The Triple Bottom Line Blog

Check out this fine article by Amy Westervelt in Sustainable Industries magazine. Titled "How (Not) To Sell Out," it's a thoughtful look at the complexities of trying to protect a company's sustainability focus even after partial or total control has been ceded to a mainstream corporate investor.

In the article, Westervelt talks to green business pioneers who felt betrayed by the corporations they sold out to (such as Greg Steltenpohl and Paul Hawken), to others who chose to back away from potential buyouts in order to stay true to their long-term mission (such as Gary Erickson), and to still others who believe they've found a comfortable niche as in-house green business advocates after selling their firms to larger corporations (Gary Hirshberg, Frederick Schilling).

The key to the successful outcomes enjoyed by the last two entrepreneurs (CEOs of Stonyfield Farms yogurt and Dagoba Organic Chocolate, respectively) would seem to be due diligence--not just about the financial status of the proposed acquirer, but about its business history, demonstrated values, and industry role.

In the case of Schilling's Dagoba, which sold out to Hershey, the structure of the overall chocolate business is what made the crucial difference. In Westervelt's article, Schilling says, "Ninety-eight percent of cacao is grown by millions of small, independent family farms, and on small farms the model is always multicropping. In itself, as a commodity and industry, cacao is really a sustainable crop, and in terms of the environmental aspects of our product, Hershey would keep that up simply because of the nature of the supply chain and cacao as a commodity."

In the case of Hirshberg's Stonyfield Farms, the acquiring firm, international giant Danone, had a long-standing commitment to corporate social responsibility, dating back to the time of former CEO Antoine Riboud, father of the current CEO Franck Riboud. (For example, Danone collaborated with Grameen Bank founder Muhammad Yunus in creating Grameen Danone, a sustainable "social business" designed to provide low-cost, nutritious yogurt for poor families in Bangladesh. This story is one of the central themes of the new book Creating a World Without Poverty that I collaborated on with Yunus.)

Although Westervelt doesn't delve into this company history, it must have been an important factor in helping to convince Hirshberg that Danone would be the right kind of corporation for him to collaborate with in bringing Stonyfield Farms to next level of growth and expansion.

All in all, a very well-done article--one that gets beyond generalizations to examine the nitty-gritty issues involved in one of the most difficult decisions any entrepreneur has to make.

Labels: Amy Westervelt, Dagoba, Danone, Frederick Schilling, Gary Hirshberg, Hershey, Small Business, Stonyfield Farms