Short read: The High Stakes of Low Quality

Quality in essence underpins durability or sustainability whether it comes to investing or consumer products. However, falling attention spans and growing consumerism has driven people’s preferences away from durability towards short termism or use and throw behaviour. Yvon Chouinard, the legendary founder of the iconic clothing brand Patagonia, writes in this oped for the New York Times, about how this behaviour is hurting the planet. Chouinard has put his money where his mouth is by donating almost all his wealth including his ownership of the company to tackling climate change.

“…our overconsumption of stuff, from shoddy tools to fast fashion that is trendy one day, trash the next.

Obsession with the latest tech gadgets drives open pit mining for precious minerals. Demand for rubber continues to decimate rainforests. Turning these and other raw materials into final products releases one-fifth of all carbon emissions.

… In a world where it’s often cheaper to replace goods than to repair them, we have gone from a society of caretaker owners to one of consumers. Manufacturers and brands must shoulder much of the blame. They increase sales by intentionally limiting the life span of batteries, lightbulbs, washing machines and more through planned obsolescence. Some build in quality fade, slowly downgrading materials to save money and duping customers into buying something a little bit worse each time even if the label stays the same. As a result, products that could have been made to last a lifetime — or even generations — end up in landfills.”

Patagonia’s focus on quality and durability in its products was met with criticism that such a business will not make money. Chouinard disagrees: “They thought we were crazy for repairing our own gear and urging our customers to buy less. They said our focus on quality would drive up prices and put our products out of reach. But the naysayers were wrong. Some of our most loyal customers still live out of vans and save up for one of our coats, knowing they may not need to replace it for a decade or more. And long-lasting goods create secondhand markets for discounted clothes and gear that have many years of good use left in them. Quality is smart business.”

He makes some suggestions about the role governments can play to drive this much needed quality revolution: “A quality revolution will require a huge shift, but it’s been done before. Early post-World War II Japan was known for making flimsy, inexpensive products. But in 1950, an American statistician named W. Edwards Deming introduced a system that emphasized consistency, continuous improvement and the importance of sourcing the very best materials. His principles transformed Japan into a manufacturing gold standard, but they didn’t catch on in his home country. Frustrated with U.S. companies’ lack of interest in his methods, Deming told a reporter he’d like to be remembered “as someone who spent his life trying to keep America from committing suicide.” If we can embrace quality as the key to living more responsibly, choosing the carbon steel knife that lasts decades over the ones that have to be replaced each year, we may just get to keep the one thing we can’t toss out: Earth.”

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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.