Since the beginning of commerce, companies have sought to make a profit, boost their revenues, and trim their expenses. Those tenets are as vital to business today as they were a century ago, being the means to staying afloat in a capital market.
But today, brands are increasingly thinking beyond the bottom line when they write their mission statement and evaluate their company’s success. Whether it’s championing the environment, advancing employee benefits, or improving consumers’ eating habits, these for-profit entities are using their businesses as vehicles for social change.
For many of these companies—including several restaurant chains—the line between what’s come to be known as “social entrepreneurship” and traditional philanthropy is a fine but important one.
“Traditional corporate philanthropy … is about what the corporation can do in a philanthropic way to benefit its customers and its community of customers, or even the global comunity that’s affected by the corporation,” says Marissa Duswalt, a nutritionist and lecturer at the Graduate School of Business at Stanford University who teaches a course on market opportunities related to food innovation, and who served as the associate director of former first lady Michelle Obama’s Let’s Move! initiative. “Social entrepreneurship is really about the problem that society is dealing with in a larger space. For the food space, there are so many social dilemmas that go beyond the scope of a single corporation.”
She adds that social entrepreneurship often takes a more creative, holistic approach in working toward these goals. Sometimes these actions might even fly in the face of conventional business wisdom.
For example, outdoor apparel retailer Patagonia has long worked to stem ecological degradation by using recycled materials and donating to grassroots environmental groups. It took that commitment to the next level on Black Friday in 2011, when the company ran a full-page ad in the New York Times imploring customers not to buy the fleece jacket pictured in the spread. The ad explained the environmental cost of such a product and reminded readers of Patagonia’s promise to recycle customers’ worn-out apparel and send them new ones.
Years later, the brand continues to challenge consumerism (even though its whole business model relies on it). This past Black Friday, the brand saw a record-breaking $10 million in sales and donated all of the proceeds to charity.
Some restaurant concepts are following in the footsteps of brands like Patagonia with their own creative programs that lead to social change.
Established just five years after Patagonia, in 1978, Vermont-based Ben & Jerry’s has also been committed to the greater good from the beginning.
“Increasingly, we’re seeing people aligning their purchasing behavior—especially younger people, the millennial generation—with companies that share a set of values with them,” says Jay Tandan, assistant global activism manager for Ben & Jerry’s. He cites Patagonia as another retail brand that understands cofounder Jerry Greenfield’s philosophy: The strongest bonds are forged through shared values.
Ben & Jerry’s is outspoken about its social entrepreneurship. The brand takes advantage of its national exposure and strong fan base to address a number of timely issues, including climate change, marriage equality, and, more recently, voter rights.
Tandan concedes that sometimes the company is “a little all over the place” when it comes to its activism efforts, but he adds that working at the local, regional, national, and even global level grants the brand substantial bandwidth. Thanks to some 300-plus shops across the U.S., Ben & Jerry’s has operators on the ground who can use their stores as community-organizing hubs.
“We really do encourage our scoop shops to get out in the community and do what they can,” Tandan says. “Folks who are in these industries and have a presence all across the country have a really great opportunity to continue to be involved in their community.”
A recent example of regional action with support from the larger Ben & Jerry’s team can be found in North Carolina. The company spent much of 2016 campaigning there, educating about voter rights in an effort to restore some of the protections that a statewide law had restricted. Although a federal appeals court struck down the law last summer, Tandan says, the brand will maintain its presence in the state as controversy around gerrymandering continues.
In terms of social entrepreneurship—or in this case, social activism—Ben & Jerry’s stands in a league of its own. Not only does it have several irons in the fire, but the brand also seems to relish starting dialogues around hot-button issues. It was one of the first major companies to support marriage equality in 2009; in 2015, it joined other businesses (including the candy company Mars) in appealing for a tax on carbon emissions at the U.N. Climate Change Conference; and in a follow-up move last year, it released an “Endangered Pints” list of about two-dozen flavors that could disappear because of ingredient shortages.
Tandan points out that if a topic weren’t contentious, Ben & Jerry’s wouldn’t have to discuss it.
“A lot of people see this space as something that is a little scary to step out into. It seems a little risky as a business to get engaged on issues that matter,” he says. “At Ben & Jerry’s, we lean into controversy rather than shying away from controversy.”
The power lifter
While Ben & Jerry’s is more than upfront about the kind of impact it wishes to have, others go for a subtler approach. Herban Quality Eats might even call its mission to change eating habits a sleight of hand.
Sure, the Philadelphia fast casual 2.0’s website says it wants to “make nutritious taste delicious,” but it also acknowledges that “healthy” often feels like a chore rather than a pleasure. As a result, Herban Quality avoids the word in its store and marketing as much as possible.
“We rarely use the term healthy; I think it scares people away. When people look in, we don’t want them to think this is some weird vegan spot or a weird salad place, so we just try to push it as more sustainable and locally sourced,” says chef Chris Paul. “It’s kind of tricking you into it.”
Paul attended Drexel University before going on to work in the kitchens of several restaurants and later doing his own pop-up, catering, and consulting work. His business partners, Amir Fardshisheh and Kalefe Wright, earned their MBAs at Wharton; the former worked at Chipotle and the latter at Shake Shack for hands-on experience and a behind-the-scenes look at running a fast casual.
Paul started as a consultant before becoming a full partner. Even before Herban Quality, the three men were self-professed fitness fiends; Paul says he’s been working out since elementary school. From their perspective, a wholesome diet was a necessary complement to exercise. The brand’s website even has a stick-figure illustration of a paunchy, “pre-Herban” fellow who trains and eats his way to washboard (stick figure) abs.
“There’s a perception of health and then there’s actual health. From my background as a chef and power lifter, I know what clean food and healthy food are,” Paul says, adding that some other restaurants push a healthy appearance without actually delivering on the promise. “I don’t want too many CrossFit people in here or a bunch of paleo dudes. I don’t want you to walk in and 20 body builders are taking up all the seats.”
In a time of highly specialized (and often rigid) diets, Herban Quality is chasing moderation and trying to instill that same mentality in its guests. The restaurant focuses on sourcing sustainable and locally sourced foods, including antibiotic-free meats and organic produce.
As a chef, Paul likes the challenge of introducing diners to new foods while testing his own skills with unusual flavor combinations and less familiar ingredients. The menu fluctuates a great deal, and not just between seasons.
“Coming from fine dining, I try to make things as complicated as possible and then use the simplest forms of ingredients,” Paul says, adding that he’s created about 70 side dishes in Herban’s first year alone. “The ultimate goal is to do as much as I can do to delete the fad or perception of health. The core group of what we do is education. I’m throwing things that people don’t eat on the menu; I use beets like 10 times, and people hate beets. I will make you like beets.”
Herban Quality is pushing its eat-better agenda into different communities throughout Philadelphia. It works with local fraternities and sororities for special events, which helps drive student business. On the more philanthropic side, it held a pay-what-you-can night, with all proceeds benefiting a nearby school, and each week it donates food to local organizations.
Stanford University’s Duswalt says she has seen an increasing number of companies building business models based on the healthful outcome of their customers.
“What I’m really loving are the products and services that are coming out; they’re helping sustain people’s healthy behaviors,” she says, citing Chipotle as one of the earliest adopters of this approach.
Many cities are turning into hot spots for similar changes at the local level, Duswalt adds. Philadelphia is an especially ripe opportunity for food-related social entrepreneurship, thanks to its storied local food scene and the strong presence of nonprofits working within a range of socioeconomic communities.
The people patron
Shake Shack may be the blueprint for fast casual 2.0 concepts like Herban Quality, but its origin story was far more modest.
“It started as a hot dog cart. … The hope was to turn Madison Square Park into a family-friendly park, so they brought in an art installation and brought in a hot dog cart to try to draw people into the park. All the proceeds of the hot dog cart went back into the beautification of the park,” says Peggy Rubenzer, senior vice president of people resources at Shake Shack.
The project was a success, and the parks services asked founder Danny Meyer if he’d be interested in building a permanent kiosk. The rest is history.
“Our employees from day one understood that they were doing something for the betterment of New York City and families in New York City. All those things continue to resonate with us today,” Rubenzer says.
Although Shake Shack is no longer a private entity under Meyer’s Union Square Hospitality Group (USHG), the famed restaurateur has left his mark—including that social-entrepreneurial spirit—on the chain. It has not yet adopted some of the USHG’s most progressive employee benefits such as paid parental leave, but the seeds for change have been planted. By evolving the standard management structure and pushing its vaunted approach to hospitality, Shake Shack stands to improve the lives of its employees—and possibly the greater quick-service segment.
For starters, Shake Shack has its own litmus test for deciding whom to hire. In his book, Setting the Table: The Transforming Power of Hospitality in Business, Meyer lays out the “51 percenter” premise, wherein the ideal hires have a high hospitality quotient, with skills that are 49 percent technical and 51 percent emotional. Desirable traits include optimism, curiosity, strong work ethic, and empathy.
“The main things that we’re really spending the time on are their 51 percent attitudes and characteristics. We can teach them how to do things you need to do to make a meal for someone, but we can’t teach them how to feel about that,” Rubenzer says. This hiring process also sets the tone for the employee experience. Reviews are less formal and more like a conversation, she adds.
Staff members are also empowered to take their future at Shake Shack into their own hands. Just as reviews feel more like a one-on-one discussion than a corporate audit, employees can decide if, when, and how they want to grow, Rubenzer says. Shake Shack managers will lay out the path to gain more skills and advance, but it sets no specific timeline. (The company website even has a “Movin’ On Up” section with a diagram outlining the steps from team member all the way to general manager and then area director).
Online training is a somewhat crowd-sourced system: Employees create and contribute their own modules to help others move forward. Rubenzer says she sees different success stories every day. One young man from the inner city started as a porter (a now defunct position) and today is a general manager of a multimillion-dollar location.
It may be Shake Shack’s cool quotient that first attracts applicants, but it is more likely the company’s commitment to its employees and community that keeps them. Prioritizing the team above all others is at the core of Meyer’s enlightened hospitality.
“It’s how we take care of each other, how we take care of our guests, how we take care of our community, our vendors, and our stakeholders—and in that order,” Rubenzer says. “Our management teams value what it means to be a part of a company that has the higher purpose. I believe that’s what the trend is among our workforce right now. Those are the people who are going to be building our company and other companies of the future.”
Companies of the future
The German philosopher Immanuel Kant asserted that an action’s morality or overall goodness should be weighed not by its results, but rather by the intent behind it. Utilitarian John Stuart Mill argued that it was the net result of an action that determined whether it was a good one.
Social entrepreneurship—like so many abstract ideas—falls somewhere in the middle. To truly be a social entrepreneur, the founders must have a genuine drive to effect real, positive change. On the other hand, the venture must bear fruit if it’s to have a good outcome. “[With] social entrepreneurship, in order for that to exist, there has to be a social dilemma. Otherwise, you’re just selling to customers. It’s either a social dilemma or a change in demand,” Duswalt says.
In its purest form, social entrepreneurship solves a problem that would essentially put the company out of business when it succeeds, she adds. Going back to Meyer’s hot dog cart, the original purpose was simply to beautify the park—something it helped accomplish.
As more brands appear with altruistic mission statements, it can be harder to distinguish the ones that are really in it to bring about change from those who are simply paying lip service.
Duswalt’s research focuses on nutrition-related ventures in foodservice. Because demand for nutritional, sustainably sourced foods has surged in recent years, she says, brands may simply be responding to volume rather than setting out to change the world. Something with less of a cool factor—like reducing food waste—often attracts players who are looking beyond the bottom line.
In general, social entrepreneurship businesses are built from the bottom up. Transforming an existing business requires companies to get down to their core principles, which is at best an involved process and at worst detrimental to their business.
Whether a company is driven by a social entrepreneur, a passionate philanthropist, or simply a smart executive responding to market signals, the days of corporate ambivalence are fading fast. Rubenzer thinks more companies will join progressive causes, Ben & Jerry’s Tandan hopes his brand can serve as an example for other companies, and Herban Quality’s Paul thinks concepts like his have a real opportunity to change the way consumers eat. Time will tell whether their optimism is part of a greater shift.
“We have always held a firm belief that business has a responsibility to be about more than just making money,” Tandan says. “Companies really do have a voice and can have an impact and can sway people like policy makers and lawmakers to make the right choices on these types of issues.”
This story originally appeared in QSR's March 2017 issue with the title "In the Business of Change."