In this regular column, Living Values, Dr Dimity Podger shares insights and practical approaches from purpose-driven leaders and organisations to help you build a successful business that is a force for good.
Eleven years ago, James and Monica Meldrum took a leap and left their corporate jobs to build Whole Kids, a purpose-driven organic children’s snack food company from scratch. It was a huge turning point in their lives, involving challenges in terms of time, effort, finances and commitment, as well as the recognition of how important their company’s values were to the evolution of their business.
The company has gone on to win industry awards for product innovation, quality and sustainable business practices, and holds two certifications – organic certification and B Corp certification, of which it is a founding Australian member. Individually, Monica has recently been named in the Australian Financial Review and Westpac 100 Women of Influence Awards.
James Meldrum took time out to discuss the links between values, purpose and building a brand.
A series of turning points
James says his and Monica’s decision to leave corporate life and create their own business involved three key turning points. The first involved a sense of misalignment with a crucial product decision at a large corporate which prioritised the bottom line over what he believed was best for loyal customers. The second came while studying an MBA in the United States, where James was again faced with the juxtaposition of profit-led business models compared to food brands whose business models were more purpose-driven, companies such as Stonyfield, Ben & Jerry’s and Seventh Generation. The final turning point was one the couple reached jointly: a surprising and empowering realisation that they could set up a business themselves and, as its founders, would have full control over how it operated.
The decision to create organic snack foods for kids
The idea for Whole Kids emerged from listening to parents in James and Monica’s network, who complained of the struggle to find organic, healthy snacks for their children. The couple realised they would face the same difficulty when they had children of their own. They saw a gap in the market.
But the new business wasn’t born overnight, nor was it based on a hopeful belief of ‘build it and they will come’. Instead, the Meldrums kept their corporate jobs while they did three painstaking years of market research. They studied food trends in the US and Europe, where an increasingly wide range of organic foods was becoming available, and through visiting trade shows learned that more organic food was being sold through mainstream grocers than through specialist organic shops. They concluded the same could happen in Australia, and Whole Kids was born.
Their big idea was to provide organic alternatives to junk food but in packaging that had the same feel as all those sugary snacks. This meant they could easily approach buyers for big supermarket chains such as Coles and Woolworths with products that would slot straight into existing children’s snack ranges – the key difference being their product was the antithesis of junk food.
In 2005, James and Monica took three sample products to the Australian Organic Expo – fruit bars, organic sultanas, and apple juice.
“We said to ourselves that if people like what we’re about we’ll continue, otherwise we’ll probably just go back to our normal jobs,” James says.
“Fortunately, the response was mums and dads loving the idea of the products and what we were about. Kids liked the samples. During that weekend we had stores wanting to order the products off the stand, and we even had export inquiries from Korea, Japan and Singapore. We just thought wow.”
A week after the expo, the couple resigned from their jobs, withdrew their life savings and went to work.
Moving from intuitive purpose and values to a formal statement
Start-up founders are often guided by deeply held values and a sense of purpose. But unless these are clearly articulated they are not always reflected in key business decisions including the design of a business model, the approach with customers and procurement philosophies.
James says he and Monica always had a clear idea of the values on which they wanted to base the Whole Kids business.
“From the start we both pretty much had the same values in what we wanted to do. We had the same frustrations about previous jobs – the politics and lack of genuine care for people, which wasn’t supportive or conducive to personal expression,” he says.
As the business expanded the couple felt they needed to articulate their intuitively held purpose and values and articulate these in a statement, to guide decisions and behaviours for all staff. They engaged a consultant to assist them to formalise a statement, which evolved into the company’s “Our reason for being” statement, which states: “Our purpose at Whole Kids is to nurture healthy kids and a healthy world. We are committed to living and breathing our social and environmental purpose every day.”
They deliver this purpose in three ways: healthy products, contributing to healthy people and, through the company’s organic food production, supporting a healthier planet.
The three core values that guide the Whole Kids team in achieving their purpose are Wholesome, Wholeness and Wholehearted.
James says their “reason for being” statement provides a benchmark against which business decisions around hiring policies, procurement, employee and supplier engagement, workplace culture, and CSR activities can be designed and measured.
Putting this statement of purpose and values into action every day
The statement of purpose and values are applied in many ways across the business:
Keeping customers front of mind when making decisions. “One of the things we do now whenever we have a meeting, or a discussion about product ideas, is we imagine there’s a chair with a customer in the room with us and we ask if we would have this conversation if our customer was actually in the room? Would we be thinking about this kind of product – and what would they say to make this product better?”
Maintaining integrity in the product range, staying true to purpose. James adds that Whole Kids also has a policy of not pursuing activities that would be in conflict with the company’s statement of purpose, irrespective of the financial impact.
“For example, we were approached by a retailer wanting to make one of our products under their label, which we are open to doing if it’s the same or better product. At that time, we were still unprofitable, we weren’t paying ourselves, and we thought we needed money in the door to survive – and this was an opportunity to make money,” he says.
“When we received their product specification, we realised the retailer wanted a non-organic product of lesser quality and nutritional benefit than our own. So even though there was pretty much a guarantee around sales and orders we decided not to do it – even though it meant not paying ourselves for a while longer,” he laughs. “But at least we were comfortable with the decisions we were making.”
Recruiting on both competency and values fit. New staff first encounter the Whole Kids statement of purpose at the start of the hiring process. James explains that, in addition to hiring for competency, “Whole Kids’ values are embedded in every job description and we assess people on those values as well as whether they are the right fit for the role.”
Sourcing suppliers who are ethical and aligned on purpose. The same values-based approach is taken when dealing with external agents such as suppliers – shaping conversations with farmers and growers to ensure products are not only grown organically but also sustainably and are ethically processed. The approach involves engaging suppliers that share Whole Kids’ values and the same business philosophies for screening suppliers.
Being transparent about their social and environmental impact via independent B Corporation certification. James writes in his blog that B Corp certification gives an assessment of whether, as a whole, a business is making a meaningful difference and reports this to the market. It also provides feedback for the company on how to improve.
Engaging employees as co-owners of the business, connecting them to the metrics and decisions. James and Monica share financial information with employees and are open about likely impacts. James explains: “Say we’re having a really bad quarter or bad month, and it means that in six months we’re probably not going to make any money, so it means we can’t invest in a certain product – we let our staff know so they are not only aware but they can also think of ways to do things that might get us out of that and also do things better.” Employees are also consulted on things such as developing new products.
Designing social and environmental initiatives. Beyond producing products aligned with its values of wholesome, wholeness and wholehearted, Whole Kids as a team is actively engaged in a range of social and environmental initiatives in Australia, driven by issues their customers see as important and their statement of purpose. One program Whole Kids launched is Unjunkit, a campaign to stop junk food advertising on TV before 9pm, aimed at preventing and managing childhood obesity.
Start as you mean to go on
The best time for founders to get clear on their purpose and values is at the start, rather than down the track. This gives them the best opportunity to consciously design a business that can be a force for good, using the purpose and values as a compass to guide decisions and behaviours.
James says: “We had the fortunate opportunity to start a business from scratch and you can actually design it the way you want… I mean, if we want to continue to survive on this planet, business has to change – it can’t keep doing it the way it is.”