Vodafone xone Innovators Series: All Good Organics' Simon Coley on balancing business with social purpose

Vodafone xone Innovators Series: All Good Organics' Simon Coley on balancing business with social purpose

To mark the arrival of the Vodafone xone business acceleratorIdealog is interviewing a whole heap of established New Zealand innovators, as well as the founders of the 10 startups selected by Vodafone to receive mentorship, funding and the potential benefits of working with a global network. In this episode, social enterprise trailblazer, and co-founder of All Good and Karma Cola, Simon Coley, talks with Idealog's publisher and editorial director, Ben Fahy.

Ben Fahy: You've always seemed like you were slightly ahead of the pack. You were heavily involved in the creation of Powershop, which was a big leap at the time for the power industry; you were part of the team that got a whole bunch of New Zealanders to buy expensive, ethically produced bananas, and now you're working with All Good and your range of beverages, like Karma Cola. What do you put that success down to? Have you always been restless and looking for the next challenge?

Simon Coley: I think coming from the creative industries, it's always been the next thing that's been the most interesting, if you know what I mean. The restlessness comes from wanting to, or being in that habit of having to come up with new ideas from a background as a sort of recovering advertising art director, that you only get noticed if you've got something that's different, and bringing that to what we have tried to do with our more ethical brands, like Karma Cola and All Good Bananas. The combination of trying to do something original in categories that are pretty well established, and this promise of a more environmentally concerned product that has also consideration for the people producing it, strangely, was original. Although people have done it before, I don't think ... Well, fortunately for us, we found a space which wasn't, at the time, especially with our bananas in New Zealand heavily contested.

Bananas are not not something you genuinely associate with innovation, but there’s a great story there, and it's a David and Goliath story. It's a bit of an underdog tale. What happened there?

Chris Morrison was the founder of Phoenix Organics, so he had some experience in the organics business. He'd been traveling in Samoa, and he'd seen how much great quality tropical fruit was just going to rot on trees there that wasn't being harvested. 50 years earlier, a big part of Samoa's GDP came from selling bananas to New Zealand. He told me about the surf trip he'd done there, and how he'd seen that fruit not being harvested, and it seemed like something really straightforward,  anoffering we could put together. You'd want to buy great food from your neighbors, and given that bananas are such a big commodity, especially in the supermarkets, they are one of the most revenue-generating single products, in that whole basket of supermarket foods, so we thought, "Well, maybe we should see if we can do that." Naively, we thought it was straightforward, we'd just get some bananas, put them in boxes, send them here, put them in shops, people would buy them.

Too easy.

Too easy, exactly. If you knew what you end up learning before you start things, I'm sure you'd never start. This was a case of that. The bananas you get from Samoa are a lot smaller than the ones we used to. They’re Misiluki bananas, they're delicious. They taste really great when they're eaten tree-ripened in Samoa. When you export them, they have a thinner skin to the Cavendish bananas we’re used to, they get bruised quite easily, and they don't really taste great until they're quite dark. What we're used to, a kind of yellowy greenish banana that tastes quite good, isn't the same as what these smaller bananas taste like. We discovered pretty quickly that it was going to be a long ride to be able to get those working here.

I remember when I talked to Malcolm Rands from ecostore, he said one of the hardest things to do is to change people's habits. The difference between what people say they want to do, and what they actually do, when it comes down to the price of a banana; between what you're used to. It's cheaper to buy, perhaps, an unethically produced banana, versus [All Good]. How did you get around that? How did you manage to change people's behaviour and accept that these bananas that were more expensive were worth buying?

Well, the ones that we did end up bringing to market here, which come from Ecuador, we very quickly learned that if they don't look great, and if they don't taste great, people aren't going to buy them again, so quality is everything, and making sure that we do have a better-tasting, better-looking banana in the stand is really important. That then gave us permission to talk about why there was a premium, and I think if you get that visual connection first, with the quality and, in our case, with a bit of a story attached to the product, then I think you've got the right to go a bit deeper with the customer and tell them more. A lot of the challenge for us was education. Fair trade is something that's recognised here, but not many people knew it in the banana category.

We needed to show a supply chain that was transparent, that the benefit of you as a customer to the grower was quite fantastic, and to do that without making accusations about the other products, because we didn't want to draw back the curtain on the practices in the industry, because we've still got to support the industry. A lot of it came from illustrating that supply chain, and showing people the benefit that they could have as conscious consumers.

Simon, you've shown that it's pretty important for companies to have a good story, and increasingly, to have a purpose beyond just making money, whether that's joy, whether that's sustainability, whether that's improving the lives of the suppliers. How important has that been for your success, and is that part of your previous role in understanding the power of marketing, and in terms of creating value in the mind, rather than maybe in the factory?

I think so. I think without that sort of central story, we wouldn't have much to differentiate this. It is supported by the facts that substantiate the claims. With Karma Cola, we do have our own foundation that supports the people that grow the cola that is the main ingredient. With All Good Bananas, we can show customers exactly the benefit that they create for growers. With Powershop it was, again, making that industry slightly more transparent, giving people more control over their usage. In the power industry, traditionally, until we came along, people would be charged for a commodity they were using after they used it, and there aren't many markets in the modern world where the seller gets to choose the price after consumption. With 42 Below, it was an origin story, too. The differentiation was that, in a country like New Zealand where you have pure air and pure water, you'd probably make a pretty good vodka.

Even with the work I did with NZTE on Better by Design, what we were trying to do, to use a phrase that Brian Richard's coined that I really like in this context, is to try and occupy this piece of psychic real estate, and the way to do that is through stories. That's what we remember. It's what's easier for us to share. In all of those examples, the key to success has been creating ideas, stories, things that can be shared, and using that to generate advocacy, because none of those businesses have had large enough marketing budgets to buy market share, that we've really had to earn it through encouraging advocacy through people who believe in what we're doing.

Has that change in media consumption, maybe even with the internet, and the quest for, or the love of provenance, for figuring out where your food comes from, where your clothes are made, has that opened up a new era of business, in a way, where these bigger companies have had to actually change their processes, because of the pressure that companies like you are putting on by showing, fairly transparently, how you've created it?

I think there are a few factors. One is that it's easy to manufacture things than it ever was, so you don't have to own a lot of plant to make things. You can work with contractors, you can find ways of doing things, the internet, just the advance of technology has allowed us to meet more people, to be making more things, so we can compete with much larger organisations that, in the past, have owned those industries vertically. I think the other external factors around provenance, just because of the food scares people have had, they seem to become more frequent, people are more aware, or better informed, around their decisions, or should be, as consumers, and want to be. Again, technology's made that happen. It's easier to research something than it ever was, and I think that there's less trust in larger or corporate organisations than there ever has been.

I did some work with Bloomberg, or did a conference with them, nearly a year ago, and one of the things that was raised was that there are some big organisations there, and that for them to be presenting themselves as sustainable just seemed anathema. I was talking with a guy from BASF, they're making a big play to become one of the largest chemical manufacturers in the world, and they’re trying to be sustainable. That's where a big opportunity lies, because that scale of organization can do a tremendous amount of good if they point themselves in the right direction, but also it's an enormous challenge, because of their legacy.

What keeps you going? Is it that purpose to try and change the other businesses that you're competing with, is it to make a small impact with the stuff that you're doing? What's the purpose?

Again, there are a few answers to that. One of them is the fear of getting it wrong like, ‘We really have to make this work.’ We're not a non-profit organisation. We, as owners of the company, and people that work with the company are all liable for it. It's got to work.

Profit is a great lubricant for doing good.

Revenue solves a lot of problems. We're looking forward to having more of that so that we actually get into a situation where we can do more, but I think just those normal pressures of wanting your business to succeed are pretty motivating. The transition from being someone who used to advise those sorts of businesses, to someone who has to live by it, is a really interesting education for me, because I think of the advice that I may have given people as a creative years ago that it would be different now that I've been on the other side of that divide. I mean, the other motivation is slightly more personal, but is about the story, is that having met the people benefiting from the commerce we're creating with their ingredients or products, it's very hard to ignore the fact that they're part of it now, and there is ... Although I don’t like to think of it as a dependency in terms of charity, there's a dependency in terms of commerce that we need to honour. We've started this thing, and we have to see it through. And that's something that I think gives us some strength, because everyone that works for us believes in that as well.

When you're competing against companies like Coca-Cola or Dole, who, as you've mentioned, have massive marketing budgets, that's a tough proposition, and as you said, in terms of getting market share, you have to be pretty clever. You could argue creativity loves constraints. The number 8 wire is born from that, and I think you have seen that first-hand in Africa with the kids creating their toys from leftovers. Is that something that you have found kind of infusing your own approach to business and marketing?

Yeah, I think one of the things that works in our favour is that scale doesn't necessarily buy you integrity, and that the people that we appeal to want that. We can compete against larger organisations because we have a kind of stronger story to tell about that provenance, and respect of all the people in that supply chain. Quality is also something that it seems we can achieve better as being a smaller player. We've got to defend and substantiate a premium. We're never going to be able to sell for the same price as some of those examples you've mentioned, so we need to have a really well respected niche, and that comes from the quality of ingredient and flavor, and the experience of the product. I think it's easier for us to do NPD, to be thinking about how we continue to keep the quality up when we're not trying to make a massive amount of product.

Even your approach to media is on smell of an oily rag, in terms of not being able to, perhaps, or not wanting to pay for traditional advertising. I think you create your own magazine, even. And you pull a lot of the resources and the people who are on the mission with you together. Is that, again, an example, of a different way of doing business that companies can tap into?

I think so. Again, the integrity of what we're trying to do is something we can rely on to help engage other people that are interested in the same kind of philosophical approach or purpose of our business. We have a kind of open source approach to what's creative, creativity and the contributions that are made to the work we do. The magazine we do is a good example of that, and because people are interested in what we're trying to achieve, they'll make contributions that we can afford. I think, also, the sort of fandom of people engaged in our products really helps distribute both the story and the products themselves. One of the things that is working for us is the kind of exposure we're getting through, say, social media. It’s creating more trade relationships, because people are discovering us online or on their Instagram feed, and they might be a café. We've had two or three examples of this in Europe, where small distribution businesses that are interested in the same kind of purpose as we are have contacted us and become great distribution partners.

So that’s the law of unintended consequences, perhaps, where things are joined up, and the connections are made through that purpose?

It's slightly oblique, but one of the things we use as a kind of maxim is that what goes around, comes around. If we put it out there, and the creative work we do seems to get this kind of response, people appreciate it, and they'll either, in some cases, tattoo it on their forearms or make something else out of it. We've got a lot of kind of fan art that's come from people just Instagramming or making things out of our cans, now that we have some cans. I think that has created a kind of life of its own outside of what we've produced.

I think from my experience writing about marketing and looking at some of the companies that are loved, and that are then often successful, it often comes down to the product may be similar in terms of quality, but if you are more interesting than the next best option, you'll probably win.

Absolutely, and the thing that I'm constantly surprised by is people actually wanting to make art out of the stuff that we offer them. I've got stained glass windows that look like Karma Cola bottles that a guy in New Mexico sent us. We've got a dream catcher that's been made out of Gingerlla and bottle caps. There's lots of examples of this kind of adoption and enthusiasm for the creative materials we put out there.

Do you think that New Zealand provenance has a role in this? When we interviewed Stolen Rum, actually, for Idealog, they said explicitly they weren't focusing on that, they didn't want to be associated with New Zealand, they wanted to be an international brand. Has that helped you, or are you not worried about that?

There's an aspect of it that does, and that's more about trade relationships. Journalists we meet, distribution partners we meet, some of the benefits we get through the network of similar companies from New Zealand really do help us commercially, but in terms of offering our customers, we're an international brand. We're not enormous, but we are in a number of, we're in probably 15 different countries, and the origin of our ingredients aren't necessarily from here. Our lemons come from Sicily. Our cola comes from Sierra Leone. Our ginger comes from Sri Lanka, so it's more of a kind of United Nations origin story, and I think if we try to tell the New Zealand story on top of that, it would get a bit confusing, but I think in a supporting role, because New Zealanders abroad have great connections with other New Zealanders abroad, and especially in the UK, where we're building our business at the moment. It's a really good network to be part of, and it's respected.

I think that seeing some of the recognition we've got from the creative community, in the UK and wider Europe, has been really heartening, that New Zealand's seen as a player on that stage now, that there's less of the sort of cultural cringe we had possibly ten or 20 years ago, and more expectation of high-quality work and products, and especially in food and beverage, from New Zealand in the rest of the world. We're running with a great crowd, if you like, which is a big advantage.

When Ralph Norris was given the Kea New Zealander of the Year Award, he did say that he felt that the inferiority complex of New Zealand had diminished substantially in the past few years.I think he's right. I think there's also an element of New Zealanders being successful, but also being nice with it. You could argue that the tall poppy syndrome is a bad thing. A lot of people do, but in some ways, we kind of keep those people in check when they're successful, which I quite like.

I definitely think some humility goes a long way, and there's always something to learn, so assuming you know a lot is not going to be that helpful. There's also, it feels like New Zealand's sort of busting at its seams. It's a small market here, and Rod Drury says, "This is subscale. You got to be somewhere else," which is kind of true. If you've got the intention or ambition to grow, you can only grow so far with four and a half million people, especially when you're a kind of niche product. The kind of export, if you like, of both talent, internationally, and the fact that people interested in their own home are going to be motivated to help you promote your product is incredibly helpful. There are these loose and well-formed networks, like Kea; there's a group of New Zealand women in business in London who have been supportive of us and helped us find staff and make connections to distributors and other people that have been helpful. There's no end of those sorts of opportunities if you look and make it known that you're interested in that support.

Speaking of humility, you're one of those annoyingly successful chaps, again, who things seemed to have gone pretty well for you with some of the things that you've done, but surely you've stuffed up. What have you learned from some of your mistakes along the way? What hasn't worked?

Look, we're still stuffing up. I mean, I don't think you ever stop making mistakes. I think the great thing about having a few things that have worked is that they tend to overshadow the cockups.

Survivorship bias.

I don't know how it works, but I think one of the things I'm more mindful of now is that we have got to make our organisation and the way we work with other people meet our kind of purpose. You can't put All Good or Karma on the side of anything without it being able to reflect everything you do. The way we manage relationships is crucial, internally and externally. I think some of the things that I wince about in retrospect is possibly not supporting people enough, is thinking about how we get the most out of everyone we work with and for. I think any business like ours, which doesn't have a lot of assets except for our IP, the respect that your customers and trade partners have for you is everything. I'm just trying to think of a way of illustrating the downside of that without it being very awkward. But the things that I've probably done that have, I really have learned the most from, have been making big, bold marketing moves that haven't paid off, and probably not listening to people. I think with Powershop, when we launched that, we thought we'd do it with a big John Lennon song and go large, and in retrospect, we probably should have done it a little bit more organically at the beginning, but it seemed to work. The brand got seen, but in terms of the way we ran the budget to do that, that was a big investment, and it took a lot of convincing for people to spend the money on it ... I think it worked, but it still makes wonder if we could have done it differently.

Success is subjective.

Absolutely, and I think seeing what we're doing from the inside, it doesn't seem as successful. There's a long way to go, from my perspective, with the projects we're working on at the moment, but I think it's heartening to see people responding well to them, and there's nothing better than seeing someone buy your product.

Big business in general has probably been guilty of overlooking the externalities of creating their products, the bad things that happen in other places, the treatment of workers, the environmental degradation. Do you feel as though that's changing? Are you optimistic about business and the transparency that now exists for them to at least change their ways?

I think you see people being held accountable more than ever, because it's harder to hide. I think that works in our favour, because we create something of a benchmark. We're not well known enough to be the gold standard for the things we purport to be our purpose, but if you think about the fact that there is now an agreement with, in the last climate summit, that these things are changing, and that's been 20, 25 years in the making. It's a slow transition to something that might work better, but it's happening, and I think people are making decisions in the way they buy products that are better informed. Because of that concern, and also the thing we talked about earlier that Malcolm Rands recognised people say something and may buy into the idea, but that it takes a long time for their behaviour to follow.

When he talked about dishwashing liquid as an example, he said the number one decision-making factor was "What did your mum use?"

That's right, and from experience I had in the same industry, that is indelibly tattooed on your forehead. It's kind of how you vote too, isn't it? A lot of these things have become almost political issues, so being able to create that kind of interest beyond the product, I think, differentiates it and gives products like Malcolm's more relevance.

When you look around the world and see companies that are similar to you, that have more of a purpose or as they’re often called social enterprises, that can make a profit, but also give something back, what stands out for you? Are there any examples that you could look to give inspiration to New Zealand companies thinking about starting up?

There's a great little outfit out of Victoria, in Australia, called Who Gives A Crap. They're making toilet paper, and an amount of every roll of toilet paper they sell goes to making sure people in Africa have clean water, because waterborne dysentery is a huge killer in Africa, so they've created an everyday experience that is beneficial beyond being loo paper.

We've been doing some collaborations with Toms shoes in the UK, and their initial idea of just offering a pair of shoes to someone who needed them for every one you bought was fantastic, and they've done it now with spectacles.

I think Warby Parker, an up-and-coming brand in the U.S., mostly, is doing a similar thing and giving glasses to people who need it.

A pair for a pair, yeah, and the thing that impresses me about that is that it's a very tangible benefit. You buy one, you know someone else has benefited from the reciprocal gift. I think when you've got a connection that's that strong, it's a harder, it's a much easier kind of thing to understand the benefit you've created.

What's the hardest bit about this, about starting up a business, about keeping it going, and is it worth it?

It's definitely worth it, just from ... I much prefer to have to take my own advice and that of my business partners than be doing this for someone else, so we have been fortunate enough to create our own kind of business and future because of that. I think starting's always hard. I mean, just starting is a good thing. I'm lucky in that, with Chris and Matt, we all sort of converged upon this idea around the same time and had the ability to go about doing it. Having great support makes a big difference. I think being, trying to do this without that would be very hard, and understand how, again, looking at it from the other side, from having been someone who used to advise people on doing this or be a part of their business, that being able to make decisions and see them through is very motivating. It's scary, but that's enough for me to be excited about the work.

I'm sure you do get a warm glow looking at the impact that your business is making in some of the areas you're working with? You look at some of the stats around economic development, bringing a billion people out of poverty in the past 20 years, I think you've probably seen that firsthand. Instead of giving aid, you're creating an economy. Do you agree with that philosophy?

We can't ignore that we're here for them as much as ourselves, and that there is a strong relation, a dependency, in a commercial way, and that it's not a billion for us, but it could be. Seeing the way that we've gone about the sort of DIY NGO we've set up and the way it resonates with our customers and the people in Sierra Leone and El Guabo who are benefiting from it. And the other organisations that are sort of supporting us, it's a strong enough approach to business for us to have confidence that it's going to continue to grow.

I'll drink to that. Thank you, Simon.

Thank you, Ben.