Organic Inc. Natural Foods and How They Grew

Source: Reprinted from the book Organic Inc.: Natural Foods and How They Grew by Samuel Fromartz. Published by Harcourt; April 2006; $25.00US; 0-15-101130-3. Copyright © 2006 Samuel Fromartz.

A Spring Mix: Growing Organic Salad

My definition of fresh is that the perfect little lettuces are carefully hand-picked from the hillside garden and served within a few hours.
–Alice Waters, 1982

It would be hard to miss the corporate offices of Earthbound Farm, the largest organic produce company in the nation. The operation is just off Highway 101, a half-hour inland from the central coast of California and five minutes from San Juan Bautista — a picturesque small town best known for the nineteenth-century Spanish mission tower James Stewart warily climbed in Alfred Hitchcock’s Vertigo. Beside green fields that stretch for miles toward the Gabilan Mountains to the east sits a squat 205,000-square-foot processing plant — the biggest of five the company has erected at a cost of more than $110 million. Out back, a row of refrigerated semitrailers lines up, waiting to pick up the twenty-two million servings of organic salad the company sells each week. In front, a huge refrigerated truck idles while a forklift unloads plastic bins of cut lettuce fresh from the fields. The bins whiz by me, headed for a submarine-sized vacuum cooling tube. Within twenty minutes the lettuce is chilled to thirty-six degrees, beginning a cold chain that will continue as the salad is washed and bagged and sent to supermarkets around the country, where it is sold within seventeen days.

I’d come to the plant to talk with Drew and Myra Goodman, a couple in their midforties who founded Earthbound on a two-and-a-half-acre garden plot two decades earlier. From these humble roots, they created a company with $360 million in sales, ranked fourth-largest in the $2.5 billion bagged-salad industry. With a 5 percent share of the packaged salad market, they have triple the market penetration of most organic foods. Earthbound bagged lettuce could now be found in three out of four supermarkets. The Goodmans grow produce on nearly twenty-six thousand acres, mostly in California and Arizona, but also in Mexico, Canada, Chile, and New Zealand (for Kiwis).

But for all their success, their company was controversial in organic circles. Myra, a svelt and casually fashionable woman with long dark hair and a New York accent, mentioned that Earthbound employees attending California’s Ecological Farming Conference, the premier annual event, had covered up or removed their ID badges to avoid open hostility from other attendees. “They felt like Jews in Nazi Germany, like they shouldn’t be there,” Myra said. When she complained, the conference organizer pleaded with her to remain a top sponsor.

What irked the organic critics wasn’t simply Earthbound’s size — clearly antithetical to the ideal of the small diversified farm — but the way the Goodmans had achieved it. “They were aggressive and predatory,” one farmer told me. The accepted story seemed to be that they had stolen the organic salad market from smaller farmers, overproducing and dropping the price until these competitors were driven out. If true, this version of Earthbound’s corporate history could be read as a parable for the mainstreaming of organic food, altering the character, ideals, and practices of the founding generation. Would this move toward industrial-sized organic farming undermine the identity of organic food itself?

The Goodmans felt no need to apologize for their success or sidestep the criticism when I brought it up. Drew, a broad-shouldered man who was friendly, though less effusive than Myra, said he simply felt Earthbound was in a different market than small farms since its customers were Safeway and Wal-Mart, not white-tablecloth restaurants or farmers’ markets. In these mass markets they had to compete on price with other mainstream players. Plus, the couple made clear, they had never really sought to become Big Organic. It just, well, happened. They had even thought about selling the business and returning to “a simpler life.” Their PR pitch emphasizes these roots: Young couple just out of college starts out on a small organic farm in Carmel Valley, selling baby lettuce to chefs and at a farm stand; a light bulb goes off; they put the lettuce in ziplock bags and become the first to sell bagged spring mix to stores. It’s a huge hit. Their company grows like crazy — partnering with big farmers, winning supermarket-chain accounts — until it becomes the number-one organic produce company (and third-largest organic food brand after Horizon Organic milk and Silk soy milk).

Behind their obvious marketing smarts, the Goodmans had entrepreneurial zeal, making the right moves to expand at the right time — perhaps because they came into the organic world without a heavy ideological bias. The couple believed in the premise of organic agriculture but were not going to limit their horizons by remaining small, local, and tied to natural-food stores. They replaced the organic idealists’ counterculture baggage with practicality, growth, and business. Jeff Larkey of Route 1 Farms, in nearby Santa Cruz, told me that in the 1980s, Drew would drive to his farm in an old Volvo station wagon to pick up lettuce. “You could even sense back then that they had this business mentality, you could kind of see it, so in a way it’s not surprising what happened,” he said. But if the Goodmans were different, they were not unique in the organic movement: Many of the founders pursued growth and the mainstreaming of organic food in order to have a larger impact on agriculture and on consumers. (This is, after all, how I slipped into the movement: through the attractive entry point of Whole Foods.)

But to make sense of how two college kids raised on the Upper East Side of Manhattan — the son of an art dealer and the daughter of a jewelry manufacturer — ended up with the biggest organic produce business in the nation, if not the world, it’s necessary to leave them for the moment and take in the landscape. Because the issue of where they started, it turns out, was as crucial to their success as all that followed. Had they begun farming on the East Coast, they would probably still be selling at a roadside stand, or at a farmers’ market, if they were still farming at all. But they hadn’t begun on the East Coast. They had pursued a decidedly Californian model. This was only something I understood after visiting the Salinas Valley, the Salad Bowl of the World, where it all began.

Samuel Fromartz is a business journalist who has written for Fortune, Business Week, and Inc. This is his first book. He lives in Washington, D.C.

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