Quilts of Denmark
NASA technology for a healthy sleep
Quilts of Denmark (QOD) was founded in 2000 by Søren Løgstrup and Erik Schmidt. In the 1990s, economic prospects for manufacturing quilts and duvets faltered. Quilts were a commodity, buying habits changed, and price became the main competitive focus in the industry. Retailers increasingly focused on price competition, squeezing profits out of small quilt manufacturers. Consequently, quilt manufacturers were forced to lower their prices and compete mainly on cost. The profitability of the industry decreased rapidly and the industry was no longer attractive for investors.
As seasoned managers in quilt manufacturing, Søren Løgstrup and Erik Schmidt had the intuition that breaking away from price-based competition could be a rewarding strategy. They decided to pursue a radically new strategy based on the development of unique and innovative products to differentiate themselves from competitors. With an increasing number of customers attaching value to healthy sleep conditions, they considered that providing bedding that would promote comfortable and healthy sleep was a major opportunity.
With the central mission statement of “Healthy sleep for a better tomorrow”, Løgstrup and Schmidt envisioned producing and selling high quality, functional bed-ding (quilts and pillows) that would actively boost clients’ sleep quality. At that time, functional quilts and pillows didn’t exist: Nobody had ever before produced a quilt that could actively improve sleep. To realize this vision, they required a better understanding of the factors that influenced sleep quality. They started to collaborate with various organizations including research institutes, laboratories, hospitals, and companies in different industries. They sought any relevant information beyond the boundaries of their industry to understand the characteristics of “healthy sleep”. They ultimately established an informal advisory board with experts on sleep who could advise them on key issues. In addition, the sleep institute at the University of Copenhagen’s Glostrup Hospital was extremely supportive and passionate about QOD’s ambitions. Through this contact, Løgstrup and Schmidt were introduced to the science of sleep and the clinical practice of sleep medicine.
A variety of suggestions resulted from Løgstrup’s and Schmidt’s contacts with specialists and discussions with the advisory board. Although different factors are involved, temperature emerged as the most important influence on sleep quality. Løgstrup and Schmidt discovered they had to find a way to slowly lower people’s body temperature without causing discomfort and then maintain the body’s temperature at the same level throughout the night. If the product succeeded in keeping the temperature in the comfort zone, people would fall into a deep sleep more quickly. Producing a quilt that could guarantee these temperature conditions would lead to a higher quality of sleep.
The managers started to look for different technologies that could control temperature to produce the desired effects. After exploring several different directions, Schmidt learned about temperature phase change material (PCM) technology in an article on space walks. According to the article in Science Illustrated magazine, astronauts were exposed to extreme temperature fluctuations (up to 80 degrees Celsius) during space walks. Temperature phase change material is used in space suits to protect the astronauts from these great differences in temperature. Schmidt discovered that the phase change technology had been developed originally for the US National Aeronautics and Space Administration (NASA) in 1988 by Triangle Research and Development (TRDC). He contacted NASA and received a positive response. At the time, the space agency was sharing information about specific space and military technologies in order to promote potential civilian and commercial uses. NASA connected Schmidt with Outlast Technologies, an accredited licensee for this technology.
In 1991, Outlast Technologies had acquired the exclusive patent rights for the temperature-regulating technology from NASA, intending to incorporate it into commercial fibers and textiles. They were interested mainly in insulation for residential buildings; the material they used was inflexible and therefore not suitable for quilts or pillows. As the collaboration between Outlast Technologies and QOD got underway, the challenge for QOD was to transform this hard material into a soft, flexible version. As Outlast began to realize the commercial value of this application in the bedding industry, it decided to devote more time to the textile applications of the technology. Both companies accelerated the innovation process and stepped up their collaboration. The technical challenges, however, remained considerable for numerous reasons.
First, engineers had to discover how to introduce the phase-change material into bedding without reducing the quilt’s flexibility and fluffiness. They worked out a solution in which the phase change material was encased in very small microcapsules. These “thermocules” were filled with a special wax that could absorb and release heat. These microencapsulated phase change capsules were so small that a piece of fabric could contain millions of them. The special wax material changed from solid to liquid and back again as the microcapsules absorbed excess body heat, stored it, and the released it again when the person’s body temperature lowered by a few degrees. Essentially, the Outlast technology moderated temperature with an ongoing interaction between the body and the environment that would keep individuals comfortable as they slept.
The second technical challenge lay in obtaining the correct temperature. The rate of cooling or heating and the final temperature could be obtained through the mixture of microcapsules. Quilts of Denmark extensively used knowledge gained from its medical contacts to find the mixture that delivered the optimal temperature and cooled down and heated up slowly enough to ensure comfortable sleep. In total, Quilts of Denmark and its partners spent almost two and a half years developing a commercially viable product.
Quilts of Denmark used this technology to manufacture the world’s first intelligent quilts and pillows, and branded them as TEMPRAKON. The innovation was introduced in September 2003 at a textile fair in Frankfurt (Germany). According to Schmidt, the product amazed everyone and TEMPRAKON benefited from rapid market acceptance. In 2009, QOD offered a full spectrum of products with four temperature types with various fillings and shells, all based on clients’ personal preferences. The Space Foundation recognized TEMPRAKON bedding products as a Certified Space Technology. This quality label allowed Quilts of Denmark to differentiate its TEMPRAKON line of products from potential imitators.
Outlast and Quilts of Denmark entered into a broad agreement on using the co-developed technology; it stipulated that QOD could license the PCM technology for quilt and pillow applications on a worldwide scale. Furthermore, the agreement granted QOD the sole intellectual property rights for their most important markets (e.g., Scandinavia) and gave QOD the exclusive right to sell quilts and pillows in countries that were specified. In other markets, Outlast could sublicense the technology to other quilt manufacturers after consulting and reaching an agreement with QOD. Finally, QOD had the right to protect the intellectual property that they developed in applying the PCM technology to products in their business. QOD successfully applied for several patents related to using the technology in quilts and pillows. In addition to forging a broad-ranging agreement, both founders emphasized that the success of their collaboration and commercialization stemmed from the trust they developed in their relationship over time. When problems cropped up, both management teams would join in looking for solutions, as they realized that a problem encountered by one firm was also affecting the activities and financial health of the other.
After the successful launch, Løgstrup and Schmidt faced a new challenge. They had to accelerate production to meet rapidly developing demand and to distribute TEMPRAKON products worldwide. To circumvent capacity problems and generate cash for the rapidly growing startup, they sublicensed their technology to other bedding manufacturers, particularly in countries in which QOD had no presence or remained disinterested. Sublicensing created its own problems, as licensees had to be monitored on prices and on situating the premium-priced product correctly in their markets.
QOD also faced challenges related to pricing TEMPRAKON products. To reach financial targets established in its contract with Outlast, QOD cooperated with some large retailers early on and established a solid foundation. To sustain its growth and to overcome downward pricing pressures, QOD tried to increase its margins through brand awareness. In addition to receiving the Space Technology Certification, they also won several innovation awards.
Despite these successes, quilts and pillows remained low-interest products. Most people did not even know the name of any particular brand of quilt. To address this, QOD’s management launched an effort to increase brand awareness by informing customers and educating retailers and store managers. QOD developed a method to train store sales staff and worked together with stores to increase brand awareness in return for advertising budgets.
Driven by the success of the quilts and pillows, QOD continued to experiment with new TEMPRAKON products. To differentiate their offerings, QOD collaborated with designers on the appearance of the products and packaging. Next, they developed the “ultimate dream bed”—the Airborne—which management perceived as an important stepping stone to achieving direct contact with the end consumer and strengthening the TEMPRAKON brand.
In 2010, QOD and Outlast developed a second-generation TEMPRAKON which was technologically superior to the first generation. The production capacity at QOD was now large enough to sell TEMPRAKON products worldwide, so the company used the introduction of the new-generation technology to terminate many of the sublicensing agreements.
Quilts of Denmark had some tough years in the period 2011-2013, partially as a result of the bird flu crisis which limited the supply of down severely, but by 2014 the company was back on track. At the end of 2014, the company received a substantial grant from the Danish Ministry of the Environment to use the PCM technology in recycled plastic fibers. The research output was promising and allowed QOD to mingle the fibers carrying microcapsules with PCM with the down itself—inside the quilt—rather than gluing the microcapsules onto the quilt’s cover fabric. This project was to be continued in 2016 and the company was working with several partners from other industries to treat the fibers in special ways, for instance with antimicrobial technologies. All of this was done in a separate department: The company was producing quilts on the one hand and it was developing new technologies on the other hand. By 2015, QOD had now more than ten years of experience with functional quilts and had its own portfolio of patents focusing on how to use the PCM technology with textiles. QOD was gradually evolving into a technical service company. Retailers became more and more interested in functional quilts and tried to make inroads into this premium-priced segment: QOD was licensing the temperature-regulating know-how to several retailers as the technology was becoming mainstream.
Figure ‑ 1: The PCM microcapsules as solution for a functional quilt
Figure ‑ 2: TEMPRAKON including the Space Certified Label