Question

Entrepreneurs must demonstrate a strong, genuine, continuous, and personal commitment to a cause-related mission and action plan. Why was Stonyfield started as a company? What roles did the two entrepreneurs play in taking Stonyfield to the company that it is today?

Answer 1

Answer ) In 1979, Samuel Kaymen, a former engineer and self-declared “back-to-the land” hippie, and his wife Louise started the Rural Education Center (TREC) in Wilton, New Hampshire. TREC was a nonprofit organization devoted to teaching homesteading skills with an emphasis on organic food production. The Kaymen’s founded TREC to help turn around the struggling New England dairy industry and halt the decline of family farms and as a response to the rising industrialization of the food system. Samuel, one of the country’s early authorities on organic agriculture, had perfected a recipe for an organic yogurt the previous year. His organic yogurt tasted better than other yogurts available on the market and would form the basis for the Stonyfield brand.

In 1982, Gary Hirshberg was recruited by Samuel for the TREC’s board of trustees to help generate financial support. Gary had previously served as a water-pumping windmill specialist and also worked for the Massachusetts-based nonprofit ecological advocacy group known as the New Alchemy Institute, which focused on organic agriculture and renewable energy systems. When Gary joined, the center and farm were deep in debt and close to bankruptcy. Under Gary’s leadership, TREC decided to expand farming at the center and to produce organic yogurt to sell to support the operations of the center.

Gary said of the decision to choose to enter the yogurt business, “Samuel made this really incredible yogurt. It was really the best yogurt I had ever eaten. So we were all sitting around talking about how we were going to make some money and somebody said ‘why don’t we sell the yogurt?’ We all kind of laughed. He also made wonderful beer and pickles, but eventually we decided to go with the yogurt.

In 1982, Gary Hirshberg, while serving as the executive director for the nonprofit the New Alchemy Institute, went to visit the recently opened Disney World’s Epcot Center. This experience changed how Gary viewed influencing the general public on environmental issues. At Epcot Center, he observed twenty-five thousand people walking through the Kraft artificial cheese exhibit, which featured a technologically driven view of farming including test tube–based plants (a stark contrast to the ecologically driven agriculture solutions taught at the New Alchemy Institute).

Gary was struck that the daily attendance at the Kraft exhibit was equal to the annual visits at the New Alchemy Institute. This experience led Hirshberg to change his view on environmental education and ultimately, he concluded that, for him personally, he would be more effective in spreading environmental awareness in a business context. The incorporation of Stonyfield Farm would provide him the opportunity to test this in the real world.

Within the first year, Gary and Samuel decided to close TREC, which ironically the business was originally meant to support, and focus their energies on building a socially driven business—selling healthy food that was healthfully produced. For the first seven years, Samuel and Gary’s families lived on-site in adjacent apartments in the 1852 Wilton farmhouse. The house and barn provided office space and the “Yogurt Works” (the manufacturing facility).

Making their social mission a reality while building a profitable business proved to be extremely challenging for the two social entrepreneurs and their families. But with the deep and passionate commitments of the two founders working long hours, family support, and extensive grassroots marketing, the fledging company was able to survive.

Like many entrepreneurial start-ups, the business was built with a lot of family equity, the two families did most of the work themselves—milking cows, making yogurt, calling customers, and delivering the yogurt.

Stonyfield thrived on innovation. It constantly looked for innovative products that would drive sales and bottom line profit. It was one of the first companies to exploit market segmentation for its yogurt product line. Stonyfield segmented its markets by age, gender, demographics, and psychographic factors. It educated customers on the impact of its products and company actions on people’s health and the environment.

For example, Stonyfield product categories have included yogurts formulated specifically for women, infants (YoBaby), and kids (Planet Protectors low-fat yogurt). The company has introduced new yogurt recipes and limited edition yogurts, such as low-fat eggnog yogurt, breakfast and desert yogurts, and frozen yogurts. Through its innovative marketing and product development, Stonyfield has been able to be an industry leader in taking yogurt from a side dish, consumed by a small number of health food “junkies,” to an everyday food for the American diet.