Lessons Learned: White Lotus Home, Going Green Without Going in the Red
02/23/2009
Environmental values are woven into White Lotus's success
2/23/2009
The bright, warm colors of the White Lotus Home store in Highland Park are in harmony with its inventory: mattresses, sofas and pillows handcrafted from organic cotton and wool.
White Lotus was born a green company in 1981, before green was everywhere. Marlon Pando, who came on board as general manger in 2003 and bought the company three years later, said environmental values are woven into the company's success.
But the history of White Lotus illustrates a parallel and equally fundamental lesson: that earth-friendly ideas alone aren't enough to build a financially sustainable business.
"Do not forget that you are running a business while you're being green," Pando said.
Founded in New Brunswick, White Lotus began by making organic cotton futons, which were sold to students at Rutgers University.
A typical customer "is a college student who bought a futon from us 15 years ago and is coming back now for a queen, all-natural latex mattress," Pando said, noting the students' parents often become customers, too. But if White Lotus had settled for remaining a quirky, environmentally aware supplier of organic futons for college kids, it "was either not going to grow or it was probably going to come to a halt," Pando said.
The problem: Futons are a small, low-budget niche of the bedding industry, Pando said. To be a significant player in the green home-furnishing world, White Lotus had to evolve.
In the early '90s, White Lotus began making organic mattresses, crafted with layers of organic cotton, wool or water-based latex. The mattresses have no springs, and are usually placed directly on a platform bed without a box spring, Pando said.
White Lotus paved the path to growth by de-coupling itself from the futon, which once accounted for nearly 100 percent of sales, but today amounts to roughly 10 percent of the company's $1 million in annual revenue.
Since his arrival in 2003, Pando has taken other steps to keep the company's green mission aligned with the business imperative to make a profit , including offering customers the choice of traditional fabrics and colors, alongside the soy-based dyed organics. Either way, the filling inside the sofa cushion or pillow is organic.
"This is a way for our customers to upgrade their homes to green," said Pando, 35.
A native of Peru, Pando said that, much like White Lotus itself, "I was born green. My mother handcrafted every piece of clothing we wore." The middle child in a family, Pando considered it quite normal to wear hand-me-downs.
His family moved to New York when he was 7, and Pando earned his bachelor's degree and his MBA from the Metropolitan College of New York in Manhattan. Before joining White Lotus, Pando worked for a company that provides professional management expertise to nonprofit associations.
Pando said his most important business decision was the 2005 launch of a wholesale division. From its production facility in New Brunswick, White Lotus now sells its products to 125 vendors in 20 states and in Canada. The results have been dramatic: In 2008, sales were up 40 percent from 2007. "If it wasn't for the recession, can you imagine how well we would have done?" Pando said.
And he's shifted nearly all his marketing dollars to the Internet, where green shoppers roam. Even consumers who live close by and could visit the store will opt to purchase a White Lotus mattress online. Pando said half his sales are via the Internet: "I do as much business online in New York City as I do in California."
The evolution of White Lotus entered a new phase in December 2008, when the company moved its showroom to Highland Park. In April, the company's production facility will also move to Highland Park, and visitors to the store can drop by and watch mattresses taking shape before their eyes, Pando said.
"A customer will be able to place an order, and then while they are shopping or visiting a restaurant in Highland Park, we will make their mattress, and then they can come back and pick it up," he said.
Highland Park's busy downtown generates increased foot traffic, Pando said. "Highland Park has a wealth of educated professionals, and green is already part of their lives. The things we tell our customers, they already know ; and our customers share their ideas with us. It's pretty cool."
E-mail to bfitzgerald@njbiz.com