Madeleine Shaw (far left) and Suzanne Siemens (far right), co-founders of Lunapads
THE CHALLENGE
Despite commercial success and B Corporation certification, the co-founders of Lunapads felt like they weren't meeting their social and environmental goals.
In 2008, through their Pads4Girls program, the Vancouver-based social business, which produces reusable feminine hygiene products, was donating its products to girls in developing countries. But this was a pricey and time-consuming undertaking, costing nearly $80,000 annually and reaching only 300 girls each year.
"We were selling Lunapads in 40 countries and turning over almost $1-million in annual sales, but we weren't reaching the girls who needed them most," says Lunapads co-founder, Madeleine Shaw. "Many girls living in the developing world miss out on school or work because they have nothing to help them manage their periods."
The company needed to find a way to continue to expand the business, while making a bigger difference in the world.
THE BACKGROUND
Lunapads specializes in natural alternatives to feminine hygiene products: washable cloth menstrual pads and stylish period underwear.
With more women choosing reusable products such as Lunapads, more than a million pads and tampons are diverted from landfills every month, says Lunapads designer Ms. Shaw, who co-founded the business with Suzanne Siemens, a chartered accountant.
Since its inception in 2000, and as part of its social impact mandate, the company has been donating a portion of its Canadian-made products to girls in the developing world, many of whom lack access to any form of feminine hygiene products whatsoever.
"Lack of access to menstrual products affects millions of girls in the developing world," says Ms. Shaw. "As many as 10 per cent of school-aged girls miss school because of it. The effect of these missed days is devastating, with girls missing up to 20 per cent of their education, thereby increasing the likelihood of dropping out, earlier marriage and pregnancy, as well as limiting career options."
As Ms. Shaw explains, it was inefficient to have Pads4Girls products made in Canada and sent over to developing nations, costing her company $35 to supply each girl with Lunapads.
"We weren't getting a huge bang for our buck and our investment was not being recognized by our customers, who buy our products in part because of our social mandate," says Ms. Shaw.
THE SOLUTION
In 2008, Ms. Shaw and her business partner were approached by two graduates working on a development project in Uganda.
Paul Grinvalds and Sophia Klumpp asked the Lunapads founders if they could copy their products to start an affiliated venture called AFRIpads in Uganda, using local labour to make and distribute them to NGOs, recalls Ms. Shaw.
Since it cost just $15 to supply each girl with products through AFRIpads in Uganda, while also providing much needed jobs, Ms. Shaw and Ms. Siemens recognized that this new direction would be more cost-effective, efficient and impactful.
They struck a marketing partnership with AFRIpads, consenting to the company to freely use their intellectual property while taking an active role in mentoring AFRIpads' startup.
"Our partnership with AFRIpads allows us to reach substantially more girls in need, while also making our customers partners in the impact," says Ms. Shaw.
RESULTS
Thanks to Lunapads allowing AFRIpads to copy and sell their products, more than 100,000 girls received the feminine hygiene kits in 2012, up from 300 annually in 2008.
In 2012, while on a visit to AFRIpads in Uganda, the Lunapads founders conceived a new program, One4Her that allows them to tell a more coherent story to their customers about the impact of their purchases.
"It's a TOMS shoes-style program which provides an AFRIpad to a girl in need for every Lunapads purchase, with the added bonus of supporting local employment" says Ms. Shaw.
To date, more than 15,000 AFRIpads have been donated to girls in East and South Africa through Lunapads' One4Her program.
As a result of their innovative work, Lunapads has garnered numerous awards, including BC Business magazine's Top 20 Innovators in BC (2011), the Women of Worth Award in Entrepreneurial Excellence (2012), and winner of Small Business BC's Successful You award for Best Community Impact (2012).
The positive impact of the marketing partnership has helped Lunapads to increase its annual revenue by 10 per cent.
Special to The Globe and Mail
Jeff Kroeker is a lecturer in the accounting division at the Sauder School of Business at the University of British Columbia.
This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.