Grocery Update #55: Business Ethics: Move Slow, Repair The World.
Also: The Purpose Pledge. Harvie's New Food Economy.
Discontents: 1. Move Slow, Repair the World. 2. The Purpose Pledge. 3. Harvie's New Food Economy. 4. Tunes.
1. Business Ethics: Move Slow, Repair The World.
What are business ethics? I have never taken a business course, let alone a business ethics course. I have never actually read a “business” textbook book either, but I have read lots of economics out of necessity. I have, however, done plenty of “business”. My team at Whole Foods (WFM) crested $5 billion in sales before I was let go in 2016. We had increased our gross margins by over 350 basis points through new item innovation, stronger supply chain standards, everyday low cost deals and a huge (10X) ramp up in promotions during my tenure there. After WFM, I worked with dozens of emerging brands, startups, indie retailers, cooperatives and investors, and I continue to do so. Lots of business done over here.
We are taught that the purpose of business is to maximize shareholder earnings.
Even at WFM in the old days, as much as we attempted to plug in higher values of quality, health, supply chains, communities, the environment and our workforce, at the end of the day for a publicly traded company, the only thing that mattered was EBIDTA and net profits. Once those slimmed down, the stock tanked and the Bezos gang swooped in, which was well after I left thankfully. We’d have never gotten along.
And as a publicly traded company, we always felt that 90 day guillotine coming, the quarterly earnings calls, the “what have you done for me lately” crap from the C-Suite, the pressure to lower expenses, especially labor costs, and do more with less. It was unpleasant and contradictory.
One thing I learned, and did my best to put in practice, was that we all did better when everyone did better. As Robin Wall Kimmerer writes, all flourishing is mutual. That was the aspiration, at least. Was my team able to do their jobs and enjoy their time at work, and most important, were they compensated fairly? Did our suppliers get what they needed from the relationship, and were they able to run their own businesses without being gutted by discounts, deductions or discontinuations? Were we living up to our own standards of selling the highest quality foods, across all 75 or so product categories we were responsible for? And ultimately, were our customers validating our decisions by buying our products?
As retail merchants, we were only interested in what customers bought, not what they said they bought or what they claimed they wanted.
We watched transaction data like red tail hawks and cross referenced it by category, brand, item, timeframe, product attributes and year over year changes to all sales, margin, SRP, unit, cost and market share data. We never missed our sales or margin targets, even in recession. And we leveraged that data and experience to develop new supply chains and product offerings, branded and private label, growing brands and trends into household names. with hundreds of new products every year, fair labor, organic, Non-GMO, allergen-free, pasture-raised, biodynamic, plant-based, regenerative before it was called that, all that stuff the kids love these days (seriously, young people are driving these trends even more than us salty Gen X-er’s who built them, good for you kids!).
We also created huge externalities from our work.
Our supply chains were dependent on fossil fuels and resource heavy activities, like trucking, electronics, packaging, manufacturing, and less than 50% of what we sold was organic, so also plenty of nasty agrochemicals. In order to introduce new items, we had to discontinue poor performers, so we always selected a few winners, and always had many losers, meaning people lost income, their jobs, possibly their businesses. Our main wholesaler partner could be a bit… extractive in how they dealt with suppliers and their employees. Our job was a meat grinder and we all sacrificed relationships and time with loved ones to show up like we had to. Our executive leadership didn’t have a clue how we did our jobs and treated our sales and margin targets like they were magic spells and that we could pull margin dollars out of our asses at the drop of a hat when they needed more cheddar for Wall Street. I worked 120 out of 200 weekends during one five year stretch, and then I stopped counting. And none of us ever felt we were compensated fairly for the energy and efforts we gave. And this was way before Amazon was a twinkle in John Mackey’s eye. So, with all this happening, even in good times, at the world’s most compelling turn-of-the millennium business success story that made health, wellness, sustainability, stakeholder capitalism mainstream when our stock split, when we were on top of the retail world, what is the point of business ethics?
Well, it matters. Especially now. In Silicon Valley, they have a saying, one that is now being applied by Elon Musk’s and Peter Thiel’s hordes of adderall-pumped DOGE contractors chainsawing through federal agencies, career civil servants’ livelihoods and public funding for vital services while Trump operates the federal government like his latest Pump and Dump scheme: “Move fast and break stuff”. In the context of cascading disasters and crises, ecological, social, economic and personal, this is dead wrong.
Business should be about moving slow and repairing the world.
The frenetic speed and pace of business is nihilistic, it is relentless and exhausting and out of control. And any enterprises we create, whether individual, corporate, cooperative, public, not-for-profit, spiritual, should first be in the business of repairing the world. In secular Judaism, we say “tikkun olam”, repair the world. I see it a lot like the Hippocratic Oath, “first, do no harm”, but it takes it a step further. “Repair” is also a lot easier to say than “regenerative”, which is all the rage these days, or “resilience”, which is necessary but just sounds exhausting too, and both concepts are highly compromised and confused at this point. (Big shout out to the folks doing real deal regenerative agriculture at Regenerative Organic Alliance and Regenerative Agriculture Alliance, btw.)
Move slow, repair the world. Be intentional, listen, collaborate, fix what this insane system intentionally breaks for the profit of a few. Bring people, ecosystems, families together. Don’t burn out. Learn from mistakes, especially others’. Don’t fuck people over to survive. Compassion and solidarity, don’t exploit and extract. Build, don’t break. Make the road as you travel, that’s a lot easier when you slow down. Heal, don’t wound. Don’t kill… sound familiar? And if you must punch, punch up, not down. For everyone else, it is about mutualism, not winners take all.
Idealistic? Yes. Realistic. lol. But when has anything good and necessary ever been considered “realistic”?
Everybody does better when everybody does better.
It can’t be just be about one out of many. This is why I like The Purpose Pledge. I wrote about it for Forbes this week and I am sharing it below. (I don’t have a lot of reader overlap between newsletters and Forbes columns, so I like to reshare.) The Pledge put me in a good mood for a little while. I love seeing a collaborative effort like this that champions values but makes them pragmatic to survive in a competitive, cutthroat, even brutal marketplace. Remember, you are never alone, especially if you are against the grain. Move slow, repair the world. Business ethics, at what feels like the end of the world.
2. The Purpose Pledge Launches.
A new coalition of food and wellness companies is looking to redefine business ethics in the Trump era. Called The Purpose Pledge, these companies are creating a community of practice based on economic fairness, environmental sustainability, and independent governance. As major food and beverage conglomerates are beating a hasty retreat from their previous ESG, sustainability and DEI commitments, The Purpose Pledge is pointing a new way forward.
The Purpose Pledge was initiated in 2022 by Dr. Bronner’s Magic Soaps, worker cooperative consultancy LIFT Economy, and the nonprofit organization One Step Closer. “The Purpose Pledge is a call for meaningful action. We’re inviting the world’s most exceptional purpose-driven companies to challenge themselves and each other to take even bigger steps forward. I believe that this effort can be a global beacon for change in how business is done,” said Lara Dickinson, co-founder and Executive Director of One Step Closer.
The ten Purpose Pledge commitments include product quality, independent governance, supply chain integrity, fair and balanced compensation, living wages, inclusion, community engagement, climate positivity, circularity for zero waste and capability building. Participating pilot companies include Dr. Bronner’s, Gaia Herbs, Guayakí Yerba Mate, Kuli Kuli, Lundberg Family Farms, Mountain Rose Herbs, MUD\WTR, Nature’s Path Organic Foods, Numi Tea, Organically Grown Company, Pachamama Coffee Farmers, Philosopher Foods, SIMPLi, and Wildway.
“It’s not a marketing vehicle,” according to Les Szabo, Dr. Bronner’s chief strategy and impact officer.
“It’s about transparency. Consumers will be able to go to the website and look up a company to see how they are progressing with their commitments.” The companies, many of which already are Certified Organic, Non-GMO, fair labor or regeneratively grown, are building a “community that fosters collaboration and shared accountability around… how we define what it means to be an authentic, purpose-led business.”
The Pledge grew out of a shared frustration over greenwashing in the food industry. Pledge participants see it as complimentary to B Corp certification, which has come under fire for allowing companies with significant ethical and environmental issues to carry the same label as much higher performing brands. The Pledge also runs counter to widespread DEI and ESG backsliding by major food and retail companies in the early days of the second Trump presidency. David Bronner, CEO of Dr. Bronner’s, noted, “There’s that tendency to go along to get along — to kiss the ring of power… administrations come and go. We’ll ride this moment out.”
Kyle Koehler, CEO and Founder of Wildly sees it like this. “We signed the purpose pledge to help pioneer a new standard for purpose-driven companies– one in which stakeholder capitalism becomes the primary driver to usher in economic, environmental, and social change by ensuring the well-being of all stakeholders over profit motives and shareholder primacy alone.”
And by requiring progress on living wages, compensation and governance, The Purpose Pledge prioritizes workers that companies rely on, but typically take advantage of.
At least half of the ten lowest-paid jobs in the US are in the food industry, which is the largest employer in the United States. According to the Food Chain Workers Alliance, compared to workers in other industries, frontline food industry personnel are 68% more likely to live below the poverty line and continue to be among the lowest paid workers in the U.S., earning a median income of $28,000 per year. Eighty-six percent of food workers surveyed earn poverty wages and only 13.5 percent make a living wage. Women in the food industry earn 66% of what men are paid and frontline food workers are more likely to be women of color, people of color, and immigrants than the general workforce. Food workers are also more likely to be food insecure than their peers in any other industry. In 2022, frontline food workers were 93% more likely to be food insecure, and food workers were 60% more likely to rely on SNAP.
The food industry is just a microcosm of the economic inequality and desperation that the Biden/Harris Administration failed to mitigate and enabled the Trump campaign to cruise to victory. Declining real wages and the increased cost of living has put enormous pressures on working people. About one in three Americans say they’re struggling to afford their usual expenses and more Americans are having difficulty paying bills.
Over one in three Black adults and nearly two in five Hispanic adults were food insecure in 2023, and over 47 million people lived in households experiencing food insecurity, an increase of 13.5 million compared to 2021. Poverty is up 65% since 2021, child poverty has tripled and 67% of Americans are living paycheck to paycheck. If wages had kept pace with productivity since 1975, Americans would have a $24 an hour minimum wage, and would have earned nearly $50 trillion in additional income, or over $2.5 Trillion annually. While some states have increased their minimum wages through ballot measures, the federal minimum wage sits at $7.25, and hasn’t increased since 2009.
Meanwhile, the average cost of a loaf of white bread has increased from $1.38 to $1.94 since 2020, a change of over 40 percent, while beef, eggs, and many processed consumer goods have gone up even more. All in all, grocery prices have climbed over 30% in the past five years, driven largely by outsized profits from consolidation throughout the supply chain. So while they pander to the Trump Administration by cancelling DEI and ESG promises, the largest food and retail companies are benefiting from the crisis.
A study by the Kansas City Federal Reserve Bank found that corporate profits drove half of the price increases in 2021 alone. Consumer packaged goods companies in particular saw record profits, coasting off higher input costs, media hysteria over supply chain crunches, smaller pack sizes and lower unit volumes. Walmart captured 30% of SNAP shoppers’ grocery dollars and over 94% of SNAP recipients said they shopped at Walmart. Walmart and McDonald’shave the most employees using SNAP, and 70 percent of SNAP recipients worked full-time every week, their benefits barely lasting two weeks into the month.
The major economic gains of the Covid-19 pandemic were concentrated among the top 1% of earners, particularly the top 0.1%, including Walmart’s Walton family who saw their net worth skyrocket by tens of billions of dollars. On average, CEOs make 399 times what their workers earn, but this ratio is dwarfed by leading food companies such as Coca-Cola (1,883 times), McDonald’s (1,224), Walmart (933), and Kroger (671).
These are the structural economic issues that The Purpose Pledge community is up against. It is why this movement of brands is prioritizing living wages, fair compensation and independent governance in their business models. But like the employee owned enterprises, unionized companies, and consumer and worker cooperatives that have tried to do likewise, they must still grow and turn profits to survive in a competitive marketplace. What then may be just as compelling to The Purpose Pledge is that study after study shows that consumers continue to gravitate to companies leading with strong values, fairness and sustainability. It is not altruism, but a new set of business ethics.
In an era when the largest food companies are tripping over themselves to win the race to the bottom, a small group of like-minded businesses is instead stepping up. Their success will show that despite heavy competition in the marketplace and reactionary pressures from the current administration, food brands can still do better by doing better. So while today The Purpose Pledge may seem ambitious and even aspirational, someday it may just be brass tacks, just a humble baseline for doing business in the United States and beyond.
3. Four Questions With Simon Huntley, CEO of Harvie.
1. What gap in the marketplace is Harvie hoping to fill?
Harvie exists to make the independent and local food economy as convenient as the industrial food system—but without the middlemen, without the race to the bottom, and without sacrificing quality, transparency, or fairness.
The reality is, people want high-quality food from independent producers, but they also want convenience.
The traditional local food model—farmers markets, CSAs, co-ops—hasn’t scaled to meet modern consumer habits. Grocery stores, on the other hand, offer convenience but strip away connection and funnel money to large corporations, not small farms and food businesses.
Harvie fills this gap by building a direct-to-consumer model that makes it just as easy to buy from independent farmers, butchers, bakers, and cheesemakers as it is to order from Amazon or walk into a grocery store. We provide the infrastructure—technology, logistics, and customer experience—to connect consumers directly to the people who produce their food, making independent food viable at scale.
2. How is Harvie's supply chain and sourcing model different that typical wholesale and retail?
Harvie is building a supply chain that prioritizes direct relationships with small and mid-sized independent farms and food producers.
Wherever possible, we work directly with producers—meaning Harvie is often the only stop between the farmer’s field and your fork. This keeps food fresher, ensures farmers and artisans get a fair price (around 50 cents of every dollar vs. 14 cents in the industrial food system), and provides complete transparency about where your food comes from.
But we're building an entirely new food economy, and right now, consistent independent sourcing doesn't exist for certain items, (think staples like lemons, bananas, and limes). In these cases, we source high-quality products and price-match with major retailers to make sure our customers can shop affordable staples alongside their independently sourced groceries. As Harvie grows, so does our ability to build new direct relationships and expand our transportation network. Over time, our goal is to build a food economy that isn't reliant on the conventional supply chain.
This is an evolving process. As Harvie grows, so does our ability to build new direct relationships and expand our transportation network. Over time, our goal is to shift even more of our sourcing to independent producers, reducing reliance on the conventional supply chain while still delivering the convenience our members expect.
3. How does Harvie select, negotiate with and treat suppliers?
Harvie prioritizes working with independent producers, but not every supplier is the right fit. Sometimes the price point, packaging, quality, or availability doesn’t work—and that’s okay. We focus on unique, high-quality products that members can’t find anywhere else. Take Willow Bend English muffins, for example—locally made, incredibly delicious, and not cheap, yet one of our best sellers. Our members aren’t just looking for the lowest price; they come to Harvie for differentiated products that offer real value. As we grow, we continue expanding our network of independent suppliers while ensuring every product we offer meets the high standards our members expect.
We're straight shooters. No fees or unexpected deductions. What we order is what we pay for!
We take the driver's seat in driving sales. If a product isn't selling, we don't cut it without warning. We'll put it on sale, create content, and feature it in the store.
4. What is the Harvie vision for the food supply?
Harvie’s vision is to build a scalable, independent food economy that fits into people’s lives as seamlessly as the traditional grocery system. We’re already proving this model works in Pittsburgh and Philadelphia, and as we grow, we want to see thousands of independent businesses thriving within it.
This is already happening—dozens of small food businesses exist today because Harvie provides them with a market they wouldn’t otherwise have. We want to continue expanding these opportunities, creating a network where local and regional producers can reach consumers directly without being squeezed by grocery store economics.
For consumers, our vision is about discovery—introducing them to exciting, high-quality products from independent producers they won’t find anywhere else. By making the independent food economy both convenient and compelling, we’re building something that can truly compete with—and surpass—the industrial food system.
4. Tunes.
Today, some Black Thought and Danger Mouse FTW.
peace.