In Episode 78 of The Wendel Forum (originally aired on September 29, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Scott Potter, managing partner of San Francisco Equity Partners, a private equity firm that specializes in consumer products growth companies.

Scott Potter of San Francisco Equity Partner

Scott Potter, San Francisco Equity Partners, in The Wendel Forum studio

Potter’s firm partners with companies that have demonstrated a proven demand for their products.  So while there’s no consumer adoption risk, the companies are usually facing operational and scale challenges to reach the next level. Typically, they are $5-10 million companies poised to scale their businesses, often to north of $100 million.

Identifying these optimal risk-reward companies is more science than art.  San Francisco Equity Partners is particularly focused on its companies’ channel strategy.  That is, a given beauty product can’t successfully be sold at both Sephora and Wal-Mart.  Channels include food (Safeway), drug (Walgreens), mass (Wal-Mart), club (Costco), prestige (specialty retailers and department stores) and direct-to-consumer (online and direct-response TV).  Determining the right channel for products is often a company’s key to success.

A growing channel is the so-called natural channel, as epitomized by Whole Foods, which is separate from the traditional grocery channel.  But Potter’s firm specializes in natural products that are targeted for the mass channel.  Companies targeting this channel should not ask consumers to pay more for an inferior product “just to save the fish,” Potter says.  Rather, the product’s value proposition has to work in and of itself outside of sustainability and natural missions.  The prime example is Method products.

When San Francisco Equity Partners first invested in Method, it was producing just hand and cleaning products.  It has evolved to include bathroom and specialty products and even successfully launched into the competitive laundry space.  Early on, Method knew it would never have the marketing budget of Proctor & Gamble.  So it chose to overinvest in packaging, focusing on the point of sale: when product is on the shelf.  Method’s in-house design team devised a distinctive look, including the bottle molds, and focused on the aesthetic and the user-experience (such as the one-hand laundry detergent dispensing system). With the “design baked into the products,” Method aspired to be like Apple.

At what kind of store are you most likely to purchase natural products?

Post Links:

Listen to the interview with Scott Potter: Episode 78 of The Wendel Forum (27:48 mins; mp3)

San Francisco Equity Partners Website: http://www.sfequitypartners.com

Method Products Website: http://methodhome.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 76 of The Wendel Forum (originally aired on September 15, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Ben Lee, director of business development at San Francisco-based CircleUp, a crowd funding platform founded in April.

Ben Lee of CircleUp

Ben Lee of CircleUp

CircleUp provides an online mechanism for consumer products companies and retailers to reach out to a broad network of potential investors, who may fund the companies in exchange for equity. CircleUp, which affiliated with WR Hambrecht, takes a commission.

So far, they’ve received 600 applications; they’ve selected 10 companies and four – including a baby skin care brand and an organic food brand – have been successfully funded.  CircleUp’s team serves as a curator for the investors. In evaluating companies, they look for businesses with $1 million to $10 million in annual revenue.  Usually these companies are seeking to raise $500,000 to $2 million to launch new products and achieve the next stage of growth. The typical investment is $5,000 to $25,000 (while each company’s offer is different, these are generally in the form of preferred stock shares); CircleUp assists with larger transactions offline.

While CircleUp streamlines what can otherwise be a year-long funding process, raising money through the platform can still take several months. Although CircleUp selects companies and presents opportunities, investors must do their own due diligence.  Like any private company investment, crowd funding is risky and the investment horizon may be three to seven years.

Lee says CircleUp’s goals include enhancing the ecosystem around consumer products, helping as many small consumer brands get financing as possible, and making sure CircleUp’s platform is a great experience for investors and companies.

Have you participated in crowd funding?  What do you see as the biggest opportunities and challenges to this form of financing?  

Post Links:

Listen to the interview with Lee: Episode 76 of The Wendel Forum (27:56 mins; mp3)

Circle Up Website: https://circleup.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

[The following post is written by Wendel Rosen Green Business Practice Group Partner Donald S. Simon in response to a recent article addressing legislation that allows for the formation of benefit corporations.  Regular readers of The Wendel Forum will remember we have covered Benefit Corporation in prior episodes.]

A REAL WORLD RESPONSE TO A PROFESSORIAL CRITIQUE

I just read the article entitled “The Truth about Ben and Jerry’s” in this Fall’s edition of the Stanford Social Innovation Review (SSIR).  This article challenges the reasons Ben Cohen and Jerry Greenfield have given for approving the company’s sale to Unilever.  It also argues that recent legislation creating benefit corporations is unnecessary because traditional corporate law allows social entrepreneurs to accomplish their goals equally well.  The article advances erroneous, incomplete and misleading analysis of applicable law and evidences a lack of appreciation for how business and law interact in the real world, outside the halls of academia where the authors reside. 

Green Business attorney Donald Simon

Wendel Rosen’s Donald Simon helped draft and promote new Benefit Corporation legislation (AB 361)

I was not involved in the Ben & Jerry’s transaction; however, I was co-chair of the California Benefit Corporation Legal Working Group that authored the California benefit corporation law (AB 361) I provide this brief response to rebut some of the key inaccuracies in the SSIR article.

The article presents a misleading discussion of corporate law.  Corporate law differs from state to state.  The article claims that most states do not require corporate directors to maximize shareholder value (i.e., profits) and instead allow directors to consider the interests of other stakeholders impacted by the company’s actions, such as employees, community and environment.  This is a gross and misleading overstatement.  In fact, directors are permitted to consider broader stakeholder interests only in states that have adopted so-called “constituency statutes.”  Such statutes have been adopted in less than two-thirds of U.S. states.  And among those that have adopted constituency statutes, each state defines a different list of stakeholders whose interests the directors may consider.  For example, some states allow directors to consider the company’s impact on the environment, while most do not.  In states that do NOT have constituency statutes (including California), directors lack statutory authority to consider stakeholders interests and must act exclusively based on the interests of the corporation and its shareholders.

What about Delaware?  The most surprising omission in this article (among many) is the authors’ failure to mention Delaware.  Writing an article on American corporate law without discussing Delaware is like writing a history of the space program without mentioning the Apollo moon landings.  Because companies can incorporate under the laws of any state they wish (regardless of where they’re physically located), Delaware sought to dominate the market by providing companies what they seek most – legal certainty.  Delaware has achieved this by creating the largest body of corporate law and a specialized (Chancery) court system dedicated exclusively to such matters.  As a result, more companies are incorporated in Delaware than any other state.  When a court in any other state considers issues of corporate law that have not already been definitively answered by higher appellate courts in their state, they typically look to Delaware court decisions for guidance. 

Delaware is critical to this discussion because in a high-profile case from 2010, where eBay sued the founders of Craigslist (eBay vs. Newmark), the Delaware Chancery court reaffirmed the shareholder primacy rule made famous in Dodge v. Ford, ruling that “[p]romoting, protecting, or pursuing non- stockholder considerations must lead at some point to value for stockholders.”  The following excerpt from the court’s decision is instructive:

“[Craigslist founders, Newmark and Buckmaster] did prove that they personally believe craigslist should not be about the business of stockholder wealth maximization, now or in the future.  As an abstract matter, there is nothing inappropriate about an organization seeking to aid local, national, and global communities by providing a website for online classifieds that is largely devoid of monetized elements.  Indeed, I personally appreciate and admire [Newmark's and Buckmaster's] desire to be of service to communities.  The corporate form in which craigslist operates, however, is not an appropriate vehicle for purely philanthropic ends, at least not when there are other stockholders interested in realizing a return on their investment. … Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form.  Those standards include acting to promote the value of the corporation for the benefit of its stockholders.  Thus, I cannot accept as valid … a corporate policy that specifically, clearly, and admittedly seeks not to maximize the economic value of a for-profit Delaware corporation for the benefit of its stockholders….”

The authors’ failure to discuss Delaware law and the Craigslist case, while mentioning an obscure 1953 case from New Jersey, is puzzling.  Surely they were aware of these well-known legal precedents that refute the central theme of their article.

The Article misunderstands the purpose and need for new corporate forms.  The article correctly notes that companies can incorporate in one state while locating and doing business in another.  Because of this, the authors argue that there is no need for other states to adopt benefit corporation legislation because a handful of states already have.  The authors are apparently unaware that states like California impose their key corporate laws (including shareholder primacy) on all companies doing business in their state, regardless of where they are incorporated.  See Cal. Corporations Code section 2115(b).  This critical fact illustrates the danger of making simplistic generalities about a legal system that differs in each of the 50 states.

A quick primer of how law works in the real world.  Although neither of the article’s authors were involved in the Ben & Jerry’s deal and apparently never spoke to anyone who was, they claim to know more about the thinking, motivations and legal concerns than the principals and lawyers who lived it.  Ben & Jerry said they accepted Unilever’s higher offer over lower ones because their lawyers (correctly) advised them that doing so could expose them to personal liability if a shareholder chose to sue them for not maximizing their profits by taking Unilever’s higher offer. 

The authors apparently read the company’s corporate documents, from which they devised legal arguments they believe would have enabled Ben, Jerry and their board of directors to prevail in such a lawsuit.  While their analysis makes for an excellent law school essay question, it is divorced from the reality that governs such transactions. 

In the real world, cases aren’t decided by attorneys or professors declaring what they believe the law should be.  They are decided by lawsuits, trials and lengthy appeals that can take five or more years to reach a final conclusion.  How many businesses do you know that can wait in limbo that long, especially on critical decisions like who will own the company?  Ben & Jerry’s lawyers also (correctly) advised them that they could be held personally liable for losses claimed by their disgruntled shareholders.  The authors dismiss this fact by saying that Ben & Jerry could have sued the company to recover any personal losses based on indemnity provisions in the corporate documents.  I’m sure Ben & Jerry’s lawyers discussed this, and equally sure it provided Ben & Jerry little comfort.  After spending years in litigation losing one case and paying the verdict out of their own pocket, I suspect nothing would sound less appealing than spending six or seven figures litigating a new case pursing their indemnity claim against the company they no longer own or control.  The delay and costs attendant to litigation, coupled with the inability of companies to remain in limbo while awaiting a final decision, is the central reason why there are so few reported cases addressing these issues. 

The article ignores the central advantage that the Benefit Corporation provides.  The article conveys the authors’ opinion that social enterprise does not require benefit corporations or any of the other new forms provided by recent legislation, while ignoring the benefit they provide.  That benefit is legal certainty, which as noted above, is a critical commodity.  Social entrepreneurs operating as a traditional corporation are like guinea pigs waiting to be called for an experiment.  So long as all the shareholders remain mission-aligned, the experiment will be a success.  But shareholders and their attitudes often change over time, and in traditional corporations, the result is often a dilution of the company’s original social or environmental values.  If the values-driven shareholders control the company, then they can do as they wish and roll the dice to see if they’re sued.  And if they do, they’ll experience the thrill of litigation, with expensive legal fees, years of watching the slow grind of our legal system and the excitement that comes with never knowing how it’ll end until the appeals have been exhausted or a settlement is reached.  For the gambler, this sounds as fun as betting the company payroll on a roulette wheel in Vegas.

The benefit corporation was created for the more temperate social entrepreneurs who prefer not to be a legal guinea pig.  The benefit corporation was created for them so that they don’t have to worry about their continued ability to operate their business in a socially responsible manner.  No questions, no uncertainty, just clarity and peace of mind so that they can focus their attention on their business instead of threats to their vision of what that business should be.

Donald Simon
Partner, Wendel, Rosen, Black & Dean LLP
Oakland, California
September 17, 2012

In Episode 74 of The Wendel Forum (originally aired on August 25, 2012, on 960 KNEW AM radio), show moderator Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Jenn Vervier, director of sustainability at New Belgium Brewing Company

Jenn Vervier

New Belgium Brewing Company prides itself on providing meaningful employment for its owners and workers.  It promotes a “high-involvement culture,” in which individuals “bring their whole selves to work” and everyone’s voice is heard.  Specifically, the company engages in participative decision-making, soliciting feedback from top to bottom.  All co-workers are included in strategic planning and business operations, and financial reports are shared monthly with all workers.

But – they don’t forget that business can be fun!  New Belgium Brewing Company is employee-owned, with workers brought into the ownership after a year.  On that anniversary, they also receive a bike.  Once employees have worked there for five years, they receive a weeklong, all-expenses-paid trip to Belgium to learn about Belgian beer culture.  Those are certainly nice perks!

Make no mistake about it, though, sustainability is a guiding business principle of the company.  In addition to donating to environmental causes, New Belgium Brewing Company is also one of the first breweries to publish a life- cycle carbon footprint of its processes for consumers.  Plus, New Belgium is constantly looking for ways to hone the efficiency and limit the impacts of its operations.  For example, the company instituted a new method of dry hopping that saves millions of gallons of water a year, and it also has changed its bottle lubricants to similarly conserve water.  For a beer company, conserving water has a tremendous influence on the bottom line and the environment.

In addition, New Belgium has a 200kW solar PV array, 800kW of cogeneration, which produces electricity from the methane captured from its on-site process water treatment, and 200kW of thermal storage—making cold water or ice at night, off peak, to use in the brewing process and in office HVAC during the hottest part of the day.

Are you more likely to drink New Belgium Brewing Company beer after learning about its core values?

Post Links:

Listen to the interview with Vervier: Episode 74 of The Wendel Forum (27:50 mins; mp3)

New Belgium Brewing Company Website: http://www.newbelgium.com/

960 KNEW AM Radio Website: http://www.960KNEW.com

Bill Acevedo’s Online Profile: http://www.wendel.com/wacevedo

In Episode 73 of The Wendel Forum (originally aired on August 18, 2012, on 960 KNEW AM radio), show host Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Lindsay Riddell who covers Cleantech, Sustainability, Startups and Venture Capital for the San Francisco Business Times.  They discuss a number of trends in the cleantech environment.
 
Lindsay Riddell photo

Lindsay Riddell covers Cleantech, Sustainability, Startups and Venture Capital for the San Francisco Business Times

Biofules and Biochemicals

Bill and Riddell start of the conversation with a discussion of what’s happening in the Bay Area biofuel and biochemical industries.  Companies in this space are looking for a variety of approaches to break down or convert renewable materials into fuels, soaps, chemicals, oils, food products, fragrances and others that typically rely on petroleum-based production.
 
With the economic downturn, capital became increasingly scarce and companies had to scale back or retool their plans for expansion.  Now, as these companies mature, they are undertaking new approaches for attracting venture investment.  The more established companies have created a roadmap for some of the emerging companies. 
 
Organizations such as the California Institute for Quantitative Biosciences (QB3), which is a joint venture between the University of California campuses at Berkeley, San Francisco, and Santa Cruz, are helping to accelerate innovation and bring discoveries to market more quickly.  Riddell discusses some of the strategies these companies are taking to survive the short term and thrive in the long term.
 

Investment trends

 
Not surprising, with the economic downfall of the past few years, Riddell acknowledges that investor enthusiasm has waned.  She observes that there is still money available for good ideas, but the investment community has been behaving more conservatively. Meanwhile, there are still resources in places like Greenstart, a startup accelerator that works with companies focused on solutions that combine cleantech and IT.  Software applications that address issues such as energy efficiency are still finding some success in the marketplace.

Carbon Data

Riddell recently wrote an article on Facebook’s voluntary reporting on their carbon footprint.  She and Bill discuss the pros and cons of releasing this data and the market pressures at play for companies to become more transparent in their operations.  This move is likened to Wal-Mart coming out several years ago with a commitment to dedicate shelf space to products that have higher levels of sustainability.  It’s clear that these big companies can have incredible influence in the marketplace and change expectations for both consumers and investors.

Electric Vehicles

The Bay Area is home to a thriving network related to the electric vehicle industry – car manufacturers, battery manufacturers, chargers and application developers for locating electric car chargers, crowd-sourcing for charging – the list goes on.  Some of the more interesting new developments include apps for available parking spaces with charging stations, car sharing apps, and there’s even an app that essentially takes the act of hitchhiking to the internet. Most of these are mobile technologies that employ various aspects of GPS tracking.
 
What do you consider to be the most important clean tech trends in the Bay Area?  What’s just over the horizon?
 
Post Links:
 
Listen to the interview with Lindsay Riddell: Episode 73 of The Wendel Forum (27:47 mins; mp3)
 
San Francisco Business Times website: www.bizjournals.com/sanfrancisco
 
Follow Lindsay Riddell on Twitter: @LRiddellSF
 
California Institute for Quantitative Biosciences:  http://qb3.org/
 
 
960 KNEW AM Radio website: http://www.960KNEW.com
 
Bill Acevedo’s online profile: http://www.wendel.com/wacevedo

In Episode 70 of The Wendel Forum (originally aired on July 21, 2012, on 960 KNEW AM radio), show moderator Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Mark Dwight, founder of San Francisco-based Rickshaw Bagworks.

Mark Dwight of Rickshaw Bagworks visits The Wendel Forum Studio

Mark Dwight of Rickshaw Bagworks visits The Wendel Forum Studio

After leaving his Silicon Valley tech roots, Dwight joined Timbuck2, where he fell in love with the bag business.  When he moved to Rickshaw, he committed to making bags in a sustainable way, including minimizing waste and overstock. 

Rickshaw bags are made with polyester recycled from beverage bottles and industrial plastic, and the company avoids materials that are noxious in their manufacture, use and disposal.  Every Rickshaw bag features a gem tag with the letters PCQ, which stands for “passion, craft and quality,” and a five-pointed star, which represents Rickshaw’s five constituencies: employees, customers, business partners, shareholders and the community.

Bill and Dwight discuss how no business can be 100 percent impact-free and that sustainability starts at the bottom line.  That is, businesses must be sustainable financially in addition to committing to environmental and social justice goals.

Dwight is also the founder of SF Made, a nonprofit organization that promotes local manufacturing. Since its founding two years ago, 350 San Francisco manufacturers, including Anchor Brewing, have become members of SF Made. Dwight established the organization as a 501(c)(3) charitable organization (as opposed to a 501(c)(6) trade organization for for-profit companies) so it can receive tax-deductible donations. The City of San Francisco even awarded a grant to SF Made to promote local economic development. SF Made has served as a model for other communities launching similar geographic branding programs.

Does it matter to you to buy local?

Post Links:

Listen to the interview with Mark Dwight of Rickshaw Bags: Episode 70 of The Wendel Forum (27:34 mins; mp3)

Rickshaw Bags Website: http://www.rickshawbags.com/

SF Made Website: http://www.sfmade.org/

960 KNEW AM Radio Website: http://www.960KNEW.com

Bill Acevedo’s Online Profile: http://www.wendel.com/wacevedo

In Episode 69 of The Wendel Forum (originally aired on July 7, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Gary Price, a tax partner at Sensiba San Filippo, one of the Bay Area’s largest accounting firms and a green business certified under the Bay Area Green Business Program

Gary Price

Dick and Price discuss how in the last few years, it’s become economical for businesses to use renewable energy sources, particularly solar and wind, which provide energy without using oil or gas. Because buildings and their occupants produce a significant amount of pollution, even  businesses like accounting, law and other service firms can help the environment by buying clean energy from roof-mounted solar power systems that replace or supplement power from the grid. Even if those businesses occupy just one floor of a big building, they can contribute to lower energy consumption.

Renewable energy used to cost more than electricity purchased from utility companies.  But the 2008 renewable energy credit program helped bring prices down.  Within just four or five years, companies using renewable energy will see the payback, resulting in real cash savings. Using solar and wind energy also has related insurance and bank loan benefits.

A new clean tech trend is that larger renewable energy companies – perhaps a solar company or even a company that produces a part of a solar energy system – have accelerated the use of solar power by become financing companies.  As a result, customers may not need cash at all to buy electricity from roof-mounted solar systems. Solar and wind energy options will continue to grow and experience increased demand, which will further drop the price point.

If a business is interested in switching to renewable energy, Price recommends finding an expert to “put the whole thing together.” Construction and engineering companies, for example, have savvy energy departments. Law and accounting firms also have specialists that put green projects together.

What would it take for your business to buy clean energy?

Post Links:

Listen to the interview with Gary Price: Episode 69 of The Wendel Forum(27:53 mins; mp3)

Sensiba San Filippo website: http://www.ssfllp.com/

Price’s article on Sensible Savings: http://www.ssfllp.com/sustainable-savings-how-businesses-can-profit-big-from-clean-technology/

Bay Area Green Business Program website: http://www.greenbiz.ca.gov/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rylons

In Episode 64 of The Wendel Forum (originally aired on May 26, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Steve Roth, CEO of Roth Consulting, which helps companies devise and execute a “winning strategy,” whether related to capital, expansion, product development or management.

Steve Roth, CEO of Roth Consulting

Steve Roth, CEO of Roth Consulting

Roth brings his experience as a senior executive and investor in companies in a wide range of industries to green businesses and double-bottom-line companies, those companies for which a social goal — like benefiting the community or the environment — co-exist alongside profit goals.  For those companies, the biggest issue is balance, Roth explains.  Companies can’t forget that profitability is what allows a company to be generous and, therefore, profitability must remain the core operational focus.  Companies shouldn’t become so enamored with a social mission that they lose the ability to fund it.

The average double-bottom-line company devotes about 5 percent of sales to a social mission.  The more profits earned, the more impact the company can have. Ben & Jerry’s was one of the first and most successful double-bottom-line companies.  “On a public relations basis, charitable endeavors are a big part of their raison d’être.”

Companies can also donate employee time – within limits.  In the 1970’s, Xerox was one of first companies to devote its human resources to help the community, and some employees were even promoted on that basis.  But Xerox diverted too much attention from its core business and now no longer exists.  “It’s an educational tale.”

Another business challenge for these companies is making the charitable work relevant to customers.  Many businesses in the coffee industry, for example, donate money back to the cooperatives that grow their beans.  It may be more expensive to source products from those areas.  As a result, customers may need to pay higher prices or the company may have to accept lower profits.  “Corporate communication is critical to justifying the premium” customers may have to pay, especially in a competitive marketplace where consumers have many choices. The customer must be educated about the social benefit of buying that product.

Roth and Dick also discuss socially responsible investing.

What social causes would inspire you to purchase products from double-bottom-line companies, even if the prices were higher?

Post Links:

Listen to the interview with Steve Roth: Episode 64 of The Wendel Forum(27:45 mins; mp3)

Roth Consulting:  http://www.consultroth.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

In Episode 59 of The Wendel Forum (originally aired on April 14, 2012, on 960 KNEW AM radio), show host Dick Lyons welcomes Morris Shriftman, a brand strategist for natural foods and green products, and CEO of Mozart, Inc. (A classical music fan, Morris’ company name carries the name of the great composer and is a double entendre on his name: “Mo’s Art.”)  He also serves on the board of the American Botanical Council, which provides consumers with credible information about plants and herbs used in natural medicine.

Morris Shriftman of Mozart Inc. visits The Wendel Forum studio

Morris Shriftman of Mozart Inc. visits The Wendel Forum studio

A marketing expert, Morris has been focused on the natural food and alternative medicine industry since 1970.  He began as brand consultant in New York.  In the 70’s, he met the founders of Tree of Life and was hired as vice president of marketing, where, he says, he gained a “360 degree perspective” on the wellness industry, handling product creation, development, manufacturing, packaging, distribution, marketing and retail partnerships.

Tree of Life became both a major national distributor of natural products and had its own line of branded natural products.  Among other things, Morris designed the well-known “Tree of Life” logo.  In 1985, when Tree of Life was sold, he founded Mozart, Inc., which “creates products and builds brands for companies doing the right thing, including using healthy ingredients, removing objectionable ingredients and having the courage to be transparent.”

Dick and Morris discuss how natural products companies can communicate their message to retailers and consumers, a particular challenge for smaller, undercapitalized companies that can’t afford the marketing practices of larger companies, such as product placements, public relations, trade advertising, events marketing or consumer advertising.  Those companies have to be inventive, Morris says.

Fortunately, social network marketing is an inexpensive way to reach a narrow audience of people who share similar values, what Morris calls “narrowcasting” (as opposed to broadcasting). Better than a new logo or slogan, narrowcasting permits a small company to convey its mission directly to communities that will be drawn to the mission.  That happened for Avalon Natural Products where Morris was brought in as senior vice president of marketing. 

He led the company to eliminate allergens and artificial and petroleum-based ingredients, including parabens, a preservative implicated in breast cancer.  Avalon’s “consciousness in cosmetics” mission resonated with The Breast Cancer Fund, an organization that informs women about the environmental causes of breast cancer. Collaborating with The Breast Cancer Fund and networking with other women’s health organizations and green scientists became a major driver in Avalon’s marketing.  That kind of work, Morris explains, can distinguish a company and create empathy with consumers.

Post Links:

Listen to the interview with Morris Shriftman: Episode 59 of The Wendel Forum (27:31 mins; mp3)

Mozart, Inc. website: http://www.mozartinc.com/

American Botanical Council website: http://abc.herbalgram.org/site/PageServer

Tree of Life website: http://www.kehe.com/treeoflife/Home.aspx

Avalon Natural Products website: http://www.avalonorganics.com/

The Breast Cancer Fund website: http://www.breastcancerfund.org/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: http://www.wendel.com/rlyons

In (originally aired on April 7, 2012, on 960 KNEW AM radio) show host Bill Acevedo talks to Christopher Angell, co-founder and president of Jungell, makers of Angell organic candy bars and GlucoLift all natural glucose tablets.

Co-founded with his wife, Suzanne, Jungell Inc. makes better versions of products the couple

Christopher Angell, Founder of Jungell

Christopher Angell, Founder of Jungell

feels passionate about.  The two grew up loving candy bars, but realized as adults that they would have to stop eating them after reading the labels.  You’ve probably seen organic or fair trade chocolate bars in your favorite health food stores, but Angell’s line of products are the first true organic and fair trade candy bars on the market.  They make a point to bring their own flavors to products and not just make an organic copy of what’s already on the market. 

Why make candy that’s both organic and fair trade?  Christopher believes if your interest in organic goes beyond your own health benefits to include the health of the environment (for example, the overall environmental and human health impacts of pesticides in farming), you’ll realize that the two go hand in hand.

Christopher and Bill discuss the organic and fair trade certifications and what goes into receiving those designations, including buying component ingredients from certified farms, inspections from certifying agencies and restrictions on genetically modified organisms (GMO’s) in food products, as well as the fertilizers and pesticides used in many farming operations that typically supply the candy industry.

A relatively new company (launched in 2010), Angell generated significant interest in the marketplace and recently announced the sale of the candy bar operations to Betty Lou’s, another organic snack manufacturer that was a contract manufacturer of the bars. 

With the transfer of the candy bar business, Jungell is now focusing on its other major product, GlucoLift, which is an all natural glucose tablet designed to help raise blood sugar in a safe and quick way.  Christopher, who has diabetes, saw a need in the glucose tablet market and put his product creator hat on to come up with a better solution.

As he had discovered in the candy bar industry, most of the glucose products available to those managing diabetes and hypoglycemia were filled with additives, artificial ingredients and questionable GMO components. Christopher thought he could do better. The result of his work was GlucoLift, the first all-natural glucose tablet on the market.  And while he was at it, he made them palatable, in a series of fruit flavors and in packaging that made it easy for someone experiencing the symptoms of low-blood sugar to manipulate. 

What’s next for Jungell?  As the company wraps up the sale and transition of Angell Bars to the new owners, Jungell will continue to focus on GlucoLift.  And Christopher and Suzanne will look for the next need in the marketplace where they can make a difference.
 

Post Links:

Interview with Christopher Angell: Episode 57 of The Wendel Forum(27:53 mins; mp3)

Jungell website: www.jungell.com

Betty Lou’s website press release: http://bettylousinc.com/news_detail.php?id=38

960 KNEW AM radio website: www.960knew.com

Bill Acevedo’s online profile: www.wendel.com/wacevedo

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