Daniel Lubetzky

Suzanne Vita Palazzo of Grocery Headquarters wrote an article surveying some of the leading food companies with a social mission and mentioned KIND and PeaceWorks as a pioneer "revolutionizing the business model for an ethical brand."

September 2008
Selling Wellness

> For the greater good
By Suzanne Vita Palazzo

Brands that align themselves with social causes are building loyalty among wellness shoppers.

As wellness shoppers continue to look for value in terms of price, they also value brands that support causes near and dear to them, such as ethical sourcing and sustainable farming. Dubbed socially responsible or ethical brands, these entities are proving that using socially conscious business practices to produce great tasting and nutritious products can result in a highly loyal customer base.
While many mainstream manufacturers have a long history of donating portions of their profits to various charitable endeavors, today’s forward-thinking brands see their products as a vehicle for achieving more than just profitable growth. They are creating direct links between their companies and a litany of causes for the greater good, transforming shoppers’ food dollars into tangible—and often influential—results.
“I think people want to feel good about what they’re putting in their body,” says Ben Lewis, founder and CEO of Pittsburgh-based PurBlu Beverages. “They want function from their food or drink, and they want to feel good about themselves in terms of what impact they’re having on their community or society.”
Industry observers note that to the wellness shopper in particular, brands that are viewed as being socially responsible are considered to be value-added. Taste and nutrition clearly continue to have the most influence over purchasing decisions, but brands that align themselves with a particular cause are empowering consumers to feel like they’re getting a bigger bang for their buck.
“When there’s a real passion to make it a better world, when there’s really an effort to tie capitalism to additional bottom line efforts, I think there’s enormous benefits both for the supermarket chains and the consumers, as well as the company doing the work,” says Daniel Lubetzky, CEO and founder for New York-based PeaceWorks.
The following is a look at some of the leaders in ethical branding:

EQUAL EXCHANGE
Founded in 1986 with the goal of being a social change organization that would help farmers and their families gain more control over their economic futures, Equal Exchange thrives today as a worker-owned co-op that distributes fairly traded and organic cocoa, coffee, tea and snacks. Awarded Fast Company Magazine’s Social Capitalist Award in 2008, the company reportedly has had an average annual growth rate of 32.2% from 1986 to 2007.
“Most of the commerce that we all engage in is very impersonal, and in the food industry, there are concerns about not knowing the source of your food,” says Rodney North, spokesperson for the West Bridgewater, Mass.-based cooperative. “Everywhere you look, people want more information about what they’re buying, such as how far did it travel, how was it grown, what are the ingredients, who grew it and how they are treated, and we meet that need.”
With 24 small coffee farmer co-op partners in 13 countries, Equal Exchange reportedly imported 5.5 million pounds of fair trade coffee in 2006. By providing pre-harvest credit to its partners, the cooperative is ensuring that the farmers are receiving higher and more stable prices as well as access to affordable financing.
According to North retailers looking to promote sound, ethical brands would be wise to choose a partner that helped establish the movement. “If you’re going to stock these products, you’re going to want to work with a company that is completely focused on this category and has demonstrated that they know how to do it,” he says.

ENDANGERED SPECIES
Based on a concept called “Reverence for Life,” Endangered Species is a company that honors the idea that habitat, humanity and species are interlinked and dependent upon one another. All of the cocoa used in the company’s natural and organic chocolates is ethically traded, and 10% of its net profits are donated to help support species, habitat and humanity.
According to Wayne Zink, CEO of the Indianapolis-based company, the term “ethical trade” refers to a more holistic view of how the cacao is being removed from the earth as opposed to simply the economics of purchasing the crop. He claims that his brand is perfectly positioned to attract the growing number of consumers who are moving from talking about conservation to actually doing something about it.
Looking forward, Zink anticipates that socially responsible brands will continue their push into the mainstream, as retailers such as Target, Wal-Mart and Walgreens make it a priority to attract wellness shoppers. He embraces the possibility of having competing, big name brands align with his efforts to preserve the earth, claiming that increased exposure to the plight only creates greater opportunity for awareness and action.
“Once you let the genie out of the bottle, it’s hard to put it back in,” says Zink. “In going down this road, whether you have clear and honest intent or not, you are educating consumers that you can do the right thing, and when you do that, people want more of it.”

PEACEWORKS
A self-proclaimed “not-only-for-profit” company, PeaceWorks is revolutionizing the business model for an ethical brand. Founded in 1994 on a mission to pursue both “profits and peace,” the company is perhaps best known for its line of KIND Fruit + Nut bars that donates 5% of its profits to the PeaceWorks Foundation, a non-profit organization that fosters co-existence between people in conflict across the world, and particularly in the Middle East.
“The reason why I started PeaceWorks 15 years ago was not because I wanted to sell a product and I needed to hatch together some concept to sell it,” says Lubetzky. “It was because I really cared about promoting peace in the Middle East and ending the conflict there.”
In addition to the KIND Fruit + Nut bars, PeaceWorks also manufactures Meditalia, a line of tapendades and pestos that are produced in Israel through cooperation between Israelis and Arabs from neighborhood countries. Bali Spice, another one of the company’s brands, is a gourmet line of ready-to-use sauces for Thai, Indian and Chinese cuisine, and is made in a woman-owned factory in Indonesia, through the cooperation of Christians, Buddhists and Muslims.
“A lot of what our brand stands for at the end of the day is transparency. It’s not just about a product with ingredients you can see and pronounce, but it’s the whole way in which we do business,” says Lubetzky. “I think that’s what consumers are looking for, and I think that partly explains why we’re growing so fast.”

ENVIROKIDZ
A staple brand of Nature’s Path, EnviroKidz donates 1% of its sales to environmental groups around the world including the Amazon Conservation Team, The Wildlife Trust and the Australian Koala Foundation. The product line, which was launched in 2000, includes cereals, cookies and crispy rice bars, all of which are made without artificial preservatives, flavors or coloring.
“We wanted to do a kids cereal that was meaningful,” says Maria Emmer-Aanes, director of marketing for the company, which is based in Richmond, British Columbia, Canada. “Every single thing we do in this company is wrought up against the pillar of our mission, which is to be a trusted, quality name for organic foods in every home.”
Nature’s Path is hardly a stranger to the ethical branding movement, as it was founded with a triple bottom line mission of environmental sustainability, social responsibility and financial viability. The company recently purchased 2,400 acres of prime grain-growing Saskatchewan farmland, which is being crop-shared by adjoining organic farmers as part of its goal to help increase organic cropland and maintain sustainable family farms.
“As consumers start thinking about where their dollars are going and how they’re affecting the planet, the world, and their children, they’ll be more conscious of it, and we come up in favor,” says Emmer-Aanes. “And we come up in favor in authentic ways.  It’s not like we forced the bandwagon and jumped on this trendy thing. When it goes away and the focus is off sustainable living, we’re going to be here.”

ORGANIC VALLEY
A La Farge, Wisc.-based cooperative consisting of roughly 1,266 farmers, Organic Valley represents approximately 10% of the country’s organic farming. This fall, the company will launch its Celebrate Organic promotional campaign, designed to connect consumers’ food choices to the spirit of giving associated with the holiday season.
Beginning in October and running through the end of December, the campaign will encourage consumers to use the company’s organic dairy products such as heavy whipping cream, half-and- half, butter and cream cheese in recipes that will be judged as part of an online contest. For every person that enters the contest, Organic Valley will give a dollar to one of four charitable organizations. The consumer participant gets to choose to which organization the dollar goes.
“We believe very firmly that these four organizations—The Environmental Working Group, Bioneers, Waterkeepers and Ecotrust—are doing great things to educate and help make our world a healthier place,” says Sarah Bratnover, marketing director for Organic Valley. “Our cooperative donates a lot of food and cash every year to organizations that have like-minded missions.”

ANNIE’S, INC.
“From the inception of the brand, the idea of being a thoughtful steward of the environment is part of who we are,” says Sarah Bird, vice president of marketing for Annie’s Inc. “Part of the brand’s DNA is focused on giving back.”
Known for kid-friendly products such as macaroni and cheese, snacks and cereals, the Napa, Calif.-based company directly supports organic farming by offering scholarships for college and graduate students who are studying sustainable farming. The company is also part of an organization called Sustainable Harvest International, which educates farmers in Central America about alternative farming techniques.
In addition to these programs, the company also makes a point to use recycled paperboard and soy-based inks for its packaging, ensuring that every step of managing the brands is thoughtfully done. “Consumers aren’t going to be able to become sustainable or green overnight,” says Bird. “But they’re going to do little things that they can chip away at, and we’re part of that process of helping them on that journey.”

PURBLU BEVERAGES
A relative newcomer to the ethical brand movement, PurBlu Beverages launched in August of 2007. The company currently distributes GIVE Natural Spring water, a line of four bottled water products that donates 10 cents of every bottle sold to four distinct charities.
“I’ve always been entrepreneurial, but at the same time, I was raised by parents who taught me to give back,” says Lewis. “GIVE lets our customers give back just by buying a bottle of water, which is pretty much an everyday thing.”
By purchasing one of the GIVE varieties, consumers can directly choose which cause they’d like to support. The Life offering benefits children in need; the Hope offering supports breast cancer research; the Love offering gives back to the environment; and the recently added Strength offering supports muscular disorders.
With a suggested retail price of $1.19 to $1.49, the GIVE line can help retailers play an active role in their community, because the donations from the product go directly to local charities that represent each of the line’s four targeted causes. Says Lewis:  “We partner with charities on a very regional basis, so when you buy a bottle in New York, you’re supporting New York-based charities.”

NEW ENGLAND NATURAL BAKERS
Based in Greenfield, Mass., New England Natural Bakers is a manufacturer of granolas, mueslis, trail mixes, bars, and flavored nuts that is committed to environmental and social improvement. The company gives 10% of its after tax profits to organizations that help support environmental and social improvement causes, such as the Amazon Peoples Resource Initiative, which works in communities along the Maramon River with health promoters and aqua-culture and agro forestry projects.
According to Todd Einig, sales manager for the company, each year the company reevaluates its giving initiatives by encouraging employees to recommend causes that may be worthy of donations. Typical areas of interest include environmental sustainability and alternative energy. The company gives to four or five non-profit organizations each year.
Of course, the company’s focus on organics is also a core component of its dedication to preserving the planet. “Our values are deeply rooted in sustainability and organics, and doing what’s best not only for our bodies but our earth,” says Einig. “That’s why we try to push organics as much as possible, because the farming processes with the organic ingredients that we use create a more sustainable life for everybody.”