Building a sustainable retail outlet brand
What do three friends – the CEO of Figaro Coffee Co and promotor of the now famous Barako coffee from the Philippines, a visual art designer, museum curator and strategic brand-marketing communicator, and a graphic designer and restaurant consultant – discuss when they meet?
For Pacita Juan, Jeannie Javelosa, and Regina Francisco the discussion started with the taste and quality of coffee all three are black coffee aficionados, the need to exercise more, and dietary habits and ended up with a realisation that there was no store in the Philippines where people can buy local, sustainable, and green lifestyle and food products.
We provide the best quality products made from natural materials procured and made using green processes, technologies, and tools
“If you want to taste coffee in its purest form, you must drink black coffee. The same philosophy reflects in everything that we do. We provide the best quality products made from natural materials procured and made using green processes, technologies, and tools,” Juan says adding that it also needs to be good, clean, and fair for the producers, farmers, and customers as well.
That is how ECHOstore – short for Environment and Community Hope Organisation – was born and soon the trio opened the country’s first green retail outlet at Serendra Bonifacio Global City, targeting the high-end urban market in September 2008. They opened the second store in 2011 at the Podium in Mandaluyong City and soon expanded with branches in Makati ECHOstore Salcedo, Quezon City ECHOstore CentrisWalk, Davao ECHOstore Davao, and Cebu ECHOstore Cebu. It also went digital with the launch of the online store in 2013.
The company has an inventory of over 700 green products, sourced from across the Philippines and made entirely from natural local materials
Most of these stores were located in popular shopping areas and popular malls like Podium, Serendra, and Centris, which ensured high-end footfall. However, what clicked for the promoters was their ability to identify the trend for green products quite early, much before other Filipino entrepreneurs could notice it.
“There was a need to create a platform to sell local, community products and create the made in Philippine brand. This opened up the opportunity for setting up a venture that could connect the stakeholders and enable people to buy environment-friendly goods,” Juan explains.
Using their combined experience of the corporate world, the trio was also able to create a network of farmers, women and social enterprises, communities, and other organisations that needed support as well as space for their products. A big draw was the social cause attached to the products since many of these were sourced from local marginalised groups, including women prisoners and the urban poor.
The company also sourced products from foundations supporting abused children and a few creative industries. The chain of retail stores also offered organic, natural, and nontoxic goods, ranging from home cleaning products to staples such as organic rice, sugar, coffee, and other produce.
The trackability of the source enables buyers to trust that the products are 100% local and made from natural materials
Today, the company ECHOstore Sustainable Lifestyle has an inventory of over 700 green products, sourced from across the Philippines and made from natural local materials.
A triple bottom line company
Raymund B Habaradas and Patrick Adriel H Aure of De La Salle University who studied the business model of ECHOstores in much detail point out that the company serves the three essential aspects of a sustainable business – people, planet, and profit. “To achieve these, the company practices sustainable agriculture, uses organic and natural products, engages in fair trade practices, supports Filipino design excellence and livelihood, and mentors’ small entrepreneurs.”
While other businesses source directly from the local communities and different marginalised groups, ECHOstores decided to take its engagement with the community beyond just sourcing to training and capacity building. “Since we are very stringent about the quality of the product that we sell, we must educate the farmers, women groups and communities on how they can improve product quality and packaging, create value add and variations, and deliver as per the needs of our target groups,” Juan points out.
Another important aspect of the company’s business is its ECHOdesign Lab programme to mentor the communities and small producers. “We provide them specific instructions and guidance. For example, we tell them that peanut butter must not contain sugar, or they should not use MSG. A lot of times they send us sample products. We test them on quality and packaging as well and tell them what to change or adjust,” she adds.
The initiative has helped the company in many other ways as well. It has helped the company create a strong network of farmers, local producers and women entrepreneurs that ensure the trackability of all its products. “Besides the promise of high-quality, trackability of the source is a unique differentiator of all our products. It also means that buyers can trust that products on our shelves are 100% local, made from natural materials without impacting the environment and will directly benefit the producers through fair trade practices,” Juan elaborates.
“The trust in our products and the brand also ensures that we can sell more and book decent profit, an important aspect of any business venture.”
If you want to taste coffee in its purest form, you must drink black coffee
The success of ECHOstore also stems from the company’s ability to seamlessly dovetail the commercial and social aspects of its business. While it has put in place a system for rigorous training, quality inspections, and programs to facilitate the flow of goods, the promoters have also set up a foundation to handle partnerships and solve both commercial and social concerns.
Post-COVID digital transformation
Like most brick-and-mortar operations, ECHOstore too had to bear the brunt of the pandemic and the nearly two-year-long lockdown. “The lockdown led to a 100% drop in our café business. We also noticed that consumers’ preference for products was changing and there was a higher demand for natural products. This meant a bigger opportunity for us, but it also meant that we had to redefine our supply chain and delivery mechanism,” Juan explains.
The team also noted that there was a surge in demand for herbs and traditional medicinal products using natural products. There was another big change. With the ECHOcafe completely out of business, the company also did not require produce like lettuce or arugula, and similar vegetables. “To meet the new requirements, we decided to go for medicinal and culinary herbs and plants in our farms like basil, including lemon basil and holy basil, oregano, paragon, Java mint, and rosemary.”
There were a few other business problems to solve: the transition of the producers to deliver new and value-add products to meet the changing consumer preference and demand, as also to ensure the quality standards that the brand was known for. It was also becoming financially unviable to maintain the physical infrastructure and stores and with no visible sign of unlocking, the company decided to go switch completely to the digital mode for retail business.
We designed and devised ways for them to adapt the digital way of learning and approach to doing business in the new era
The road to transformation led to the quick hiring of digital professionals, from web designers to SEO and social media experts, and those who can handle apps and digital payment gateways. A critical aspect of ECHOstores business is its network and relationship with the community and small, local producers, where social media emerged as an important listening, engagement, monitoring, and marketing tool.
“Training of partners across villages and smaller towns is an important aspect of our business. It is important to ensure quality of products and packaging as per the ECHOstore standards,” says Juan adding that with restriction on people movement the company decided to adopt digital technologies to replicate training workshops and programmes remotely.
“We continued our relationship with the producers. We designed and devised ways for them to adapt the digital way of learning and approach to doing business in the new era,” she points out. The company also arranged for pre-loaded mobile devices for the partners to ensure they have sufficient data for online training programmes. This ensured that their smooth transition to the digital way of doing business.
Another big aspect was to solve the supply chain and online payment problem to transform fully into an eCommerce company. While the company was selling products through its website, the pandemic saw it set up a full-fledged e-commerce platform using the Shopify platform for online stores. The platform has helped ECHOstores transform itself as an online retailer and includes tools for integrating payments, marketing, shipping and customer engagement.
“The adoption of Shopify platform helped us quickly launch the e-commerce platform, enabling ECHOstore to maintain the online store, choose a payment gateway, and upload new products or remove out of stock items conveniently. It is user-friendly and we do not need technical expertise to maintain it,” she informs.
While ease-of-use and management was a key reason for Juan and her team to adopt Shopify, another key reason was the cost. “It costs very little in terms of monthly subscription. I am glad we use this instead of designing and developing an e-commerce platform from the scratch, which would have been expensive and unaffordable, as well as taken a much longer roll out time,” she points out.
It also tied up with technology-based delivery and rideshare companies like Lazada, Shopee, Grabmart, Foodpanda, and Pickaroo for logistics. Besides, it joined hands with Zalora, a fashion brand that had decided to get into consumer product distribution to tap the premium market segment through its online platform. It also integrated payment gateways like G-Cash and PayMongo to ensure a seamless transaction and invested in mobile platforms and social listening tools to drive business through digital channels.
“COVID had a massive impact on our business, but we are back on foot in a new digital avatar. With the cost for prime real estate for the brick-and-mortar outlets at a minimum, the online business model is fetching 10%-20% better margins across our product lines,” sums up Juan.
- Philippine’s first green retail outlet, ECHOstore Sustainable Lifestyle, was set up in September 2008 as a platform for selling local, green lifestyle and food products.
- The company practices sustainable agriculture, uses organic and natural products, engages in fair trade practices, supports the local design, and mentors small entrepreneurs.
- The success of ECHOstore stems from the company’s ability to seamlessly dovetail the commercial and social aspects of its business, thereby creating a unique value proposition.
- ECHOstore Sustainable Lifestyle has an inventory of over 700 green products, sourced from across the Philippines and made from natural local materials.
- It migrated to digital business, reducing its physical stores during the lockdown, enabling it to improve margins by 10% to 20% across product lines.
- It tied up with technology-based delivery and rideshare companies like Lazada, Shopee, Grabmart, Foodpanda, and Pickaroo for logistics.
ECHOstore, the Philippine’s first sustainable lifestyle concept store, is managing the balance between commercial interest and social benefit.
Shubhendu Parth is a contributor to Business Transformation Asia.