Jun 1, 1984

Planning For "the Next Economy"

 

Although loath to become a food faddist, Hawken says, he began to study how America had altered its food supply. As we industrialized our farming practices in the late 19th and early 20th centuries, Hawken found, we had also industrialized the food supply itself. "We weren't cultivating the soil, we were mining it," argues Hawken. Before the nutrients got to our table, moreover, we were adulterating them with artificial additives, he concluded.

This research provoked Hawken's epiphany. He was reading a standard textbook on the soil sciences, when suddenly, an idea hit him: "I realized the soil is alive!" It isn't just dead and inert matter like sand or powdered rock, but is teeming with millions of minute organisms with their own organic systems. With that flash, Hawken scuttled his old metaphysics and took up a new sense of what the world is.

Hawken's old view cast the earth as something cold and sterile, a big, blue marble with vinyl land masses and plate-glass oceans. The earth and its soil were dumb in both senses of the word: stupid and inarticulate. Hawken's new view casts the earth as a living entity, an organism. The earth and its soil are articulate, if only we would pay attention to them; and intelligent, if only we would credit them.

Hawken's new philosophy soon served as the basis for his first major commercial venture, Erewhon Trading Co., a leader in the development of America's natural-foods business. He moved to Boston in 1966 and realized he had outrun his natural-foods supply lines. So he fell in with what was known in those days as a food conspiracy. This one was a small group of people who pooled their time and money, made a weekly station-wagon run into the countryside to find and buy organically grown food, and then returned to a small basement to divvy up some of it and store the rest. Hawken thought they would have an easier time supplying themselves if they opened a store to sell a larger volume of food to a broader public. He volunteered to take the lead: "Remember, none of these folks wanted to be a merchant!" He filed incorporation papers for Erewhon, the group turned the basement into retail space, and Hawken ran the store. Initial capital: $500.

At first he bought the food through conventional suppliers, until the day a woman asked him how he knew a bag of grain was organically grown. "Why, it says so right on the bag," he remembers saying. Then he caught himself and figured it was time to pay a little attention. He checked the origins of the grain and the rest of the store's wares with his own eyes and ears.

"Just about everything we sold was fraudulent," Hawken discovered. "It wasn't grown organically. You could get the same stuff at other stores for cheaper prices."

Hawken's solution was to integrate the business vertically. He hit the road to recruit his own network of 55 farmers on 40,000 acres in 37 states. He signed up his own trucks and rail cars. He set up manufacturing facilities in Los Angeles and Boston. He leased his own warehouses. Soon, Erewhon was growing and making and selling several hundred different products: wheat, rice, nuts, fruit, bread, cereals, pasta, peanut butter, jams, beverages, cosmetics, and more. It supplied retail stores and institutions and opened its own string of stores on both coasts. Its gross revenues rose in its first six years to about $10 million, while its work force grew to 150 employees.

Erewhon enjoyed the advantages of being a pioneer in a new field, but Hawken didn't learn much about business while he was building and running the company, he concedes. "I mainly learned what not to do. How not to treat workers, how not to plan -- although it later proved to be a good experience to reflect on."

But, as he had been taught so compellingly, Hawken paid attention to what he saw and heard in the field and in his business. His shrewd sense of which information to credit and how to use it shaped Erewhon's ingenious marketing strategy. Simply put, Hawken persuaded people to pay high prices for what were literally commodities. He did this by making the case, exhaustively and imaginatively, for the distinctive origins, good taste, and high nutritional value of his merchandise.

"We could give every carrot a pedigree," says Hawken. Thus, bags of food on Erewhon's shelves carried in loving detail the story of the produce's origins: the name of the farmer who grew it, the farmer's methods, the location of the farm, the nature of its soil, the wind and weather conditions, and the source of the water.

"We wanted customers to know why our food had better taste and better nutrition," Hawken explains. "And we also wanted to make our food interesting." The typical Erewhon store, with its rows of products bearing detailed stories of their provenance, was like a living catalog.

As the company grew, however, Hawken lost his close ties to farmers and customers. He found himself a prisoner atop the Erewhon hierarchy. In 1973, after seven years at Erewhon, he decided he had to escape. He went off to Europe, where he worked on his first book, The Magic of Findhorn, a study of a Scottish coastal village known for the abundance of its gardens.

During this time, Hawken's marriage ended. He lost his ties to and equity in Erewhon in the divorce settlement. At the end of 1974, he hightailed it back to the West Cost. Erewhon's ownership changed hands over the years and -- despite the dramatic growth in the natural foods business -- wound up in receivership in 1981.

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