Madrid Javier Goyeneche talks about his project with a mixture of humility and enthusiasm. He produces sustainable fashion and for this purpose collects rubbish from the sea. To do this, he founded Ecoalf twelve years ago – a fashion company that exclusively produces clothing from recycled materials and gives it a cool design.
“It should be recycled fashion, but not look like it,” explains Goyeneche. When the 51-year-old came up with the idea for Ecoalf in 2009, there were hardly any materials made from waste in the fashion industry, and when they did, they were neither high-quality nor fashionable. “Back then, sustainability was more of a hippie concept,” he recalls. Funding for his plan was therefore not easy to find, and so family and friends gave him one million euros in start-up capital.
Ecoalf is now represented in more than 1,500 stores around the world, and the brand has its own stores in Madrid, Berlin, Barcelona, Paris and Tokyo. For this year, Goyeneche is aiming for sales of 40 million euros – the pandemic has spurred its business. His commitment has won numerous prizes, last year that of the Schwab Foundation for Social Entrepreneurship. Klaus Schwab is CEO of the World Economic Forum.
More power than NGOs
“Javier Goyeneche was a pioneer, he was the first to process 100 percent plastic and create a new model for sustainable fashion,” says Martina Pasquini, strategy expert at the Instituto de Empresa (IE) business school in Madrid. Even fashion giants like H&M and Zara now have their own lines with sustainable fashion.
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Goyeneche deliberately did not set up an environmental protection organization, but a company. “If you collect garbage and make a cool product out of it, you are much better able to point out and raise awareness of a problem than if you just collect garbage. You won’t make a story with that, ”he explains. Pasquini argues in a similar way: “Companies sometimes have more power than non-governmental organizations,” she says. “Some can dictate trends and make their struggle for a cause more visible.”
In 2018, Ecoalf was the first Spanish fashion company to receive the sustainability certificate as a “B-Corporation”. The American NGO “B-Lab” honors companies that meet the highest standards in social and environmental protection, transparency and accounting and want to create added value for society in addition to their own profit. It has issued 4,000 such certificates worldwide, but the trend is rapidly increasing.
Before Goyeneche founded Ecoalf, the trained business economist and marketing expert was an ordinary entrepreneur. In 1995 he founded “Fun & Basics”, a company for bags and accessories that grew rapidly and in 2005 earned him the award for best young entrepreneur in Madrid. But in the crisis of 2008 he had to file for bankruptcy and eventually sold the company. “I was fed up with fashion and wanted to work for sustainability,” he says.
“The activists wanted to protest, but I wanted to make a difference”
At that time, the reforestation of the forests was important to him. For a year he was looking for a powerful NGO with a project that he would have wanted to work on. But there weren’t any in Spain. “It was also a world of activists who mainly protested,” says Goyeneche, “but I wanted to make a difference.”
In 2009 he had the idea for Ecoalf. The bustling Spaniard traveled the world for more than two years to find producers who could use recycled material to produce the soft, high-quality fabrics he was looking for. He found what he was looking for in Taichung, Taiwan. An elderly lady had a small business there that made fabrics for carpets from plastic bottles. He made the first collection with her in 2012 – six jackets and two backpacks.
The range now includes sneakers, sweaters, shirts and hats. The fabrics consist of old plastic bottles, old car tires, fishing nets or coffee grounds. Ecoalf organizes the entire value chain from garbage collection to the sale of clothing. Partners do the production themselves.
The materials are no longer made up of 100 percent waste. “You can’t use it to make textiles as fine as shirts,” says Goyeneche. “But we always try to recycle as much as possible.” The prices are not exactly low at 400 euros for a winter jacket or 100 euros for a sweater.
Fishermen collect 700 tons of ocean waste for the Ecoalf Foundation
You can feel that Goyeneche enjoys his work. When he talks about his second project, his eyes start to shine: the Ecoalf Foundation. “That’s what fulfills me the most,” says Goyeneche. Founded in 2015, he spends 20 percent of his time working there. The core is the “Upcycling the Oceans” project. Fishermen collect rubbish that they find in the sea and ensure that it can be properly disposed of or reused – for example for the fabrics from Ecoalf.
The initiative began in 2015 with the money from an American philanthropist, whom Goyeneche just as convinced to participate as three fishermen. In the meantime, 3500 fishermen all over the Mediterranean are collecting ocean litter – by the end of 2020 this totaled 700 million tons. But commitment outside the company also includes more than 1000 lectures annually in schools, universities or at congresses, with which Ecoalf wants to sensitize young people in particular to environmental protection. “Ecoalf is not just a brand, it has created a community around a motif,” says IE expert Pasquini. “Not all of them make it.”
Nevertheless, the Ecoalf company has the same goal as all companies: to make a profit. “This is actually very important for companies that want to do things differently,” explains Goyeneche. “If they are profitable, they will also find more imitators.” However, with his business model, it’s not that easy. “If we had allocated all of our costs to the product right from the start, the prices would have been significantly higher than I wanted to set them,” he says. “Today, our margin is still five percentage points below what is considered healthy for a fashion company,” he admits. Working with recycling is expensive.
Buying less is also sustainable
It is a classic dilemma for companies with a social commitment: “Their commitment to a cause often runs counter to the goal of profit maximization,” explains expert Pasquini. Ecoalf, for example, has ended a promising collaboration with Amazon because the Internet giant’s algorithms have granted discounts too often. “That doesn’t fit our values,” explains Goyeneche. For him, sustainability also includes buying less, but good quality that lasts for a long time. It’s the opposite of fast fashion.
In 2020, Ecoalf achieved earnings before interest, taxes, depreciation and amortization (Ebitda) for the first time. This year a gross margin of ten percent was planned as well as a net profit for the first time. Because of the global delivery bottlenecks, however, it is in danger, says Goyeneche. There is one person in particular who will not like to see that: the investment fund Treïs Group. Goyeneche sold 66 percent of the shares in Ecoalf in 2017 to raise fresh capital. The founder himself still holds 17 percent, the rest is kept by his supporters from the beginning – friends and family.
Goyeneche selected the investor in such a way that he pursues the same values as Ecoalf and does not insist on a certain margin in a very short time. Treïs had previously invested primarily in sustainable energy, but wanted to get into sustainable consumption. Goyeneche admits that there are now and then strategic discussions with its major shareholder. “Basically, however, the fund is very respectful and supports us. And there has never been a debate about our values, ”he says.
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