The Triple Bottom Line Blog

This week, I hosted a panel at the Ceres Conference at which Jeff Swartz, the CEO of Timberland, the boot company, and Gary Hirshberg, the CEO of Stonyfield Farms, the organic yogurt company, answered questions about the role of business in society. Prior to the panel, I spoke with them about sustainable consumption.

I was very pleasantly surprised.

Rather than the usual canned answers one often gets from CEOs at these events, both these Red Sox fans proved to be deeply committed, not to selling less shoes or yogurt, but to sustainable consumption and enlightened consumerism as a potential way out of the ecological and societal quicksand in which we find ourselves.

Gary explained that only about half of what we eat is real food, in terms of its nutritional value. For him, sustainable consumption starts with optimizing the food value chain, which will reduce waste and create value simultaneously. The resources we now waste to make Twinkies can actually feed lots of people.

Gary believes that we need enlightened consumers, i.e. a critical mass of organic yogurt eaters to really change the equation. Twenty years ago, when Gary realized this, he started Stonyfield.

Jeff represents the third generation of Swartzes to run Timberland, and has a harder case to make with boots. But he and Gary are on the same program. Timberland's mission is "to equip people to make a difference in their world," which includes showing consumers, employees, other companies, and his children how commerce and justice can go hand in hand.

Timberland works hard to sell boots on the basis of its environmental and social actions. This is "cause marketing," yes, but also a deeper attempt to change consumer preferences by helping people "to be the change they want to see in the world." And, yes, quoting Gandhi is apropos here--Jeff is deeply motivated by spiritual and inter-generational concerns.

I know when I am being sold a bill of goods, and this time I was not. Both of these guys have thought deeply about their actions, and they're not just walking the talk, they're running it. When we finished the panel later that morning, they deserved the prolonged standing ovation they received.

As for me, like some other unenlightened "experts" in sustainability, I had wrongly assumed that smaller companies like Timberland and Stonyfield were sideshows to the main event—that the GEs and GMs of the world would move us forward, not the little guyes. Now I see the role that deeply committed CEOs like Gary and Jeff are playing and I would not be surprised if they had more of an impact, in the long run, than companies that are hundred of times as big.

And that size gap may not last forever. Under Jeff, Timberland has grown from annual revenues of $159 million to $1.6 billion, and the company now competes directly with Nike and Adidas. And while organic foods represent only three percent of the food consumed in the United States, Stonyfield sells six times the amount of yogurt as Kraft foods and is growing every day.

Maybe the answer lies in one of my favorite lines from The West Wing: "They'll like us when we win."

Labels: C-Suite, Gary Hirshberg, Jeff Swartz, Stonyfield Farms, Sustainable Consumption, Timberland

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