Talking Sustainability No. 1: Diana Paakspuu, CEO at Uuskasutuskeskus

In this interview for the series Talking Sustainability, we speak with Diana Paakspuu, the CEO of Estonian re-use center, Uuskasutuskeskus, on how an NGO with reuse at its core has evolved into one of the best-known sustainability brands in Estonia, how the Covid-19 pandemic has affected its business and the changes in the reused consumer goods market.

Interviewer: How did Uuskasutuskeskus come into being and would you describe to us what it does?
Diana Paakspuu: Reuse center, or Uuskasutuskeskus in Estonian, was established in 2004 by the Foundation of Good Deed, Fund for Estonian Nature, Caritas Foundation, and two private individuals, Priit Mikelsaar and Rasmus Raski, and the idea of our organization was that we gather different items which are in good condition and put them back into circulation.  

Interviewer: Would you describe your business model in more detail? 
Diana Paakspuu: We are a non-profit organization and our aim is not to make a profit but to fulfill our mission which is to make sure that things that are used, and in good condition, do not end up in landfills. Our operating model is that we gather from Estonian people all kinds of items that they don’t need anymore, but which are still usable and in good condition, and put them back in circulation. We do so in two ways. Firstly, we sell them in our stores, and secondly, we help our partner organizations who are dealing with different people in need.

Very often we get questions from people asking: if you get the items for free, why are you selling them? The answer is, that we are selling those items to cover our operating expenses, like store rentals, utilities, salaries, transportation costs. Because we don’t get any support from any other organizations or municipalities. That is the reason we are selling. We don’t have a private donor who is taking out dividends. Everything that we earn is to fulfill the mission as well as we can. And if something is left over, we are contributing those funds in order to expand. To open new stores in Estonia, so that we can make reuse more accessible to even more people in Estonia. 

Interviewer: What are the everyday challenges that a business like yours faces?
Diana Paakspuu: We have two major challenges. One of them is the quantity of donations, and the second is the quality of donations so that we can send to circulation items that are in good condition. Things that are very dirty or broken, it’s hard to find a use for them and we are trying to educate our customers that they would bring us things which we are then able to send into circulation. 

Interviewer: Related to that, I’d like to ask if there have been any curious donations that you have received, things out of the ordinary that you couldn’t put in the shops? 
Diana Paakspuu: Yes, over the years we have received very interesting items. Some examples are, for instance, artificial teeth, then different kinds of documents, personal letters, adult toys, basically everything so I believe our people don’t get bored while sorting different items.  

Interviewer: How do you deal with the challenges of quantity and quality of the items. For example, I believe you get a very sizeable inflow of textiles. How do you ensure you have the resources to deal with it?
Diana Paakspuu: We have in total 130 people working for the reuse center. Out of those around 100 work for shops and we do sorting in two different places. We have a central sorting center, and then we also do sorting in all our stores. We have in total 16 stores at the moment. And yes it takes a lot of time because we are doing the sorting manually, and especially if you have very different items, different brands, different materials, then it takes time. But we have quite experienced people. Also, we don’t just sort textiles but also other different categories like dishes, footwear, accessories, home appliances, so the list is long. 

Diana Paakspuu, Uuskasutuskeskuse tegevjuht

Interviewer: Could you please describe the rental operations of the reuse center? For example for the purposes of theatre and film. How does that one work? 
Diana Paakspuu: We do a lot of projects and co-operations together with theatres and movie makers. We lend them all kinds of items that they might nee din for their films and plays. So it could be clothes, footwear, it could be any kind of accessories because it does not make sense buying those items for using them just once or a few times. So yes, we have done such co-operations for quite a few years and if your watching the most recent Estonian movies, serials, plays, I believe in most of them there are items that have been borrowed from reuse center. 

Interviewer: What kind of change do you see in the reuse goods market and what do think of it? 
Diana Paakspuu: When we started the reuse center 17 years ago, consuming second-hand goods was not very fashionable or in, so we mostly had need-based customers, but we see the trend that more and more customers are visiting our stores and making purchases out of choice, and choice is very often based on environmental considerations. I believe this trend will continue and we will have more and more customers from different segments, different ages, different backgrounds. 

And I think that’s a really convenient way to contribute to the environment because if you are purchasing items from a second-hand store then you are doing good in two ways: firstly when you purchase a used item, you save the resources that would be used to produce it new and secondly the used item will not be thrown away but will go into circulation again. So it is a two-way benefit for the environment. 

Interviewer: What kind of other ways do you have for people to access your services, in addition to your stores. For example are there other collection points, or maybe events where people could donate items? 
Diana Paakspuu: The easiest way is to donate at any of our 16 stores all over Estonia, but have also recently opened different collection points. They are either in department stores or a very new project of ours, which we opened last year, is collection houses which we did together with Astri Grupp and Environmental Investment Centre. So basically those are points where people can, 24×7, bring their items, and during the weekends those points are manned so that you can bring more fragile items, which you cannot put into the bins. So ya that’s one of the new projects that we have recently launched. 

And we also do co-operations with different companies, for instance, they order our collection boxes for their offices, and then they keep them for a few weeks, and so their employees have a very convenient place to bring their items and once the boxes are full, they let us know, and we take them away. 

Interviewer: Do you face some kind of prejudice regarding second-hand goods?
Diana Paakspuu: Yes, definitely several years ago when we were established, then a lot of people had preconceptions about consuming second-hand products or visiting second-hand stores because people thought that if I’m visiting those stores then I must be doing badly financially. That I’m not able to buy new items from “normal” stores. But those beliefs have shifted, and we see more and more people who are willing to buy from second-hand stores and we are very happy about this as this is one way of contributing to the environment. 

Interviewer: Do you ever receive items that are very valuable, or have antique value? 
Diana Paakspuu: Yes, sometimes we receive very valuable and interesting items. Usually, these are dishes or paintings. But, for instance, last year we received an LP that was signed by Shostakovich. Sometimes people say that our stores are like treasure hunting places because you don’t know what you might find from there. 

Diana Paakspuu, CEO at Uuskasutuskeksus

Interviewer: Could you talk a little about the impact Covid-19 had on Uuskasutuskeskus and the kind of measures you took to deal with it? 
Diana Paakspuu: Of course, Covid-19 was quite harsh on us, especially as we had to close down all our stores, which meant that we found ourselves in a situation where we had no income, but we still needed to cover our expenses, rentals, and utilities and salaries. So that was a very difficult situation and we decided to launch a project that we had been considering earlier but we never had had the time for and that was the online store. We had been considering it as we saw that a lot of commercial was going online but we had found it hard to implement in our case because all the items are different, they are cheap, and it takes a lot of time o get those items to an online shop. For instance, you have to select them, you have to make sure they are in a good condition, then you have to photograph it, upload the photograph, you have to make the measures, you have to write the description, and if the customer orders it, you have to pack it and send it, and for that, for instance, you get 2 euros for a T-shirt. So that is quite a lot of work compared to the price you receive, and that was the reason why we had never implemented this idea

But now suddenly, because of Covid, when all the stores were closed, we had quite a lot of workforce to deal with the online shop work, so ya then we decided to implement this plan, and within 4-5 weeks we managed to open an online store. And we still have it, and when we had the second wave of Covid-19 a year later, it was very good to have this online shop. 

Interviewer: Did the customers find your online shop easily once the lockdown was implemented? 
Diana Paakspuu: Yes they did. It was very interesting that we had the official time, I remember it was on a Wednesday, and in order to avoid technical problems, we made the technical solution ready one night earlier, and some people already found it. So by the time we officially opened the online store, we already had over 20 orders.  

Interviewer: My next question is a little more generic and has to do with climate change. Given the current situation we are in with regards to climate change, what kind of impact do you think the change in our own consumption patterns towards reusing items can have? 
Diana Paakspuu: I think at the end of the day it is the customer who determines which way we are going. At the same time, it is the large corporations making the biggest impact. Because if a small company in Estonia is doing wonderful handicraft work or upcycle products, their market share is so small, that it does not have a significant impact on the whole sector. So that is why it is very important what the big corporations are doing. What are they doing with their business models? To what extent do they want to change it? And I think this is where the consumers play a significant role, because at a time when consumers decide that they don’t want to consume fast fashion anymore and they want to switch more to slow fashion, then I think the corporations will have to adapt to that. So overall I think it has a significant impact.  

Interviewer: In your experience, what can a business based on upcycling and reuse of items do to compete with bigger businesses that are producing goods en masse, and having lot bigger market shares? 

Diana Paakspuu: I think it is a very good question, and I think it is also a very difficult question because I think there is no easy or good answer to that. Of course, small entities can do a lot of manual work and prepare handmade products, but then they really can’t compete with large organizations, so I think the keyword here, or one of the keywords might be automation. To find a good way to bring in circular economy concepts and do it in an automated way in larger quantities. I think that might be key to success.  

Transcribed and edited by Saumya Tyagi