Friday, October 6, 2017

Stonyfield's Struggles and Successes as a Social Business

Yesterday, I listened to How I Built This' podcast on Gary Hirshberg of Stonyfield Yogurt.

I assume most readers are familiar with Stonyfield Yogurt, and perhaps a bit of its story, but I think the podcast goes far beyond what is generally known. 

The main thing that stuck out in the podcast was how many struggles Stonyfield faced. Most of the companies featured on How I Built This struggle for a few months or even a few years, but Stonyfield seemed to face more than its share of challenges for well over a decade. The yogurt seemed pretty popular early on, but production, distribution, and cash flow problems haunted them. Stonyfield also had a tough time sticking with their organic commitment, abandoning organic for a few years when they outsourced production and couldn't convince the farmers to follow their practices. With friends and family members' patient investing (including Gary's mother and mother-in-law), Stonyfield finally found financial success after raising money for its own production facility, readopting organic, and finding broader distribution.

After about 20 years, Stonyfield sold the vast majority of the company to large multinational Group Danone. Gary explained that some investors were looking for liquidity and that he felt it was time to pay them back for their commitment. Gary was able to negotiate some control rights for himself (unspecified in the podcast) and stayed on as chairman. While this sale was a big payday for investors, it is unclear how much of the original commitment to the environment and community remained. Also, the podcast did not mention that Danone announced, a few months ago, that it would sell Stonyfield

Personally, I am a fan of Stonyfield's yogurt and it will be interesting to follow their story under new ownership. I also think students and faculty members could benefit from listening to stories like this to remind us that success is rarely easy and quick. 

http://lawprofessors.typepad.com/business_law/2017/10/stonyfields-struggles-and-successes-as-a-social-business.html

Business Associations, Corporate Governance, Corporations, CSR, Current Affairs, Entrepreneurship, Haskell Murray, Shareholders, Social Enterprise | Permalink

Comments

So glad you posted on this, Haskell. I love Stonyfield yogurt--have for years--and a friend/former colleague put some money in early on. I will make time to listen to the podcast sometime soon.

Posted by: joanheminway | Oct 8, 2017 3:21:46 PM

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