Loll Designs (“Loll”) is a Minnesota company that specializes in designing and manufacturing heavy-duty outdoor furniture. In 2007, Loll began using recycled milk jugs (plastic milk containers) to manufacture their chairs. Greg Benson, Loll’s co-founder and CEO, had a firm conviction that manufacturing their products out of recycled milk jugs was the company’s competitive advantage. Positioning Loll as a caring, environmentally friendly, sustainability-oriented company enabled the company to target a niche psychographic segment. In early 2017, Greg considered the possibility of switching to virgin plastic instead of recycled milk jugs. The plummeting oil prices made the switch not only feasible but also cost-effective. Making new plastic suddenly became less expensive than the recycling process, since collecting, cleaning, and preparing used plastics took a lot of energy, time, and effort.
Loll was concerned with keeping the environment vibrant, clean, healthy, and beautiful. As such, the company had several green initiatives. Loll gave back to the community through an annual volunteer gathering to plant trees and pick up trash. The company was also part of the “1% for the Planet” movement, whereby participating companies donated at least 1% of their annual net revenues to environmental organizations worldwide. However, recycling milk jugs resonated the most with their customers as the company’s best green initiative. Should Greg drop his company’s most glamorous green initiative and procure virgin plastic to cut costs?