How a Social Mission Guides This Business
BY Josh Spiro
The CEO of Dancing Deer moved her cookie company to a gang-ridden neighborhood and donates a third of the profits of one product line to charity. Can this be good for business?
Trish Karter, CEO of Dancing Deer Baking Company, learned social responsibility from her father who helped pioneer industrial recycling.
Dancing Deer Baking Company got off to a rocky start but that didn't stop the Boston-based baking company from placing the needs of the local community and a very special charitable cause on the same level as turning a profit.
The company got its start in the mid-1990s, when America was falling head over heels for gourmet coffee. To Dancing Dear founder Suzanne Lombardi, the rise of chains such as Starbucks created an opportunity for sales of high-quality baked goodies. After spending time with some artisanal roasters in California, she recalls, "I realized that the coffee craze was something that was going to come East."
So Lombardi rented a caterer's kitchen in the evenings where she could bake en masse, schlepping pots and pans to and fro each night, and delivering her all-natural baked goods to coffee shops at the crack of dawn. Understandably, this was a stressful way to run a business and, one day, she sought out Trish Karter and her husband Ayis Antoniou for advice. The pair did her one better and became angel investors, but a year and a half into the partnership Lombardi was still struggling.
Because she was running a one-woman show, Lombardi had accumulated a hefty pile of unprocessed CODs, she had no order processing system, and she had no one who could handle these crucial details while she worked her kitchen wizardry.
"We'd been funding her operating losses and I thought the investment was potentially threatened, even though the business had great promise, so I offered to jump in for what I thought would be three or four months," Karter recalls. "That was 14 years ago."
Karter became more involved in the business, eventually taking the helm as Dancing Deer's CEO. As she set out to professionalize the business and brand the as well as bringing her social values to bear on the way it operated. In 1998, despite shocked reactions from friends, she relocated headquarters to Roxbury, an area of Boston that at the time was notorious for gang violence. The location was the same price as a facility Karter had found in a suburban office park, but remaining in Boston proper allowed the company to keep its workforce. It was also "an opportunity to have a terrific impact on a neighborhood that needed something positive happening," she says.
As an extension of this attitude, the company frequently donated baked goods to local causes and initiatives, but soon it was inundated with requests, so Karter tried to focus Dancing Deer's philanthropic energy on a single cause. Now 35 percent of the sales from one of their product lines, called the Sweet Home Project, go to a scholarship for homeless mothers. The company just launched a study to see how much of their business comes from people who have a positive impression of them because of this project, but they already have some numbers that speak for themselves: that line consistently raises $50,000 a year for the scholarships. "Anybody can make a cookie," Karter says, "so we're always looking for ways for people to feel loyal to our cookies."
It's easy to stay committed to your principles in good times, but when the economy went south, it hit Dancing Deer hard. Karter lost many large-order customers in the financial services industry. As a result, she was forced to seek additional funding. Taking on outside investors had a serious side effect: Karter's stake was diluted to the point that Dancing Deer no longer qualified as a woman-owned business.
Still, Karter was looking out for her employees, many of whom come from the local community. She says that a Massachusetts workshare program allowed her keep all her manufacturing workers with only a slight cut in pay. She adds that "every time I raised money and diluted myself, I reverse diluted the employees," who own 15 percent of the company.
Now Dancing Deer has some distribution deals in the works, including arrangements with a major airline and United Natural Foods, which distributes to 17,000 stores across the country. Karter hopes these and other strategic alterations will put the company back on track for growth but, ultimately, it's about more than that. She says, "if you're going to work this hard and give up this much, it's got to be more meaningful than just making a living."