Purpose At Work: How Ripple Foods Disrupts To Drive Growth and Impact
Business leaders that innovate around impact can disrupt categories, gain market share and scale growth. That’s certainly the case for Adam Lowry, the former co founder of Method and is now executive chairman of Ripple Foods. I had the opportunity to speak with him about how he builds and scales companies through a ‘Lead With We’ mindset.
Simon Mainwaring: Why do you launch purposeful businesses?
Adam Lowry: I’ve always enjoyed the outdoors. I’ve been racing small sailboats since I was a kid. The interconnectedness of people with nature inspired in me a desire to make those things better.
SM: Did you plan on building one responsible business after another?
AL: No, I discovered it as I went along. I always ask, ‘What do I want to do next?’ When I came out of undergrad, I was really into environmental science. I got a job at the Carnegie Institution for Science as a climate scientist working to support environmental policies. That led to frustration and a different path.
SM: How did you find the right co-founder for Method?
AL: I started Method with a guy named Eric Ryan. We went to high school together, but weren’t close friends. Look for somebody who’s going to work as hard as you and has as much passion. Find someone with a skill set that’s different and complimentary to your own. Emotional intelligence, maturity and integrity become increasingly important as the business grows.
SM: What insight would you share from selling Method?
AL: It went differently than I imagined. It was more about how we affected peoples’ lives. Business can simultaneously create positive, social and environmental change and great financial returns.
SM: You’re a founding member of the B Corp movement. Why was that important?
AL: The founders, Jay Coen Gilbert and Park Houlahan, approached me. They asked how Method governs in a socially and environmentally responsible way when corporate forums require you to prioritize financial returns? I agreed to use Method as a guinea pig to start the movement.
SM: How was social and environmental impact built into the business model?
AL: I realized it’s pointless to make green products for green people. We need to make green products for everybody. It comes down to the design of the business and how you run it. If you have to trade off between your financial and environmental bottom line, you haven’t found the right solution.
SM: Were there difficult moments where it was hard to honor growth and environmental goals?
AL: Sure. The key is not to get hung up on any one decision. Sometimes one bottom line has to win, but what is the aggregate? For example, In the early days of Ripple Foods our protein source was not available in the United States. We had to buy it from France to get the business going and demonstrate we could create a better product. Over time, we replaced that and eliminated the trade off.
SM: How did you decide to sell and who was the right partner?
AL: There are four important things when selling a business. One, will the business be able to grow better? Two, will it be able to deepen and enhance its social and environmental mission? Three, is it good for employees? Four, does the price make sense to shareholders?
We built a factory in Chicago that’s one of two LEED Platinum certified factories in the United States. It’s renewably powered, water neutral and has the largest rooftop greenhouse in the world. It’s amazing. That was built after we sold the company because we met those four conditions. We were able to create hundreds of green manufacturing jobs in a place where people desperately needed work. You don’t have to sell out when you sell.
SM: How did you transition after selling Method?
AL: I asked myself, “How can I do the most good through business before I retire? Is it best for me to stick with this thing that I’ve created that’s large and growing and successful, or do I take a chance and try another thing?’ I decided to do Option B largely because the impacts of our food system are even greater than in household care.
SM: Is there anything with Method you would have done differently?
AL: Tons. The biggest mistake we made — Eric and I wrote a book about this called The Method Method — was that we overextended the business. We had a successful formula of how we were bringing consumers in. Retailers were excited about how we were reinventing categories. They asked us to reinvent lots of different categories across the store. We did too many of them and we had to lay off about a third of our staff. There’s a difference between smart growth and growth for growth’s sake.
SM: What made you look at the dairy category and think you could take it on?
AL: I looked for white space relative to the consumer opportunity. With Ripple Foods, it was the fact that there were terrible dairy alternatives. None of them has the rich and creamy milk taste. They’re thin and watery and most lack protein entirely, which is the number one nutritional benefit of dairy.
We developed a technology that others don’t have that enables us to create a nutritious dairy alternative that doesn’t taste the way a lot of plant based products do.
SM: How did you come across the pea-based alternative and that technology?
AL: It was deliberate. Plant proteins taste like plants. It’s hard to get rid of those flavors. The insight was that protein itself is entirely tasteless. So, if you caught pure protein from plants, there’s no reason for it to taste like plants. My co-founder is a chemical engineer. He developed a process to make the purest protein from plants. Because of that, it’s flavorless. You can put a lot of it in a dairy alternative and make it taste a lot more like milk.
SM: Why did you decide to call the company Ripple Foods?
AL: Method doesn’t immediately say ‘cleaning products.’ The brand is more about technique than power. Ripple is similar. It’s about the ripple effect. It’s about the little choices we make every day and how that makes us healthier and the world a little bit better. Contrast that with the category, every other brand has an ingredient in the brand name. Our name isn’t ‘Pilk.’
SM: How do you compete with other brands?
AL: We make the most nutritious and delicious plant-based products on the market. Just go long-term. What’s going to be important in food categories is taste and nutrition.
SM: Does pea protein allow you to compete on price?
AL: It’s the second cheapest source of plant protein. We could be cheaper if we used soy, but we chose not to because it has a bad reputation, especially in the United States.
SM: What would you say to get your first shelf space?
AL: Don’t take my word for it. Try it.
SM: So what drove Ripple’s success?
AL: Taste and protein. If you have a better product, all the other stuff becomes a bit easier.
SM: How do you show people the environmental and health benefits?
AL: We have a counter on ripplefoods.com that shows the amounts of water savings, greenhouse gas savings, reduced sugar consumption, increased protein intake, reduced plastic use that results from people buying Ripple in real time. We’re giving credit to our consumers, for their ripple effect.
SM: How do you think about marketing?
AL: The most important thing in marketing is authenticity. It’s a relationship with a person. When your products are highly differentiated you have more opportunity to be authentic in how you talk with your consumers. That’s what we’re trying to go after.
We don’t focus much on education. It’s more about inspiration. It’s about being delightful. People see a cool product, then read the back of the label and go to the website. It’s less forward and demonstrates to people that their choices matter and that they don’t have to settle.
SM: Did you have to reengineer the supply chain and innovate products?
AL: It’s a requirement to use business — companies like Method and Ripple Foods — to try to change the industries that they compete within. A great example would be concentrated laundry detergent. Method pioneered that in 2004. Most of that category is now far more concentrated than it was 15 or 20 years ago. That’s how you start to change the monopolies and make real change. Proctor and Gamble has to copy us instead of the other way around. More importantly, you’re changing consumers’ minds about what they can expect from the things that they buy every day.
SM: Has there been ups and downs? Have you had pushback from the dairy industry?
AL: A lot of ups and downs. There’ve been competitive attacks on our shelf space. We’ve been sued by almost everybody.
SM: How do you think through those challenges?
AL: It depends on the situation. Funny story. Back in the day, Clorox challenged Method because they had a Greenworks brand where they used a picture of a daisy on their label. We had a little image of a daisy on a bottle of Method. They sent us a cease and desist letter. We decided to publish it and we created a micro site called votedaisy.com. We challenged America to decide who should own the daisy, Clorox, Method or Mother Nature. In other situations it’s more about making sure it doesn’t strain your resources and you keep your team focused. Getting sued by a mega corporation is actually a positive sign. They wouldn’t sue us if they weren’t threatened by us.
SM: How did you choose your tone of voice? Does it change over time?
AL: It’s part philosophy and part strategy. The philosophy I have is that doing good should be part of the quality of the product and the way the business does business. It shouldn’t be the differentiating factor of that brand versus another brand. If we’re successful, all brands are going to adopt these mannerisms. Strategically, sustainability is not what sells. We show people you can have awesome products that can also be sustainable.
SM: When you think about competition, do you think about sustainability differently?
AL: If you’ve made sustainability the new competitive battleground, then you’re playing to your own strengths. You have to be good at that stuff or you’re not going to succeed, but that’s actually good because that’s where competition will drive you to get better and innovate further.
SM: Is there a dark day that stands out?
AL: Last year the special protein we made was creating lumpiness in our milk products. It wasn’t a safety issue but it was unpleasant. By the time you discover something like that, the scale is pretty large.
SM: How do you keep your culture together?
AL: At Method, we said culture was the secret sauce, but none of us had the recipe. The book we wrote was all about the process of creating the cultural code after the fact.
There are values, behaviors and rituals. Values are what we believe in. Behaviors are how we act. Rituals are those little things that you do every day in a business that reinforce that collective code.
At Ripple, we’ve done it as spectrums. For example, we talk about accountability and freedom as a spectrum. One earns freedom to work the way they want through delivering results.
SM: What would you say to companies on being intentional about their culture?
AL: It’s important early on. It’s also important to leave space to mine the culture from within. Don’t make it prescriptive. It has to be creative. Work with your team on defining this. Get a handful of well-suited people within the organization. Hold meetings to mine what people think culture means. Encourage the founders to give some inspiration. Then there’s a push and pull to decide how to put that on paper in terms of what we value and how we behave and how we practice those things.
SM: How do you measure success?
AL: We report our financial, social and environmental metrics. Our Benefit Corp status requires us to share that stuff every two years, but the Ripple Effect Counter on our website is updated monthly. It helps us quantify that. What gets measured gets done. It is a lot of work to build the infrastructure and have the capabilities as a team to do that. But once you do, you’re much better able to make decisions that are true and authentic to the brand, and don’t confuse people.
SM: How has being a B Corp added to your bottom line?
AL: It helps us attract and retain employees. It’s also directly benefited shareholders. When Method sold, it traded at a premium because of its authentic social and environmental outcomes. The acquiring company recognized the long-term potential of a reduction in both hard and soft costs that would come by using cheaper and more sustainable packaging materials compared with virgin plastics, for example.
SM: On your website, you allow regular people to invest via OurCrowd. How does that work?
AL: It’s a crowdsourcing financing platform. It’s allowed us to have a much broader set of investors, both geographically and in the broader finance spectrum. It’s created more relationships with people compared with raising money via a venture fund.
SM: What does the future of Ripple Foods look like?
AL: We’re going to focus on dairy alternative categories. Specifically, milk, cheese, yogurt and ice cream in North America. I recently put new senior members on to the leadership team with experience in multi-thousand employee companies and billion dollar brands. They’re going to help us scale. In the near future, it’s about shelf space and pricing and promos and that type of stuff. I’d say international opportunities will further develop in the next three to five years.
SM: How did you respond to COVID-19?
AL: We donated shelf-stable nutritional products to people on the front lines working all the time. From our business perspective, we’re essential because we make food. Aside from our lab employees, everybody’s working from home. It created some challenges from a retail standpoint but what it’s actually been good for our businesses in two areas. One, e-commerce and two, people are spending more time at home. They’re thinking more about their meals and their nutrition. Same store sales on our core items are up compared with last year.
SM: You’re working on something in the sugar space. Is there anything you can share?
AL: I started another company called Sugarbreak. We’re focused on reducing people’s consumption of sugar and helping with blood sugar management for diabetes and pre-diabetes. Our hero product is like a Listerine strip. You put it on your tongue and it freshens your breath. For about an hour after that, you cannot taste sugar. It tastes like you have sand in your mouth. We’ve got a couple other products that lower your blood sugar over time too.
SM: Any advice you’d give to entrepreneurs?
AL: Start with the consumer and think about them as a person. What are you providing to that person? Is it better in all of the traditional ways that they would evaluate that category or thing? If you create a better product that’s really differentiated than the rest, business gets a lot easier.