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Patagonia and Organic Cotton: A Case Study

In the early summer of 1994, a group of men and women sat in a conference room at Patagonia headquarters in Ventura, in a heated discussion that went on all afternoon. At risk was around $20 million in sales.

In 1991 Patagonia had commissioned an environmental impact study on the four major fibers we use in our products. We expected the synthetic, petroleum-based materials to be the worst, but we were surprised to learn that conventionally grown 100 percent cotton, which we had always thought of as a "natural" product, was just as bad as the rest of them.

The process of growing conventional cotton involves the heavy use of chemicals that poison the soil, air and ground water. And, since many of these chemicals were originally formulated as nerve gases for warfare, it's no surprise that where spraying occurs, health problems follow. Higher rates of birth defects and cancer in both humans and wildlife surround the cotton fields. This is an outrageous cost to pay for the battle against bugs, and it's a battle we'll never win. While the bugs quickly adapt to the chemicals, some of which cost $500 a gallon, the rest of us sustain long-term damage.

We had to do something about our use of a fabric with so dreadful an impact on the earth. But at that time, sportswear made from conventional cotton was 20 percent of our total business.

The alternative, organically grown cotton, was and is expensive: to grow and to gin, spin, knit and weave. The entire farming industry was and is organized around, and dependent on, the chemical industry.

Very little certified organic cotton was being grown anywhere in the world at that time. Organic farming is much more labor intensive. The farmers must work the fields constantly, checking for hazards to plant health. Weeding and composting also require extra labor. Defoliation has to be done naturally, without toxic chemicals. If Patagonia had to hike prices to cover the cost of making clothes from organic cotton, and our customers refused to pay those prices, we could lose our sportswear business. We would be, someone said that afternoon, "toast."

The meeting that day in 1994 ended finally when Yvon said, "If we continue to make clothes with conventionally grown cotton, knowing what we know now, we're toast anyway. Let's do it; let's go organic." Our board of directors voted that all conventionally grown cotton had to be eliminated in the Patagonia line by the spring of 1996. We settled on three goals for the spring 1996 organic cotton line: to sell the line successfully, to influence the rest of the apparel industry to use organic cotton and to encourage growth in organic cotton farming. We reduced our margins on most of the items so the retail price would not exceed a 2 percent increase over conventional cotton. Goals were one thing; reality was another. In the past, when we wanted some fabric for pants, for example, we would call a salesman who would show us a sample book of fabrics, and we merely had to browse through and make a selection. Now we had to begin with bales of raw cotton and "bird-dog" the entire process through to the finished goods; the staff at Patagonia had to go back all the way to the beginning of the supply chain. We searched out cotton brokers with access to bales of organic cotton. Of all the fabric mills we ended up using for our supply of organic cotton, only two had prior experience working with it. We had to pay three times more for our cotton fabric in 1996 than it cost in 1995, and there were fewer types available. We had to cut the cotton product line accordingly, from 91 styles down to 66.