In 2005, David decided he couldn't in good conscience buy raw materials from operations that didn't take labor practices as seriously as he did, so he set a two-year goal of switching all the company's major ingredients to certified fair trade. Only one problem: Nobody could find any certified organic and fair-trade farms that produced some of those ingredients.
The solution: Get into the farming business. By 2008, Dr. Bronner's owned a 200-employee fair-trade coconut-oil operation in Sri Lanka and a 150-employee palm-oil plant in Ghana, and had partnered on a peppermint-oil operation in India. Maybe the most audacious fair-trade project so far has been a partnership that combines olive oils from farmers in the West Bank and Israel, and has become a symbol of Israeli-Palestinian coexistence. Emanuel Bronner would be proud.
Going fair trade hasn't been cheap. In addition to the start-up costs, Dr. Bronner's pays a 10 percent premium, dedicated to community development projects such as digging wells, on top of what it pays farmers for the raw materials they provide. And of course, it has meant another series of battles to establish better standards and fight so-called fairwashing, in which manufacturers use just enough fair-trade ingredients in a product to put a big Fair Trade on the label.
David says without hesitation that the causes he undertakes are more important to him than money. But one of the biggest contributors to the company's healthy bottom line is the awareness that results from its activism. "Because of the activist mission, we've attracted some amazing people and been able to increase our professionalism and expertise in business management—financial reporting, inventory control, sales," he says. "And instead of spending 10 percent of our revenue on advertising, like a regular cosmetic company, we're spending it on activism." And getting the same effect as advertising, anyway.
If David Bronner comes off as a kind of righteous warrior king, his brother, Michael, is more like the king's distant Midwestern relative. Michael, who has short hair and, the day I met him, was wearing a Green Bay Packers jersey, exudes sensibleness. "My brother is mission driven, whereas I'm more product driven," Michael says. "He is looking to pioneer progressive measures that people don't know they want. I am looking at what people want. And the company needs both."
This balancing act has played out perhaps most clearly in Dr. Bronner's efforts to expand into new product categories. Liquid soap has always been the most popular product—it makes up about 75 percent of sales—but it doesn't fit neatly into the way people tend to use liquid soap. It's less viscous than your typical liquid soap, but in fact it's far more concentrated. Whereas most pump soaps are about 10 percent soap and 90 percent water (the viscosity comes from thickeners),Dr. Bronner's is almost 40 percent soap. That's why if you put the soap in a pump bottle, the mechanism will clog, and inevitably soap will squirt out at an unexpected angle, maybe into your eye. (There's actually a warning about this on the bottle.)
"No product engineer or marketer would make a product like this if they were just getting started," Michael says. "Everything about it is unconventional. But that actually puts us in a pretty secure position. What competitor is going to come up with this? And if they do, it's going to be seen as inauthentic."
In addition to the classic liquid and bar soaps, a household cleaner, and a new line of hair care products, Dr. Bronner's has expanded in the past five years into lip balm, body balm, lotion, and shaving gel. Even the most ardent Dr. Bronner's fans might not know this, however, because all the new products were launched with new labels. Gone were all the references to Emanuel and the Moral ABC, even all the dense text, and in their place was a simple picture of two hands clasped in an embrace around the earth. The company went so far as to formulate a new kind of hand soap that worked fine in a pump bottle. It was a strategy cooked up as the company began to expand into mainstream stores.
The new, more mainstream products and labels haven't sold well, however. "You go into Target, and the old label outsells it 10 to 1," David says. "Ten to 1!" It was a case of conventional product design and merchandising simply not working for Dr. Bronner's. Or maybe a case of Dr. Bronner's ignoring the most conventional business wisdom of all: Stick with what works for you. The company has begun replacing all the new labels with a variation of the classic, slightly mad design—only this time with the text talking about hemp, organic ingredients, and fair trade. "We didn't want to take my granddad's thing and treat it as marketing shtick," David says. "We can only do that if it's sincere, and that means it only works on the classic soap."
David, his brother, and his mother say the company can hit $100 million in gross revenue in five years. It's both a realistic goal (the company has averaged 19 percent annual growth in the past five years) and an aggressive one, because it will require more widespread adoption of the company's unconventional products, a big uptick in sales of its new products, and/or significant mainstream retail growth. So far, natural grocers represent about 65 percent of Dr. Bronner's sales. Target, the largest single mainstream retailer, makes up less than 5 percent. The opportunity is obvious. The trick will be to seize it without compromising the company's image or letting big-box stores muscle down prices, which could alienate natural retailers or, worse, compromise the product.
Meanwhile, offers have begun rolling in weekly from suitors that want to buy Dr. Bronner's—to the point that David tosses inquiry letters in the trash without glancing at them. "We see the companies that sold, and sure, they still have a mission," he says. "But what we're doing is pretty radical; this is not feel-good sustainability, buying offsets and crap like that. This is taking on the Drug Enforcement Administration. My intention is never to sell." Exceptions eternally? Absolute none!
