Air Date: Week of August 30, 1996

The outdoor clothing gear company Patagonia combines work with play at its California headquarters. Virginia Biggar profiles this privately held company which is coming out with a new line of active-wear clothing manufactured from organically grown cotton.

Transcript

CURWOOD: Most outdoor enthusiasts are familiar with the Patagonia label. The Ventura, California-based company caters to buyers of clothing and gear for activities like hiking and rock climbing, along with people who are fishing for trout or just fishing for a fashion compliment. In addition to designing top-shelf products, Patagonia also prides itself on being environmentally responsible in its everyday operations. And as Virginia Biggar reports, the company also hopes to act as a guide for other businesses trying to become greener.

(A door opening and closing, silverware clanking)

BIGGAR: It's lunchtime at Patagonia. A group of employees is just back from a midday run.

MAN: All right. Pepper...

WOMAN: All of the essentials.

BIGGAR: Today's meal is baked potatoes with all the toppings. People sit around long tables chatting and eating. Open windows allow the sea breeze in. A bulletin board gives the daily surf report: nice high waves, but it's summer vacation, look out.

(A baby cries. Woman: "Oh, I didn't mean to hurt your feelings." Another woman: "What did you say?")

BIGGAR: In an adjoining room, mothers visit their babies in one of Patagonia's daycare centers. They feed their kids or just play until lunch hour is over.

CHOUINARD: We like to blur that distinction between work and play here.

BIGGAR: That's Yvon Chouinard, who founded Patagonia over 20 years ago and is the driving force behind the company's laid-back philosophy.

CHOUINARD: So you see everybody, you know, dress casually, the surfboards laying around. There's wetsuits hanging all over the, you know, fences and stuff, and I think we all have that same attitude that if we're going to go to work let's enjoy it and not drag ourselves to work and then our real life starts when we get home.

BIGGAR: Chouinard's life story is told as company legend. In the late 1950s he was a sometimes detective tracking Howard Hughes's girlfriends. He was also an accomplished rock climber and started forging his own pitons, the spikes that climbers bang into rocks and use as footing. For his pitons Chouinard used steel, which proved to be superior to the usual iron. He sold his wares out of his car at climbing hot spots. In 1973, Chouinard started making outdoor clothes for customers he affectionately calls "dirt bags."

CHOUINARD: The dirt bag is the person that lives and breathes their passion, which is their sport. But in reality most of the dirt bags can't even afford Patagonia, and in fact they progress beyond needing any kind of equipment, you know. They've gotten so good at their game that they don't need our stuff. But that's who we focus our product on and that's who we try to design for.

BIGGAR: Patagonia now sells shirts, shorts, long underwear, rain gear, jackets -- in short, everything you need to stay warm, cool, or dry outdoors and in style. The company has grown to 600 employees worldwide with $154 million in sales. But Chouinard says he never wanted to be a businessman.

CHOUINARD: One day I woke up and I realized I was a businessman, and I was going to be a businessman for a long time, that I decided to do it on my own terms. I want to run this company just like a sustainable farmer would run his farm. In other words, no intention of ever selling it, 10,000 years from now it's going to be farmed. And so, with an attitude like that, you don't use pesticides, you don't use fertilizers. You don't till the soil so that, you know, you lose a inch of topsoil every year and stuff like that.

BIGGAR: At Patagonia, sustainability takes a number of forms. The work as play ethic is one. And growth is held to 5 to 6% a year. The company also gives away 1% of its sales. Environmental programs director Jill Zilligan explains.

ZILLIGAN: We give money to grassroots environmental groups all over the country and in other countries in which we operate. So generally, they're groups that are pretty hard-hitting, front line kinds of groups. A lot of them are working on the kinds of projects that can't necessarily always get funding from more mainstream funding sources.

BIGGAR: The list includes a range of organizations, from a women's resource center to the Ski Area Containment Coalition. This last cause has raised eyebrows among some in the ski industry who think Patagonia shouldn't support groups in favor of restricting ski areas when so many skiers buy Patagonia products. The company also wears its philosophy on its sleeve. For example, fleece for its clothing is made out of recycled plastic soda bottles. Patagonia keeps packaging to a minimum and the company now uses only organic cotton. Conventional cotton is one of the most pesticide-intensive crops in the world. Nearly half a billion tons of chemicals are used annually to control insects and weeds and to defoliate cotton for harvesting. That amounts to about 10% of the agricultural chemicals used worldwide every year. Evon Chouinard.

CHOUINARD: Once I found out how bad using conventional cotton is to make clothing or to make anything, I just could not justify ever making clothing out of this stuff again. I mean it's that bad. And so we made a commitment that we would rather go out of business, or rather not make clothing out of cotton again if we have to use industrial cotton.

BIGGAR: Chouinard says this move is a risk. Patagonia has had to raise some prices to cover the greater cost of organic cotton. But Chouinard says he's counting on loyal and environmentally aware customers to buy the product.

(Discussion echoes in a room)

BIGGAR: Recreational Equipment Incorporated, or REI in Los Angeles, is part of a major chain of outdoor retailers. Sherry Squires and Dorothy Winter are shopping for new summer clothes.

SQUIRES: We were just talking about Patagonia and how much we love it, but it's so expensive.

WINTER: They always hang the signs off their thing about how it's made and, you know, recycling and that kind of stuff. But when it comes down to price, I mean, I'm not going buy their product over another product because of that. You know, if the other product's cheaper.

BIGGAR: Does the price ever stop you from buying anything?

SQUIRES: I usually think twice about it and make sure I'm going to use it real well. But everything I've ever purchased I've been very happy with.

BIGGAR: The difference in price between Patagonia and some other brands can be significant. In fleece jackets, for example, REI's Judy Anderson says the store brand runs about $55. Patagonia, $95.

ANDERSON: You want to try on one of the zippered fleeces?

BIGGAR: Yeah.

(Takes jacket off the rack)

ANDERSON: This is a full zip. (Zips) Cinchilla jacket. They're cut straighter, usually a little bit slender. They don't have that extra bagginess around. So I found for people that are layering, sometimes they fit better underneath because you don't have as much bulk.

BIGGAR: Anderson says this extra attention to fit and workmanship makes Patagonia especially popular among expeditionists. Those who spend time ice camping or hiking in remote areas, for example. She says the store also gets busloads of foreign tourists who in part come for the name. While many companies talk about being environmentally responsible, few follow through as thoroughly as Patagonia, according to Joel Makower, who edits the Green Business Letter for businesses trying to improve environmentally. And, says Makower, the company also makes smart business decisions.

MAKOWER: I wouldn't view their move toward organic cotton as being without regard for the market or the bottom line. I think in some ways it's a smart thing that they're doing by committing to large purchases of organically grown cotton. At this point they're locking into what is really a tight market. I think they're going to have a competitive advantage later on, when everyone else tries to go organic, and the supply isn't there or it's just plain expensive.

BIGGAR: The move to organic cotton, Makower notes, is more feasible for Patagonia than many of its competitors. Yvon Chouinard owns the company and therefore doesn't answer to shareholders. Also, Makower says, Patagonia doesn't have to manufacture any of its own products.

MAKOWER: Everything they sell is made by someone else. The real question that we need to be looking at is not just what are Patagonia's principles, but how are those principles being followed by all of the people they do business with? And I know they've had some successes. But I also know most companies that have tried to impose environmental standards on their trading partners have been frustrated by the lack of complete success doing that.

BIGGAR: It's hard to tell if Patagonia's move to organic cotton will attract more customers. Sales figures for fiscal year 1996 are up $4 million over last year, but the company doesn't separate out the cotton line from the rest of its goods. Either way, owner Yvon Chouinard doesn't seem concerned.

CHOUINARD: The only downside is, you know, I'm kind of trapped. I'll never get away from this thing. I'll never sell it, I'll never go public, and I've got to figure out how it's going to continue without me.

BIGGAR: Patagonia has recently hired a CEO to handle most company responsibilities. So for the moment Chouinard isn't complaining too loudly. And he just got back from a Hawaiian surfing trip where he was testing out the merchandise. For Living on Earth, I'm Virginia Biggar reporting.