Aveda Manufacturing & Distribution

Our Operations

We manufactured more than 86% (by units) of our products in Blaine, Minnesota in the last half of 2016. Our employees staff the production lines and distribution centers filling orders for the salons, spas, Experience Centers and other sales channels through which our products are sold. Their contributions are supported by Aveda staff who manage shipping, facilities, quality assurance, environmental compliance, safety, employee training, and hiring and retention. [1] Together, they have key roles in helping Aveda implement its Mission.

Our Blaine campus hosts both manufacturing operations and corporate functions along with a distribution center and an Aveda Experience Center. Teams within the campus either report directly to the Aveda Global General Manager or have dual reporting lines shared with ELC.

The Aveda Mission encompasses a commitment that can be seen not only in our products and ingredients, but in our campus, retail stores, Institutes and distribution centers. Our vision is for operating our business using renewable energy, achieving zero waste to landfills, managing water use within a fair share of local capacity, and using materials that are consistent with Cradle to Cradle principles.

Energy and Greenhouse Gas (GHG) Emissions

Our focus on energy use and associated GHG emissions is about pursuing continual reductions, both in absolute terms and in intensity. We recognize the enormity of the challenge that climate change poses to our business and our role in contributing to the problem. This is why we also acknowledge our responsibility to finding solutions. We rely on the bounty of nature to provide us with the raw materials to create high-performance products for our customers. Climate change is a direct threat to us in the increasing potential to disrupt farming and wild harvesting in the geographic areas that are the sources of the plant materials for our products. And it threatens the livelihoods of the people who produce these materials and who are our partners in pursuing the Aveda Mission.

In fiscal year 2015 and 2016, we continued our strategy of purchasing renewable energy and looking for opportunities to increase energy efficiency and offset GHG emissions that cannot yet be eliminated. Our performance at our Blaine manufacturing, corporate and distribution center facilities is detailed below.   

Energy and GHG Emissions for Headquarters Office, Manufacturing, Distribution and Institute Facilities

Total energy consumption for all locations rose slightly (2%) over the fiscal year 2012 to fiscal year 2016 period, peaking in FY2014 and then falling. The infamous “polar vortex” that gripped Minnesota in sub-zero temperatures for extended stretches during the winter of 2014 was to blame for some of the high energy use during FY 2014 as a high volume of natural gas was used for heating our facilities there. The unusually cold weather caused particularly high gas consumption at the MWDC as extra heating was needed during construction of a 60,000-square foot addition which occurred that winter. The new addition has increased energy consumption at the MWDC over what it was prior to the expansion as reflected in the numbers for FY 2015-2016.

Aveda operations in North America have been effectively carbon neutral since 2007 through purchasing wind energy for the electricity consumed and carbon offsets for the natural gas burned at our domestic facilities. Our wind energy purchases offset 100% of the energy used by our primary manufacturing facility in Minnesota, our company headquarters, the Aveda Institute Minneapolis, and our Aveda-owned Experience Centers, Salons and Institutes in New York City.  We also purchase CO2 offsets for our aerosols which are made by a third party. Read more at: http://www.aveda.com/living-aveda/responsible-manufacturing. We also track our GHG emissions as they would be reported without these purchases. These Scope 1 and 2 emissions rose and then fell over the same 5-year period to about the same level in FY 16 as in FY 12. During this period, both kg of production and units of production rose 16%.

Energy and GHG Emissions Intensity for Headquarters Office, Manufacturing and Distribution

Energy intensity for our Blaine manufacturing facility and two distribution centers by weight and units each declined by almost 9% between FY 2012 to FY 2016. Similarly, the GHG emissions intensity per kilogram and per unit for these combined facilities declined by just under 9% over this period. 

In FY 2016, we came up short of the goal established in our last Earth and Community Care Report of reducing our GHG emissions per kg of production by 14% against a 2014 baseline, achieving only an 8.6% reduction in GHG intensity. We believe our difficulty in further reducing energy consumption has been due to several factors including a 60,000-square foot expansion of our Midwest Distribution Center in FY 2015 and the more energy intensive manufacturing processes for certain recent new high- performance products. 

While we are disappointed in the results we achieved in reducing our energy use during FY 2015-2016, we have been encouraged by several new initiatives begun near the end of the reporting period that we believe will yield significant results.

One of these is greater collaboration between our pilot scale-up team, Research and Development and our production group and other departments to drive greater energy efficiency in manufacturing. Together, they are considering the implications of formulations, process changes and production scheduling for energy consumption required for manufacturing. This and other efforts to reduce energy use at our Blaine campus are discussed by Aveda’s VP of Global Supply Chain and our Director of Supply Chain Operations and Maintenance, here [link to “sidebar” below].

Saverio Marcario, Aveda VP Global Supply Chain, and Dan Berry, Director of Aveda Supply Chain Operations and Maintenance, discuss our efforts to address energy use that we believe will result in positive trends that we can report on in our next report:

Saverio: “By encouraging our teams to challenge our traditional operating parameters they have succeeded in delivering on many energy improvements within the campus. The challenge with meeting our energy management objective is how to grow our business while reducing our absolute energy consumption. These two aspects typically trend upward together, but to live the Aveda Mission we need to put forth our best effort and drive them in opposite directions with energy being reduced and the business growing. To accomplish this task, we need to look at the way that things have been done and challenge the traditional paradigms. A mindset shift is needed where everyone considers the impact that they can have on natural resource consumption and makes a commitment to have a positive effect.”

Dan: “Over the past two fiscal years, Aveda has embarked on a number of improvements in our systems, processes and equipment. Additionally, we have chartered a new employee engagement group focusing on developing and implementing energy reduction.”

“Within the building, we have converted nearly 1,200 compact florescent bulbs and fixtures to more efficient light-emitting diodes (LED). We have a phased approach to upgrade the other lamps and fixtures.  By formalizing our energy reduction team it has gained more recognition and influence. This employee-led team brings together Environmental Health and Safety (EHS), Manufacturing, Facilities and others. Some preliminary initiatives include optimizing our major building infrastructure processes between times when occupied and producing versus non-production times.  Performance improvements on production lines have mitigated non- weekend work thus reducing the energy use on weekends.  As this team continues to execute, we will see our energy use and associated costs decline even further. By encouraging this team to challenge our traditional operating parameters they have succeeded in delivering in many energy improvements within the campus.”

Saverio: “Our newly chartered energy reduction team has been empowered to re-examine how we currently operate and where we can reinvest in projects which consider our environmental impact and couple the environmental cost benefits with financial returns on investment (ROI). We are looking at options throughout our manufacturing processes, office spaces, transportation and other non-manufacturing activities that have energy-reduction potential. Each project will be evaluated by not only by the traditional ROI but also upon environmental benefits which will be delivered attributes.”

 “We care for the world we live in through community engagement, volunteering, and by being activists for the environment.  When we leverage the Aveda beliefs with our employees, the Aveda network and guests we will make a more profound impact. We are always amazed and proud of the level to which the employees and the network live the Mission each and every day to make the commitment to make a difference.”

Waste Generation and the Road to Zero

With well over a decade of experience, Aveda’s Zero Waste Program has had a significant impact on transforming how we view everyday business operations. Longstanding efforts include recycling operations throughout the manufacturing, distribution, office and retail facilities, managing a wide variety of materials and products such as office supplies, furniture, pallets and boxes in a manner where reuse and refurbishment are standard practices, and collection of organic wastes for composting.[2] We strive to take a novel approach to everyday things, by finding ways to change and reduce the current impact of everyday office and business activities.

In FY 2016, Blaine facilities generated a total of 2,900,000 pounds of waste, of which 76% were recycled or reused. Over the fiscal year 2012­-fiscal year 2016 period, total annual waste generation increased by 10%, while the quantity of waste recycled increased by 17%. The recycling rate also increased by 4 percentage points (from 72% to 76%).

Our goal for FY 2016 was to have an 80% recycling rate for our manufacturing facility and a 98% recycling rate for our Midwest Distribution Center (MWDC), exclusive of industrial and hazardous wastes against a 2014 baseline. Our manufacturing facility achieved a 79% rate in FY 16 just missing our goal, while we were not able to find ways to improve our performance at the MWDC, which maintained a rate of 96%. The industrial and hazardous wastes generated by our MWDC and Blaine production facilities include but are not limited to aerosols, other returned or expired products, incorrectly produced batches and lab chemicals.  When these wastes are taken into account, the total recycling rate for our office and manufacturing facility also showed steady improvement in fiscal years 2015-16. However, after improving in FY 2015, the total recycling rate for the MWDC decreased from 72% to 62% in FY 2016, reflecting an increase in returned unsaleable and expired products requiring disposal.

Waste Generation at Blaine Office and Manufacturing*

*Weights rounded to nearest hundred.

Waste Generation at Blaine Midwest Distribution Center*

Consistent with Aveda’s zero waste to landfill policy for Blaine, the 24% of wastes that were not recycled or reused, including municipal, hazardous and industrial wastes, were sent to waste-to-energy facilities.

One example of how we think and initiate changes to further our Mission is a product that is nearly universal, even in the age of digital management–the three-ring binder.

Carolyn Panning, Aveda’s Manager of Office Services for nearly a decade and a half tells the story:

“Part of my new hire orientation when I came to Aveda 23 years ago, was being told that ‘Everyone is in customer service,’ along with the mantra of Aveda’s founder, Horst Rechelbacher, that ‘environmental responsibility is part of everyone’s job.’ My role in the company has always been internal. I was in Human Resources before I took on my current position about 14 years ago. In both cases, I saw my job as both serving my ‘customers’–my Aveda colleagues–and finding ways to fulfill the Mission to be an environmental leader.”

“Over the past few years, our office Zero Waste team started seeing larger numbers of 3-ring binders in our office supplies reuse area. They were piling up because the binders were not recyclable and therefore not Mission-aligned. We began working with our vendor to develop a binder made with easily recycled materials. Now, we are able to assemble and disassemble the binders on-site and recycle the components of binders that won’t be reused.”

Carolyn is also an enthusiastic participant in Aveda’s composting program, which experienced considerable growth during the 2015-2016:

“I’m really excited over the increased opportunities for composting that are available to us. Here in Blaine, we’re collecting compostable material and sending it to an off-site commercial composting facility. But we’re also trying to encourage our employees to compost at home. Perceptions of composting are changing and there is a huge improvement in people’s acceptance of compost over what it has been in the past. Part of what has made a difference is that I, along with a number of other Aveda employees, became master recycler/composters. It is a program that certifies members of the public as master recyclers/ composters and requires 25 hours of volunteer time for the certification. I’ve been impressed with my colleagues who’ve become advocates for composting at Aveda and at home.”

And Carolyn is taking a leadership role in the office of the future:

“Aveda is moving faster to adopt technology that will change what we do here. We’ve also been using video technology for quite a while to reduce travel. I am really excited to see meetings with more digital information and less paper. More and more, we’re adopting technology that will transform the office environment from an area with files, binders and papers to one where those things are absent.”

Water and Wastewater

The amount of water Aveda uses for production operations, as a product ingredient, office activities, the Aveda Institute Minneapolis, and in our distribution facilities has not changed significantly since FY 2012, especially when comparing water use with the number of units produced. Water use rose between fiscal year 2012 and fiscal year 2016 by 8% to 101.4 million liters while water use per kg of products manufactured declined by 7%. Industrial wastewater discharges at Blaine rose 31% between FY 2012 and FY 2016. The increase in water use and discharge was due in part to changes in the mix of products and an increase in changeovers between products resulting in increased cleaning of equipment. During a review in Blaine, it was also determined that equipment maintenance problems in 2016 likely contributed significantly to the increase of water consumption. These problems have since been rectified and we have also made other improvements, such as installing a flow restrictor to reduce water required for a grinder in the manufacturing area which we estimate is saving over 100,000 gallons per year. In previous reports, we have discussed the potential replacement of USP reverse osmosis water system with a more efficient deionized water system that would reduce water use. However, we have since decided to keep and improve the existing system, while working to reduce our water consumption through reuse efforts.

Blaine Manufacturing, Distribution and Institute Water Use

Better Shipping

In pursuing Aveda’s Mission, we continually seek a balance between minimizing our impact on the environment and providing the highest level of service to our customers. The environmental impact of transportation is significant because it is a major user of energy, accounting for about a quarter of the world’s fuel use and associated greenhouse gas (GHG) emissions. Without transportation, we would not be able to manufacture our products or deliver them to our customers throughout the world. Dave Nordine, Aveda’s Director of Transportation, explains how we incorporate the Mission in moving raw materials and product:

“Aveda’s standard transportation modes are ground and ocean shipping. Yet, there are times when we ship goods via air freight due to small shipment sizes, limited alternatives in certain areas where we source raw materials and components, manufacturing delays and unplanned sales demand. Shipping by air requires substantially more energy per unit shipped and, therefore, results in greater levels of GHG emissions. In response, we began using rail service in lieu of trucks on a limited basis at our domestic distribution centers.  We found that it was not easy to avoid compromising our high level of customer service.”

“In February of 2015, we began using our rail partner’s ‘RoadRailer’ service (special trailers equipped to be used on the highway and rail cars) to send one truckload per week from Blaine to our Distribution Center in Pennsylvania. The trip worked well with our rail partner maintaining a 4-day transit time for our shipments. In September, our rail shipments came to a stop when our rail partner decided to dedicate the RoadRailer business to the automotive industry route between Detroit and Kansas City. The next best rail service we could find was a 9-day transit time with added handling and additional trucking, which did not meet our standard for the level of service we want to provide to our customers.  By having distribution centers around the country, this allows us to reduce our environmental impacts by shipping full truckloads to those locations.  Smaller packages are then shipped out to the salon network, Experience Centers and our online customers.”

 “Despite the challenges, we will continue to seek ways to ship our products using the least amount of energy possible while maintaining a premier level of service for our customers. One of the ways we do this is by partnering with the U.S. EPA Smartway Program. In fiscal year 2016, Aveda utilized approximately 8,619 ton miles annually for outbound transportation via the program. We maximize the efficiency of our trucks and containers by carefully balancing volume and weight to fill the maximum amount of available space without exceeding weight limits. We partner with shipping companies that have high scores with Smartway and we take into consideration the relative environmental impacts of different shipping modes. For more information about the EPA Smartway Program, click here.”