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Exceptional January-June 2012 - Natural Selection - Charles Sweat - EY - United States

Exceptional

Natural Selection: Charles Sweat

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"You have to find your values, what your company stands for."

To Charlie Sweat, organic food is a no-brainer.

The CEO of California-based Earthbound Farm believes it is good for your health and the environment and, if he can make it affordable, why wouldn't everyone buy it?

"If organic food tastes great and doesn't cost a huge premium over non-organic food, why not? D'uh!" he says with a smile. "That's how we talk about it in our company: d'uh!" So it makes sense that he'd apply the same "why not?" logic to every aspect of the business.

"You're always going to be tempted to take the easy road," he explains, "but I have found that you really have to find your values, what your company stands for." Earthbound Farm was founded in 1984 by Manhattan transplants Myra and Drew Goodman, whose first farm was their 2.5-acre backyard in Carmel Valley.

After meeting Myra on vacation in 1998, Sweat, whose background is in finance, joined the company as CFO. In 2009, he became CEO. During his time at Earthbound, revenues have grown from US$50m to US$475m, making it the world's largest grower of organic produce.

This is in spite of a well-documented crisis in 2006, when spinach tainted with E. coli was traced back to an Earthbound Farm facility. Two hundred people around the US fell ill, and three died. Sweat's initial reaction was shock.

"Here we were, a company producing healthy food for people, and we had a product come through our facility that was linked to this outbreak. You'd better have your values in line throughout the company of what your business means and how you deal with that."

He met — and shed tears — with the families. "But we also stepped back and asked, 'How could something like this happen?' We took a tragic event, looked at our values, and figured out how to do things even better. We're now the only produce company that tests all its inbound products and all its finished goods on a daily basis, 24/7."

This value system includes an employee-focused culture. "I was always a big believer that you could create an environment where employees are valued," Sweat explains, "where you can watch them reach their potential, rather than be stifled."

This starts with providing health insurance for all employees, who can also nominate and petition for their favorite charities each month. Earthbound Farm now supports more than 350 of them. At any given time, five or ten company kids are being supported through college.

Sustainability is another goal, and the company has built a water reclamation system and a recycling plant to convert plastic bottles into salad containers. It also uses 100% recycled paper, plows green waste back into fields and uses fluorescent lighting in its buildings.

"One area I haven't solved yet is energy use," Sweat admits. "I run 300,000 sq. ft. of refrigerated building, 24/7, 365. I use a lot of electricity and I've yet to solve it economically." For now, the company is offsetting its power use by planting 50,000 trees a year.

For Sweat, business is all about challenging conventional wisdom and being a catalyst for positive change. And he's happy to serve as a role model.

"If the world would adopt more eco-friendly aspects in its businesses," he says, "even if it brought on more competition, I would like that."



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