2011 INC. 5000 RANK: 1336
HEADQUARTERS: Bethesda, MD
YEAR FOUNDED: 1998
2010 REVENUE: $71.7 Million
A few years ago, an article that mentioned Co-op America and Sam's Club and Wal-Mart in the same paragraph was usually about activists protesting the nation's largest retailer. And yet, as I prepared to speak at Co-op America's Green Festival in Washington on Nov. 9 and Co-op America's Green Business Conference in San Francisco on Nov. 13, I came to realize that while the activist consumers and green/social entrepreneurs who gain support and inspiration from Co-op America are the vanguard of innovation and sustainability, the folks at Sam's and Wal-Mart can play an important role in enforcing that change.
Companies like Honest Tea, Seventh Generation, Stonyfield Farm, and hundreds of our peers, would not have made it without the supportive network that Co-op America represents -- conscious consumers and economic enterprises that seek to make economic decisions consistent with their values and their hopes for a better future.
I've worked with Co-op America for more than 13 years -- going back to before I launched Honest Tea -- and they live, work, and breathe their mission. I still recall traveling to Chicago to speak at a socially responsible investing event with executive director Alisa Gravitz in 1997. She held on to her juice can from the plane for the whole the trip until she could find a place to recycle it, which eventually turned out to be back home in Washington. (As it marks its 25th anniversary, Co-op America is changing its name to Green America.)
But even the leading-edge companies occasionally need prodding, and Honest Tea's came from Sam's Club. When we first presented our Honest Kids variety pack to Sam's Club earlier this year, we took three cartons of our Honest Kids boxes and shrink-wrapped them together, with a cover sheet. It looked like this:
Our buyer, Dacia, liked the product inside -- she was sold on the idea of a healthier, organic kids drink, but she knew it was still going to be a stretch for her customers, many of whom didn't regularly buy organics and were not familiar with our brand. She also told us the packaging needed to be more effective as a sales tool and she pushed us to get rid of the unnecessary, costly, and environmentally wasteful packaging. Sam's sent a packaging designer and sustainability expert to our offices in Bethesda and together we worked on a new way to present Honest Kids to Sam's Club customers. We changed the package, and reduced the overall weight of the packaging by 41 percent. Here's what the new package looks like:
We started selling our Honest Kids variety pack with Sam's in May of this year, and together we've sold more than 24 million pouches in just five months, twice as many pouches as we'd sold during Honest Kids' first year on the market. It has been especially surprising to see where our organic pouches are selling well -- some of the top-performing stores are in cities where Honest Tea hardly exists, cities like Anchorage, Alaska, Pearl City, Hawaii, and Metairie, La.
The worlds of Sam's and Co-op America coincided for me in October when I met with Co-op America's board to discuss whether the ownership of a company should make a difference in determining whether a company should qualify for Co-op America's Seal of Approval. I argued that Co-op America should be identifying and supporting solutions wherever they come from. I cited Honest Tea's marketing partnership with the Saturn VUE Greenline Hybrid, noting that we specifically partnered with a sustainable part of GM's business, and were absolutely not partnering with the Hummer, another GM brand.
I also shared our packaging experience with Sam's Club. A board member challenged me, "Do you think Sam's pushed you to reduce the packaging because they wanted to help the environment or because they wanted to save money?" My response was, "Who cares? Of course it would be nice to think that they were solely motivated by a desire to reduce our environmental footprint but at the end of the day even if Sam's was only trying to save money, their impact was more important than their motivation."
Our packaging experience with Sam's Club in no way excuses or denies that there are other ethical challenges presented by the success of Sam's and Wal-Mart. But it does highlight the fact that solutions can come from unexpected sources. I told a member of Sam's leadership team that I wished they sold cars, because if he told the auto companies they needed to make cars that got 40 miles to the gallon, I bet Detroit would find a way to make it happen. Automakers have a record of protesting efforts to raise Corporate Average Fuel Economy standards, but there aren't many large companies that will tell Wal-Mart they can't sell them what they want.
Look what happened with laundry detergent. Wal-Mart sells approximately 25 percent of all liquid laundry detergent sold in the United States, so when the company demanded concentrated laundry detergent, which would result in less plastic, less water, less cardboard, and less fuel consumed, all the major companies responded by competing to see who could make their detergent the most concentrated.
One of my favorite bottle cap quotes is by Henry Ford, (whose controversial past is a topic for a separate blog). "You cannot build a reputation on what you are going to do," he once said. And just as there are some companies that claim to be socially responsible but fall short (they claim to donate their profits to charity, but never make any profits), there are mainstream companies that make significant change happen, even if it's not a core part of their mission.