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Yogurt maker practices what he preaches

01:00 AM EST on Sunday, March 2, 2008

By Peter B. Lord

Journal Environment Writer

For more than 25 years, Gary Hirshberg has been telling people that they can do business, make money and actually thrive without destroying the environment. His successful Stonyfield Farm yogurt company is proof of his message, growing to $300 million in annual sales.

Now, with energy costs and climate change warnings both soaring, business people are finally paying attention.

Hirshberg, whose company is based in New Hampshire, gets so many speaking requests he says he could be on the road every day. To help “expedite evolution,” as he says, he recently came out with a book, Stirring It Up — How to Make Money and Save the World.

The book comes with cover endorsements by Ben Cohen of Ben & Jerry’s; Laurie David, the climate-change activist; Eric Schlosser, author of Fast Food Nation; former Vermont Gov. Howard Dean and actor Robert Redford, who wrote that Hirshberg “dared to dream new ways of doing business based on respect for customers, employees, and the earth. And it worked.”

Following Hirshberg’s typical penchant for “guerilla marketing,” the back of the book is filled with enough coupons for Stonyfield products to repay the owner for the book’s cost.

Hirshberg offers a readable tale about an environmental activist who decided he couldn’t do enough in the nonprofit world, became horrified at a Kraft foods exhibit at Disney’s Epcot, and decided to try to put his beliefs into practice in the business world.

Interviewed at 8 one morning recently by telephone from Miami, where he was addressing some Wal-mart vendors, Hirshberg was energetic and optimistic, but also pragmatic and self-deprecating.

He said he has visited China 25 times to talk about sustainability and good business practices, yet the burgeoning country is obviously dirtier than ever. On the other hand, during his last visit, he stepped into the world’s first building that had the highest green rating — platinum — because of its energy-saving attributes.

In the late 1970s, Hirshberg worked for New Alchemy Institute, an ecological research and education center on Cape Cod. The group built a solar-heated greenhouse that produced food without using herbicides, pesticides or chemical fertilizers. He recalls working with a Brown University professor and his students. It was Harold Ward, professor emeritus of environmental studies, now a key figure in efforts to reform Rhode Island’s drinking-water practices.

New Alchemy also set up an experimental operation at the Fields Point Sewage Treatment Facility that treated wastes with a manmade marsh.

Hirshberg writes that his life was changed with a visit to Disney’s Epcot Center, in Florida, in 1982. He toured the Land Pavilion, sponsored by Kraft Foods, and found “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.”

He was further troubled that the Kraft exhibit was hosting more than 25,000 people a day, more than his institute saw in an entire year.

That exhibit gave him the “eureka flash” that changed his life. He decided that to get people to listen to his ideas about sustainability, he’d have to become Kraft. Not Kraft per se, but a large, successful company.

He argues that modern agriculture appears lucrative, but only because the factory farms and makers of pesticides and fertilizers don’t pay the full cost of their business practices.

Nutrient runoff causes massive algae blooms that hurt fishermen. People become ill from drinking tainted water. The farmland becomes depleted of nutrients.

Hirshberg returned to his home in New Hampshire and joined a friend’s yogurt business. With Hirshberg as chairman, president and “CE-Yo,” it has since grown into the largest organic yogurt maker in the world.

He wrote a mission statement then that he has changed little. His goals were to:

•Provide the highest quality, best tasting organic products.

•Educate consumers and producers about the value of protecting the environment and supporting family farmers and sustainable farming.

•Show that environmentally and socially responsible businesses can also be profitable.

•Provide a healthful, productive and enjoyable workplace for all employees, with opportunities to gain new skills and advance.

•Recognize obligations to stockholders and lenders by providing an excellent return on investment.

Hirshberg learned to follow practices that were the mirror opposite of huge industries, such as soft drink makers. Coke and Pepsi, he writes, constantly work to minimize their costs. They long ago stopped using sugar and switched to high-fructose corn syrup. They spend heavily on advertising.

Stonyfield pays top dollar for organic ingredients, sometimes at double the cost of conventional ingredients. It does little advertising. It pushes for more government oversight and regulation. And it gives detailed reports to customers and investors on how much pollution and waste it generates.

In 2003, Stonyfield spent hundreds of thousands of dollars on a solar electric array on top of its yogurt works in Londonderry. Hirshberg said he expected it would take 12 years to earn back the cost. Then oil prices soared, and cut the payback period in half.

By installing more insulation, energy-saving light bulbs and energy-saving boilers in his plant, he saved $1.6 million in 10 years.

The company replaced its yogurt lids with foil seals and saved more than $1 million annually.

More recently, Stonyfield worked to offset its generation of greenhouse gases by investing in tree planting, wind power and methane-recovery plants.

To offset global-warming emissions resulting from the publication of his book, Hirshberg invested in a manure digester at a Pennsylvania dairy farm. The device uses methane from cow manure to produce electricity and heat.

To increase sales, Stonyfield avoided expensive advertising and resorted to catchy gimmicks. To get into the Chicago market, for instance, it handed out 85,000 containers of yogurt to transit riders with coupons that thanked them for doing their part to save the planet.

The company got coverage on local television and in every local newspaper, and it avoided spending some $10 million on advertising. Sales tripled in three days, at a cost of $100,000.

As a result, Stonyfield’s sales have grown by more than 27 percent annually, for 18 consecutive years.

In his book, Hirshberg also describes other businesses that practice sustainability and steer some of their profits toward environmental causes. The companies include Patagonia, Whole Foods, New Belgium Brewing, Eileen Fisher clothes, Timberland boots and Wal-mart.

“Not only have I not found any industry, I have not found a single business that could not benefit,” says Hirshberg. “Give me a business and in a few minutes we can identify five double-digit suggestions that could drive the bottom line.”

Hirshberg was in Miami recently advising companies doing business with Wal-mart. He said the giant retailer has told vendors it will give them preferential treatment if they have superior environmental records.

In fact, after Hirshberg made a 15-minute pitch to Wal-mart executives, the company increased its purchase of Stonyfield products, despite their higher cost.

He said it drives his environmentalist friends crazy when he promotes Wal-mart’s efforts. But the company is taking serious steps — not out of altruism, he says, but because sustainability is good for business.

Hirshberg said he was giving a speech about two months ago when his sister handed him a package of Kraft American cheese singles that was labeled as organic.

His first response was, OK, it’s organic. But is it really cheese?

But then, he says, he realized he didn’t have to become Kraft.

“They could become me.”

For those interesting in learning more about Hirshberg’s theories, he is scheduled to give a public lecture at 6:30 p.m. Wednesday, March 19, in Stepan Grand Hall at Bryant University. He will judge the final round of Bryant’s elevator pitch competition, in which first-year business students get 90 seconds each to convince judges that they have a new business idea worthy of further exploration. Then he will sign copies of his book. The events are open to the public at no charge.

plord@projo.com

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