Sustainability might make for good marketing, but it doesn’t guarantee financial success.
Surveys and spending data alike indicate that many consumers do value sustainability—and, in some categories, are willing to pay a premium. However, that willingness is highly variable, depending on the product, price point, and the type of benefit offered. Many executives, especially in the consumer-packaged-goods (CPG) sector, find that sustainable products still struggle to capture meaningful market share,” according to an April report from McKinsey.
Consumers may say they want sustainable products, but their actions show that comes with serious caveats. The gap between what consumers say about sustainability and what they actually buy is typically described as an “intent versus action” gap.
Anna Granskog, who leads the European Green Business Building work as part of McKinsey Sustainability, thinks that framing oversimplifies the problem.
“As I see it, sustainability on its own is rarely a strong enough driver of purchase behavior to overcome entrenched habits, price sensitivity, and performance expectations. In other words, sustainability is competing against a broader set of decision criteria, and most of the time it’s losing,” she wrote.
Now, MUD Jeans, a brand built around sustainability, has filed for Chapter 11 bankruptcy protection.
MUD Jeans makes sustainable jeans
A noble mission alone does not pay the bills, which is something the jeans company has learned. The brand explained its mission on its website.
“MUD Jeans exists to eliminate textile waste by keeping denim in circulation indefinitely through repair, resell and fibre-to-fibre recycling. By making circularity the foundation of our business model rather than an afterthought, we aim to demonstrate that fashion can be both commercially viable and genuinely restorative,” the company shared.
As a consumer who has covered retail for over 30 years, those words just scream “expensive” to me. Prices on the company’s website back that up.
The cheapest men’s jeans cost $82.13 as part of a half-off sale, while the priciest pairs come in at $234.78, with many pairs priced between $164.33 and $176.07. For women, the low-end sale prices start at $76.22, while the highest-priced pairs cost $176.07.
Living in Florida, I actually haven’t bought jeans in years, but a visit to the Kohl’s website shows a variety of Levi’s options from $44 to the mid-$50s (although there are some pricier pairs).
More Bankruptcy:
- Outdoors retailer closing 91 stores in Chapter 11 bankruptcy
- 97-year-old aerospace manufacturer files Chapter 11 bankruptcy
- 60-year-old dining chain franchisee files Chapter 11 bankruptcy
Consumers, data shows, are generally not driven to pay more simply because an item is made sustainably, according to a study of sustainable health and beauty care products conducted by Yewon Kim, an assistant professor of marketing at Stanford Graduate School of Business, and Kristina Brecko, an assistant professor of marketing at the University of Rochester.
“It turns out that package size, ingredients, and brand name are much bigger drivers of purchases than sustainability,” Brecko said.
Shutterstock
MUD Jeans files for Chapter 11 bankruptcy
MUD Jeans founder Dion Vijgeboom shared the news in a LinkedIn post.
“With great sadness, we have to share that MUD Jeans has been declared bankrupt, following the bankruptcy filing we submitted ourselves,” he shared.
“This is not the ending we fought for. Over the past months, our team worked tirelessly to build a sustainable future for this company. We believed there was a way forward. But despite all our efforts, the financial burden of historic debt ultimately proved too great to overcome,” he added.
The MUD Jeans website remains up, but is no longer taking orders.
In addition, the company does not know what will happen to its existing orders.
“We understand this raises questions, including about orders, ReLoved and our repair and take-back service. We’ll inform you as soon as we know more. Updates will be shared through our channels and at mudjeans.com,” it shared on Facebook.
Building sustainable retail brands proves challenging
Creating a successful business that’s also giving back or improving the planet has been notoriously difficult. TOMS, the shoe brand that famously gave away one pair of shoes for every pair it sold, ended up being taken over by its creditors in 2020 after the company could not pay back a $300 million loan.
TOMS still exists, so that’s a victory, but doing good as a marketing strategy (even one the company’s founders believe in) goes only so far.
That’s been made clear over the past few years as companies like Beyond Meat — a brand marketed around the good plant-based meat will do for the planet — have struggled to survive.
In a similar situation, offering healthy vegetarian food might be good for people and the planet, but low sales led vegetarian fast-food restaurant chain Clover Food Lab to file for Chapter 11 bankruptcy on Nov. 3. That chain closed all its locations before a buyer stepped in and reopened some.
Another food-based company, KDC, which operates the Do Good Foods brand, however, has moved from Chapter 11 bankruptcy to a Chapter 7 liquidation.
Sustainability in fashion costs more money, according to Vogue.
“Sustainable manufacturing leads to higher prices, but brands have been reluctant to absorb the cost or pass it on to customers,” according to the magazine.
Vijgeboom still believes in the model and hopes the company gets a “second chapter.” He does not mention the pricing problem in his post.
“MUD Jeans became far more than a denim brand. We proved that circular fashion could be modern and desirable. We never believed people should have to choose between looking good and doing good. That’s why we refused to compromise on quality, fit or sustainability. Every pair of jeans we made reflected that belief,” he wrote.
Related: Casino operator liquidated as Chapter 11 bankruptcy ends
