susTaiNabiliTy iN iNNovaTioN
Learning Objectives
In this chapter, we will address the following questions:
1. What drives companies to develop sustainable products and services?
2. What makes a product or service sustainable?
3. What are the levels of eco-eciency in NP design?
4. What are sustainable product systems, including the cradle-to-cradle strategy?
5. What dierent product–service systems strategies can a rm take?
Marius Claudy is associate professor of marketing at University College in Dublin, Ireland. His PhD
is from the Dublin Institute of Technology. Dr. Claudys research is in marketing of innovations and
sustainability in the innovation process.
Creating and Marketing new ProduCts and serviCes
Sustainability Efforts Decompose at Frito-Lay
In 1999, manufacturer of the popular SunChips snack food, Frito-Lay (a wholly
owned subsidiary of PepsiCo), set a corporate-wide goal to become more sustain-
able at its manufacturing facilities by reducing water usage by 50%, natural gas by
30%, and electricity by 25%. To tout this green initiative, the company ran an ad
campaign announcing its facility was utilizing solar power to make SunChips. In a
billboard campaign, the letters spelling out the SunChips brand name were placed
as a cutout on top of the signs upside down and backward. When the sun came
out, the SunChips name would appear as a shadow across the top of the signs.
Frito-Lay didn’t want its sustainability eorts limited to manufacturing. In April
of 2009, the company announced that by Earth Day 2010, it would begin selling
its snacks in fully compostable packaging. In a press release, Frito Lay reported,
is month, the SunChips brand is taking the rst step toward this transforma-
tional packaging. e outer layer of packaging on 10½ oz.-size SunChips snacks
bags will be made with a compostable, plant-based renewable material, polylactic
acid (PLA). By Earth Day 2010, PepsiCo’s Frito-Lay North America division
plans to roll out a package for its SunChips snacks where all layers are made from
PLA material so the package is 100% compostable [so] it will fully decompose in
about 14 weeks when placed in a hot, active compost pile or bin.
Frito-Lay uti-
lized an open innovation strategy by partnering with NatureWorks, the innovator
of Ingeo™, a biopolymer made from corn-based sources. Green-product enthusi-
asts eagerly awaited the introduction of this sustainable packaging.
Yet, the marketplace acceptance of the new packaging was less than enthusias-
tic. Shortly after launch of the fully decomposable packaging, year-on-year sales of
SunChips started to plummet. According to the SymphonyIRI group, a Chicago
market research rm that tracks sales at retailers, SunChips sales declined more
than 11% over a 52-week period. e reason for the drastic decrease was that
consumers found the new bag to be too “noisy.” e noise of the bag—due to the
molecular structure of Ingeo, which made the bag more rigid—registered at more
than 100 decibels, where a lawn mower registers 90 decibels and a motorcycle 95

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