24. Heidi Frasure on furniture circularity

Audio Transcript:

[00:00:07.150] – Garr Punnett

Welcome back, masters of the Multiusiverse. My name is Garr Punnett. Chief Impact Officer here at Rheaply. Another great conversation coming forward to you today with Heidi Fraser, Sustainability Manager at Steelcase is an office furniture manufacturer located in Michigan, but footprint globally. I mean, they are absolutely a leader in this space and provide probably something you’re sitting in right now or something you sit in at the office. We got to talk about sustainability work, her origins in the sustainability and circular economy space, more extended producer responsibility initiatives and again, more programs to come from either Europe or the United States. And then also what we get to expect when we’re talking about more product circularity. There’s more work for future generations to come and more work for us to talk about. But again, here’s the podcast. Enjoy. Heidi, thanks for joining us. We’ve got Heidi Frazier here from Steel Case, sustainability Manager at Steel Case, one of the leaders in office furniture manufacturing. So excited to have you. Thanks for joining. To talk about circularity and sustainability. How did you get involved with sustainability and circularity and then how did you get your start and involvement at Steel Case?

[00:01:23.170] – Heidi Frasure

Yeah, so thanks for having me. I’m excited to be here. My background really is kind of weird. I got my start in environmental compliance. My background is actually watershed science and stewardship. So kind of hit the ground running. Working for the Department of Energy, doing nuclear waste site clean up. So it was a little funky. I don’t glow, but had a lot of experience doing actual cleanup efforts. So soft first hand what happens when organizations, including our government, don’t manage waste properly and don’t actually have sustainable efforts. So got my start there and then kind of moved on through the industry consulting terms. I worked on a huge oil spill clean up project on the Kalamazoo River here in Michigan. A similar concept of dealing with different regulatory entities and sometimes they don’t always get along. So that was really interesting. We could do a whole podcast on that and then kind of jumped into the manufacturing side of things. I did some internal auditing with a company called InterTech out of Grand Rapids. Absolutely saw how things were made from behind the scenes and that was really cool and kind of started really evolving and growing from there in the sustainability world.

[00:02:43.620] – Heidi Frasure

I’ve been with Steelcase for five years and really excited about kind of changing from within, especially with corporations. I think we always kind of want to make a difference, and I volunteer a lot on the side, but I really think the difference comes from within organizations. And so that’s kind of where my passions are driven. I also fly fish and do a lot of outdoor activities, so keeping the environment clean is a huge passion of mine in general.

[00:03:12.110] – Garr Punnett

Well, that maybe speaks to the passion for the river systems as well. I want to take a step back actually into something you talked about with the regulatory efforts. Can you actually speak about that a little bit in terms of the experience you saw on either different departments trying to figure out where they fit and who is trying to lead, what type of effort, how does that play into manufacturers in general, in your opinion? I think that’s always an interest for our audience on how does the business landscape maybe interact with the compliance and regulatory landscape. What have you seen from your experience in that?

[00:03:47.910] – Heidi Frasure

Yeah, I would say it’s ever evolving and kind of patchwork and difficult to stay ahead of. So right now, from a circular economy perspective, I think there’s a ton going on in that space, especially in Europe and I think there’s a lot of efforts being put forth around extended producer responsibility laws and what companies do with their products after their place on the market. Where does that ownership start and stop and how much ownership should they have over end of life treatment and management of their products? So I think that it’s ever evolving. We’re seeing it pop up here in the States too now Maine, Oregon, a bunch of packaging, extended producer responsibility laws coming out and I think furniture is definitely on a lot of radars from that perspective. So something we’re definitely keeping an eye on. It’s interesting. I think it pushes industries in directions, sometimes positive, sometimes not so positive because I think it can be really confusing like that patchwork. So in Europe especially, we tried to have an integrated and aligned system through the EU, but unfortunately that’s not really how it played out. So the extended producer responsibility laws that are really confusing and in some cases not always going towards actually funding recycling of the products, which is what the whole point of them was.

[00:05:13.480] – Heidi Frasure

So I think there’s a lot to be said for learning lessons learned on what was done right, what was done wrong and I’m hoping that the States and Canada kind of take a note from that rather than trying to repeat what they’re doing and continuously doing the wrong thing. I think it’s pushing industries in different directions.

[00:05:35.850] – Garr Punnett

Yeah, I think that’s fascinating where again there is a continual there’s a reaction from a government and business standpoint that is just again, everevolving to your point, I could’ve phrased this negatively and I’m going to try not to. We in the States kind of can go back and forth with how the business community views the government community and they’re always the reaction and I’m fairly pro some sort of regulations when it comes to the environment but also understand the consequences that has on growing business and understanding those regulations. What positive light do you see happening here in the States on efforts of coming together and really figuring out a lot of these paths that we have towards solutions of our future?

[00:06:26.950] – Heidi Frasure

Yeah, I think where it can be positive. I mean, everyone has a role to play in a circular economy. If you look at a true circular economy, it cannot happen without regulations, it cannot happen without businesses, and it cannot happen without partnerships and different players in that space. So I think really regulations have a role to play in that and setting the level playing field. So if you have a federal law around EPRs, that’s a really level playing field for any industry that’s trying to do business in the state. We know what we need to do. It’s clear you can actually implement it and it will have actual tangible impacts. That’s I think best case scenario. Unfortunately, what we see though, is this patchwork system coming out with the different state regulations. Each one is regulating different products so they have different products in scope. Sometimes it’s furniture, sometimes it’s not. They’re setting different thresholds of sales, there’s different costs, there’s different EPR systems in place. So some again, may not even your money. Once you’re submitting that money into the EPR program, it may not ever get back to the recyclers and the infrastructure that actually need the money to ensure that the product is getting recycled, the end of life.

[00:07:42.980] – Heidi Frasure

So I think there’s a lot of barriers there that are just not working well. And like I said, you can learn from what’s happening in Europe right now. And that’s what we’re kind of seeing is like that money is going in from the OEM like Steel Case we’re paying into these systems, but is it really actually going towards the infrastructure that’s needed in order to support the recycling of products?

[00:08:06.850] – Garr Punnett

I mean this in the best context. I think what you’re saying too, is there’s a regionality to determine some of these regulations outside or within a federal mandate of some sort? I think that’s always so interesting to me when you talk about the certain power dynamics within those regions. And so I think of Michigan as such an innovative state when it comes to a lot of these initiatives. We at Rheaply, we’re working with a lot of similar contacts that you all might have at Steel Case. But it’s so interesting how that identity in Michigan has formed towards a lot of these initiatives and pushing these initiatives. What can you say about that within Michigan? I’ve always been fascinated by seeing a lot of these innovative type of solutions, but then also really sticking by legacy solutions like a bottle bill. What can you say about the identity within Michigan that you feel being a native?

[00:09:01.390] – Heidi Frasure

Yeah, I’ve worked a lot with the state on what they’re trying to do and initiatives around recycled content, initiatives around reuse and circular economy. So I think the state really does care about these issues. They want to be kind of leading the charge in that sense. And then we also, from a furniture perspective, obviously we have a lot of furniture industry here in the Grand Rapids area in particular, but Michigan in general. So I think there’s a lot of interest around exploring what Reuse looks like. We have Kent County landfill right now reimagining what a landfill looks like and potentially putting a system in place where they could capture that value at the end of life and reuse it in some fashion, either through taking the plastics out and reusing it, or really innovative strategies around like burning the material to a point where it could be used as a filler for plastics. There’s all sorts of really cool exploration going on with the Kent County landfill. So I think it’s interesting Michigan is taking a lead there. We also have very low recycling rates. If you look at it from a state perspective, we’re one of the lowest in the country.

[00:10:19.640] – Heidi Frasure

So I think Michigan is taking the lead on, hey, we don’t want to be the lowest, we want to do what’s right. I think a lot of it does come down to like politics and tipping fees and such though. So as long as tipping fees are low and landfill is still the least expensive option, that’s going to be where products end up. And so I think ultimately Michigan is trying to look at that differently and see how they can incentivize more recycled content which would eventually drive that recycling infrastructure and the recycling economy. I think they’re exploring EPRs. We’re not sure where they’re going to go yet with that, but I think there’s definitely some really innovative thinkers at the state level that are kind of driving change. And there’s funding there too, which is always good to see.

[00:11:06.340] – Garr Punnett

Always good to see. I wanted to call this out. I love there’s usually so many economics at play here when it comes to landfills or those tipping fees. One thing that’s always fascinating is Michigan. Kind of makes sense though, because I’ll have a lot of space and so when there’s so much space, a lot of land, the land is cheaper, which means the tipping fees are cheaper, which means it’s easier to put things in landfill. And so that’s always such a dynamic that I think people forget when it comes down to almost just the simplicity of those economics sometimes. Where the steel case fall in this? What’s the vision? I mean, you all have been creating great furniture for a long time in Reapply’s business. We see the aspects of that great builds that you all have. So there’s obviously care and intentionality in the design and in the manufacturing. How do you all treat those products? What is your sort of the sustainability strategy? What’s the circular economy strategy involved with sort of the future of steel case?

[00:12:08.370] – Heidi Frasure

Well, I think we’re on a journey and I think all of the OEMs are on a journey right now to really explore what does that look like for us. We obviously build products that last a Rheaply long time. There’s a ton of steel case furniture on the resale market so we know that they last a long time. We will continue to build products that way. They have one of the longest extended warranties on the market. So that’s always kind of been built into what we do. But I think what we’re exploring now is what does it look like for us to help customers keep our products out of landfill. And when we do that, what we’re finding is it’s not just keeping our products out of landfill, we’re keeping competitor products out of landfill as well. So I think there’s a lot to explore from an OEM perspective and I think what would be really interesting and exciting and this is kind of space I would like to explore more, is how does that work from an OEM perspective where we’re coming together and working towards end goal, where we’re not competing against you can send the most landfill.

[00:13:12.630] – Heidi Frasure

So we all have similar issues and there are similar scalability problems and regionality issues. How could we potentially come together as OEMS and explore what does that look like for us to support? Maybe it is an epic program, maybe it’s something where we’re all funding and investing in end of life opportunities for customers so that we’re supporting that circularity, working with you guys, working with partners to pilot and explore. What does it look like to reuse steel case furniture? I think there’s so much to explore there and we’re really just kind of on the cutting edge of a lot of that. But we’ve had some really great partnerships recently with Green standards and others where we’re really trying to keep products out of landfill and have a high diversion rate there. But not only that, it’s also helping with local communities. So when those pieces get donated in the local communities, you’re able to tell those stories of the beneficiaries. It’s helping that beneficiary not have to worry about how they’re going to find seats for their people. So there’s some social aspects there too. And I think that’s kind of the interesting part of a circular economy for me is not just thinking about landfill diversion and waste, it’s about the whole story.

[00:14:32.830] – Heidi Frasure

How do you upskill local communities to be makers and refinishers? Because I think that’s really where this is going to have to head. It doesn’t make sense for a customer in San Francisco to send Thousand Chairs back to Grand Rapids to be refurbished or re manufactured. It makes more sense for a local maker in that area to do that and I think no OEM is going to be able to solve for that on their own. So how do we work together to build that network of these makers and local skills that can help with that refurbishment piece? Because I think that’s a huge missing link right now for any refurbishment or repair.

[00:15:14.640] – Garr Punnett

It takes it back almost to probably the origins of Steel case again. I know the brand from being in the space of being so rooted in the community that there’s an element of taking it back to that place. Of rooting it in the next generation of that furniture. Rooting it in not necessarily expanding the footprint. But really ultimately investing in communities too. That can help grow the brand. Help continue the value of that furniture.

[00:15:44.430] – Heidi Frasure

Yeah, we want to leave the communities in which we live, work and play a better space. That’s our value proposition. And I think that’s something we really do believe down in our core, and it’s something we try to live out. Obviously, there are challenges here, like we talked about, a couple of them, but you have reverse logistics challenges. You have the logistics challenges. Does it make sense from a sustainability perspective? What’s the lesser evil there? And I think that’s the challenge with sustainability is there’s always trade offs. You’re always you’re always choosing one thing over the other, and it’s not always the best option. And that, I think, plays out a lot in the circular economy. And maybe it doesn’t get discussed as much, but there’s so many challenges and barriers to entry there. And that’s why I always say we’re on this journey. I don’t think it’s appropriate that anyone has this all figured out, because they don’t. And to me, that’s a huge red flag.

[00:16:47.080] – Garr Punnett

If someone says, yeah, no kidding, we’re.

[00:16:49.870] – Heidi Frasure

Definitely on a journey.

[00:16:51.020] – Garr Punnett

I think that’s absolutely true. I’ve engaged with certain organizations in the sustainability world, in the circular economy world, the number one red flag might be like, oh, no, we’ve got it figured out. And it’s like, yeah, I don’t know if you all got to figure it out. There’s a hump on this coming because the problems are so big.

[00:17:09.190] – Heidi Frasure

Yeah, I was going to say not at scale. Right. You can see this working and playing out really well in local communities. And we see that in San Francisco. There’s a ton of really cool partners there that are playing out circular economy models at a small scale. But once you start growing to a global scale, I do not know of a single partner or competitor that is doing this on a global scale. It’s very challenging. There are so many logistics challenges.

[00:17:37.610] – Garr Punnett

Yes, absolutely. So, speaking into those systems, what inspires you most about being in the sustainability world and solving I think in your introduction you said I came from an interesting path. I think we in this industry, we all come from those paths. It’s definitely an industry of many people coming and bringing their different perspective. What inspires you most about the work that you’re doing today? And then again, the people that it puts you in contact with. If we could get one more person in the field, what would you say to them? I guess.

[00:18:17.330] – Heidi Frasure

I think it’s such a cool field to be in right now. I never thought I’d see a day where sustainability was growing at the rate that it is right now. I mean, yes, she is really kind of tipping it on its edge there and pushing it off the cliff and I think that’s exciting. What I think inspires me on a daily basis is, like I said, the change from within. And you could look at that another way, right? Like you’re almost corrupting for the good from within and you have this power to really make a difference and change from within a corporation that without me in this position, I don’t know if that would be happening, right? So I think that’s exciting, but it also yields a lot of power. So I think that’s exciting. I’m excited always by and we talk about this a lot, you and I, about how do we marry sustainability and profitability. I don’t think those two have to be mutually exclusive of each other opposites.

[00:19:18.600] – Garr Punnett

It’s possible.

[00:19:19.790] – Heidi Frasure

I think it’s totally possible and I’ve seen that play out in my career quite a bit on taking plastic wrap at Seal case, that was wasted, it was going to landfill, taking that and just by changing the system and it was a lot of work to change that system and how it was being managed. But once we did that, we were able to take it, bail it and send it to an end party that was able to reuse that material for feedstock for a new product. So those are small little examples of circular economy playing out. But that was a profitable model for us. We were getting money back from it whereas we’re paying for it.

[00:19:57.080] – Garr Punnett

Yeah. Can I have you unpack that a little bit? I think so many times we even get caught with either newer colleagues or people that are joining the field. They can get caught in this paralysis of scale ideas when there’s so much power that can be done. Well, yeah, exactly the classic. But I think even there, it’s like people think, oh my God, all these systems and problems are insurmountable and they’re not. You got to break them down. And even in that little unique scenario, which you said you figured out that there was some packaging and opportunity in the packaging to find some circularity. Can you break that down a little bit further in terms of the team and how did you guys work on that as a team and what was that like in terms of identifying the problem, identifying the solution and then making the change happen?

[00:20:42.530] – Heidi Frasure

Yeah, I mean, it kind of always works backwards, right? We found out that on the recycling market, this product has a value if it’s consolidated and bailed and shipped directly to the end user. So we kind of worked back from that, we found that out and then did some engagement with that vendor and said, hey, we have this material if we were able to get it consolidated in this way, would you be interested in? How much would you be willing to pay us for it and negotiated that? And then the hard work comes in. And I think this is kind of where, like you were saying, you get paralyzed by scale. Well, really, any pilot, you have to start small. And it does come down to, like, boots on the ground hard work of saying, hey, we’re going to do this and it’s going to be hard and there’s going to be labor involved in doing it, but it’s worth it in the end. Here’s the ROI. And so taking those actual financial calculations and proving that out to leadership and getting their buy in and support and then going boots on the ground and working with the teams and explaining and training and showing them how we have to bag this and put it in a baler in this way, and this is how you put it on the trailer.

[00:21:58.890] – Heidi Frasure

It can have skids all this stuff. It’s a very complex process on the ground, but then we get a rebate for that material, so it’s worth it in the end. And that did make sense.

[00:22:10.720] – Garr Punnett

And none of that was without paying, I’m sure. I’m sure there were question marks at all times. Right? And so it’s like, again, that’s a part of the process and it’s almost an embracing of that process a little bit. I was asked about what does it mean to be like a circular disruptor in that way? And that’s not to toot our own horn. I think we all are. Yeah. But for me, the way I was just thinking about it, maybe it was that day, maybe it was that hour, for me, it was thinking about it in terms of we have to provide so much friction to the status quo system that ultimately that system stops and then starts to reverse in another, maybe better direction. Again, corrupting, as you put it, that maybe that inefficiency or it was efficient for one way of thinking, but now we can build an efficiency in a way in another way of thinking that ultimately builds in profitability. And I think that friction is just a part of the process. The pain is a part of that.

[00:23:03.520] – Heidi Frasure

Process, even on the smaller scale, like just starting to question things. Does this make sense? Does it make sense to continue to in the plastic wrap, for example, continue to throw that away at a cost? Or it doesn’t make sense to reconfigure it in a way that, yeah, it takes some time, but once you get that system running, it’s a smooth system and you’re making money off that makes more sense. So I think just kind of breaking that down, like you’re saying, not getting caught up in the scale. I think a lot of people get caught up in the scaling on a circular economy. We were talking about this earlier today. People just jump to the end state of like, Wouldn’t this be cool? And it’s like, yeah, but in order to get there, you got to figure this out and this out and this out and that out.

[00:23:49.380] – Garr Punnett

Yes.

[00:23:49.800] – Heidi Frasure

So there’s so much in between that needs to work out, and it’s completely dependent on partnerships between us and you and others. Those partnerships are going to be what makes this work in the end.

[00:24:04.040] – Garr Punnett

Yes. No, I love that. Again, it’s all about solving the mystery, asking the question, and then again, continuing to sort of, again, demystify a lot of the weird parts of all of this. And then we start to just solve one part at a time.

[00:24:21.810] – Heidi Frasure

Yeah. Failing forward.

[00:24:23.230] – Garr Punnett

Failing forward.

[00:24:24.320] – Heidi Frasure

Not being afraid to fail, because you’re going to learn more from the failures than you do from the successes. Like in the example I gave. I hate to keep going back to that, but we learned so much from the failure that we were able to scale it to all our plants because we knew, okay, this worked. This didn’t work when we moved to another plant. This is what we’re going to do differently. And that’s how you really get around that scaling paralysis, is just by learning small and failing small so that it’s not as painful. And then when you go to scale it, you know exactly what’s going to work and what’s not going to work.

[00:25:00.250] – Garr Punnett

Fail and tweak and fail and tweak. It’s just refinement. Yes. I love that. I think that’s so helpful for maybe even the growing audience or growing, even demographics that are coming into sustainability and seeing it to know that that’s, again, a part of the process. And I love that you brought up failing, because you cannot be afraid of that. If you’re afraid of failing, sustainability won’t be necessarily the field for you.

[00:25:24.180] – Heidi Frasure

Yeah, I heard quote one time, it was like I stood on a mountain of Nos, for one. Yes. And that is literally being in the sustainability profession you’re going to get no. And I think that to me, has been the lesson is finding those value added and profitability models that work. Looking at the ROI, getting comfortable with calculating ROI, because I think that’s where you’re going to get those. Yeses. And then when you can build up enough yeses. That’s when you can kind of come and say, hey, this may not be profitable, but it’s the right thing to do. And even in those cases, I’ve found there’s profit to be found. So it’s interesting. I think finding that good mesh of profitability and sustainability is something that I’m very passionate about.

[00:26:13.950] – Garr Punnett

I love that. Any last thoughts to leave our audience here on either the mountain of knows the future of sustainability, the work that you love, what would you like to leave them with?

[00:26:25.410] – Heidi Frasure

I think I’m super excited about the new flock of people that are coming in the sustainability world. I think they have a really good business acumen, which is really fun to see because a lot of us, like me, there was no sustainability degree when I was in college. It was like, you get an undergrad and some environmental science degree and then you move into the sustainability world. And now what I’m seeing and working alongside a lot of colleagues where they have that financial acumen, they have a business acumen. And so they’re able to kind of hit the ground running in a way that I was not. So I’m really excited about that and where they’re going to take us because I think they’re going to be able to solve for some of these problems that we’re only starting to open up. Right. And it’s those small tweaks that are going to make a big difference. But I really think this new flock of sustainability professionals are going to kind of push through some of those barriers and then organizations like yourself who are kind of pushing through some of those tech boundaries on how do we do this?

[00:27:27.130] – Heidi Frasure

What does this look like? How do we explore provenance of our products? I think that’s exciting, too. So that’s kind of where I’m really focused on, I think, just looking forward and learning from our past and exploring what the future looks like with the new generations.

[00:27:45.990] – Garr Punnett

I think you’re exactly right. We’re all standing on the shoulders of some other giant and we can continue to do that. Thank you, Heidi. Thanks so much for taking the time today.

[00:27:53.720] – Heidi Frasure

Yeah, thank you. Appreciate it.