You are using an older browser version. Please use a supported version for the best MSN experience.

These companies turn trash into millions

CNBC logo CNBC 17-08-2015 Michelle Castillo

Steve Rowling used to wonder why women would always ask for the used coffee grounds from his Melbourne, Australia, coffee shops. After doing a little digging, he discovered that the customers were turning the discarded waste into beauty scrubs.

Realizing he could transform the trash into a trendy product, Rowling partnered with content agency Willow & Blake founders Erika Geraerts, Bree Johnson and Jess Hatzis in March 2013 to found Frank. The skin care line— which focuses on caffeinated products with natural ingredients—said it pulled in $4 million Australian dollars ($3 million) in revenue during its first year, and more than tripled that number to AU$14 million in year two. It's projected at AU$33 million this year.

And, they made it all possible without having a brick-and-mortar store. That's right: Frank only sells its products online. The company claims it sells a scrub every 40 seconds on its website.

"There's plenty of opportunities out there in the market now that let people be able to set up a global business online," Rowling said. "It's about looking at things a little bit differently for myself and the Frank team."

Part of Frank's success is due to using the upcycling waste story and emphasis on natural ingredients as a part of its marketing. It's one of a number of companies that are highlighting their environmentally friendly stances or sustainable practices in their campaigns to connect with younger consumers.

General Motors (GM) has 122 zero waste facilities where 97 percent of the trash is recycled or reused, which generates $1 billion a year according to Forbes. Wal-Mart (WMT) is working toward its energy supply being 100 percent sustainable (it's currently at 32 percent). Brazilian Wal-Marts that have opted into this green program save about 11.5 percent on their energy bills.

One-third of millennials consider themselves to be environmentalists, according to the Pew Research Center. A survey by online publication Elite Daily and consulting firm Millennial Branding showed 75 percent of the young people they talked to said it was "either fairly or very important that a company gives back to society instead of just making a profit."

"Customers are no longer as interested in the technical differentials in their product," Thread International CEO Ian Rosenberger said. "Back in the 1990s, it was about how waterproof an item is. Now, what they really want to know is where it comes from? What is the story of this good? If we can't communicate that to people, then they don't believe [the product is] trustworthy."

Pittsburgh-based Thread International created fabric out of trash as a response to the dirty practices of the textile industry. Instead of creating its own products, it supplies its cloth to other brands. Rosenberger said the company is producing for several multinational brands in the outdoor apparel and gear sector, as well as the lifestyle apparel and accessories fields for the upcoming 2016 and 2017 collections. During its last round of investment in June 2015, it raised $2.78 million, bringing its total to $3.75 million.

© Provided by CNBC

Willow & Blake had been doing agency work 2 ½ years before Frank. The team used its best practices, and experimented with Frank to see what marketing worked best for a young female demographic.

They determined Instagram would be the best vehicle. Sure, some of the attention could be due to the risqué nature of some of the photos, but by and large it's created a "cool kid" effect by having online influencers cover themselves in the Frank coffee grinds and then reposting those images on its social feeds.

Thanks to the prowess of Willow & Blake, in three years Frank has gained more than 1 million Instagram followers and 15,300 Twitter followers.

"We felt we were spending so much time writing for brand and using social media for particular brands in the beauty industry and we saw this disconnect between beauty brands and customers," Geraerts said. "They never truly understood their customer and how these young girls like to be spoken to. "

Interestingly enough, Frank no longer uses used coffee grinds because the company determined fresh caffeine was better for the skin. However, it makes a concerted effort that everything is natural, responsibly sourced and its packaging is recyclable. It is also working on making sure shipping and manufacturing is environmentally conscious as well.

If you're a brand interested in working with Thread International, you don't just get their fabric. Rosenberger said it provides data to its customers ranging from CO2 emissions to economic impact. The purpose is for their partners to use the information in their marketing campaigns.

"Whatever you think resonates with your customers, we're going to help you use," he said. "We call ourselves a 'waste tech' company."

Rosenberger felt it was a necessary addition to help his company stand out. Before this job, he had worked in television production and at a marketing agency.

"Marketing and communications is as part of our business as making good fabric," he said.

Most popular on MSN Money:

4 billionaire habits you should follow

You won't believe these 15 jobs pay 6 figures!

10 credit card benefits you didn't know of

Don't add mobile number on your Facebook profile

More from CNBC

image beaconimage beaconimage beacon