Organic pioneer: Arran Stephens lives his life by his father's dictum to leave the soil as you found it.
Arran Stephens has been offered ridiculous sums of money to sell his family business.
But while the founder of Nature’s Path, North America’s leading organic cereal company, admits to fleeting temptation, he and his wife Ratana have no regrets about turning down each and every offer.
“One day several years ago, I received a phone call from Kellogg at 10am, and another phone call from Kraft two hours later. The dollars offered were staggering,” he recalls.
“We asked ourselves if all the money that was offered was going to improve the character of our children, and would it improve the lives of our many employees and stakeholders, the communities and economies that we worked in, the organic movement that we have served and helped build over so many years. And we decided no.
“We would run our company better independently, and make it strong enough to survive and thrive into the next generations. The offers still come every week, but they find themselves in the round file, and the voice messages are deleted.”
Raised to respect the land
When you take a look at Arran’s background it is perhaps not surprising that he would turn his back on mega bucks for higher ideals. The seeds were sown by his father Rupert, fondly described as an “odd duck” on the company website, and mother Gwen on a farm on Vancouver Island, British Columbia. Life was far from easy but Arran says some of his happiest memories are of “helping his Mom and Dad gather and spread kelp on the fields, planting corn with his Dad and wandering through the farm eating sun-ripened berries”.
Rupert, he says, left him with an abiding love of nature and unspoiled beauty and the dictum he lived by: “Always leave the soil better than you found it.”
Natural taste: Arran, with Happy, enjoyed the benefits of growing up on a berry farm.
It’s a dictum Arran, named for that windswept Scottish isle, has been doing his best to follow ever since. After studying spirituality and meditation in India in the 60s, Arran was barely in his 20s when he returned home to open the first vegetarian restaurant on Canada’s west coast in 1967.
“Organic grains and vegetables were on the original menu. There was nothing else like the Lotus in Canada at the time, and like a time-ripe idea, caught on and transformed many lives for the better,” he says. “Money was never my first consideration, but I was forced to learn that ‘if you’re not a profit, you’re a loss’.”
It was challenging sourcing organic produce, too. “There was little supply, little demand, and little understanding. Our job was to educate and take the risks of investing in what others thought were hare-brained ideas.”
He must have seemed something of the odd duck himself, then, to start a natural supermarket in 1971? “I’ve never followed the beaten track, and often celebrated the eccentric,” Arran says. “I wanted my values to proceed ahead of and infiltrate my actions, keeping in mind that deeds speak louder than words.”
Keeping organic farming alive
LifeStream was a pioneering company but was torn apart by a partnership squabble in 1981 and eventually ended up in the hands of Kraft/Phillip Morris. In a nice reversal of industry trends, however, it has been back in the family fold for some years now. “It was so small, they didn’t know how to run it. Fourteen years after Lifestream was sold, my family and I bought it back from Kraft, and it went from losses to profitability within nine months.”
A lot of the suppliers Arran found for LifeStream have also been bought out over time, but there are still independents going strong, such as Eden Foods. Many of them Arran and Ratana helped nurture through the supermarket, and continue to do so today with Nature’s Path.
Family first: Arran as a baby with brothers John and Godfrey, parents Rupert and Gwen, and dog Happy.
The cereal brand the couple started out of the back of their restaurant in 1985, which now sells certified organic waffles, bars, and cereal and baking goods among other products and exports to Australia, New Zealand and the United Kingdom, is responsible for the produce of more than 100,000 acres of organic land. Hundreds of organic farmers owe their livelihoods to this innovative couple. ”We have also invested in 2240 acres of dry grain farmland and are converting it to organic, with the help of our farmer partners. But this only represents about two percent of our grain requirement,” Arran says.
Given his refusal to sell to the big boys, how does he feel when another independent organic company is snapped up? ”I can’t help but feel a twinge of regret every time I see another organic brand swallowed up by a Kraft, a Kellogg, a General Mills, or a Cadbury,” Arran says.
“But, let’s move on. As long as more land is being converted to organic, and more family farmers are receiving a decent living for their toil, and less agri-chemicals are introduced into our water, air, earth, and our bodies, the better it is for all.
Organic farming is the only viable option
“Organic is destined for mainstream. In fact, it is already mainstream in a small way, but has great room yet to grow. I believe that eventually, organic farming will be the only really viable farming for the family farms of the world.”
Despite the move of multinationals into the organic market, Arran does not believe that the term has lost any of its value with consumers of authentic brands. “Nature’s Path continues to grow from strength to strength, because we started out on the organic journey decades ago, and that is our single focus,” he says.
“Often, when a non-organic company acquires an organic company, the values start shifting. Some say that the soul is gutted out. Focus is lost. Sometimes, the sale of an icon brand has helped us because of the acquisitor’s loss of focus. It goes from an ideological commitment to one of profit only. Profit is not bad, but we believe in the triple-bottom line: Socially responsible, environmentally sustainable, and financially viable. Consumers continue to reward us by their support.”
Mother earth: Gwen Stephens, circa 1952, gets her hands dirty.
But, like all companies facing competition, Nature’s Path has had to become much more sophisticated in its financial and operating systems, as well as in areas such as research and development and human resources.
Organic companies also have to battle arguments that their method of farming is too costly, pushing up the price of the resulting produce, and that genetically modified crops are the only way to feed the world.
“One of the biggest frauds ever perpetrated has been the promise that GMO crops have higher yields and require fewer chemical inputs because of desired engineered traits,” Arran says, citing a three-year study at the University of Kansas which showed reduced yields for a GM soya crop as further proof of the wrong-headedness of such a position. Organic supporters are also opposed to the use of GM seed because of its detrimental effect on seed diversity, as well as attempts by the very companies promoting it to control world seed supply.
As for the cost, Arran says any discussion needed to take into account the real effect of substantial farming subsidies. “What is the real cost of food, when all agricultural subsidies are withdrawn? Organic farmers are paid a significant premium for their crops, and you don’t hear of many organic farmers going bankrupt, abandoning third or fourth-generation farms, or even committing suicide as is happening in the chemical farming world.”
Critical of high costs
But while Arran believes that an organic premium is justified for farmers he is critical of the cost of some organic lines. “Consumers will accept a 10 to 15 percent premium, but when an organic counterpart is double or triple the price, the mainstream is left with a major disconnect,” he argues. “Now, if we pay a 50 percent premium for organic wheat, or a 75 percent premium for organic oats and the farmer family is able to make a decent living and not go bankrupt, I have no quarrel with that.
“However, our production, packaging, labour, energy, overhead, administrative, finance and marketing costs do not carry a premium cost over conventional food operations; therefore while we process large quantities of organic grains for which we pay a big premium, our retail prices may only carry a 10 percent to 15 percent premium, and often are at par with non-organic.”
It is also worth noting that while the cost of chemical agriculture continues to climb, the costs of organic farming – other than the higher cost of seeds – are relatively stable. “I see that the price inequity between organic and non will narrow as volume continues to grow,” Arran says.
Awesome foursome: Arran and Ratana work with daughter Jyoti and son Arjan in the business.
As an innovator in the organic business world, Nature’s Path has won many awards over the years, including for entrepreneurial flair and export achievements. But Arran says his proudest relates to the company’s credentials as an employer: “Being recognized as one of the Best 100 Companies in Canada to work for, three years in a row.”
He is quick to point out that his wife, the “wonderful life companion” whom he wed in an arranged marriage in 1969, deserves us much credit for all their success, if not more. “Ratana is co-founder and chief operating officer, and has saved me from several business blunders.”
Two of their four children are active in the company. Daughter Jyoti heads up the sustainability and stewardship initiatives and son Arjan is the vice-president of marketing and production innovation. The apple hasn’t fallen far from the tree with his other two daughters, either. Shanti lives in Illinois and owns and operates Manna Organics, baking organic sprouted Manna Bread (Nature’s Path’s first product), with her husband Markus; while Gurdeep, who has an MA in biosciences, lives in Italy where she is studying finance and hopes to get involved in the company one day.
Theirs is clearly a family who walks the walk, not just talks the talk. But how does Arran persuade other people without the advantages of such an upbringing that organic is the way of the future? “We need to win new consumers by the taste, quality, elegance and real value of our products. We believe in demoing and sampling; getting our product into the mouths of consumers,” he says. “We need to win over others with the authenticity and values behind our brand. We can do this with viral web campaigns, packaging, marketing, PR and advertising, educating our customers about who and what we stand for as a company, such as our long commitment to the environment (avoiding greenwashing) and social causes through our giving campaigns.
“And, lest we forget: let us each and everyone leave the Earth better than we found it.”
For further information on the benefits of organic food, Arran recommends readers visit the websites of The Organic Center and The Rodale Institute.
