Building a Sustainable Business

By Ari Weinzweig, Zingerman’s Co-Founding Partner

Over the past ten years, there’s been increasing support for sustainable agriculture in North America. While there’s a long way to go to get that approach to become an accepted day-to-day reality, many organizations are working in consciously and ecologically sound ways.

Sustainability, though, exists in a broader sense, one that’s not limited to agriculture but to the idea of building business in a sustainable way as well.

Leaving Our World Better Off
A definition of sustainable agriculture that’s stuck with me came from something I heard about 20 years ago at a food-focused conference. It was early in the move toward organics and a grower on a panel was responding to questions about the higher prices of organic produce. What he said was that consumers who purchase industrially produced foods were paying only a portion of the full price. There were additional costs still to come—like restoring the soil, cleaning up the environment, etc.—which society would have to pay in full. In essence, the initial purchase of industrially produced goods is akin to a downpayment made with a credit card—the full cost comes due later, usually with the same sort of extremely high (in this case, ecological) interest rates added on to the retail price.

By contrast, when we purchased sustainably raised food, the price we paid was “all inclusive. Rather than depleting natural resources and leaving less for those who come later, the soil in which these sustainably produced products had been grown was at least as good—and hopefully better—than when the farmer started working it.

The idea of creating sustainability in business is, to me, about taking this same concept and applying it to all elements of organizational activity. The results should be similar as what the farmer described—the world around us will be a better place.

We’ve built this concept into our long-term vision for Zingerman’s. It’s about taking something we’ve worked at and turning it into an overt commitment with clear guidelines of what it means in daily life.

Here are some of the components. While the lower part of the list is likely to be familiar—working on environmental, agricultural and community issues—the overall approach is radical. Sustainability is not just about soil; it’s also about staying in business, staying alive, staying engaged, doing good things for a long period of time, all in a way that’s rooted in our values.

Staying in Business
Trying to do the right thing is great, but you have to be financially viable to succeed. To be a sustainable business, you need to stay in business, and to do it in a way that’s rewarding for all involved.

That hope and intent is in sharp conflict to the standard reality of the business world. Most businesses are not flourishing. While a handful do thrive, most, at best, survive; and the vast majority are in some stage of going out of business.

Paying the Full Price Up Front
This idea bleeds into a topic that nobody wants to talk about—charging enough to be financially viable. In the world of sustainable food production, there are people always arguing for lower prices. But the reality is that higher prices that allow healthy, sustainably minded businesses to do all the things we’re talking about are necessary. By contrast, driving prices down all the time, at all costs, is the model to avoid.

I think about this issue from a food perspective. Michael Pollan, author of Omnivore’s Dilemma, said it well in a recent New York Times Magazine essay, entitled, “Unhappy Meals. In his “principles of healthy eating, number 5 is, “Pay more, eat less. He explains that better food—measured by taste or nutritional quality—costs more, because it has been grown or raised less intensively and with more care. Those of us who can afford to eat well, should. Paying more for food well grown in good soils contributes not only to our health but also to the health of those who live downstream, and downwind, of the farms where it is grown.

Charging a fair price is fine, but retailers do need to manage their businesses wisely. I hear over and over again, stories of restaurants and retailers that were generally considered to be big “successes who, it later turns out, never made any money.

To the consumer, these businesses look to be just fine; and the prices they charge set a standard that others accept as a norm. But using these failing businesses as a benchmark is akin to setting one’s weight target by looking at fashion magazines; the model (sorry, pun intended) is not very likely to be sustainable. It survives for a bit, but eventually collapses in on itself in unhealthy ways. And, in the process, it leaves the world around it—staff, suppliers, customers and community—worse than when it arrived.

We must have the courage to charge what we need to charge to stay in business in a healthy way. Yet we still need to back up what we charge by delivering great experiences to those we interact with—staff, suppliers, community, shareholders and customers. We must back that up even further by using good business practices, careful costing, effective purchasing, etc.

That’s the crux of what sustainable business is all about. Staying in business in ways that sustain the lives and livelihoods of the people, producers and population of the community in which we’re located.

Community
At Zingerman’s, we want Ann Arbor to be better because of our work than it was when we arrived here. This is part of what’s commonly called “giving back to the community. On a tangible level, it could mean giving money, time or information to help those around us. Leaving the community a better place is also about somewhat less explicitly stated contributions. By giving great service, by sharing constructive business practices with staff and others, by just being nice to our neighbors, we make a difference.

Staying Put 
In his book, Kinds of Power, James Hillman wrote, “The best way, maybe the only way, to change a situation is to imagine, even to declare that you will stay where you are, in your locale, the rest of your life."

Earlier this year Ann Arborites unwrapped their afternoon newspapers to find out that the corporate headquarters of one of the largest employers in town had decided to close its local office. The decision came at the cost to the community of more than 2,000 jobs.

The closing reminded me of the import of simply being sustainable in the context of the community. This business was wooed here with tax breaks and city support. While I’m not criticizing the effort to attract good businesses from the outside, the idea of sustainability does make me think what might have been accomplished if that support had gone to local businesses or to organizations that had a commitment to commerce and community that extends beyond near-term economic opportunity.

By staying in business, we keep jobs in the community, we keep cash flowing through to other local businesses, we keep delivering quality experiences every day.

The Environment
The environment is a critical piece of keeping the world in which we live intact so that future generations can enjoy it. We’ve committed to do much more with ecologically sound work in food, fuels, carryout containers and other facets of our businesses. Working to more effectively recycle, to reduce unneeded energy use, etc. are all going to contribute in small but significant ways to our environmental efforts.

Food
We strive to apply the idea of “sustainable business to the food world—locally, nationally and globally. The more we can demonstrate that everyone really can taste the difference between great flavor and so-so stuff, that most consumers do care about quality and are willing to pay what it takes to get it, the more we encourage like-minded businesses to go out and do good business in their communities, the better for all. And the more we can align sustainable production with great flavor, the better for everyone.

There are dozens of good resources that can shed light on the benefits of local agriculture, traditional farming techniques, sustainable seafood sources, humanely raised and more flavorful meat, etc. Supporting suppliers who share these values builds a solid foundation for positive work in the food community, around the country and the world. That support can come in the context of cultivating relationships, sharing techniques, being willing to pay the higher price that sustainable and more flavorful food usually carries, sticking with new suppliers when they’re struggling, providing insight and being patient when we’re not fully satisfied in the short term so that we can get to the win-win solutions that will benefit all involved.

The People We Work With
This concept of sustainability means that the lives of the people who work in our organization are going to be better when they leave us than when they arrived. I hope this is true whether they work at Zingerman’s for a three-week stint to help at the holidays or for 20-plus years of partnership. In small but meaningful ways, we share with them the tools/opportunity to be in a richer, more rewarding place. How do we make that happen? It’s simply by giving our staff the chance to participate in, and contribute to, a sustainable business. By living our guiding principles, treating others with care and consideration, and being actively committed to the success of those around us, we’re showing everyone who comes to work here that a business can be a positive force in the lives of those who are part of it. To help people see that work can be fun, something you look forward to, not something you dread.

We also impact people’s lives positively through the use of what we refer to as, systemic approaches to what we do every day that help each of us be more successful. By simply teaching and modeling ways to run constructive meetings, effectively manage one’s money, handle conflict resolution, give great service, appreciate the nuances of food and life, we share tools that will help our staff create, model and teach positive things wherever they may go. In a more conventional sense, there’s also the idea of providing benefits at a level that helps people lead productive lives—health care, discounts, employee assistance programs, allowing for flex time, creative non-financial benefits, child care, scholarships, etc. These do make a difference in helping people manage their lives in good ways.

Balancing the Near Term with Long Term
Big business often responds to near-term pressures, to deliver short-term results at a negative cost that comes due much later. But we can get both positive short sustainability—i.e., stay in business—while still driving hard to create long-term benefits. The two are often in conflict, but they can be brought together. The idea of sustainability as a business is to embrace the struggle and find ways to do both.

Consider what sustainably minded farmers are doing: designing for diversity in the field, to meet near-term needs while still working with a positive long-term future in mind. We want to use our power and authority wisely and judiciously, in much the same way that sustainable producers limit their inputs. We want to stay true to our values, not just react to near-term market pressures. And throughout, we want to be respectful of what nature has given us while still shaping a path of our own choosing.

Despite the “wisdom of agribusiness experts, evidence is everywhere that farmers who do a good job growing sustainably are able to attain solid, steady financial success that’s still in synch with their values and supportive of their community. What they’ve demonstrated is that they can make farming viable over the long haul and still pay the bills today. That works in business too.

Getting Good with Gray
All this stuff comes at us every day, every hour, only in shades of gray.

We are constantly faced with difficult business decisions; is it better to get so-so local mass-market milk or to ship better tasting, sustainably produced dairy from 500 miles away? Is it more productive to forego certain foods that don’t grow here in the winter, or to support native economies in warmer climates that are working to find ways to make their own lives viable? Is it more desirable to stay local, or to spread the positive energy and word more aggressively by opening all over the country as others have?

Anyone working toward this sort of sustainability in business is going to come to good—if ever imperfect—answers. Organizations that are honestly trying to do the right thing will make a positive difference.

In her novel Eva Luna, Isabel Allende wrote, “I just do what I can. Reality is a jumble we can’t always measure or decipher, because everything is happening at the same time . . . I try to open a path through the maze, to put a little order in the chaos, to make life more bearable.

This business sustainability concept runs counter to much of the business world. But our vision here is to fight that tide, to stay in business in positive ways; to still be here, contributing, improving, enriching and enhancing the people, the produce and the world around us for many years to come. If we can make sustainability work in every sense of the word—and I think we can—the world around us wins in most every way imaginable.