In Ecoman, Avery describes Rands as "a true eco warrior who lives and breathes environmental sustainability".

Apart from his business success, Rands has "almost single-handedly created a national and international awareness of the need to create an environmentally eco-friendly sustainable business and shown how it can be done", Avery writes.

Rands says the whole reason he set up ecostore was to fund his not-for-profit organisation called the Fairground Foundation.

About 10 per cent of the company's profit goes to the foundation, whose projects over the years have included building organic gardens at schools and trying to get a car-pooling system off the ground in Auckland. Rands has struck a deal with Vector to fit out the ecostore, in Freeman's Bay, with solar panels. It will cost ecostore nothing.

"In five years we'll still be paying the 2013 [level of] power bill," Rands says. "Because we're the pilot, any small business in New Zealand can do the same. That's a classic Fairground project."

Rands says he has made mistakes along the way.

One of those was the decision to break into America through a licensing agreement. In every other market, ecostore works through a distributor.

"Everything's about the brand for us," Rands says.

"It's about the authenticity, it's about the lovability, and it's about how the people act within the business. To have a successful brand, it's not a marketing exercise. It's everything. Once you've lost that to someone from a completely different culture, you're buggered. It's distorted quite a lot in America so I wouldn't do that again."

At home, the brand is under threat too.

"Why the hell is a housewife in Hong Kong buying my dishwashing liquid? "It's not a rational decision, it's an emotional decision. They want a bit of pure, clean New Zealand. And if we blow that? What a disaster."

The government needs to wake up and start taking the country's problems seriously, he says. It's the dirty waterways, the mining plans, the traffic congestion.

"There's no investment in organics, there's no investment in cleaning up our naughtiness. We should be investing in clean, green New Zealand. I've been saying this for a long time."

Rands has big plans. He wants ecostore to be well established in Asia. He's also looking at a direct delivery system for regions like Europe.

"Rather than actually setting up chains of ecostore or bothering with the supermarket chains, we might just have a very clever system partnering up with Amazon or something."

Being a privately-owned business is a huge luxury, he says.

"We're not worried about the quarterly reporting cycle, which I think is a real handicap for a lot of businesses. They've got to look at such short-term goals.

"We can make a decision to lose money for the next four years if we want to because we know that in year five we're going to really rocket and that's what we've done in the past."

Rands says he has the classic strengths and weaknesses of an entrepreneur. With passion, vision, energy, and optimism come a loathing for details and repetitious work. He says he's probably too soft on his employees.

"I'm not a hard-arse enough."

His advice for young entrepreneurs is to avoid getting caught up following the latest trends or fads.

"If it's not a true passion and it's not something you're good at already, don't even start because you'll run out of steam and there'll be other people who will out-compete you."

Rands' own philosophy is to be the first, don't wait for someone else to show the way.

"It's just taking on a project that everyone else is too afraid to do. Imagine the future and do it now. That's my motto."

Ecostore

* Founded by Malcom Rand in 1993
* Manufactures over 60 cleaning, body and baby care products
* Sold nationwide and internationally in Australia, US, Hong Kong, Singapore, Taiwan and Malaysia
* Turnover $30 million last year
* Head office and concept store in Freemans Bay, Auckland
* Employs about 60 staff in Auckland, 3 in Australia

Price comparision

(Countdown online shopping)
Dishwash Liquid:
* Ecostore 500ml $3.95
* Palmolive 500ml $2.49
Laundry Powder:
* Ecostore 1kg $8.85 ($7.85 with One Card)
* Persil 1kg $8.59

Ecoman comes out in bookshops next Friday.

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