LEGAL ISSUES

A Vintage Cleanup

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Imagine a football field covered in garbage. It's a foot deep, so when you walkaround in it - slogging through office paper, food pulp, old Bic pens - it reaches up pastyour ankles. Now imagine that someone has cleaned that field. The waste is the same depth,but now it only reaches from the first to the seventh yard line, and 93% of thefield is pristine and green again. That's a major cleanup. And that's whatFetzer Vineyards, in Hopland, Calif., has accomplished with its own waste since 1991.Fetzer has done it during a time when sales more than doubled.

Not being one to rest on its laurels, the Fetzer winery aims to go further - to zerowaste by the year 2009. "We are already recognized as a zero waste company by thestate of California," said Patrick Healy, environmental coordinator at Fetzer. Whatthey do with all that non-waste is instructive. They recycle everything from cardboard toantifreeze; compost organic waste and turn it into fertilizer; and work to keep materialsout of the waste stream - by restoring oak barrels rather than discarding them, forexample.

There's almost no aspect of the winery that escapes this kind of detailedenvironmental scrutiny. Take the administration building, for example. This10,000-square-foot facility, completed in 1996, is one of the world's firstlarge-scale examples of rammed-earth (underground) construction. It was built almostentirely with recycled wood. Carpets are natural fiber. Lights are on motion sensors, sothey go off as you leave the room. Heat comes from waste heat off chillers used inwine making. And instead of air conditioning, the building uses night-air cooling."Computerized and motorized windows open at night to admit cool air," Healyexplained. Even landscaping is environmentally conscious. It's "zeroscape,"he said, because the drought-resistant plants take little water.

And then, of course, there's the photovoltaic array on the roof, which got up andrunning in June. "It's the largest photovoltaic display in northern Californianot owned by a utility company," Healy said. It supplies three-quarters of thebuilding's energy needs. All other power used by the winery is from renewablesources, thanks to a unique utility contract signed in May.

Most telling, perhaps, is the vineyard's approach to grape growing itself: anorganic approach that relies on natural pest control and soil management. Techniquesinclude the use of "cover crops" grown between the vines, like crimson cloverand purple vetch, which attract beneficial insects. "They keep the bad guys in check,so to speak," said president Paul Dolan. Another technique is "canopymanagement," in which the leaf and cane canopy is opened to bring in sunlight, toreduce the chance of mold and rot, and eliminate the need for fungicides.

The process "brings us closer to the vine," Dolan said. "We don'thave the quick fixes of chemicals, so we're in the vineyards more. We find that ourfarmers are better farmers as a result." And the grapes simply taste better.That's where the financial payoff lies. There's some demand for speciallylabeled "organic" wine, which Fetzer meets with an organic label, Bonterra. Butit doesn't label most of its wine organic. Organic growing "is part of who weare," Dolan said. "It's not something the consumer is aware of."

About 20% to 30% of grapes used now are organic, but Fetzer plans to reach 100% by 2010. Toward that end, it formed "Club Bonterra" to help share ideason sustainable farming among its outside farmers, who provide more than 90% of the grapes.

Does all of this environmental focus cost more? Yes and no. Organic methods are alittle more expensive to begin with, but not in the long run. The solar array reallywon't pay for itself, but it was built with the help of grants. Renewable power isslightly more expensive, but Fetzer is offsetting that by pursuing efficiencies in usage.And recycling is decidedly less expensive than landfilling. It all does make economicsense. "But it's not like we're using it as a competitive edge," Dolansaid. It simply fits with how the company does business. Fetzer's vision statement isto enhance the quality of life.

What's remarkable is that Fetzer takes this holistic approach as a publicly heldcompany. This $160 million firm is owned by the $2 billion Brown-Forman Corp., based inLouisville, Ky. "They've been great about it," Dolan said. Fetzer runs itsown show, as long as the profit is there. And as Dolan says, Fetzer is "veryprofitable." Over the last six years, profits and revenues have grown at a 15%annual compounded rate.

It's a model worth showcasing for a new century - a thoughtful and deep commitmentto the environment, combined with financial excellence. As Dolan said, "it helpsother people see it can be done."

Copyright © 1999 Business Ethics magazine

Contact: Patrick Healy, Fetzer Vineyards, P.O. Box 611, Hopland, CA 95449. Phone707-744-7600; fax 707-744-7492. E-mail Patrick-Healy@B-F.com.

Last updated: Dec 2, 1999




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