If you shop at Whole Foods, or pay attention to green products, you probably know Seventh Generation. The Burlington, Vermont-based company makes natural, non-toxic products for the home and, more recently, personal care products, too–paper towels, toilet paper, laundry detergent, household cleaners, diapers. Given the current frenzy for all things green, you won’t be surprised to hear that sales are growing at 30 to 40% a year. But you probably didn’t know that it took the company more than a decade to make its first profit.
Earlier today, I did an hour-long conference call/interview with Jeffrey Hollender, the company’s founder and CEO, a business leader I’ve long admired. (When we first met years ago, I learned that Jeff and my wife, Karen Schneider, were high school classmates at Riverdale Country Day School in New York.) I’m hosting a series of calls this spring around the theme of “Leadership and CSR” for Net Impact, a nonprofit group of 10,000 business students and young business people whose mission is to use business to improve the world. Great organization. I believe they will eventually post an audio/podcast of the calls on their website.
Talking to Jeff this time, what impressed me was his persistence. He started Seventh Generation in 1988 and didn’t make any money, or really grow sales all that much, until about 2000. (Sales were less than $10 million until then.) His products were confined to smallish natural food stores. He took the company public in 1993, sold stock for $5, then took it private again in 1999 when the share price fell below a buck. It can’t have been easy.
“We were, in many respects, way ahead of our time,” he said.
What kept him from giving up? Purpose and passion. “If there’s no passion, it’s very tough to keep going,” he said. “We didn’t want to become a statistic for all of the naysayers.”
Like many other makers of green and organic products, Seventh Generation saw its sales take off with the growth of Whole Foods. Now, the products are sold in traditional grocery stores and Target as well–but not in Wal-Mart. If you want to know why, check out Jeff’s excellent blog, the Inspired Protagonist.
The challenge for Seventh Generation today is to manage growth, and keep raising the bar for its products and practices. Sales are now close to $100 million a year, but as mainstream companies go green, Hollender has to keep moving to stay ahead. “We have to be more innovative today than we ever have been before,” he says. “We have to be much quicker.” He lamented the fact that Unilever’s Small and Mighty All, with an assist from Wal-Mart, found a way to shrink its packaging before Seventh Generation did.
By the way, Jeff and another Riverdale grad, Stephen Fenichell, have written an excellent business book called What Matters Most: How A Small Group of Pioneers is Teaching Social Responsibility to Big Business, and Why Big Business is Listening (Basic Books, 2004). It’s remarkable when you realize the impact that entrepreneurs like Jeff, Paul Hawken, Ben Cohen, Gary Hirschberg of Stonyfield Yogurt and Yvon Chouinard of Patagonia have had on the FORTUNE 500. They were, in fact, ahead of their time.