It’s Net Impact Conferece time, this year hosted by the Stanford Business School. Following this morning’s opening address by the honorable Al Gore, we’re here in the wifi equipped auditorium about to hear former Odwalla CEO & current Adina CEO Gary Steltenpohl as well as Stonyfield Farms CE-YO Gary Hirshberg. Let’s see if I can live-blog it.
Greg Steltenpohl: A story from Senegal. A woman wfrom Senegal with whom Steltenpohl was aquainted returned to Senegal after a 5 year time living in the US to find that none of the traditional beverages of Senegal were being served any more, in particular a beverage made by hibiscus – in a span of 5 years they had been replaced by western brands. Ironically, she said that no one in Africa would accept a new brand unless if came from the west. So what would happen if she created a brand that was so popular in the US that it could return to Senegal. Perverse logic, but they teamed up and created a women’s cooperative in Senegal, thus began a new partnership now producing “Bissap” and other juices called Adina world beat juice.
He then talks about the origins of Odwalla – started when “natural foods” was barely a glimmer of a market, and improvisation and passion were their only driving forces. At that time, and still today, he was suspicious of “capital”. In capitalizing Adina – he went not to VC firms but to individuals in hopes that they’d have greater personal investment beyond just monetary.
Gary Hirshberg – Some myths: We can contunie to mine and toxify the earth’s crust with no consequence, we can heat the planet forever buring carbon and sending it away, that there is even such a thing as “away”. Sollution to pollution is not dillution – that’s dellusion!
Hirshberg recals visiting Epcot Center and seeing, at the land pavilion, the Kraft sponsored vision of future food production. Among the technological marvels, the basic idea was “buy Kraft and don’t worry about where the food comes from”. His vision was essentially the opposite – Stonyfield farms is now 3 times the size of Kraft in terms of yogurt.
Additionally – paying more for things like organic sugar, despite a doubling in costs, can be seen as a literal investment in the natural capital of the earth. Over time, organic farming results in rich, far healthier ecosystems that will ultimately result in increased yeilds and therefore profit. The Brazillian organic sugar the Stonyfield has invested in has already increased yeilds by 25%.
What about competing with Coke? Coke has incredibly cheap product, therfore they can spend huge amounts of money on advertisments. But Stonyfield has a disadvantage in this because they need to reinvest in farmers etc… so they have to get creative. They put messaging on yougurt lids, including ways to write letters to congress, they gave away yogurt on the Chicago El Trains to thank people for using public transit… what happened? They exceeded market share expectaions for $10 million less than they otherwise would have spent on ads. In Texas – they ran a campaign about filling people’s tired properly to save gas – “we support inflation”, result – instant marketshare in Texas.