Soda Pop & Ice Cream: Waxing Philosophical About
Business Ethics

July 6, 2006

I stumbled upon a fascinating story yesterday while perusing CNN.com and its details occupied a large portion of my thoughts last evening. I read the story several times and it proved fertile ground for an intriguing discussion with my husband. I’d like to share part of the story with you. From CNN:

“Three people have been arrested and charged with stealing confidential information about drink recipes from The Coca-Cola Co. and trying to sell it to rival PepsiCo Inc., federal prosecutors said Wednesday. According to prosecutors, on May 19, PepsiCo — based in Purchase, New York — provided Coke with a copy of a letter mailed to PepsiCo in an official Coca-Cola business envelope.

The letter, postmarked from the Bronx in New York, was from an individual identifying himself as ‘Dirk,’ who claimed to be employed at a high level with Coca-Cola and offered ‘very detailed and confidential information.’ Pepsi spokesman Dave DeCecco said his company did what any responsible company would do in cooperating with Coke and the investigation. ‘Competition can sometimes be fierce, but also must be fair and legal,’ DeCecco said.”

Man, someone give Pepsi a high-five! Ponder the significance of that decision for a moment: Pepsi and Cocoa-Cola are giants in American industry. According to sales figures I unearthed last night after reading the article, Pepsi revenues topped $466 million in 2005 while Coca-Cola raked in a mammoth $23 billion. The stakes are high and each company employs thousands of people who depend on the corporation for their livelihood. Pepsi is the clear underdog in this fiercely competitive market; yet, when presented with trade secrets that could (at least in the short term) impact Coca Cola’s lead, Pepsi refused to take the bait, opting instead to turn the evidence over to the FBI. There’s a huge lesson in that somewhere.

Competition is a fact of life in any business. As a small business owner, I know this all too well. But I am continually impressed when I learn of companies who take the high road; it seems to occur less and less frequently in modern business and I am enamored with businesses that make ethical choices when faced with strategic decisions. It’s not easy, but oh-so-worth it. For instance, many entrepreneurs draw inspiration from the same pool. The difference, I think, is that some people visit the pool, chat casually with other visitors and take a dip every now and then, while others seem intent on visiting everyday, drinking in as much water as they can and then stealing the pool towels as they go.

Create an innovative beauty product and I can point out someone, somewhere with a cheap knockoff within a few months. The phenomenon, unfortunately, isn’t unique to the beauty industry. Even the Oscar dresses are pilfered each season and, in a matter of two or three weeks, the imitations have wormed their way onto department store racks across the country. In consumers’ quest for bigger/better/faster/cheaper, we’ve created a sort of “Anything Goes” atmosphere. We’ll sacrifice American jobs to save 15 cents on a jar of pickles. We’ll abandon small businesses in favor of 50,000 square foot shopping monstrosities where we can pick up our groceries and clothing, have our hair styled, our eyes checked and our nails polished before refilling our prescriptions and posing the kids for their holiday portraits- all under one roof.

I’m not calling out to you from my Ivory Tower Of Innocence. I struggle with this myself; I have to continually put myself in check and make a conscientious effort to analyze my family’s spending patterns. But we’ve made a firm “No Wal-Mart” rule at my house… I’ll pay a bit more and drive a bit farther to protect small businesses. I buy organic whenever I can, knowing that the small farmer is counting on my family to feed his. This year I have redoubled my efforts to critically assess each new Bella Luccè product, in order to satisfy myself that it’s a creation born from my company’s creative vision rather than someone else’s research and development. I’ve found that I stand taller when talking about my products and sleep better at night when I know that the Dagoba chocolate sugar scrub, Seaweed salt scrub, etc. are ours and ours alone.

The desire to run an ethical company filters through practically every decision I make, from what product packaging to use, to which ingredients to include and how we go about sourcing them, to which companies to partner with, to the wages and treatment of my staff. Once you begin to pull back and analyze the larger picture, the ramifications of each “baby step” you take are at once both magnified and clarified. I affectionately refer to Bella Luccè as my third child. And, like any child, she isn’t perfect. But as we grow and I refine my vision, I strive to bathe my company in the type of ethics that would make my parents, and one day will make my real-life children, proud. I have both gained and lost gobs of money and a margin of respect by taking various stances within the beauty industry. And I am at peace with that…we work damn hard and grow wiser with each lesson learned as the company matures.

With all these thoughts swirling in my head after dinner last night, I retired to bed, grabbing my most recent copy of The Healing Arts Guide for a bit of reading. The magazine was profiling “responsible capitalists” and included an interview with Walt Freese, CEO of Ben & Jerry’s (tell me now, would that not be THE single greatest job on earth?). With the Pepsi story fresh on my mind, something Mr. Freese said struck a chord:

“…It all comes down to votes- how people vote with their dollars…if we want to end the business practice of externalizing environmental and social costs, then we vote for change.” He also encourages consumers to: ” [See] purchasing as a social and environmental act, not just an economic one. The deeper truth is that all of your choices, including what companies we support with our business, should be seen as an expression of our values.”

That last bit was so succulent that I chewed on it for several minutes. Ben & Jerry’s doesn’t just talk the talk; they’re equally adept at walking the walk, with a commitment to responsible sourcing of ingredients, their focus on environmental concerns, and their desire to create a workplace which both celebrates and supports their employees. I applaud Mr. Freese and his company- the world would be a better place if all businesses, both large and small, focused more on their ethics and consumers followed suit by voting with their dollars.

As for me, I’ll be drinking a lot more Pepsi and indulging in copious amounts of Ben & Jerry’s this summer. It’s a dirty job, but someone has to do it. I hope you’ll join me and that this “waxing philosophical” has given you a nibble of food for thought.