Up until recently, entrepreneurs and brands could check this box with something as basic as ‘giving 1% of sales’ to a feel-good cause, selecting recyclable packaging or by just paying farmers’ a fair price. And while every little bit helps, consumers increasingly want more.
According to the New York City-based partner agency Beyond Brands, today consumers want to support companies that are pursuing more than just the basic triple bottom line of people, planet and profit to also include passion and purpose.
In this episode of FoodNavigator-USA’s Investing in the Future of Food, two leaders from Beyond Brands talk about how the rise of conscious consumerism and conscious capitalism are reshaping the competitive landscape and what it takes for startups to meet modern consumers’ higher standards.
Beyond the triple bottom line to the quintuple bottom line
In the 1990s, the idea of the triple bottom line emerged and companies and consumers alike embraced the idea that business could do more than generate profits, and could also benefit the planet and people.
And while Schnell acknowledges that these are “three great guideposts,” he also notes it is no longer enough in the current competitive environment. Now, he says, entrepreneurs need to think about the quintuple bottom line.
At Beyond Brands “we talk about passion, purpose, people, planet and prosperity,” and “we try to weave those through as guideposts in some of the mentoring and business strategy we do – especially when forming a new company or a new brand from scratch,” he said.
While striving to meet two more ‘guideposts’ is harder than just meeting three, Park notes that a new company or brand launching today cannot exist unless it meets all five.
“The consumer today really wants to know where the products come from, they want to be able to feel like they are giving back, and they are willing to pay a premium price for it,” she said.
So, what does it take to meet this higher standard? According to Schnell and Park, passion is the first key.
“Every business that is created must first start with passion. Extreme, burning passion from the founder or co-founder or the family that started the company,” Schnell said. He explained that might come from a mission, a personal story or need to create a product or a family recipe that has been handed down from generation to generation.
By weaving passion into a business, entrepreneurs will create more than a ‘widget’ – they will create a brand to which consumers are loyal and which has more flexibility in terms of future product development, Park added.
Establishing a purpose that serves people
The next ‘p’ is purpose, or the reason consumers will buy a product over and over beyond wanting to support an entrepreneur’s passion.
“A lot of purpose [now] is about healthier living and a healthier lifestyle. That seems to resonate” with people more broadly beyond the founder’s immediate circle, Park said.
The third ‘p’ in Beyond Brands’ quintuple bottom line business values is people – without which Park explains there would be no company and no consumer. Drawing on her almost 30 years working with Starbucks, she explains why businesses must support people.
“At Starbucks, what we learned is, you always treat people right, and if you are good to your people, then your consumers will come back … [and] you customers will stay loyal to you and spend more money,” she said.
Similarly, if a company supports the people who work for it, those employees are more likely to stay – reducing the long term costs of recruiting and training new staff, she said.
Supporting the planet
The fourth ‘p’ in Beyond Brands’ business model stands for the planet and draws on the original triple bottom line.
Consumers are worried about the environment and what the planet will be like for future generations, and as such they are buying products that supporting the future they want to see, Park said.
And the last ‘p,’ but certainly not the least is profit – or as Beyond Brands likes to think of it: prosperity.
“We want businesses to be prosperous because if the business is prosperous then all the cylinders are firing, shareholders are making money, business is thriving and hopefully the people in the company are being taken care of with the good living, if not a great living, and ultimately the community around that company” will also thrive, Schnell said.
To ensure prosperity, he recommends companies approach the idea of ‘winning’ not like they would a poker game where one person takes all, but rather as a partnership where each player supports the others to lift the whole group higher.
Beyond Brands does this by being transparent about what they need to be make a profit, so what is their margin, and then asking the others at the table what they need to make a profit. From there, they find a solution that works for both parties.
“The third win is the one that is the wild card. Now, it may be the planet, it may be the consumer, it may be some charitable organization,” but it is whatever both business partners decide they can do to ‘do good’ once their basic needs are met, Schnell said.
Reaching these guideposts
Knowing what each of the five guideposts are in the quintuple bottom line is only the first step, both Schnell and Park note.
To actually meet each element is hard, but they note that Beyond Brands’ 18 partners are eager to help by drawing on each of their 10 to 20 years of experience in the natural products industry serving at the C level as well as in entrepreneurial positions.
Schnell notes: “What really motivates our 18 partners is having a helping hand in helping nurture some of these companies along” and creating a “best in class experience” that will benefit the world at large.