Innovators: Culturing the Organic Revolution A yogurt maker goes large yet keeps his ideals close to home
By Reed McManus
It's hard to make yogurt any greener: Stonyfield Farm's Gary Hirshberg.
A CHILD OF THE '60S, GARY HIRSHBERG HAS BECOME an adult of the 300s—running a company with $300 million in annual revenues, that is. Along the way, the former Hampshire College ultimate-Frisbee champ, who spent his shaggy-haired 1970s researching organic agriculture at Cape Cod's nonprofit New Alchemy Institute, never lost his save-the-planet values.
Now carbon footprint has become as familiar to corporate honchos as three-martini lunch, and the president and CEO of the country's leading organic yogurt producer is using his Wall Street cred to take his message national. He's head of an organization called Climate Counts, which rates U.S. corporations on their efforts to curtail their contributions to global warming, and has written a book, Stirring It Up: How to Make Money and Save the World, to be published in January by Hyperion.
Hirshberg's message is simple: Reducing a company's environmental impact is good for the bottom line.
Hirshberg joined Stonyfield Farm in 1983, a few months after it was founded by back-to-the-land advocate Samuel Kaymen. From its inception, the New Hampshire company has vowed to help family farms and eliminate agricultural chemicals. At the same time, the partners expected Stonyfield to be "as profitable as any in our industry." Stonyfield is now the third-largest yogurt maker in the United States. In a field where annual growth of 4 to 6 percent is the norm, the company has expanded by at least 24 percent for each of the past 18 years.
Hirshberg attributes much of that success to "the First National Bank of Conservation." Energy efficiencies have reduced Stonyfield's operating costs, and by remaining true to its principles, the company has built customer loyalty. (The company contributes 10 percent of its profits to environmental causes.) The key, Hirshberg says, is a no-stone-left-unturned approach to measuring Stonyfield's impacts. Early on, logistics studies prompted the company to replace lighting throughout its plant, install solar panels, and trap and reuse heat from wastewater with heat exchangers. In 1995, Stonyfield became the first U.S. manufacturer to offset 100 percent of its greenhouse-gas emissions.
More-rigorous "life-cycle assessments," however, identified Stonyfield's bigger problems, including the waste from the cows its business is built on and the packaging its product is delivered in. The company addressed waste issues by investing in an anaerobic manure digester, which runs partly off the biogas it produces. Hirshberg sounds like Al Gore exhorting from his scissor lift as he rattles off that project's statistics: The digester cost 15 percent more to build than a traditional waste-treatment system, but it uses 80 percent less energy and produces 90 percent less waste—one truckload of sludge every other year instead of a truckload a week with the old method. Stonyfield recouped its costs in less than three years.
Since then, Stonyfield has converted its six-ounce and quart cups from familiar high-density polyethylene plastic to thin polypropylene and replaced the type of lids it uses, trimming its demand for plastic by 17 percent. Hirshberg says he's especially pleased when he can make converts of the company's non-environmentalists, those "just looking for ways to make money." Like logistics director Ryan Boccelli, who figured out how to eliminate deliveries by trucks that were departing the plant without a full load (cutting the company's $15 million annual transportation costs by 8 percent).
Mark Kastel, senior farm-policy analyst for Wisconsin's Cornucopia Institute, says Stonyfield "is doing almost everything right." But he worries that the financial demands of publicly traded global food giant Groupe Danone—which has owned 85 percent of Stonyfield since 2004—could make it harder for the company to hew to its ideals. (Hirshberg says he retains complete control of the company's operations.)
The tension plays out fiercely in the market for organic raw ingredients. Stonyfield must find reliable sources for the 160 million pounds of ingredients it needs each year—which means that a small portion of supplies that could be grown in the United States comes from abroad. The problem, says Ronnie Cummins, national director of the Minnesota-based Organic Consumers Association, lies with U.S. food policies that subsidize commodity crops while neglecting fruits and vegetables. He says that Stonyfield, which has been lauded for its partnerships with northeastern dairy farms, needs to tackle those policies head-on.
Now Hirshberg wants other U.S. businesses to join in the carbon-footprint scrutiny. His Climate Counts program rates companies, with or without their cooperation, on whether they measure and reduce their climate impacts and report their results. (Stonyfield came in sixth of the 56 companies rated in 2007; Canon Electronics was first.) Hirshberg is buoyed by the response from McDonald's Corporation, which received a middling score in 2007 and is, according to the company, "pleased to be a part" of the scorecard. "They're learning," Hirshberg says, "that a company's environmental and social mission can be a competitive advantage."