Arjan Stephens was named one of ‘Business in Vancouver’s Top 40 Under 40 in 2012.’ He’s the second generation of the Nature’s Path organic foods company, a business he says was ‘founded on a hope and a dream.’
The business is still driven by those same values 30 years later. Now it’s turnover is over $300 million a year and selling into over 50 countries.
“We want Nature’s Path to be a sustainable business in every sense – both financially and environmentally. My parents’ vision was always to leave the earth better than they found it, which is why we still work to the triple bottom line: people, planet and profit.” There’s another ‘p’ too, which is passion. “My parents had this enormous passion to make organic food accessible to everyone. I remember growing up, seeing them struggling to get the business off the ground, going with them to trade shows, and helping with really basic things like sticking labels on boxes.”
But Arjan didn’t originally intend to follow his parents into the business at all. After a degree in history, Arjan was looking at the possibility of a Masters when a conversation with his mentor proved to be a lightbulb moment: “He said to me, your parents are doing great things with the business, and they’re not doing all that just in order to sell it to the highest bidder. They’d much prefer to get their family involved – why don’t you give it a try?”
“So I did. I started in operations, then product management, and somewhere along the line I found the same passion for the business that my parents had. I could see how what they were doing was translating into a better future for people and the environment, and I really wanted to be part of that.”
After an MBA in Chicago. Arjan returned to the business full time, and took on his first solo project – setting up a new factory in Mississauga, Ontario. “We had to get this plant off the ground in six months, and we had less than a $1 million budget, but it proved to me that if you have a dedicated, experienced team who can rise to a challenge you really can make things happen. Since then I’ve worked on our new export business to the UK, and then on sales, innovation, and our strategic plan.”
That plan was developed during the economic downturn. It was a tough time for the business, because consumers were spending less and less on premium food products, and at the same time the price of organic commodities was rising. “But because we’re a family business we could take a longer view and stay true to our values. We basically said, look, we believe in organics no matter what. And because of that, consumers know that our brand is authentic – that we stand for what we believe. That set us up for the new strategic plan and the next phase of growth, and we basically doubled in the last five to six years.”
Since then Nature’s Path has expanded beyond its core category of breakfast products with the acquisition of Que Pasa Mexican Foods. “This was a significant change in direction, and it was also a challenge integrating it into our business and aligning everyone to it, and communicating it. That’s part of a much bigger challenge of making sure you reinforce your values as you grow. How you stay nimble, and entrepreneurial, and pioneering.”
“When you grow from $10 million to say $100 million you probably still know all your team members and have the same family atmosphere. But when you get to $300 million, you suddenly have 600 employees, some of them 4,000 miles away. How do you ensure that the working culture is still what you want it to be?”
So what’s the next road for Nature’s Path, and how is the digital revolution affecting their business model?
“The thing about digital is that you can’t afford to be complacent, because sooner or later someone will come up with an idea and suddenly the whole market has changed. Organic food was the disruptor once so I know what it means. One thing we’re looking at is customization. Lego have done it, and Nike have done it – allowing consumers to create their own personalized versions of their products online. In theory, we could do it too – customized granola mixes for example. But at the moment the sums don’t add up.”
“It would cost too much to be a competitive option for people. We’re innovative in other ways too. I’d really like to adapt our business model by starting up an incubator for other entrepreneurs with similar values, which would sit alongside our main business. We could mentor them, and give them start-up funding, and if they’re successful we could either buy them out or spin them off. I’m really interested in doing that.”
This insight was part of The Next Generation of Family Business Leaders published by PwC. It has been reproduced with their permission.