100 per cent organic? A sustainable entrepreneurship perspective on the diffusion of organic clothing

This paper analyses the sustainability-oriented transformation of industries from the lens of sustainable entrepreneurship. The authors investigate the co-evolution between pioneers introducing radically more sustainable offerings and (mostly large) market leaders with their responses. While sustainability pioneers introduce new products in niche markets, incumbents advance them into the mass market, together leading to the transformation of industries, markets and consumer habits.

The authors apply the sustainable entrepreneurship perspective to a case study of the German clothing retail industry with a focus on organic cotton. The analysis covers four of the ten largest German textile retailers. Data collection is based on public available sources.

The late 1970s saw the foundation of Hess Natur, which pioneered organic cotton practices and supported the development of sustainability standards in the clothing industry. In the beginning this was largely a phenomenon in niche markets, but to date some organic practices have diffused amongst mainstream retailers. This is counter-intuitive, as theory suggests that incumbents only adopt practices with significantly lower sustainability standards than companies in the niche.

The study suggests that more research should focus on the co-evolutionary dynamics between pioneering companies and incumbents and examine whether and how sustainability practices diffuse into the mass market.

The findings can help managers to better understand their organisation's role in the transformation of industries towards sustainability and, vice versa, how the transformation may affect them. Leading the transformation challenge by adopting organic and other sustainable supply chain practices can be an important measure for market success.

This study is one of the few pieces of research investigating sustainability-oriented industry transformation from a market-based perspective. Actual data on organic cotton diffusion in German retail are presented.