Organic Reach: How Natural Products Became a Billion-Dollar Industry, Part 2 | BBH Podcast Ep 10

Hello and welcome back to the big bold health podcast, Making Health Personal in a World of Disease.

Well, welcome to episode two of the Jeff and Doug dialogues. Boy, did we have fun in episode one. I hope you were able to hang in with us because there's a lot of news to use in that episode one. But not to be daunted, off we go into episode two. And, Doug, I'd like maybe you and I to talk over our 40 years of experience working together and collaborating and growing up together to talk about this concept of cooperation. And because in this world often we see competition and we see the survival of the fittest and, you know, this whole Darwinian concept that one wins and another loses. And so how do you cooperate? Particularly how do you cooperate across disciplines in which maybe you're hunting for commonality, because in the end, there is this common shared belief about an objective. You might get to the destination in a different journey, but you can cooperate along your path in learning from one another. And I think I can say without any equivocation, in my life, you have been that. In my life, you have been a role model for how I have navigated my journey, how I've taken my training and background in the science side of the world and, and try to convert it into being present, to engage in the important translation in the human value, to do something that would make a difference in people's lives. And I know you've done that as well. So let's start, if we can just quickly to review the. In your life, the start of Natural Foods Merchandiser, this incredible publication that really unified the industry and its connection to some of the founding members of the natural products industry as personalities who had their own agendas but were collected together on these common missions. And then how that translated into your Natural Foods Expo and the connection that that afforded me to bring some of my science background into the development of the model. So tell us about those steps for you, because they were all remarkable stories.

Well, this going back to Dr. Peter Thomas, who was an early mentor of mine, who just loved everybody and cared for everyone. And his name was on the hospital, not because he gave money, because everybody loved him so much and was an amazing man. And he always spoke about cooperation and working together with people and trying to understand everybody else's point of view. And you don't really walk in their shoes, so be careful about judging them. You don't know what they've been through, etc. And so I had that drilled into me again and again from age 14 and also by Just watching him, how he dealt with people, and he was legendary in his life and where he lived and was always the most generous human being I knew. But what I also realized from all that in the natural foods and starting this magazine is that, and I still find that today, people really don't know how to think about things. Some people had great parents. The mass majority of people were not fortunate to have really great parents. So where are they learning their behavioral wisdom? Are they getting it from television, watching sitcoms or reality shows today? Where are they getting it from? And I also found that in working with these early natural foods retailers, these are people that all had again, not come into the business to make a fortune, had come into business to have a job and change their community and make things better. And they really didn't know how to think. And so I would come to them to write a story about them and they didn't want to say anything because what if somebody reads it and comes steals my business and I can't pay my house payment or whatever? And I had to sit down and say, hey, I'm not asking you to tell everything about what you're doing to the world, but I want you to give me one piece of pie, so to speak. And if you'll just take one little piece of your business and go in depth and make yourself vulnerable on a small piece of what you're doing, I'm going to go around and talk to all the leaders in the country doing this, and I'm going to get one little piece from each one of them. And guess what? When it's all said and done, you're going to get 100 pieces of pie back for your one piece of pie investment. And then they go, oh, this is how vulnerability and sharing can help me. And I said, yes, let's do it. And it was like kind of pulling teeth on the first couple of ones. But then they started to see how it did make things better, and then they were absolutely to learn from it. And then that set up a whole network of cooperation. And of course, as I knew these people and got them to know each other, and some of us did some recreational things together outside of work to learn about each other. Because I also believe in business, you're going to have times when you sit down and have your real business discussions that can be very frank. But the more you can bring to that, the more you know each other, the better it is. And that's one reason at the Expo in the early days, we started having dance parties at night because if you're out there dancing with somebody, the next day you're in a business meeting with them, well, you were just on the dance floor sweating away and having a good time the night before. You have a different relationship when you sit down to talk to talk the next day. And so at one time it's not highly known and it was the but on chart of accounts of how you even tracked your numbers, people didn't understand how the early days because the natural foods industry wasn't founded by MBAs and whatnot. And in the early days, some of the retailers in the country, in various parts of the country were sharing their financial statements even with each other, which was unheard of because everybody was trying to figure out what goes into labor cost, what should labor cost, what's the dashboard of growing this business and what makes sense. And then I think once everybody started sharing a little bit, they realized that it was a win win situation. And the key thing is switching from this fear based model to a trust based model. And I think that's what's happening in evolution right now, period. And what we're going through. And again, in the days of when we started the natural foods industry, the natural foods industry started, it was about getting people to share more, to understand what it took to grow an industry and how we all had to cooperate together and how together we could create so much more. And it worked. But from all this I had some ideas. But there were so many great entrepreneurs that came out of this. And watching how Peter Roy, who was the first president of Whole Foods, how he dealt with people, watching John Mackey and his brilliance of how to create a bigger platform in the world, the founding CEO of Whole Foods, just hearing all them, how they think and, and going and playing basketball or tennis or whatever you did and getting to know everybody, we were all so hungry to learn that we were all so generous with each other and everybody slept on each other's couches. I mean it was when you went to a city, it was never you're going to go to a hotel, it's always you're going to oh sure, I've spent hundreds of nights on couches just getting to know everybody. And it was a great way. And also I have to say that you have some of your best conversations later at night. In fact, one time I put on the had inscribed on the back of an early iPad I had that said most of what I learned, I learned past 10pm.

Well, you know, you did something that I thought was very wise and quite remarkable and that is in your early development of Expo, when I was involved collaborating with you in the development of some of the educational programs that went along with Expo, you made a very conscious decision to honor these founding people from the different components of the industry and to bring them up and put them on the stage and allow them to tell their story. Now, many of these people had never been public speakers. They had never seen themselves, maybe even as authorities, but you gave them the pride of their own knowledge base and their own experience. And many of them grew up then to be extraordinarily good speakers and good presenters and leaders and going to Congress and working on legislation and passing the Organic Standards act and all sorts of things. But they had to have the self confidence to do that. And you do that by building a collaborative team and making other stars. And you did that very, very well through Expo. And I've used that model, I hope, successfully. In the medical side, when Susan and I founded the Institute for Functional Medicine, my objective was to bring a lot of outside leaders in the field of medical technology, medical development, so they would show the way into the future, but then also to honor those that were really creating the application of that, the clinicians in the trenches, doing the daily work and make them stars and have them tell their story so they'd be seen as authority figures. And as you do that, as you did in your field and hopefully Susan and I did in our field, you said, start to grow them up and you start to see there are all sorts of people that have leadership capabilities that might not have even recognized that.

Well, I think we're all in the hero building business, so to speak. Another one of my great mentors was Bill Gore, the founder of Gore Tex. And he and his wife were just amazing people. And he was a bench chemist that started Gore Tex when he was, I don't know, in his mid-40s. And usually bench chemists don't start startups in their mid-40s. But he was amazing person who built an amazing company, and he believed that he was in the hero building business. And he said, you know, that's our jobs. And he said, if you treat people like heroes, they will become heroes. And I realized early on, for the natural foods industry to grow and become what I knew it could be and wanted it to be, we needed a bunch of heroes. And so there's nothing like seeing yourself on the front cover of the magazine, quoted or speaking in these meetings. And of course, everybody was reticent and of course they were natural leaders. So many of them all you had to do is get them an inch out there and they just took off. Because so many people are afraid of public speaking and etc. Etc. But once they get out there and understand it and then get great feedback, then they grow. And so we always saw ourselves as in the hero building business and looking for people who had really the potential to be really heroes like yourself. Although I say unabashedly, you were already a hero when I met you. But we were always just looking to find good people. And one of the times when I was editor of the magazine, I would wonder about, well, what's really my job? And I said, well, my job is because it's so easy to write about, this is bad or that's bad. And there was a lot of people doing that. And I said, what we need is what's working, what's good, what can we model ourselves on? I kind of envisioned myself as the United States being this place. I would get up on a very high ladder, find something really great happening, and I'd hold a mirror down and show what was happening. And anyone in the country could look up in that mirror and say, wow, look what they're doing in New Orleans, look what they're doing in Boston. So my job was to go find people who were expressing courage, doing innovative things, maybe not even knowing it was innovative, because so many of them were led by inner impulses to do these things and to go find them. And then when you see the great heroic things they're doing, share that with others, hey, look what heroic thing they did. And keep in mind also, all of us early founders, we were really interested in nutrition, and we were really interested in natural and organic and holistic health. But we were also equally interested in social justice. And that it was really a much broader platform than just selling natural foods. It was. We were trying to treat people better, run better business opportunities, because now it's in the vernacular, but I remember when it was, you know, unheard of. I remember Stanford had me come give a couple of speeches at their MBA program on creativity and talk about listening to yourself and whatnot. And it was like, shocking. They said, we've never had any. We've never had a course like this. It was the first course on creativity ever in the United States at a major university. Now that's everywhere, but in the early days, it was just getting started. One of the things that I tackled early on was and got in big trouble for it in the natural foods industry, because there was a health food industry that had been around for 40 or 50 years that had certain belief systems and whatnot. And this new paradigm of natural foods included health foods was a larger paradigm, and it shook a lot of people up. And I know you had a lot of attacks by some people that were less than comfortable with change. And, you know, we had a good decade or more of dealing with that. And it was trying to still be kind to them and appreciate them, but realize that we're going to change, we're going to evolve, we're going to move forward, and not letting their criticisms, listening to them always, because there's always something to learn from everybody, but at the same time being focused on what we were trying to build and try to go forward. And I'd say that every day was an inspiration, meeting people. And it seemed like it was happening everywhere. You'd be in Peoria, Illinois, or wherever you might be, and there was somebody in their community trying to bring nutrition and trying to do things on women's rights and a whole variety of social issues. You'd go see the bulletin board in their store, and there was every social issue you can imagine that there was somebody having a meeting on or doing a fundraiser for something. And that was really inspiring. So I think America and lots of places happened. It was happening in Germany. It was happening in a lot of places at the time. People were looking for how to build this new world based on trust. And we'd come out of this old, really after World War II, kind of a hard time and a fear culture. And the world was just in the 70s, ready to change and wanting to go forward. And the natural foods industry happened to be an industry where you could do that, where now some of that's happening. A lot of it's happening in a lot of industries today. But I think the natural products industry is one of the first industries to really embrace social change and equality and fairness at its core. And that was exciting, and that was so inspiring that it made you get up early and stay late because you really felt like you were actually achieving something.

Yeah. And I think that there is a very interesting part of this story that shows how a movement gains its own momentum and it takes on its own identity and. And it becomes what it is from kind of the vision tenders initially, but then it emerges to be something even beyond that. What you had originally maybe suspected. And I think part of that was fueled by both you and me in our representative places. Not only you and me, but I think we're exemplary of this, and that is moving beyond our comfort zone to travel the world to take these messages elsewhere, to hear what other people were doing. And, you know, for me, 6 million miles of travel over the years gave me a much more richness of a palette to paint off. And I think I'm a mosaic of all the things that I learned from all these people, from all these different cultures and experiences that were all aspiring for similar shared purpose. But maybe we're coming at it from a slightly different perspective. I know you did this fantastically with. You know, I think you put Expansion magazine together, which was pioneering different locations in the country that might be good places to put healthy businesses that then moved into your international work. Plywood in Siberia and General Motors in Russia, and a restaurant in Grenada and toy company in South Africa and textile design company in the Caribbean. I mean, all sorts of ways that you were spreading both your learning, but also your impact to. To bring together kind of these shared values.

There's no doubt that travel is the best education there is. And international travel, getting outside of your own culture. I don't think you can really see your culture from inside your culture, because there's kind of a cultural hypnosis that Bill Gore used to talk about, and it's important to get outside of that. And I started in 1981, went to England for the first time to look at their natural foods industry. And it was interesting. In those days, there was the natural foods industry and the health food industry, and they had nothing to do with each other. Natural food stores wouldn't carry vitamins, and vitamin stores wouldn't carry organic foods except a tiny smattering of them. And in the United States, we were able to skip that step and come together. Of course, now it's come together in England, but in Germany, it was also separate for a long time. And I ended up doing. When the Soviet Union collapsed, I ended up doing magazines and conferences there because I had seen a food industry be developed in the United States with natural food. So I saw how an industry could come together, and I ended up finding a great Dutch partner, had a weekly newspaper called the Moscow Times. It was actually funded by the Dutch lottery as a do good project to try to make the world a better place. I happened to be in Russia, just was on a mission to see how not to have them have their missiles pointed towards us, actually. And I could see that the Russian food industry was going to collapse because you had one factory that made all the yogurt and one factory that did that. And I toured a couple of those factories, and I went, oh, my God. And so I thought this is all going to go away and these people are going to starve. And so we set up conventions and magazines for the food industry, the restaurant industry. It was a great time. And I remember once the, the president of the CFO of Coca Cola in Russia stood at a conference and said that our company is the glue that held it all together. But we would have private seminars on how to deal with the mafia when they show up at your place. Real issues that everybody was experiencing. And, you know, I ended up, I thought I was going there for just a little bit, but I ended up working there for 13, 14 years. And from that, on the weekends you'd have to leave because they were killing everybody. So we would go to Amsterdam on the weekends. Literally one year In Moscow, like 150 CEOs were assassinated. And you'd read in the paper in the morning. And so we'd leave on Friday and come back on Monday. But that's how I ended up Amsterdam. Now I've lived in Amsterdam part time and that's become one of the organic centers of the world. And the largest ingredient source company is based in Amsterdam, Trodden. And from there in South Africa. Doing work there really started with trying to help get Mandela out of jail and actually change the government. And we were going back and forth. And I've still got tapes of me giving speeches to 100 senior executives in Johannesburg and in Durban and Cape Town, you know, encouraging them to break the laws, to bring down this, these, to bring down apartheid. And that was a, you know, and going into Soweto to see things. And the only thing they weren't blowing up in those days was the beer truck. So being in the back of a beer truck under a blanket in the back seat to be snuck in the Soweto and going, thinking, well, I guess this is okay. But sometimes not knowing so much helps you. But from there. And then, like you, I got very involved in Hong Kong in the 80s, in China and Huachi Nakam and Japan and through Expo, we always had these pioneer leaders show up in Anaheim and meeting them and going and visiting them. And of course today, now I also live in Australia, where it's a very vibrant natural foods industry, getting better and seeing leaders and be inspired by leaders like Marcus Blackmore from Australia. And then also now I also live part time in Spain, in Barcelona. And it's been amazing because the home we have there, there was not a natural food store within a half a mile of us. Now there's four within four blocks of us. And there's two within two blocks of us. And so in seeing that come out of the ground. So I think it's very interesting and it's very fortunate to be able to experience the world from, you know, three continents and four countries and five cities at once because you just start to recognize patterns, see things. And it always would get my attention. I would be in Moscow in really difficult situation. 1991, 92 to no electricity in the office, people coming in masks blowing up the safes and stealing all your hard drives and wondering what was that? Then find out it was the tax revenue people that our competitors had turned us in just to mess with us and have all these situations. But you learn from all those things. But what caught my attention is being in these dark situations in Russia and have some 25 year old ask me a question that's the same question that someone in LA had asked me a week before. No way they could have known each other. And you realize that that's human nature. And so what I've always tried to look for is what really is human nature because you have to accept human nature for what it is and then build from there. And all this cross cultural experience, as you know better than anyone, you learn so much from it. And it's also like you're like the Johnny Appleseed planting those seeds everywhere you go. And that's why your fan base is so big globally.

Yeah, I think that you hit on a couple of really important points. And I was reflecting back to an experience that Susan Bland and I had when we started a partnership relationship in Hong Kong. This is prior to the changeover in Hong Kong, was still British. And the group we were working with, a group of young entrepreneurs, Chinese entrepreneurs, men and women that were really totally committed to their mission and totally committed to quality and excellence and prodigious workers like you would not believe. 20 hours a day, seven days a week type working. And they built a company within three years from startup. We just blew us away. We started off with our first shipment of materials to them in the back of a Jeep Wagoneer. We didn't even know how to ship to China, to Hong Kong. We did that and by the end of the second year their business was $80 million of US dollars and they were voted the number one entrepreneurial startup in Hong Kong. And they had big bulletins when you came from the airport, on the signs of buildings, of their presence. And they had over 700,000 customers within two years from startup. And then all of a sudden the changeover occurred because they were a Company that was very much involved with assembly of getting people together and to share visions and to educate them and stuff. And China was very reticent to have big assemblies of individuals that they were suddenly visited by every governmental agency, the tax department, the health department, the this and that. They confiscated their computers, their hard drives, everything to interrupt their business and basically pretty much put them out of business from this very high flying, very successful company. But I think it shows the tenacity of the entrepreneurial spirit and ideas that are right will grow. We were very fortunate just recently, Susan and I, to go back to their 25th anniversary. They've reconstituted themselves. They never gave up the fight. They now have one of only seven licenses in the whole country of China for public assembly companies, direct consumer companies. And they went from a valuation of virtually nothing to evaluation of a billion dollars in one week with the approval of that license. And the individuals that are running the company haven't changed at all. They have the same vision, they have the same commitment. They're working just as hard. They're there for the long haul now. They're 25 years older. But there is something about the spirit that builds into resilience and builds into stuff and builds into seeing through the tough times that always come to the other side of the equation, which is why, why was I here? What was I trying to do? And I think you've been a spirit of that. And the people that you've pioneered and sponsored over the years, I've seen that in them. You know, good leaders attract other good leaders. You know, as my mother used to say, for years, birds of a feather flock together. And when I think back to in our first episode, you mentioned Bill Thompson with the Thomson Vitamin Company, who was instrumental in both of our early years of development and mentored both of us in his little pia de terre there in Santa Monica. And sit us down and tell us it was he, it was Bill Thompson. I said, someday I'd like to earn $20,000 to take my kids on a vacation. And he was very sage. He said, that's going to be the least of your worries. The most important worry that you'll always have is to make sure you stay the integrity of what your mission is. If you stay in your mission, all the other things are going to take care of themselves. And I have thought of that hundreds of times since that period in the 70s. So I think what we're laying out between the two of us is although different paths, our journeys have resulted in very, very similar observations about what it is that leads to value in a life and how you can make that life purposeful and give back to other others and let some of the other things take care of themselves if you deal with the big stuff. So maybe this is a good place to end episode two and hang with us. We're not through. We still have some really good stuff to share as news to you. So thanks Doug for episode two.

Thank you Jeff.