Source: LOHAS Weekly Newsletter
Published: Monday, December 01, 1997

Natural Business recently asked a number of industry executives to express their views on how rapid growth in the mainstream may affect the historic culture and “soul” of the industry. Following are excerpts of their responses.

by Chuck Slotkin

Many executives and owner-managers of natural products companies who entered the industry for idealistic reasons as well as profits have pondered how rapid growth and accelerated mainstream acceptance is changing and perhaps undermining the historic culture and “soul” of this niche industry. Based on the responses of a diverse group of industry executives, the industry’s sense of mission and the integrity that develops from it may be maintained despite the pressures as it enters an era of unprecedented growth and mainstream acceptance.

Differing views exist as to the impact of bigness on the industry. Jesse Singerman, CEO of Blooming Prairie, a large co-op distributor in Iowa, states that “the industry is being assimilated into the dominant culture. We are no longer outsiders who are only talking to like-minded people.” She also believes that “size is not a determinant of principled behavior or high standards.” Singerman adds that, at Blooming Prairie, honesty in all of its dealings is a core value, even in instances where the impact on the bottom line is negative.

An alternative perspective was presented by Richard Rose, founder and CEO of Rella Good Cheese Co. He said that “assimilation into the mainstream will be detrimental to the long-term well-being of the industry if it de-emphasizes the historical values on which the industry was built.” He believes that “we are not educating mainstream customers so much as we are removing the barriers such as taste and the counterculture image of stores that kept them from buying the products.”

Two other senior executives, Jay Borneman of Standard Homeopathic and Michael McGuffin of Zand Herbal Formulas, expressed concern over how to perpetuate the success of the industry. Borneman, whose family roots in homeopathy extend back three generations, said that the strength of the company is the combining of historical mission and modern science. “We see our relationship to the science and the marketplace as a form of stewardship and are obliged to do our best to grow and nurture it for the next generation,” he says.

“Growth does have the potential to compromise industry culture or soul, if it’s that element—culture or soul—that has made aggressive profitability a secondary interest,” McGuffin says. “These cultural values have minimized competition, to a certain extent.” Yet, he adds, “The inroads made into the mainstream market by medicinal herbs have given our industry a high level of influence in the debate over the government regulation of herbal supplements.”

The perspective of Greg Leonard, corporate director of merchandising of Tree of Life, is that the values of the industry have not changed over the last 20 years, even though both the list of industry leaders and the scale of operations of industry participants has. Largely, he says, it is dependent on the commitment of individuals. “When business is small you are strong on concept but not nearly as focused on the consequences of decisions,” he says. “But when the scale of business has grown, the reality and the significance of the decisions made by senior management and their potential effect on others requires a different level of involvement and responsibility.”

An alternative perspective on the existence of the industry culture and “soul” was offered by Terry Dalton, the founder of the Unicorn Village, the trend-setting natural products retailer and restaurant in N. Miami Beach, FL. “The natural products consumer has been the prime mover in the creation of the culture and the soul of the industry, although the retailers did provide the original vision,” he says. “The Alar situation was actually a mass-market-driven event that created the strong demand for organic produce when natural foods retailers were resisting such products.” Dalton also believes that Star Markets, a traditional mass-market retailer, is conducting business in a manner that fosters the industry’s historic values and that could be a model for other natural foods supermarkets.

Janet Jennings, the founder and CEO of Sunspire, also looked at the industry from the perspective of customers. She stated that “the definition and distinction of natural products vs. conventional products can only be stretched so far before customers become confused. At this point a backlash in the form of a return to a clearer definition of ‘natural’ could spawn another industry.”

Chuck Slotkin is president of Nature’s Equity Inc., a New York-based investment banking and business development firm serving the natural products industry.