BAG BUSINESS: Green entrepreneurs retool humble grocery sack
December 21, 2007|By Ilana DeBare, Chronicle Staff Writer
Stephanie Ashworth and Kerri Stenson just started their company this year, but already their business is in the bag.
Literally.
The Woodside women have launched a business making collapsible, reusable grocery bags that can be stashed in the cup holder of a car. They are among a number of entrepreneurs who hope to capitalize on Americans’ increasing disaffection with the disposable plastic grocery sack.
In the wake of San Francisco’s recent ban on plastic grocery bags, other jurisdictions from Los Angeles to New Jersey are considering restrictions on the use of plastic bags. And since last summer, California law has required all large supermarkets to offer reusable bags for sale.
Meanwhile, worries about climate change and marine pollution are leading more individual consumers throughout the country to answer “none of the above” when faced with the cliched choice of “Paper or plastic?”
“The market has absolutely exploded,” said Michael Wold, founder of Customgreenpromos.com, an online store that has sold a wide selection of grocery totes. “If you asked me two years ago, there were dozens of reusable bags. Now there are a hundred or more.”
Environmentalists have urged consumers to bring their own bags to the supermarket for years. But until recently, few people responded.
Those who did had limited choices – things like beach bags, hippie-looking hemp bags, or an individual’s motley collection of canvas totes accumulated through years of trade show giveaways and public radio membership drives.
But that has started to change.
Wold launched his Web business – which sells eco friendly bags and many other eco friendly promotional products.
“I wanted to get away from the tattered, really old tote bag with an in-your-face eco-message,” he said.
Others had the same idea, including a Chico software programmer named Andy Keller who two years ago started making nylon grocery bags that collapse into their own attached pouch. Keller’s venture grew out of a trip he took to his local garbage dump, shortly after being laid off from his software job.
“I got there at the end of the day, when there was an entire day’s worth of trash uncovered and exposed,” said Keller, who named his company ChicoBag. “It was huge. It took my breath away. And there were plastic bags everywhere, with birds pecking at them, or caught on the fences. I made a commitment to myself to adopt a healthier reusable bag habit. And then came the business side, when I thought, ‘I can make a business out of this.’ ”
Keller’s ChicoBags sell for about $5. Some other local bag manufacturers have a higher price point: San Franciscan Ania Moniuszko runs an online business called My Own Bag that sells grocery bags made out of interior-design fabrics for $40 to $58 each.
Ashworth and Stenson, the Woodside women who recently launched the reusable bags that fit in a cup holder, fall somewhere in the middle. Under the brand name Olive Smart, they’re selling a set of six colorful nylon bags that stuff into a pouch for $39.
Ashworth and Stenson met at their children’s playground and discovered a shared interest in starting some kind of environmentally focused business. They brainstormed about how to make it easier for people to use reusable bags.
“You always hear people in the checkout line say, ‘Oh, I left my bag in the car,’ ” Ainsworth said. “Well, what if the bags were in your face, like in the cup holder of your car? And you’d need enough bags. I have three kids, and Kerri has two. We don’t go to the store with one cute little tote.”
While companies like Custom Green Promos, ChicoBag, My Own Bag and Olive Smart have clearly identified a growing niche market, it remains unclear which of them, if any, will ultimately ride that market to success.
Wold points out that it’s not hard to get into the grocery bag business, so there’s the potential for large numbers of competitors.
“All you have to do is create a basic design, send it over to China (for production), spend $10,000 to $20,000, and you’ve got 5,000 to 10,000 bags,” he said. “The barriers to entry are almost nonexistent, while the level of sophistication of the market is rapidly advancing. So you’ve got to have a really good product that stands out and is different.”
Meanwhile, all the major supermarkets have started manufacturing and selling reusable bags with their own logos – using cheaper materials such as polypropylene and charging lower prices. Safeway, for instance, sells totes with its logo for 99 cents.
It will be challenging for small independent manufacturers to compete with those prices.
“Most supermarkets are selling them at cost or slightly below, since they view it as a marketing expense,” Wold said.
Village Market is a family-run supermarket in the upscale, environmentally conscious neighborhood of Rockridge in Oakland. Its experience with reusable bags could be a sign of things to come – at least in liberal enclaves like the Bay Area.