For Doug Raunch, Trader Joe's ex-CEO, a successful business isn't just about Hawaiian shirts and kitschy names (though they do help create a culture that customers and employees love). After 31 years at the grocery store chain, he's creating another kind of socially conscious business.

In June, Rauch opened Daily Table, a nonprofit grocery store that aims to tackle food waste. Grocery stores and wholesalers donate food that didn't sell or is nearing expiration dates to the store, where they are sold at extremely low prices. Apples go for 49 cents a pound, blackberries for 99 cents a pint, and a can of tuna for 55 cents.

Not only does this concept create a purpose for food that would otherwise be tossed, but the affordable prices also give low-income Americans access to food they otherwise wouldn't be able to afford.

At this week's Summer Fancy Food Show in New York City, Rauch, who also serves as CEO of Conscious Capitalism, Inc., spoke to attendees about what it takes to make a socially-conscious business profitable.

He did have a leg up in getting the company off ground with donations from famous friends like John Mackey of Whole Foods. But even if your business doesn't have access to big partnerships, your first priority should be addressing a social problem that needs a solution.

Understand that social problems can change

The truth is, it's not just people who are considered as "underweight" suffering from lack of access to food. In 1985, no state in America had more than 14 percent of its population classified as obese, according to data from the CDC.

Then, in 2010, every state had a population that included 14 percent of people who suffered from obesity. Many may see this as a sign that more Americans need to be educated about proper nutrition. Rauch sees this as a sign that the 49.1 million Americans who live in food-scarce households can't afford the food they need to stay healthy.

"Hunger has morphed on us," he told the crowd at the Javits Center in New York. "It's not the hunger that mankind faced for millennial. It's instead a full stomach, and what we need to do is get people a healthy meal."

Rauch recognizes that Daily Table's business model may have to change to adapt to the needs of low-income Americans. He is currently in talks with grocery delivery service Instacart, since Daily Table currently doesn't have the budget to deliver food to those unable to access supermarkets.

Treat your customers and employees with dignity

Business is based on a voluntary exchange. Customers choose to invest in a company's services because those services create some kind of value for them. This is why Rauch advocates using the medium of retail to give people more access to nutritious food, rather than donations.

Those who would normally turn to a food bank or food stamps in order to afford food from Daily Table can now purchase food of their own free will. Treat every customer, regardless of who they are, as a person whose service you need to win.

But respect shouldn't just end with your customers. Rauch says that when he was at Trader Joe's, customers would come up to him and say, "I love being in a store where everyone seems happy." Or they would see employees being trained, and say, "I wish that's how my boss would train me."

While your customers might pay your bills, focusing on making your employees happy will help give customers an insight into whether or not they should be spending their time and money on your business.

Fail around your purpose -- and share those failures

It's not hard to find columns from CEOs and business school professors touting the benefits of failure. But there's a good way to fail, and a bad way to fail. Or, as Rauch puts it: "Don't fail in your sexual harassment policy."

If you're going to take risks, make sure that you're not just throwing something against a wall. Take a risk if it will teach you something about the company, the product, or the marketplace.

If your experiment turns out to be a bust, share those failures with other people at your company. "If corporations and organizations punish you for mistakes, that means that everyone has to learn on their own. Everyone has to reinvent the wheel," says Raunch.

Published on: Jun 30, 2015