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When a CEO-or in this case a "CE-Yo"-writes a book about the philosophical and environmental underpinnings of the company he founded, it is natural to expect an ego-driven text. But Hirshberg, founder of Stonyfield Farm, the organic yogurt maker, dilutes the ego with "eco." After all, this is a book that presents management lessons gleaned from life on a farm: in one such lesson, a herd of hungry pigs attacks a mound of damaged plastic yogurt cups, devours the contents and teaches Hirschberg nature's idea of recycling. While there is some cultured finger-pointing at big-name competitors and other corporations for organic abstinence and environmental insensitivity, Hirshberg focuses on how Stonyfield succeeds in pursuing sustainability and profitability-not to mention valuable shelf space alongside giants like Kraft and Yoplait. But in addition to describing how his company addresses such tasks as negating its own carbon footprint or establishing a "handshake with the consumer" in lieu of advertising, Hirshberg shares stories of similar successes at other companies, including Whole Foods, Timberland and, more recently, at Zipcar. Hirshberg has produced a manual of use for managers at any size company with an earnest interest in learning how to save the world while enriching employees and shareholders. (Jan.)Copyright 2007 Reed Business Information
Sustainability is the key to that alliance. A sustainable system is nature's version of the proverb "waste not, want not." Our solar-powered planet doesn't exude waste. Our planet is a wondrous system of interdependent processes that nourish themselves. In my view, the more any business emulates this model, the more it can generate true wealth for its owners, customers, and all humans.
How I became an eco-entrepreneur is a story that began in the late 1970s when I was executive director of the New Alchemy Institute, an ecological research and education center on Cape Cod, Massachusetts. We built a solar-heated greenhouse that used no fossil fuels, herbicides, pesticides, or chemical fertilizers. Yet it produced enough food to feed ten people three meals per day, 365 days per year. Even when the yard was covered with snow, it was toasty inside-a haven for everything from birds and bees to bananas, figs, and papayas. Tanks of water absorbed sunlight by day and radiated heat at night. Each tank raised about one hundred pounds of fish per year. Their waste fertilized plants, which, in turn, provided food for the herbivorous fish. Wind systems provided electrical and mechanical power.
All this seemed to be a worthy achievement to this young idealist until 1982, when I visited my mother, then a senior buyer at Disney's Epcot Center in Orlando, Florida. There I rammed into one of those epiphanies that change your life forever.
We toured the Land Pavilion where sponsor Kraft Foods was touting its vision of future farming. In tribute to the blessings of supposedly endlessly fertile land and unlimited resources, Kraft displayed, in a building both heated and cooled by fossil fuels, rivers of chemical fertilizers, herbicides, and pesticides swooshing around the naked roots of anemic-looking plants grown hydroponically in plastic tubes. In this paean to fertility, there was not a single grain of actual soil. Natural farming is all about creating great dirt, rich with nutrients. This was a cartoon scene of chemistry gone mad. As I saw it, nothing grown the Kraft way would sustainably nourish a laboratory rat, much less soil itself.
Kraft underscored its bizarre message with "Kitchen Kabaret," a pseudo-musical featuring the four food groups and Bonnie Appetit, the show's only live character. The other "actors" were animatronic robots named Miss Cheese, Miss Ice Cream, Miss Yogurt, and the like, who sang lyrics I wish I could forget:
Your taste buds I'll appease. I know how to please. It's known that I am too good for words. Oh, isn't that right, big boy?
As bad as the lyrics were, I left feeling that the singing foodstuffs were secretly humming a very different and troubling tune:
Just buy Velveeta, please. So what if it's not real cheese? Real is what we'll say it is, And Mother Nature's on her knees.
Every day, twenty-five thousand people paid to see this spectacle-more than visited my own New Alchemy Institute in a year. After viewing the Kraft-sponsored pavilion twice myself, I came away deeply disturbed.
While stewing about all this, I had a eureka flash that eventually shaped my life, built my company, and led me to write this book. I blurted out to my mother: "I have to become Kraft."
Don't misunderstand. I was still convinced that Kraft was crazy and only sustainable practices could save the planet. But now I faced the reality that people like me were unheard voices preaching to ourselves in an uncaring world. To change anything, we needed the leverage of powerful businesses like Kraft. If we had their cash and clout, people would listen and begin to make changes, which led to my key point: To persuade business to adopt sustainable practices, I would have to prove they were profitable.
Ever since, the challenge of proving that sustainability pays-and hugely-has driven my career. Somewhat to my own surprise, I have succeeded. After years of work and many experiments, I have discovered that sustainable practices not only make money, but are invariably more profitable than conventional business methods. Now I want to share what I've learned and persuade other businesspeople to join the cause.
Once corporations like Kraft realize that businesses can derive big profits from cleaning up the planet and operating in green, sustainable ways, the battle will be won. Business is the most powerful force on Earth. Unlike governments, which are usually bound by consensus and convention, business can lead. Unlike churches, community groups and nonprofits, business has money to back up its ideas. It can act quickly, get rules changed, and overcome entrenched interests. In one of those ironic twists that make life so interesting, the same boundless thirst for profit that got the planet into trouble can also get us out of it.
The first step is to understand that many widely held assumptions are wrong. Take the notion that modern agribusiness is a model of efficiency. Some analysts calculate that typical food producers use ten to fifteen calories of fossil-fuel energy to produce every single calorie of food energy they sell. By any standard, economic or environmental, that's ridiculous-a suicidal ride to bankruptcy via inefficiency. But because the industry's conventional accounting method adds up only dollars, not energy-or, for that matter, any so-called externalized costs, such as resource depletion, pollution, or the demise of farmers-agribusiness is wrongly deemed "efficient."
This story line nicely told in Michael Pollan's excellent book, The Omnivore's Dilemma, began with the advent of synthetic fertilizer, first developed in the United States using ammonium nitrate left over from the production of explosives in World War II. Synthetic fertilizer combines vast quantities of nitrogen with a fossil fuel, usually natural gas. It makes it possible to grow genetically identical plants on hundreds of thousands of acres, year after year, apparently without concern for wearing out the soil.
That's the seemingly good news. Absent the need to rotate crops or leave a field fallow to replenish depleted nutrients, farmers are free to practice monoculture genetically modified hybrid corn, a voracious consumer of nitrogen, is now produced on a huge scale. The corn farm operates like a factory, transforming vast quantities of fossil-fuel energy into food energy.
There's a catch: The fertility that comes in bags and tankers depends on petroleum energy stored up aeons ago from the remains of dead plants and animals. It is nonrenewable, in contrast to the ongoing natural process that breeds soil-borne micro-organisoms, which feed on the roots of a rotating crop of legumes such as soybeans and make nutrition available to plants. In other words, monoculture is not sustainable. It's the opposite of nature's self-supporting systems. It's a stranger to the soil it uses. Instead of enriching the land, monoculture just rents it for a season and then checks out, like motel guests in the morning, leaving the room a mess for the maid to clean up.
Fossil fuels are needed to make the synthetic fertilizer, of course, and more fuel is spent to power the equipment that plants, harvests, and carries the corn and other crops to market. But something else happens when agribusiness upsets the balance of nature with scientific meddling. It turns out that feeding plants with synthetic nitrogen, which leaves them deficient in certain micronutrients, in turn makes them more vulnerable to pests. The factory farmer caught up in this counterintuitive approach reacts by dousing his crop and the soil beneath it with chemical herbicides and pesticides, wasting still more fossil fuel.
Intuitively, a farmer might be expected to protect his sources of fresh, clean water and conserve topsoil. But with no need to plant cover crops to restore nitrogen and nutrients, the industrial grower leaves the ground bare after the harvest. This reductive behavior allows wind and rain to erode his topsoil, and the silt runoff clogs local streams and rivers.
Worse yet, in the pursuit of illusory efficiency, factory farms tend to overuse both fertilizers and pesticides to ensure a big crop. Some of the excess leaches into the water table and contaminates the groundwater, while some evaporates and creates more acid rain. Whatever is left flows into streams and rivers, polluting drinking water and contributing to huge algae blooms when it reaches the sea. The algae use up all the oxygen in the water, creating hypoxias, or huge dead zones in our oceans where no marine life can exist. One of the world's largest hypoxias is in the Gulf of Mexico, near the mouth of the Mississippi River. Ranging between six and seven thousand square miles in area, it is already larger than Rhode Island and growing rapidly. All told, 146 major hypoxias dot the world's oceans, and all are growing.
Who pays the price for all this contamination, this destruction of the Earth's equity upon which all of us ultimately depend? Not the fertilizer maker or the factory farm per se. It is paid by fishermen and oystermen and scallopers, who can no longer make a living from our contaminated waters. By taxpayers who must bankroll municipal facilities to produce potable water. By people who become ill from drinking tainted water, lose work time, and perhaps incur medical costs. By lumberjacks whose livelihoods are threatened by acid rain-related damage in our forests. In the long run all of us, especially our children, pay a terrible toll for this unnatural approach to "efficiency."
The root cause of all this seems to be that we humans consider our versions of efficiency superior to nature's. This illusion has damaging effects. If you look at farming as a strictly economic enterprise, you virtually guarantee an addiction to oil-based fertilizers and pesticides. Those chemicals inevitably abuse the natural resources on which farming depends. The conventional way of thinking literally turns big farms into excavations-Earth destruction pits-as opposed to verdant cultivation sites that are in harmony with nature's rhythms and systems. The real costs of industrial farming, then, are horrendous, far greater than the ledger entries. Echoing the paradoxical Vietnam-era rationale that we had to destroy a village in order to save it, Big Agribusiness assumes, in effect, that we have to destroy the Earth in order to farm it.
Just as monoculture and factory farming reduce complex biological relationships to easy tricks for soil chemists, so, too, modern industries shrink complex economics to whatever it takes to achieve quick profits at minimum cost. In the name of efficiency, future consequences become irrelevant. Immediate gratification rules. If a job can be done more cheaply elsewhere, it is outsourced; if a supplier can be made to swallow an extra dime of cost, he gets squeezed; if the law allows the emission of X tons of pollutants, factory smokestacks spew out every legal ounce.
The consequences can no longer be ignored. We humans are so careless about our impact on nature that we endanger ourselves, to say nothing of other species. Our own behavior increases the severity of global warming and the resultant droughts, famines, floods, forest fires, and Katrina-scale storms. Millions appear blind to the irony that man, the "rational" animal, keeps trashing the only planet we will ever have.
Business has a special obligation-and opportunity. Given our past depredations in pursuit of profit, companies should now declare war on ecological idiocy. What could be more in our own strategic interest? What could be more genuinely profitable than using business power and know-how to literally save the world?
Most of this case for action was only a hunch that day in 1982 when Kraft's Land Pavilion handed me a mission. I knew that I yearned to help foster a business transformation. But the world is full of hapless prophets. If I wanted to become effective rather than eccentric, I had to somehow create a truly sustainable business that actually made money-and the more, the better.
I began as a small acorn, unlikely to become a mighty oak anytime soon. Realizing that New Alchemy was no business academy, I returned home to New Hampshire and joined Samuel Kaymen, my friend and fellow idealist, in launching what then seemed a pretty quixotic enterprise-Stonyfield Farm, a tiny venture in yogurt production.
Some twenty-five years later, Stonyfield is the world's largest organic-yogurt maker, and I am its CE-Yo. Better yet, our U.S. yogurt sales surpassed those of Kraft's Breyers brand nearly a decade ago. Stonyfield has grown by more than 27 percent a year for the past eighteen straight years, compared with 5 to 7 percent for the yogurt industry as a whole. In 2006, our sales topped $260 million; in 2007, we're on track to exceed $300 million. It's largely due to our focus on sustainability-the art of replacing myopic efficiency with sensible methods that boost profits while benefiting nature rather than destroying it.
High on Stonyfield's agenda is our top priority-real wealth. As a business, we're pledged to do anything feasible to help reduce environmental costs and rebalance the planet's natural systems, from the land to the atmosphere.
In practical terms, we look to nature in striving to make our business as sustainable as possible. Natural examples abound. Consider how a tree builds and supports its own ecosystem. It sprouts leaves that make shade and conserve the water needed for growth. It fertilizes itself by dropping its leaves to the ground, where they decompose into soil that, in turn, nurtures microorganisms needed for the tree's balanced and healthy growth. Certain tree species support epiphytes, such as mosses and bromeliads, that produce nitrogen, another fertilizer for the tree's ecosystem. Many trees also secrete acids that help to break down the soil, thus keeping it friable and absorbent so that life-sustaining moisture can reach the tree's roots. Trees reproduce themselves by sending out seeds, and when stands of trees develop, a windbreak is created, which affords protection to other organisms in the ecosystem. All in all, a tree is an elegant, self-cultivating system devised by nature with no waste.
In essence, the whole Stonyfield story thus far is the learning curve that my coconspirators and I went through in building a business that defied conventional wisdom. What have I learned? Let's start with the bottom line. It's just this: Sustainability thrives when you open your mind to doing things most businesspeople would consider plain nutty. Examples:
* We pay some of our organic suppliers as much as twice the going rate for conventionally grown materials. * We do hardly any advertising, and we use our packaging to promote other organizations. * We actually push for more government oversight and regulation of our industry. * We give our customers and investors detailed reports on how much pollution and waste we generate-even when those figures are rising.
Our approach runs almost diametrically opposed to the ancient business recipe for success: Buy cheap, sell dear. We're willing to spend top dollar to produce the product-and to build the business-that will make us most proud. That's not typical.
Consider the soft-drink industry. The people who make Coke and Pepsi have solidified their empires mostly by always working to reduce the cost of their ingredients. Since 1984, these sugary drinks have contained not a bit of sugar. Pepsi and Coke figured out back then that they could switch to high-fructose corn syrup, save a few cents an ounce, and the consumer wouldn't notice the difference in taste. Next they super-sized the containers and offered twenty-ounce bottles for only pennies more than they used to charge for smaller bottles in the days when they were still using sugar. Gross margins grew tremendously, and they plowed the new revenues into ubiquitous advertising that kept their brands in consumers' faces.
At Stonyfield, however, our goal is more than making money. We aim to be both sustainable and profitable. When we make decisions, we consider the alternatives in terms of whether their impact would move us closer to, or further from, sustainable profitability. Pay more for milk? Yes, if the milk is high-quality and our purchases will ensure long-term access to a key, quality ingredient.
Excerpted from STIRRING IT UP by GARY HIRSHBERG Copyright © 2008 by GARY HIRSHBERG. Excerpted by permission.
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Posted March 13, 2008
Historically and at present, every school curriculum, be it at regular school or college level stresses the importance of getting and spending, about materialism, about maximizing profits and return on investment, all with good intention, but nowhere are we thought about living in harmony with nature, about sustainability and preservation of the environment, every class in business emphasis maximum profit, but not one of them teaches us about the impact to the environment and at what cost it is to Mother Nature. We are taught about making short term profits but not about the long term impact to the environment, this practice is going to cause untold misery and suffering for future generations. We as custodians of the environment, ature, the animal and plant world, supposedly of a higher intelligence are suppose to safeguard and protect it, but we are all guilty of abusing it. Industrialization and modernization has certainly given us a more comfortable lifestyle, but at what price? As a species, we human beings have consumed, exploited, and destroyed more of the earth's resources in the past fifty years than all of the previous years human existence combined. Besides the reduction of carbon emissions and finding alternative energy sources, one of the other solutions is to change textbooks to factor in climate and environmental issues into the business equation, as well as to change our mindsets as to how we impact the environment in our daily lives. No other news item, activity or event is going to dominate our lives in the future more than Global Warming, the climate and the environment. If we don't reverse this trend or stop it, generations of people in the future will be facing a life of hardship and suffering to difficult to fathom, for a preview of this view the movies 'Mad Max' and 'Waterworld'. Hirshberg does an excellent job in illustrating that we can live in harmony with nature and make profits at the same time. This book should be read by CEO's of all companies so that they can start the Green Revolution. Bharat Vala Patel Lenasia, SA Cincinnati, OH, USA
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Posted May 2, 2011
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