Yogurt Culture Goes Global
August 1 2004 by Chief Executive
Apparently plenty€¦quot;if the organic foods guru is Gary Hirshberg, chief executive of Stonyfield Farm. The Paris-based Groupe Danone, parent of Dannon USA, in late 2003 acquired roughly 85 percent of Stonyfield, but CEO Franck Riboud wants more than a stake. He wants Hirshberg, cofounder of the feisty little yogurt company in Londonderry, N.H., to shake up the culture at Danone’s operations around the world.
Hirshberg, whom the company describes as a CE-YO (for yogurt), helped found Stonyfield Farm in the late 1970s as an experiment by a not-for-profit organization that promoted organic farming in New England. After he and cofounder Sam Kamen took the outfit commercial in the early ’80s, Hirshberg’s combination of business savvy and ethics-mindedness helped him create a lesser-known echo of Ben & Jerry’s Homemade Ice Cream, located next door in Vermont. The $150 million Stonyfield far and away dominates the natural-yogurts business, not only in natural-foods outlets but also in mainstream supermarkets in all 50 states€¦quot;not to mention online with a hip web site that advertises “multiple organisms guaranteed.” Its brandname for its organic dessert yogurt is Moo-la-la.
Hirshberg has kept Stonyfield growing at an annual rate of more than 20 percent, in part by keeping the company nimble. In 1997, for example, within three months of hatching the idea for a new product for babies and toddlers, Stonyfield had YoBaby on store shelves. It also remains in step with its customer base, contributing 10 percent of profits to environmental causes.
It’s that agility and passion that Riboud is hoping will rub off and take hold at the bigger company. This summer, Hirshberg had his first meeting with executives at Dannon USA in Tarrytown, N.Y., and has met with the managers of Danone operations around the globe. “Sometimes I’m talking marketing with them, sometimes products, sometimes employee practices such as profit-sharing,” says Hirshberg, 50, whose goal is to “expose our entrepreneurial, out-of-the-box, fast-moving notions to try to influence their people.”
He’s also teaching Danone about the organic craze, and advising Riboud on acquisitions in the natural-foods market. “He drills me and asks me what’s going on in the natural-products world,” Hirshberg says. “I’m kind of his scout in this segment.” Nobody is putting this CE-YO out to pasture any time soon.
The complaint cited violations dating back to 1981, when the EPA says DuPont discovered C-8 in blood samples from pregnant women who worked in its Teflon plant in West Virginia.
In a special report last year (“DuPont’s Teflon Dilemma,” November 2003), Chief Executive examined the controversy in depth. The article focused on the role of DuPont CEO Chad Holliday, who had developed a reputation as a champion of environmental sustainability. The story was picked up by The New York Times in August.
In the mid-’80s, DuPont discovered C-8 in the public water supply near its plant, and in 1991 recorded the substance in levels surpassing the company’s internal safety guidelines. The Toxic Substances Control Act requires companies to immediately report any health concerns, yet DuPont failed to notify the EPA, the agency said. In addition, the agency cited DuPont for failing to provide requested toxicological data on C-8.
The latest action could result in the largest fine ever levied by the EPA under the federal act. The law allows the agency to issue fines of up to $27,500 a day. In DuPont’s case, the fines could total $300 million. DuPont denies the charges and says it will appeal the finding.
The nation’s second-largest chemical maker, DuPont already faces a legal battle over C-8 in Parkersburg, W.Va., where it has manufactured Teflon, its patented nonstick material, since the 1970s. A class action on behalf of 50,000 residents alleges DuPont knowingly released the chemical into the surrounding air, land and water without informing the community. C-8 is a known animal carcinogen; its effects on humans have not been extensively studied. An EPA investigation into whether C-8 is harmful to humans is ongoing.
In response to the EPA’s complaint, the Chinese government has said it will conduct studies of Teflon out of concern for public safety. China is a market that Holliday has targeted for expansion.