Tony Instagram: @tonyrcp
Etiko Instagram: @etiko_fairtrade
Etiko website: https://etiko.com.au/
Fairtrade International: https://www.fairtrade.net/
Ethical Fashion Report: https://baptistworldaid.org.au/resources/ethical-fashion-guide/
The Myth of the Ethical Consumer: Find the book here
The Lohas Report
In this episode of Producing with Purpose, I catch up with Nick Savaidis, the founder of the Fairtrade certified fashion label, Etiko, where we talk in depth about creating a certified B Corp business that doubles as a successful social enterprise.
Activist or Entrepreneur
We kick things off today with Nick painting a picture for us of the years before founding Etiko, where he spent time in the late 80’s and early 90’s working on various projects with indigineous communities, specifically Yuendumu.
Tasked with teaching numeracy and literacy in remote communities, Nick acknowledged that there was a resistance from the community to learn the skills when there were no jobs to apply them to.
As any good teacher would. Nick set about looking for opportunities to better contextualise the education process and combine it with ways to generate employment, support the community and give meaning to the education.
With a vision in mind, Nick acquired funding to open a commercial laundromat, where the community could benefit from the business itself, generate employment and also connect the education to a real world example.
Without yet knowing it by name, this was Nick’s first, but certainly not last, endeavour into social enterprise.
“it was a great training ground for someone who wants to work in social enterprise because all those years I was doing it. I'd never heard the expression social enterprise and we were just doing it.”
Returning to Melbourne with increased knowledge of founding social enterprises and a connection to the cause, Nick recalls how he approached the dominant non-profits, but without the formal qualifications, found himself with a world of direct experience but the gaps on paper that prevented him getting into the sector.
With an ambition to work in the space, Nick pushed forward and eventually acquired the distribution rights for the (now disbanded) brand, No Sweat - the world’s first ethical shoe brand.
I speak to Nick about whether he classes himself as an ethical entrepreneur, or a social enterprise activist, with a commitment to the work that runs a fine line in between.
With a goal to combine entrepreneurship and generating profit with his passion of helping communities, Nick has achieved an impressive balance of business management with activism that has truly enabled him to have an impact on his customers, and those who are involved in the supply and manufacturing processes of Etiko.
“That’s what I’ve been trying to do. Run a successful business, whilst creating positive social impact”
15 years of progress and the ‘Myth of the Ethical consumer’
Following the training ground of social enterprise that Nick had been a part of, with Social Impact laundromats and working with the No Sweat brand, in 2014 Nick takes us back to the moment he took the plunge and decided to create his own company, founding Etiko.
We cover the challenges of creating a business and the disparity between what the research indicates consumers care about, and how they then act when presented with the ethical decision to be made which was reinforced by a previous book that Nick recaps, titled ‘The myth of the ethical consumer’
With acknowledgement of ‘the magic of marketing’, we dig into the harsh reality of how consumers are influenced by social environments and the consequential behaviour of virtue signalling to indicate they are more likely to make ethical choices, and if this can translate to an online environment, where people are making purchases in isolation and aren’t as compelled to make the ethical decision.
As a result, the brands like Etiko, who are trying to do the right thing, are getting a share of a much smaller proportion of the market than research may suggest, causing a slower, and more challenging transition to running a successful business.
We discuss how this comes back to the strength of marketing, and brand affiliation, which Etiko has been working to increase more and more in recent years.
The direct impact of Fairtrade
In addition to Etiko being the first Fairtrade Certified fashion brand in the southern hemisphere, Nick has been heavily involved with having manufacturers audited and accredited to ensure the Etiko production processes are some of the most ethical and transparent available.
With a comprehensive overview of what the Fairtrade certification means for workers, suppliers and manufacturers alike, we learn about the differences between minimum wage and a working wage in countries such as Bangladesh, and how the Fairtrade certification ensures that companies go above the minimum standards and generate work that provides a livable income for employees.
Our conversation continues to cover the fact that other accreditations available are not always as reliable and are often rewarding companies for doing the bare minimum, where they can be perceived as being rewarded for making a positive impact.
“When the CEO of a company gets paid more than $1 million a year, and they can’t pay workers in a developing country a living wage, I hardly describe that as being an ethical fashion brand”
Nick receiving a Human Rights Award for Business in 2016
Clarity of brand
After speaking in some depth about Nick’s work in community based social enterprises, his time with No Sweat and then the solo founding of Etiko, we speak briefly about the origins of Etiko, starting as an ethical sports brand.
Identifying that manufacturers were able to create Fairtrade sports equipment, Etiko produced the first non-food products in Australia to be Fairtrade certified, releasing sports balls and equipment via ethical production methods.
Encouraged by the work that could be done by the Fairtrade factory with sports equipment, Nick committed to branching out into footwear and started the transition into Etiko sneakers and clothing by 2008.
With some confusion emerging whether Etiko was a clothing brand or a sports equipment brand, the business decision was made to split the brand into two entities. Inspired by the Walpiri word for ‘victory’, Nick created the secondary brand, Jinta, to focus purely on sports equipment.
In 2013, following the Rana Plaza factory collapse, a shift began towards greater consumer consideration for ethical practices in clothing, and Etiko began to increase their presence in the market as a well established ethical clothing option.
With the Etiko brand growing, resources were stretched over two brands and Jinta began to take a back-seat to Etiko - at least for the short term…
Not only has Nick been single-handedly heading up the Etiko fashion side of the business and Jinta sport, but we also dive into the interesting third arm of the business, Etiko Merch.
With many brands talking about their commitment to sustainability and social impact, Etiko provide bulk order, branded production, allowing some of the country's largest universities to offer branded products that align with their ethos, without needing to embark on the arduous process of identifying FairTrade Certified providers in the way Nick has.
Talking about how Etiko expanded into this side of the business, we cover the necessity of branching into different revenue streams, and how any method of increasing the demand for FairTrade cotton circles back to the positive impact that Etiko can have on their supply chain.
Aspirations for the future of Etiko
As with any business, there are always visions and aspirations for the future. With the foundations set over the last 15 years, Nick expresses the ambition to spend the next year growing the brand into international markets.
Producing footwear for New York University and a worldwide shift for more eco-friendly and ethical products, the market is available for Etiko to grow into, and we cover the business opportunities and hard work ahead that comes from trying to grab this opportunity.
With plans for an equity-raising campaign in 2021, Etiko will be collaborating with individuals for investment but are also considering a crowdfunding for equity campaign, allowing their supporters to become a part of the Etiko family with ownership options.
The secret to surviving 15 years as an ethical brand
Coming into a market, potentially ahead of when the market was ready, Nick has navigated Etiko through tough times like the 2008 GFC and outlasted many other brands along the way. By keeping a lean model and sticking to the ethos that was established from day one, he has put everything, from time to money and a belief in creating social impact, to a point that the business had no option but to succeed.
“I put so much on the line, I couldn’t afford not to make it”
He covers how many aspiring entrepreneurs come to him on a weekly basis, wanting to create their own brand, but without the appropriate resources, team or funding to really get off the ground.
However, running a lean operation does come with it’s challenges such as retaining highly qualified staff, but it has been a compromise that has set Etiko with a strong foundation for future growth.
The next 12 months
Nick reveals the big news that Etiko’s retail store will be relocating to Brunswick in Melbourne.
By March next year, Etiko will be launching their crowd-funding for equity campaign, with lower cost entry options, but also options for investors of over $10,000 to be involved. For more information, you can contact Nick on: email@example.com
Lastly, Nick talks about plans to continue enhancing and expanding the footwear range along with building the Etiko team and launching North American distribution, paving the way for a successful and exciting year ahead for Etiko.
I’d like to once again thank Nick for being a part of the podcast, and look forward to seeing more of the positive social impact Etiko can have in the years ahead.