1 00:00:04,720 --> 00:00:10,200 Speaker 1: Welcome to Calling Bullshit, the podcast about purpose washing, the 2 00:00:10,240 --> 00:00:13,320 Speaker 1: gap between what companies say they stand for and what 3 00:00:13,360 --> 00:00:16,320 Speaker 1: they actually do, and what they would need to change 4 00:00:16,400 --> 00:00:20,040 Speaker 1: to practice what they preach. I'm your host time Ontogue, 5 00:00:20,440 --> 00:00:23,479 Speaker 1: and I've spent over a decade helping companies define what 6 00:00:23,600 --> 00:00:26,720 Speaker 1: they stand for, their purpose and then help them to 7 00:00:26,920 --> 00:00:31,520 Speaker 1: use that purpose to drive transformation throughout their business. In 8 00:00:31,560 --> 00:00:35,760 Speaker 1: this special episode, we're sharing a positive case study, a 9 00:00:35,880 --> 00:00:39,040 Speaker 1: deep dive with the CEO of a purpose led company 10 00:00:39,200 --> 00:00:47,559 Speaker 1: who we think is getting it right. Today, we're going 11 00:00:47,640 --> 00:00:51,360 Speaker 1: to talk about Vital Farms, a publicly traded food company 12 00:00:51,400 --> 00:00:55,000 Speaker 1: based in Austin, Texas, with the purpose of improving the 13 00:00:55,080 --> 00:00:59,400 Speaker 1: lives of people, animals, and the planet through food. I 14 00:00:59,440 --> 00:01:03,560 Speaker 1: had a great conversation with their CEO, Russell Diaz Conseco 15 00:01:03,720 --> 00:01:07,360 Speaker 1: about how their mission drives decisions at every level of 16 00:01:07,400 --> 00:01:10,840 Speaker 1: the company. But before we get to Russell, let's do 17 00:01:10,920 --> 00:01:18,360 Speaker 1: some background. Vital Farms started in two thousand and seven 18 00:01:18,400 --> 00:01:21,640 Speaker 1: on a twenty seven acre plot in southwest Austin with 19 00:01:21,760 --> 00:01:26,080 Speaker 1: only one farmer, Matt O'Hare. Matt saw an opportunity to 20 00:01:26,200 --> 00:01:29,800 Speaker 1: change the way food is produced in America to reduce 21 00:01:29,840 --> 00:01:33,880 Speaker 1: the environmental impact of the industrial approach to farming and 22 00:01:34,000 --> 00:01:37,720 Speaker 1: give the power of food production back to small family farms, 23 00:01:38,280 --> 00:01:41,560 Speaker 1: all while producing a high quality product at large scale. 24 00:01:41,959 --> 00:01:46,240 Speaker 1: Starting with eggs, pasture raised egg gets a third or 25 00:01:46,240 --> 00:01:49,520 Speaker 1: more of its diet the chicken does from grass, so 26 00:01:49,560 --> 00:01:54,200 Speaker 1: they're eating salad as a result. The quality and the 27 00:01:54,280 --> 00:01:56,960 Speaker 1: taste of the egg is dramatically different than anything and 28 00:01:57,080 --> 00:02:00,480 Speaker 1: even before. That's matt back in two thousand and nine 29 00:02:00,800 --> 00:02:04,680 Speaker 1: at the original Vital Farms location. Now, most eggs look 30 00:02:04,720 --> 00:02:07,080 Speaker 1: pretty much the same on the outside no matter how 31 00:02:07,120 --> 00:02:11,079 Speaker 1: they're produced. But the hens at Vital Farms eat grass, 32 00:02:11,560 --> 00:02:16,720 Speaker 1: which creates a beautiful golden yolk, more beta caroteen, less cholesterol, 33 00:02:17,360 --> 00:02:21,639 Speaker 1: and more vitamin A than conventional eggs. But here's the thing, 34 00:02:22,120 --> 00:02:26,120 Speaker 1: Vital Farms was never just about eggs. That humble beginning 35 00:02:26,240 --> 00:02:30,560 Speaker 1: was powered by an ambitious and inspiring purpose to improve 36 00:02:30,600 --> 00:02:34,760 Speaker 1: the lives of people, animals, and the planet through food. 37 00:02:35,560 --> 00:02:39,760 Speaker 1: And to do this, mattow Hair considered all the stakeholders. 38 00:02:40,600 --> 00:02:43,160 Speaker 1: He designed his business for the welfare of the chickens, 39 00:02:43,240 --> 00:02:46,919 Speaker 1: of course, but he also considered all of the people 40 00:02:47,040 --> 00:02:52,400 Speaker 1: involved investors, small family farmers, employees, and customers, and last, 41 00:02:52,480 --> 00:02:56,799 Speaker 1: but not least, the planet. The industrial food system that's 42 00:02:56,840 --> 00:02:59,680 Speaker 1: made food so cheap in this country comes at a 43 00:02:59,760 --> 00:03:02,480 Speaker 1: huge which cost to the earth, and Matt wanted to 44 00:03:02,520 --> 00:03:08,519 Speaker 1: provide the country with a real alternative. Matt's concept got 45 00:03:08,560 --> 00:03:13,200 Speaker 1: the attention of another Austin based company, Whole Foods, which 46 00:03:13,240 --> 00:03:16,280 Speaker 1: loaned him a hundred thousand dollars for equipment to scale 47 00:03:16,320 --> 00:03:20,880 Speaker 1: his idea and then became his first customer. Up until now, 48 00:03:21,000 --> 00:03:22,480 Speaker 1: the only way you really could get a pastor raised 49 00:03:22,520 --> 00:03:24,240 Speaker 1: egg was to drive to a farm by a dozen 50 00:03:24,240 --> 00:03:26,840 Speaker 1: eggs and drive home. And that's a fairly large carbon 51 00:03:26,840 --> 00:03:29,760 Speaker 1: flippent for for dozen eggs. And we think that getting 52 00:03:29,760 --> 00:03:31,560 Speaker 1: them into the whole food stores and getting in with 53 00:03:31,639 --> 00:03:37,040 Speaker 1: the customer is a more efficientative doing that, And this 54 00:03:37,320 --> 00:03:41,800 Speaker 1: is when things really took off. Vital Farms started contracting 55 00:03:41,840 --> 00:03:45,040 Speaker 1: with other pasture raised egg farmers, which allowed them to 56 00:03:45,120 --> 00:03:49,120 Speaker 1: scale up distribution, and by two thousand and eleven, Vital 57 00:03:49,200 --> 00:03:52,520 Speaker 1: Farms was doing four point nine million dollars in revenue. 58 00:03:53,640 --> 00:03:57,640 Speaker 1: Four years later, Vital Farms became a certified b corp. 59 00:03:58,360 --> 00:04:03,119 Speaker 1: This certification measures a by's entire social and environmental impact 60 00:04:04,360 --> 00:04:09,800 Speaker 1: In ten Matt handed the CEO job to Russell Diaz Conseco, 61 00:04:10,080 --> 00:04:13,240 Speaker 1: who had joined the company in furteen as an egg 62 00:04:13,280 --> 00:04:17,479 Speaker 1: warehouse manager. With Russell at the helm and Matt still 63 00:04:17,520 --> 00:04:22,640 Speaker 1: involved as executive chairman. On July thirty one, twenty Vital 64 00:04:22,720 --> 00:04:26,000 Speaker 1: Farms went public on the NASDAC with the ticker b 65 00:04:26,240 --> 00:04:29,040 Speaker 1: I t L on one of those of course, today, 66 00:04:29,120 --> 00:04:32,279 Speaker 1: Vital Farms up sixty on the first day of trading, 67 00:04:32,839 --> 00:04:37,560 Speaker 1: quite amazing, and in one Vital Farms hit two hundred 68 00:04:37,560 --> 00:04:40,880 Speaker 1: and sixty million dollars in revenue and is now the 69 00:04:40,960 --> 00:04:45,920 Speaker 1: largest producer of pasteurised eggs in the universe. And something 70 00:04:45,960 --> 00:04:49,719 Speaker 1: that really caught my attention because an industrial farm would 71 00:04:49,800 --> 00:04:54,040 Speaker 1: never ever do this. In one Vital Farms created a 72 00:04:54,160 --> 00:04:57,440 Speaker 1: label that allows you to actually log in and see 73 00:04:57,480 --> 00:05:00,880 Speaker 1: the farms and hens where the eggs come from. At 74 00:05:00,960 --> 00:05:03,440 Speaker 1: Vital Farms, we want everyone to know the truth about 75 00:05:03,480 --> 00:05:08,039 Speaker 1: where their eggs come from without any bolt. After logging 76 00:05:08,040 --> 00:05:10,760 Speaker 1: in to see the hands involved in my breakfast, I 77 00:05:10,839 --> 00:05:13,680 Speaker 1: knew I wanted to learn more about this company. So 78 00:05:13,720 --> 00:05:16,359 Speaker 1: the question we're here to answer today is how do 79 00:05:16,400 --> 00:05:20,000 Speaker 1: we make more stories like this one happen? I asked 80 00:05:20,120 --> 00:05:23,760 Speaker 1: Vital Farms CEO Russell Diaz Conseco to sit down with 81 00:05:23,839 --> 00:05:26,520 Speaker 1: us to share what he's learned about the challenges and 82 00:05:26,600 --> 00:05:38,599 Speaker 1: rewards of keeping Vital Farms ambitious purpose front and center. Folks, 83 00:05:38,680 --> 00:05:43,360 Speaker 1: I'm very excited to introduce today's guest, Russell Diaz Conseco, 84 00:05:43,760 --> 00:05:47,520 Speaker 1: the CEO of Vital Farms. Russell, thanks for joining us. 85 00:05:47,839 --> 00:05:51,040 Speaker 1: Thanks so much for having me, So let's jump right 86 00:05:51,080 --> 00:05:54,080 Speaker 1: into it. I'd love to just have you tell our 87 00:05:54,080 --> 00:05:59,080 Speaker 1: listeners a little bit about yourself and your background. Thanks TI. So. 88 00:05:59,160 --> 00:06:01,279 Speaker 1: I was born on the East Coast. I'm a product 89 00:06:01,320 --> 00:06:04,919 Speaker 1: of parents on both coasts, very blue state upbringing. For 90 00:06:04,960 --> 00:06:07,360 Speaker 1: the last twenty one years, I've lived in Austin, Texas. 91 00:06:08,040 --> 00:06:11,640 Speaker 1: I moved here to pursue a really exciting opportunity with 92 00:06:11,680 --> 00:06:14,640 Speaker 1: a grocery chain down here called H E B which 93 00:06:14,640 --> 00:06:16,840 Speaker 1: is the biggest little grocery chain you never heard of, 94 00:06:16,920 --> 00:06:20,560 Speaker 1: but does billions and billions of dollars in business. And 95 00:06:20,600 --> 00:06:22,800 Speaker 1: that was the place that I was told was the 96 00:06:22,800 --> 00:06:25,599 Speaker 1: best in the business to learn grocery and I was 97 00:06:25,600 --> 00:06:29,839 Speaker 1: really excited about doing that and my latest gig here 98 00:06:29,880 --> 00:06:32,080 Speaker 1: at Vital Farms. I've been here for eight years, which 99 00:06:32,120 --> 00:06:35,159 Speaker 1: is by far the longest company I've ever been with 100 00:06:35,279 --> 00:06:38,239 Speaker 1: and and having the most fun by far. That's great. 101 00:06:38,360 --> 00:06:41,080 Speaker 1: And so when did you join the company? I joined 102 00:06:41,160 --> 00:06:44,919 Speaker 1: at the beginning of and you took over as CEO 103 00:06:45,160 --> 00:06:50,000 Speaker 1: from the founder Matt O'Hare. Is that right? Yes? In 104 00:06:50,839 --> 00:06:54,160 Speaker 1: and how has that transition been? You know, in some 105 00:06:54,320 --> 00:06:58,640 Speaker 1: places it's difficult for a founder to step back and 106 00:06:58,760 --> 00:07:02,280 Speaker 1: hand a new CEO of the You're right, that transition 107 00:07:02,400 --> 00:07:04,560 Speaker 1: is fraught with peril, and I think there are more 108 00:07:04,600 --> 00:07:06,680 Speaker 1: stories of it not working well than stories of it 109 00:07:07,000 --> 00:07:10,960 Speaker 1: working well. I think a couple of things worked to 110 00:07:11,000 --> 00:07:14,280 Speaker 1: help make sure that this relationship would work, and ultimately 111 00:07:14,280 --> 00:07:18,120 Speaker 1: this transition would work. One is I think a lot 112 00:07:18,240 --> 00:07:23,000 Speaker 1: of mutual respect. Right, Matt isn't just a sort of 113 00:07:23,440 --> 00:07:26,120 Speaker 1: head in the clouds creative guys. He's an opportunity around 114 00:07:26,120 --> 00:07:28,760 Speaker 1: every corner. He's also one of the hardest working people 115 00:07:28,800 --> 00:07:33,440 Speaker 1: I've ever met, and so Matt will pursue his ideas 116 00:07:33,600 --> 00:07:36,840 Speaker 1: with vigor and frankly, there's no kind of work that 117 00:07:36,880 --> 00:07:40,080 Speaker 1: he won't do in pursuit of his goals. I have 118 00:07:40,120 --> 00:07:42,600 Speaker 1: a lot of respect for that. We we actually share 119 00:07:42,640 --> 00:07:45,840 Speaker 1: that in common. I think he came to respect me 120 00:07:45,920 --> 00:07:48,760 Speaker 1: pretty early on as somebody who um, he could trust 121 00:07:48,800 --> 00:07:50,960 Speaker 1: to be transparent, to do what I say, say what 122 00:07:51,000 --> 00:07:53,480 Speaker 1: I do, which is consistent with the culture of the 123 00:07:53,480 --> 00:07:56,320 Speaker 1: place he was building. But more than that, I think 124 00:07:56,360 --> 00:07:59,680 Speaker 1: it's it's not that common to find people who you 125 00:07:59,800 --> 00:08:03,320 Speaker 1: in ploy as the entrepreneur who can show as much 126 00:08:03,360 --> 00:08:06,360 Speaker 1: passion for your thing as they do. And when I'm 127 00:08:06,400 --> 00:08:08,480 Speaker 1: passionate about something, I'm all in, and so I can 128 00:08:08,520 --> 00:08:10,400 Speaker 1: start to show up in a little bit with the 129 00:08:10,480 --> 00:08:13,800 Speaker 1: kind of energy and the kind of ownership that I 130 00:08:13,800 --> 00:08:18,000 Speaker 1: think entrepreneurs don't often see in the people they hire. Right, 131 00:08:18,080 --> 00:08:22,720 Speaker 1: And is this your first experience at a different names 132 00:08:22,720 --> 00:08:24,800 Speaker 1: for them, but a purpose led company, a company that 133 00:08:24,840 --> 00:08:28,760 Speaker 1: pursues conscious capitalists. It is. I definitely have worked for 134 00:08:28,840 --> 00:08:32,600 Speaker 1: some high quality companies that had some pretty strong cultures 135 00:08:32,720 --> 00:08:36,360 Speaker 1: and some pretty strong values. But the extent to which 136 00:08:36,360 --> 00:08:40,000 Speaker 1: our purpose is something that people throughout the organization understand, no, 137 00:08:40,559 --> 00:08:44,400 Speaker 1: And the extent to which our culture and our stakeholder 138 00:08:44,440 --> 00:08:48,040 Speaker 1: model is built into kind of the daily conversation and 139 00:08:48,040 --> 00:08:51,440 Speaker 1: how we make decisions, I've never seen it anywhere but here. 140 00:08:52,040 --> 00:08:55,080 Speaker 1: So let's pivot to that. How do you articulate the 141 00:08:55,160 --> 00:08:59,480 Speaker 1: Vital Farms purpose. Our purpose is to improve the lives 142 00:08:59,480 --> 00:09:03,040 Speaker 1: of people, animals, and the planet through food. And we 143 00:09:03,120 --> 00:09:06,160 Speaker 1: do that through our mission, which is to bring ethically 144 00:09:06,200 --> 00:09:10,240 Speaker 1: produced food to the table. Yeah, I love that. How 145 00:09:10,280 --> 00:09:13,920 Speaker 1: would you characterize or talk about the dominant system that 146 00:09:14,080 --> 00:09:18,080 Speaker 1: Vital Farms is trying to improve upon, you know, making 147 00:09:18,080 --> 00:09:21,440 Speaker 1: that purpose real in the world. Well, you know, the 148 00:09:21,480 --> 00:09:25,360 Speaker 1: dominant system is the U s food system. And you know, 149 00:09:25,600 --> 00:09:29,280 Speaker 1: I think the US food system is characterized by a 150 00:09:29,640 --> 00:09:34,560 Speaker 1: very steady march post World War Two towards very high 151 00:09:34,640 --> 00:09:39,079 Speaker 1: productivity through very high concentration of animals in the way 152 00:09:39,080 --> 00:09:43,199 Speaker 1: that they're reared and food is produced, very high concentration 153 00:09:43,240 --> 00:09:45,400 Speaker 1: of players. There's been a lot of press lately about 154 00:09:45,720 --> 00:09:48,679 Speaker 1: the Big four meat packers in the United States controlling 155 00:09:48,960 --> 00:09:52,480 Speaker 1: the vast majority of just about any animal protein you 156 00:09:52,480 --> 00:09:56,200 Speaker 1: could name a real concentration in terms of I think 157 00:09:56,280 --> 00:09:59,640 Speaker 1: the productive benefits of that system to a limited set 158 00:09:59,640 --> 00:10:03,360 Speaker 1: of stay holders and a lot of negative externalities that 159 00:10:03,440 --> 00:10:06,040 Speaker 1: I think understate the cost of the food produced in 160 00:10:06,040 --> 00:10:10,000 Speaker 1: that system, whether it's environmental externalities, whether it's the increased 161 00:10:10,080 --> 00:10:13,280 Speaker 1: risk from lack of resilience because it's so concentrated to 162 00:10:13,600 --> 00:10:15,840 Speaker 1: all the people who died in meat packing plants over 163 00:10:15,840 --> 00:10:17,880 Speaker 1: the last year and a half of COVID. That's what 164 00:10:17,920 --> 00:10:20,880 Speaker 1: I would describe as system we're working too to disrupt. 165 00:10:21,679 --> 00:10:26,320 Speaker 1: Right and Vital Farms started in the egg business and 166 00:10:26,320 --> 00:10:28,400 Speaker 1: and so obviously chickens are a huge part of your 167 00:10:28,400 --> 00:10:32,600 Speaker 1: supply chain, and past your raised chickens are a big 168 00:10:32,679 --> 00:10:38,439 Speaker 1: part of your consumer proposition. Can you explain to our 169 00:10:38,480 --> 00:10:43,200 Speaker 1: listeners what that means? At its core, pasture raised means 170 00:10:43,240 --> 00:10:46,840 Speaker 1: a system of rearing the chickens that is based in 171 00:10:46,880 --> 00:10:52,200 Speaker 1: the outdoors and in allowing birds to exhibit their natural behaviors. Now, 172 00:10:52,840 --> 00:10:55,520 Speaker 1: what I've learned in the eight years I've been in 173 00:10:55,559 --> 00:10:57,960 Speaker 1: this business and in the twenty plus years i've been 174 00:10:57,960 --> 00:11:02,280 Speaker 1: in the food business is a term doesn't have much 175 00:11:02,320 --> 00:11:06,000 Speaker 1: meaning unless it's documented as a standard and then enforced 176 00:11:06,080 --> 00:11:09,360 Speaker 1: with inspection. And so one of the first things that 177 00:11:09,559 --> 00:11:12,840 Speaker 1: our founder, mattow Hair did was when he decided to 178 00:11:12,880 --> 00:11:15,640 Speaker 1: pursue and try to scale up what he thought was 179 00:11:15,679 --> 00:11:19,560 Speaker 1: a very superior way to raise hands to lay eggs 180 00:11:20,000 --> 00:11:22,199 Speaker 1: that was much better for them and for their welfare 181 00:11:22,240 --> 00:11:25,000 Speaker 1: and their health. And frankly would produce better eggs as well. 182 00:11:25,520 --> 00:11:29,560 Speaker 1: He went to a third party certifier, Certified Humane, and 183 00:11:29,640 --> 00:11:33,720 Speaker 1: collaborated with them to create a standard for pasture raised 184 00:11:33,720 --> 00:11:36,960 Speaker 1: egg production in the United States that would be well 185 00:11:37,000 --> 00:11:41,160 Speaker 1: documented and verified by them. So he realized early on, 186 00:11:41,960 --> 00:11:44,760 Speaker 1: lots of companies claimed lots of things, but you're only 187 00:11:44,800 --> 00:11:49,160 Speaker 1: as good as your ability to to convey and frankly, 188 00:11:49,200 --> 00:11:51,560 Speaker 1: have transparency and trust that you're really doing what you're 189 00:11:51,600 --> 00:11:56,080 Speaker 1: saying you're doing. So the pastur A standard has specifications 190 00:11:56,120 --> 00:11:58,920 Speaker 1: for everything from the amount of outdoor space that the 191 00:11:59,000 --> 00:12:02,080 Speaker 1: birds will have in our case, it's a thousand birds 192 00:12:02,120 --> 00:12:04,760 Speaker 1: per hectare, which works out to just under a hundred 193 00:12:04,760 --> 00:12:06,920 Speaker 1: and nine square feet per bird if you do the math. 194 00:12:07,679 --> 00:12:11,200 Speaker 1: It has specifications for how much space inside their barn 195 00:12:11,280 --> 00:12:13,280 Speaker 1: where they go to sleep at night and be safe 196 00:12:13,320 --> 00:12:16,480 Speaker 1: from predators. It has specifications for all kinds of things 197 00:12:16,520 --> 00:12:20,000 Speaker 1: around access to feed and water and how often you 198 00:12:20,000 --> 00:12:22,640 Speaker 1: you provide those things to them, and and what you're 199 00:12:22,640 --> 00:12:25,199 Speaker 1: gonna do to protect them from predators, and what you're 200 00:12:25,200 --> 00:12:27,880 Speaker 1: gonna do to rotate those birds around the pastures so 201 00:12:27,920 --> 00:12:30,760 Speaker 1: it doesn't get too eaten down in any one area. 202 00:12:30,880 --> 00:12:33,839 Speaker 1: So it's a very comprehensive standard. And so for us, 203 00:12:33,920 --> 00:12:36,440 Speaker 1: that all adds up to this thing we call pasture raised. 204 00:12:36,880 --> 00:12:39,439 Speaker 1: It sounds great, How does that compare to the experience 205 00:12:39,480 --> 00:12:42,680 Speaker 1: of an average laying hand. So in the United States 206 00:12:42,679 --> 00:12:46,199 Speaker 1: there are several different housing standards. I guess they might 207 00:12:46,280 --> 00:12:50,240 Speaker 1: refer to it as ranging from no claim, which means 208 00:12:50,280 --> 00:12:53,600 Speaker 1: the birds are being raised in cages, battery cages all 209 00:12:53,640 --> 00:12:55,680 Speaker 1: the way through the pasture raised, which is what we 210 00:12:55,760 --> 00:13:00,320 Speaker 1: do the majority. So it's still more than half of 211 00:13:00,360 --> 00:13:02,559 Speaker 1: the laying hens. I believe it's about six of the 212 00:13:02,640 --> 00:13:05,880 Speaker 1: laying hens in the United States are still being raised 213 00:13:05,920 --> 00:13:08,920 Speaker 1: in cages today. When I joined Vital Farms in two 214 00:13:08,960 --> 00:13:14,640 Speaker 1: thousand fourteen, it was so we're really moving the needle, 215 00:13:14,920 --> 00:13:17,240 Speaker 1: but there's still a long way to go. And much 216 00:13:17,240 --> 00:13:20,040 Speaker 1: of the progress has been made in the conversion of 217 00:13:20,040 --> 00:13:23,840 Speaker 1: birds out of cages simply to to them not being 218 00:13:23,840 --> 00:13:26,560 Speaker 1: in cages. And that's a the low the next lowest 219 00:13:26,640 --> 00:13:30,440 Speaker 1: level we believe of animal welfare called cage free. Cage 220 00:13:30,440 --> 00:13:33,280 Speaker 1: free doesn't mean the birds go outside. Cage free means 221 00:13:33,679 --> 00:13:37,840 Speaker 1: they're still inside a house, a barn, a big, big warehouse, 222 00:13:38,679 --> 00:13:41,640 Speaker 1: but they're no longer in cages. And in fact, the 223 00:13:41,679 --> 00:13:45,760 Speaker 1: irony of the movement towards cage free, we believe is 224 00:13:45,800 --> 00:13:49,640 Speaker 1: that many of the largest producers are taking the opportunity 225 00:13:50,120 --> 00:13:55,319 Speaker 1: to raise their old caged houses and build even bigger 226 00:13:55,480 --> 00:13:58,240 Speaker 1: and more efficient cage free houses. So you get rid 227 00:13:58,240 --> 00:14:00,520 Speaker 1: of the cages. But now in stead of having a 228 00:14:00,640 --> 00:14:03,839 Speaker 1: hundred thousand birds in one building, you might have five 229 00:14:03,960 --> 00:14:07,400 Speaker 1: hundred thousand birds in one building or more. So the 230 00:14:07,440 --> 00:14:11,120 Speaker 1: experience for the birds gets worse in a way. Before 231 00:14:11,160 --> 00:14:14,320 Speaker 1: I ever even contemplated doing a podcast, I was a 232 00:14:14,360 --> 00:14:17,120 Speaker 1: customer of yours. I love the design of the packaging, 233 00:14:17,280 --> 00:14:19,680 Speaker 1: first of all, but I was reading it just nord 234 00:14:19,800 --> 00:14:23,360 Speaker 1: ing out on what you had to say, and I 235 00:14:23,480 --> 00:14:26,280 Speaker 1: noticed the I think it's called hens behind the lens, 236 00:14:26,360 --> 00:14:29,280 Speaker 1: where you can actually go and look at one of 237 00:14:29,320 --> 00:14:32,880 Speaker 1: your farms. I loved that because it hits on such 238 00:14:32,920 --> 00:14:36,320 Speaker 1: an important part of I believe being purpose led, which 239 00:14:36,320 --> 00:14:40,320 Speaker 1: is transparency. Has that been a hit with other customers, 240 00:14:40,360 --> 00:14:44,800 Speaker 1: It's definitely hit a note. Look, I believe that what 241 00:14:44,880 --> 00:14:48,440 Speaker 1: we've figured out how to do is not just doing 242 00:14:48,480 --> 00:14:51,280 Speaker 1: the right thing every day, but it's doing the right 243 00:14:51,320 --> 00:14:54,480 Speaker 1: thing every day and communicating in a way to all 244 00:14:54,520 --> 00:14:59,200 Speaker 1: of your stakeholders that engenders their trust. Trust is easy 245 00:14:59,200 --> 00:15:01,280 Speaker 1: to lose, hard to gain. We kind of all know that. 246 00:15:02,240 --> 00:15:04,880 Speaker 1: I think that this campaign is just one of many 247 00:15:04,920 --> 00:15:08,600 Speaker 1: touch points over a long period of time that we 248 00:15:08,800 --> 00:15:13,600 Speaker 1: use to just be radically transparent and really engage our 249 00:15:13,640 --> 00:15:16,520 Speaker 1: stakeholders and what we're doing, because that's the only reason 250 00:15:17,080 --> 00:15:19,160 Speaker 1: they have to pay more for what we do than 251 00:15:19,680 --> 00:15:24,160 Speaker 1: what somebody else does. Right, And so, just in terms 252 00:15:24,160 --> 00:15:27,960 Speaker 1: of comparing Vital Farms to industry standards, are there other 253 00:15:28,080 --> 00:15:31,320 Speaker 1: industry practices that you'd like to improve on in the future. 254 00:15:31,960 --> 00:15:34,440 Speaker 1: Do you have like any kind of a sort of 255 00:15:34,520 --> 00:15:37,920 Speaker 1: innovation roadmap? You know, when I think about what makes 256 00:15:37,960 --> 00:15:39,600 Speaker 1: this place the kind of place for me to work 257 00:15:39,640 --> 00:15:42,520 Speaker 1: out for eight years and the you know, the things 258 00:15:42,520 --> 00:15:44,120 Speaker 1: that kind of get me out of bed in the morning, 259 00:15:44,720 --> 00:15:48,000 Speaker 1: animal welfare improvement were the table stakes. That's what got 260 00:15:48,000 --> 00:15:51,520 Speaker 1: me in the door. But what really excites me beyond 261 00:15:51,600 --> 00:15:55,240 Speaker 1: that is that we are an alternative for so many 262 00:15:55,360 --> 00:15:59,080 Speaker 1: of our stakeholders to a more traditional corporate system, not 263 00:15:59,160 --> 00:16:02,000 Speaker 1: just food system. I think about the people who join 264 00:16:02,040 --> 00:16:06,360 Speaker 1: our company who are so engaged and so just frankly 265 00:16:06,720 --> 00:16:10,400 Speaker 1: smart and capable and driven and have such extreme ownership. 266 00:16:10,920 --> 00:16:14,040 Speaker 1: So I like the fact that we're creating alternatives not 267 00:16:14,120 --> 00:16:17,440 Speaker 1: just for the birds, but we're creating alternatives for consumers 268 00:16:17,480 --> 00:16:20,120 Speaker 1: to actually get what they're paying for, you know, for 269 00:16:20,240 --> 00:16:24,000 Speaker 1: retailers to have transparency because we're not perfect every day, 270 00:16:24,000 --> 00:16:26,920 Speaker 1: and so we are we're the ones that tell them 271 00:16:26,960 --> 00:16:29,160 Speaker 1: well in advance of the new things coming along and 272 00:16:29,200 --> 00:16:31,760 Speaker 1: maybe the challenges as well, saying a supply chain issue. 273 00:16:32,240 --> 00:16:35,280 Speaker 1: We're the alternative for the communities in which we operate, etcetera. 274 00:16:35,360 --> 00:16:37,920 Speaker 1: And so I just I mean, I come home proud 275 00:16:37,960 --> 00:16:39,880 Speaker 1: every day of the work we do, and sometimes what 276 00:16:39,960 --> 00:16:42,080 Speaker 1: I'm thinking about might not have anything to do with 277 00:16:42,080 --> 00:16:46,680 Speaker 1: the chickens. Well, there are animal welfare advocates who have 278 00:16:46,800 --> 00:16:50,800 Speaker 1: argued that and ethically produced egg is impossible because of 279 00:16:50,840 --> 00:16:54,880 Speaker 1: the nature of the process. And given your purpose, how 280 00:16:54,920 --> 00:16:58,240 Speaker 1: do you think about resolving that tension at vital Farms. 281 00:16:58,600 --> 00:16:59,920 Speaker 1: I think I'd say a couple of things to that. 282 00:17:00,080 --> 00:17:05,240 Speaker 1: One is, Look, the reality is if you eat food 283 00:17:05,240 --> 00:17:08,280 Speaker 1: produced by animals, whether it's the animal itself or something 284 00:17:08,359 --> 00:17:10,760 Speaker 1: that comes from the animal, you have to be okay 285 00:17:10,760 --> 00:17:13,640 Speaker 1: with animals dying to make that happen. That's number one. 286 00:17:13,840 --> 00:17:18,040 Speaker 1: So if that's a nonstarter, then you shouldn't eat eggs. Look, 287 00:17:19,080 --> 00:17:23,199 Speaker 1: I know, fundamentally, I believe with all my heart that 288 00:17:23,320 --> 00:17:26,480 Speaker 1: the birds laying eggs in our system enjoy a much 289 00:17:26,520 --> 00:17:29,560 Speaker 1: better quality of life, much better health and welfare, and 290 00:17:29,600 --> 00:17:34,320 Speaker 1: are much better able to exhibit their natural behaviors then 291 00:17:35,640 --> 00:17:39,159 Speaker 1: the vast majority of birds in any other system in 292 00:17:39,240 --> 00:17:43,840 Speaker 1: any other company. I also believe that my people have 293 00:17:43,920 --> 00:17:47,359 Speaker 1: a better experience in my company than in the vast 294 00:17:47,400 --> 00:17:49,840 Speaker 1: majority of other companies. Then I could go around my 295 00:17:49,880 --> 00:17:52,879 Speaker 1: stakeholder groups and point out the ways in which working 296 00:17:52,880 --> 00:17:55,240 Speaker 1: with us makes them better off than just about any 297 00:17:55,240 --> 00:17:57,760 Speaker 1: other company they could work with doing what we do. 298 00:17:58,320 --> 00:18:02,439 Speaker 1: I read once that a thought exercise about your unique 299 00:18:02,720 --> 00:18:05,560 Speaker 1: right to exist as a company is to imagine a 300 00:18:05,560 --> 00:18:08,400 Speaker 1: world without you, and say, what would be different if 301 00:18:08,480 --> 00:18:11,919 Speaker 1: your company shut down tomorrow. And the first thing that 302 00:18:11,920 --> 00:18:15,760 Speaker 1: would happen is the eggs that are produced by my 303 00:18:16,000 --> 00:18:19,719 Speaker 1: millions of birds would now shift to being produced by 304 00:18:19,760 --> 00:18:22,680 Speaker 1: another company. And if I think I've got the best 305 00:18:22,760 --> 00:18:26,119 Speaker 1: animal welfare in the business, then We're going to shift 306 00:18:26,119 --> 00:18:31,639 Speaker 1: animal welfare down. So is that better for the birds? Now? Look, 307 00:18:31,680 --> 00:18:33,560 Speaker 1: I get it, And there are some people and I 308 00:18:33,600 --> 00:18:35,480 Speaker 1: have a lot of respect for people who make food 309 00:18:35,560 --> 00:18:38,399 Speaker 1: choices based in their beliefs. That's what our customers do too. 310 00:18:38,840 --> 00:18:42,439 Speaker 1: But the reality is we can't let their sense of 311 00:18:42,560 --> 00:18:47,000 Speaker 1: perfection get in the way of fundamentally better than what 312 00:18:47,040 --> 00:18:50,560 Speaker 1: we started with. Yeah. One of the things that I 313 00:18:50,600 --> 00:18:54,000 Speaker 1: really do believe is that no company is perfect. That 314 00:18:55,240 --> 00:18:57,879 Speaker 1: being truly purpose led is is a journey. Would you 315 00:18:57,920 --> 00:19:02,080 Speaker 1: agree with that? Oh? Absolutely, We're learning every day. Yeah, 316 00:19:02,160 --> 00:19:04,640 Speaker 1: and so i'd love to hear I want to talk 317 00:19:04,680 --> 00:19:07,280 Speaker 1: a little bit more about the Vital Farms journey and 318 00:19:07,280 --> 00:19:10,320 Speaker 1: and also your journey is a leader. First, do you 319 00:19:10,359 --> 00:19:13,440 Speaker 1: think that you know, being a purpose led business leader 320 00:19:13,640 --> 00:19:17,159 Speaker 1: is harder, for instance, because you have so many more 321 00:19:17,440 --> 00:19:21,639 Speaker 1: stakeholders to think about as the CEO of Vital Farms, 322 00:19:21,680 --> 00:19:25,879 Speaker 1: then does the CEO of a traditional company. It's interesting, 323 00:19:26,359 --> 00:19:29,359 Speaker 1: it's it's a different set of challenges. I don't know 324 00:19:29,400 --> 00:19:32,399 Speaker 1: that i'd call it harder or easier. You know, the 325 00:19:32,440 --> 00:19:36,600 Speaker 1: reality is every company has stakeholders. The question is do 326 00:19:36,640 --> 00:19:39,240 Speaker 1: you realize it, do you acknowledge them and get treat 327 00:19:39,280 --> 00:19:42,720 Speaker 1: them that way? Right? Great point? Great point. The challenge 328 00:19:42,760 --> 00:19:45,840 Speaker 1: that comes in when you're trying to manage or even 329 00:19:45,880 --> 00:19:49,639 Speaker 1: work with multiple stakeholders. Isn't so much that you've always 330 00:19:49,680 --> 00:19:53,880 Speaker 1: got misaligned interests. I do think that the challenges tend 331 00:19:53,920 --> 00:19:56,399 Speaker 1: to come up when we're looking at different time horizons. 332 00:19:56,880 --> 00:20:00,600 Speaker 1: So I believe fundamentally that our business can only be 333 00:20:00,720 --> 00:20:04,960 Speaker 1: sustainable if it's sustainable over the long hole for all 334 00:20:04,960 --> 00:20:09,639 Speaker 1: of our stakeholders. So, for example, if farmers go bankrupt 335 00:20:09,640 --> 00:20:12,320 Speaker 1: at the end of our movie, as so often happens 336 00:20:12,320 --> 00:20:16,320 Speaker 1: in corporate agriculture, then we don't have sustainable supply chain, 337 00:20:16,400 --> 00:20:21,080 Speaker 1: let's say. Or if our our people can't afford healthcare 338 00:20:21,240 --> 00:20:23,200 Speaker 1: or daycare for their kids, then we don't have a 339 00:20:23,200 --> 00:20:27,399 Speaker 1: sustainable workforce. So it has to be sustainable over the 340 00:20:27,480 --> 00:20:30,960 Speaker 1: long hole for all of our stakeholders. But on any 341 00:20:31,000 --> 00:20:34,320 Speaker 1: given day, what they might want may or may not 342 00:20:34,440 --> 00:20:37,600 Speaker 1: be something I can agree to, and in that moment 343 00:20:37,640 --> 00:20:42,280 Speaker 1: there can be tension. What keeps us sustainable is the 344 00:20:42,320 --> 00:20:46,000 Speaker 1: track record that over time it's all going to work out. 345 00:20:46,840 --> 00:20:49,719 Speaker 1: Everybody wants more. Farmer would love to be paid more, 346 00:20:49,720 --> 00:20:52,280 Speaker 1: and I'd love to pay more for their products. The 347 00:20:52,320 --> 00:20:54,520 Speaker 1: consumer would love to pay less for the eggs. Of 348 00:20:54,560 --> 00:20:57,120 Speaker 1: course I want to pay less. The retailer wants more 349 00:20:57,160 --> 00:21:00,720 Speaker 1: trade dollars so they can have better profits, acetera, etcetera. 350 00:21:01,080 --> 00:21:03,679 Speaker 1: You can't be everything to everyone, but if you have 351 00:21:03,720 --> 00:21:07,120 Speaker 1: the courage of your convictions that what you're doing will 352 00:21:07,160 --> 00:21:10,200 Speaker 1: be sustainable for all of them of long haul, then 353 00:21:10,400 --> 00:21:13,120 Speaker 1: it tends to work out in my experience, especially when 354 00:21:13,320 --> 00:21:17,040 Speaker 1: you have values alignment. Yeah, this question is just occurring 355 00:21:17,080 --> 00:21:19,240 Speaker 1: to me, but can you think of an example of 356 00:21:19,240 --> 00:21:24,560 Speaker 1: a time when you had to keep your commitment to 357 00:21:24,680 --> 00:21:28,439 Speaker 1: a set of stakeholders in a way that you know, Well, 358 00:21:28,520 --> 00:21:31,520 Speaker 1: I guess what is the toughest decision in regard you've 359 00:21:31,600 --> 00:21:34,840 Speaker 1: You've had to make? Offer one that was a pretty 360 00:21:34,840 --> 00:21:39,320 Speaker 1: transformational decision for us as a company. So when I joined, 361 00:21:39,320 --> 00:21:44,919 Speaker 1: there was a terrible outbreak of avian influenza, and I 362 00:21:44,920 --> 00:21:48,560 Speaker 1: believe it was that resulted in the destruction of more 363 00:21:48,560 --> 00:21:51,840 Speaker 1: than ten percent of all the birds in America. Forty 364 00:21:51,880 --> 00:21:55,359 Speaker 1: four million birds were depopulated. Um, that's a story for 365 00:21:55,359 --> 00:21:59,200 Speaker 1: another time. All of the avian influenza was spread inside 366 00:21:59,280 --> 00:22:03,040 Speaker 1: those factory arms, even though the industry thought that the 367 00:22:03,160 --> 00:22:05,480 Speaker 1: risk was going to be birds like ours that went outdoors, 368 00:22:05,840 --> 00:22:08,280 Speaker 1: and none of ours were affected. But there was a 369 00:22:08,359 --> 00:22:11,560 Speaker 1: typical boom and bus cycle where the shortage of eggs 370 00:22:11,680 --> 00:22:14,840 Speaker 1: raised prices for eggs, and then the whole industry ramped 371 00:22:14,880 --> 00:22:16,760 Speaker 1: up production, and then there was a bust where the 372 00:22:16,800 --> 00:22:19,320 Speaker 1: price of eggs really tanked about a year later, and 373 00:22:19,359 --> 00:22:22,080 Speaker 1: we were left with way too many eggs. And our 374 00:22:22,119 --> 00:22:26,040 Speaker 1: contracts with our farmers have us buying their eggs whether 375 00:22:26,040 --> 00:22:27,800 Speaker 1: we need them or not. We when we write a 376 00:22:27,800 --> 00:22:29,320 Speaker 1: contract with you, we say we're gonna buy all your 377 00:22:29,359 --> 00:22:31,760 Speaker 1: eggs for a certain period of time and we'll figure 378 00:22:31,760 --> 00:22:34,520 Speaker 1: out what to do with them. But this was sort 379 00:22:34,560 --> 00:22:38,439 Speaker 1: of an unprecedented shock to the system, and many companies 380 00:22:38,600 --> 00:22:42,320 Speaker 1: left in that situation. We're simply telling farmers that they 381 00:22:42,320 --> 00:22:44,320 Speaker 1: couldn't buy any more eggs for a while, and they'd 382 00:22:44,320 --> 00:22:46,200 Speaker 1: call them back when they were ready to buy some more, 383 00:22:46,760 --> 00:22:49,560 Speaker 1: and we certainly had the right within our contracts to 384 00:22:49,640 --> 00:22:52,119 Speaker 1: do the same thing. We went to our board and 385 00:22:52,160 --> 00:22:54,879 Speaker 1: we said, hey, if we walk away from these farmers 386 00:22:55,280 --> 00:22:59,600 Speaker 1: for a period of time, will likely bankrupt them. And 387 00:23:00,080 --> 00:23:02,920 Speaker 1: I don't think that means long term sustainability for the farmers, 388 00:23:03,000 --> 00:23:05,160 Speaker 1: which is part of our values. And these aren't giant 389 00:23:05,200 --> 00:23:09,400 Speaker 1: corporations either. These are family farmers, right, These are individual 390 00:23:09,520 --> 00:23:13,840 Speaker 1: family farmers who have put in not an insignificant amount 391 00:23:13,840 --> 00:23:16,640 Speaker 1: of money to build out a farm to our specifications. 392 00:23:17,000 --> 00:23:20,119 Speaker 1: They have a soul source contract with us, they have 393 00:23:20,240 --> 00:23:22,159 Speaker 1: may have other income streams, but this is a this 394 00:23:22,200 --> 00:23:25,360 Speaker 1: would be a big this would be a big hit 395 00:23:25,440 --> 00:23:30,000 Speaker 1: to their financial well being. And we all said, you know, you, look, 396 00:23:30,040 --> 00:23:32,919 Speaker 1: if we walk away from them now, then when we 397 00:23:33,000 --> 00:23:35,719 Speaker 1: need eggs again, are they going to be trusting Are 398 00:23:35,760 --> 00:23:37,840 Speaker 1: they going to trust us not to do that to 399 00:23:37,880 --> 00:23:40,159 Speaker 1: them again? And so will we even be able to 400 00:23:40,200 --> 00:23:42,200 Speaker 1: get back in the business when we need them again. 401 00:23:43,400 --> 00:23:47,240 Speaker 1: The board didn't take too long to debate the idea 402 00:23:47,359 --> 00:23:50,879 Speaker 1: that it would be better for them to do another fundraise. 403 00:23:50,960 --> 00:23:53,880 Speaker 1: This is when we're a private company, take dilution and 404 00:23:54,000 --> 00:23:57,120 Speaker 1: use that money to pay the farmers not to produce 405 00:23:57,200 --> 00:24:01,120 Speaker 1: eggs until we were ready. In essence, we paid them 406 00:24:01,160 --> 00:24:06,240 Speaker 1: one pent profit replacement. We made them whole for as 407 00:24:06,280 --> 00:24:09,080 Speaker 1: long as we had too many eggs, and it was 408 00:24:09,080 --> 00:24:10,359 Speaker 1: a lot. I mean, that was a year when we 409 00:24:10,440 --> 00:24:12,320 Speaker 1: might have been budgeted to make a million dollars in 410 00:24:12,359 --> 00:24:16,720 Speaker 1: iba DA and that cost us six million dollars. We 411 00:24:16,800 --> 00:24:21,080 Speaker 1: spent six million dollars paying farmers not to produce eggs. 412 00:24:21,119 --> 00:24:26,280 Speaker 1: So think about private equity venture capitalists making that decision. 413 00:24:26,960 --> 00:24:30,040 Speaker 1: Holy smokes. Yeah, how did that go over with the board? 414 00:24:30,080 --> 00:24:32,240 Speaker 1: That must not have been a board meeting even looking 415 00:24:32,280 --> 00:24:36,000 Speaker 1: forward to Well, I gotta tell you they stepped up 416 00:24:36,080 --> 00:24:38,919 Speaker 1: because one of the things that our founder, mattow Hair 417 00:24:39,080 --> 00:24:42,120 Speaker 1: had done so thoughtfully was he curated who he took 418 00:24:42,200 --> 00:24:45,199 Speaker 1: money from. And so we had this amazing board of 419 00:24:45,280 --> 00:24:48,359 Speaker 1: impact investors who were pretty aligned with the idea that 420 00:24:48,359 --> 00:24:51,679 Speaker 1: we shouldn't bankrupt the farmers, who were pretty aligned with 421 00:24:51,680 --> 00:24:55,479 Speaker 1: the idea that the time horizon for this business to 422 00:24:55,720 --> 00:24:58,159 Speaker 1: show its potential was over a little bit of a 423 00:24:58,200 --> 00:25:02,679 Speaker 1: longer term horizon. And the payoff was that single act 424 00:25:03,119 --> 00:25:07,359 Speaker 1: created a reputation in the industry that has led us 425 00:25:07,440 --> 00:25:11,800 Speaker 1: to never market to attracting farmers, never advertise to attract 426 00:25:11,800 --> 00:25:14,200 Speaker 1: new farmers. We have a list of a hundred plus 427 00:25:14,280 --> 00:25:18,119 Speaker 1: farmers waiting to get into this system because we're the 428 00:25:18,240 --> 00:25:20,840 Speaker 1: rare guys apparently that do what they say and say 429 00:25:20,880 --> 00:25:22,760 Speaker 1: what they do and stick up to you know, we 430 00:25:22,840 --> 00:25:26,160 Speaker 1: stand behind our contracts, right, do the right thing. That's great. 431 00:25:26,480 --> 00:25:29,800 Speaker 1: Love that story. What are the standards that you used 432 00:25:29,840 --> 00:25:32,520 Speaker 1: to decide who gets into the family, as it were. 433 00:25:32,960 --> 00:25:37,040 Speaker 1: That's a great question, and we actually have a team 434 00:25:37,320 --> 00:25:39,840 Speaker 1: of well over twenty. I want to say we're probably 435 00:25:39,880 --> 00:25:44,239 Speaker 1: hitting about thirty people that both support our farms and 436 00:25:44,320 --> 00:25:48,119 Speaker 1: help that new ones and onboard new ones, which is 437 00:25:48,520 --> 00:25:51,720 Speaker 1: like a really big investment. Somebody said once that I 438 00:25:51,760 --> 00:25:53,359 Speaker 1: think it might have been Peter Drucker said. If you 439 00:25:53,359 --> 00:25:55,600 Speaker 1: want to know a company strategy, look at their budget. 440 00:25:56,040 --> 00:25:57,680 Speaker 1: And if you look at our budget, what you'll find 441 00:25:57,760 --> 00:26:01,080 Speaker 1: is that we spend an awful lot of money in 442 00:26:01,200 --> 00:26:04,040 Speaker 1: service of helping our farmers be really successful. And that 443 00:26:04,080 --> 00:26:07,600 Speaker 1: starts with choosing the best ones, not unlike the focus 444 00:26:07,600 --> 00:26:11,840 Speaker 1: we put in hiring. So some things we go through 445 00:26:12,560 --> 00:26:15,359 Speaker 1: UM Typically we're looking for someone to be a referral 446 00:26:15,440 --> 00:26:18,280 Speaker 1: from a trusted and high performing farmer who's already in 447 00:26:18,280 --> 00:26:22,320 Speaker 1: our network and most of them are. Next, we might 448 00:26:22,400 --> 00:26:28,680 Speaker 1: go to their neighborhood and talk to some references. It's 449 00:26:28,720 --> 00:26:30,440 Speaker 1: always a good idea to go to the feed mill 450 00:26:30,480 --> 00:26:32,520 Speaker 1: and ask if that person pays their bills on time. 451 00:26:32,880 --> 00:26:35,520 Speaker 1: Then we go look at their land. They may already 452 00:26:35,560 --> 00:26:37,800 Speaker 1: have land, or they may be looking to buy some land. 453 00:26:38,240 --> 00:26:41,600 Speaker 1: The land is really important for success. The right land 454 00:26:42,119 --> 00:26:44,119 Speaker 1: is going to be in a part of the country 455 00:26:44,119 --> 00:26:46,679 Speaker 1: that we call the pasture belt. The pasture belt is 456 00:26:46,720 --> 00:26:49,679 Speaker 1: this goldilocks part of the country that's warm enough to 457 00:26:49,720 --> 00:26:52,960 Speaker 1: have meaningful outdoor access year round instead of having feet 458 00:26:52,960 --> 00:26:55,800 Speaker 1: and feet of snow in the northeast, for example, and 459 00:26:55,880 --> 00:26:59,679 Speaker 1: wet enough to have meaningful vegetative cover instead of you know, 460 00:26:59,760 --> 00:27:03,399 Speaker 1: the the southwest for example. We might also want to 461 00:27:03,400 --> 00:27:07,000 Speaker 1: look for things like um standing water or open bodies 462 00:27:07,000 --> 00:27:10,240 Speaker 1: of water on their land because those can attract sort 463 00:27:10,280 --> 00:27:14,119 Speaker 1: of wild water fowl that can introduce disease on a farms. 464 00:27:14,160 --> 00:27:16,680 Speaker 1: There are lots of factors that go into the right 465 00:27:17,040 --> 00:27:19,720 Speaker 1: kind of land in the right area. The other thing 466 00:27:19,760 --> 00:27:22,000 Speaker 1: that we've discovered over the years that's really important is 467 00:27:22,040 --> 00:27:24,800 Speaker 1: treat cover. We used to think of pasture as a 468 00:27:24,880 --> 00:27:28,840 Speaker 1: manicure golf course, but the reality is these laying hends 469 00:27:28,880 --> 00:27:32,359 Speaker 1: are descended from jungle fowl, and so what they want 470 00:27:32,560 --> 00:27:36,960 Speaker 1: is varied terrain under a canopy of treat cover, and 471 00:27:37,000 --> 00:27:40,960 Speaker 1: so we increasingly are shifting our farm model to more 472 00:27:40,960 --> 00:27:44,280 Speaker 1: of that. The really cool thing that allows for our 473 00:27:44,280 --> 00:27:48,520 Speaker 1: farmers is if what we want for the birds is 474 00:27:48,520 --> 00:27:52,480 Speaker 1: not a manicured lawn but instead varied, you know, sort 475 00:27:52,480 --> 00:27:56,320 Speaker 1: of very topography under a tree cover. Now we're helping 476 00:27:56,320 --> 00:27:59,720 Speaker 1: a farmer make use of land that he probably didn't 477 00:27:59,720 --> 00:28:03,160 Speaker 1: have an another use for. In essence, this is forest 478 00:28:03,440 --> 00:28:06,760 Speaker 1: edge land that wasn't going to be good for a crop, 479 00:28:06,880 --> 00:28:09,600 Speaker 1: and might not even be good for for grazing cattle. 480 00:28:10,200 --> 00:28:13,760 Speaker 1: Just another area of inquiry. At some level, proclaiming yourself 481 00:28:13,800 --> 00:28:18,640 Speaker 1: to be purpose led in business makes a company a target, 482 00:28:18,840 --> 00:28:21,480 Speaker 1: even if by comparison you're a beacon of hope in 483 00:28:21,520 --> 00:28:27,000 Speaker 1: your industry. Have you ever felt that pressure at Vital Farms. 484 00:28:27,040 --> 00:28:29,720 Speaker 1: It's interesting. I think we saw that with if I'm 485 00:28:29,720 --> 00:28:34,080 Speaker 1: not mistaken, the CEO of of don Own, who, during 486 00:28:34,080 --> 00:28:36,360 Speaker 1: a time when the stock wasn't performing as well as 487 00:28:36,640 --> 00:28:40,320 Speaker 1: investors had expected, accused him of being overly focused on 488 00:28:40,320 --> 00:28:43,480 Speaker 1: the purpose and not on the profits. That's right. There 489 00:28:43,520 --> 00:28:46,400 Speaker 1: are certainly skeptics, and I gotta tell you, twenty five 490 00:28:46,480 --> 00:28:48,280 Speaker 1: years ago in business school I was one of them. 491 00:28:48,360 --> 00:28:51,360 Speaker 1: I was, you know, firmly in the Milton Friedman camp 492 00:28:51,400 --> 00:28:54,680 Speaker 1: of your job as management is to maximize share older value, 493 00:28:54,720 --> 00:28:57,239 Speaker 1: and anything you do with the profits other than give 494 00:28:57,280 --> 00:29:00,280 Speaker 1: it to the shareholder is socialism. I mean, yeah, us, 495 00:29:00,320 --> 00:29:02,480 Speaker 1: that is exactly what he said. He comes up a 496 00:29:02,520 --> 00:29:06,480 Speaker 1: lot on this show. Actually, I mean, and I believed it, Like, hey, 497 00:29:06,640 --> 00:29:10,080 Speaker 1: if the company believes you should give money to a charity, 498 00:29:10,280 --> 00:29:12,720 Speaker 1: give it to the shareholder. Let the shareholder choose the charity. 499 00:29:12,760 --> 00:29:14,680 Speaker 1: I mean, that's where I was in two thousand. You know, 500 00:29:15,560 --> 00:29:18,200 Speaker 1: there's a falsehood in that whole chain of logic, which 501 00:29:18,240 --> 00:29:22,560 Speaker 1: is I don't think about purpose and profits as two 502 00:29:22,600 --> 00:29:27,520 Speaker 1: separate obligations on my balance scorecard. I actually think that 503 00:29:27,600 --> 00:29:31,680 Speaker 1: the way we operate and our purpose are the things 504 00:29:31,720 --> 00:29:33,880 Speaker 1: that give us the right to win in the marketplace 505 00:29:34,240 --> 00:29:38,760 Speaker 1: and over time will produce outsized returns. Right, I again 506 00:29:38,840 --> 00:29:41,840 Speaker 1: going back to that thought starter about hey, what does 507 00:29:41,880 --> 00:29:45,480 Speaker 1: the world look like if your company seeses to exist? Well, 508 00:29:45,560 --> 00:29:47,960 Speaker 1: in essence, what that's asking is what makes you different? 509 00:29:48,760 --> 00:29:51,160 Speaker 1: And what impact are you having that's different than everybody else? 510 00:29:51,800 --> 00:29:53,960 Speaker 1: And the impact we're having this different is is about 511 00:29:54,000 --> 00:29:57,800 Speaker 1: animal welfare, and it's about improving the lives of people, animals, 512 00:29:57,800 --> 00:30:00,360 Speaker 1: and plant through food. It's our crew members, it's our armors, 513 00:30:00,360 --> 00:30:03,960 Speaker 1: it's our consumers and retail partners. Right, it's the chickens. 514 00:30:04,000 --> 00:30:07,600 Speaker 1: It's less risk of you know, environmental destruction, if there's 515 00:30:07,600 --> 00:30:12,120 Speaker 1: a flood, I mean better resilience for our factory workers, etcetera, etcetera. 516 00:30:12,520 --> 00:30:18,000 Speaker 1: And so those things cost money, right, those things aren't 517 00:30:18,040 --> 00:30:22,960 Speaker 1: all cheaper to do than a factory farm approach. Therefore, 518 00:30:23,560 --> 00:30:25,640 Speaker 1: we have to have a way to get credit for 519 00:30:25,680 --> 00:30:28,240 Speaker 1: them and have that resonate with consumers in order to exist, 520 00:30:28,280 --> 00:30:30,960 Speaker 1: because otherwise we're just the most expensive egg producer in America. 521 00:30:31,880 --> 00:30:34,360 Speaker 1: So it's not a tradeoff like it's not. Well, we're 522 00:30:34,360 --> 00:30:35,920 Speaker 1: gonna have a certain amount of purpose, but we've got 523 00:30:36,040 --> 00:30:37,480 Speaker 1: to balance that with how much we dropped to the 524 00:30:37,520 --> 00:30:40,200 Speaker 1: bottom line. It's actually a whole reason to exist and 525 00:30:40,480 --> 00:30:44,520 Speaker 1: our strategy for for success in the marketplace. Are there 526 00:30:44,560 --> 00:30:47,120 Speaker 1: any other leaders you mentioned the CEO of don Owne. 527 00:30:47,320 --> 00:30:50,880 Speaker 1: Are there other leaders of purpose led businesses that have 528 00:30:51,040 --> 00:30:54,080 Speaker 1: come to inspire you as you have kind of entered 529 00:30:54,120 --> 00:30:57,480 Speaker 1: that or made the transition from the freedman model to 530 00:30:57,960 --> 00:31:01,360 Speaker 1: the purpose led model. Well, certainly, you know Whole Foods 531 00:31:01,440 --> 00:31:04,240 Speaker 1: and John Mackie loom large for us at Vital Farms. 532 00:31:05,480 --> 00:31:10,800 Speaker 1: They do an incredible amount of work verifying their vendors. 533 00:31:11,320 --> 00:31:14,120 Speaker 1: So when they set out their own standards for egg production. 534 00:31:14,560 --> 00:31:16,880 Speaker 1: They visited every one of our farms and they do 535 00:31:17,320 --> 00:31:21,880 Speaker 1: every year to eighteen months. Nobody else that we supplied 536 00:31:21,880 --> 00:31:24,560 Speaker 1: to does anything close to that. So I have a 537 00:31:24,600 --> 00:31:27,320 Speaker 1: ton of appreciation for Whole Foods because they kind of 538 00:31:27,360 --> 00:31:29,040 Speaker 1: do what they say, and they say what they do. 539 00:31:29,120 --> 00:31:31,440 Speaker 1: In fact, they probably do more than they get credit 540 00:31:31,480 --> 00:31:34,720 Speaker 1: for in some regards. In terms of other leaders, one 541 00:31:34,800 --> 00:31:37,680 Speaker 1: that has always been an influence for me as Paul Pullman, 542 00:31:37,880 --> 00:31:40,120 Speaker 1: certainly when he was at Lever and the work he's 543 00:31:40,160 --> 00:31:42,640 Speaker 1: doing since then. And then one of the kind of 544 00:31:42,640 --> 00:31:46,160 Speaker 1: holy grail companies that we always look at is Patagonia. 545 00:31:46,240 --> 00:31:48,440 Speaker 1: There's always a little bit about what would Patagonia do 546 00:31:48,960 --> 00:31:54,160 Speaker 1: question in our discussions to learn more about how vital 547 00:31:54,200 --> 00:31:58,160 Speaker 1: Farms mission drives company culture and for some great advice 548 00:31:58,240 --> 00:32:02,960 Speaker 1: for anyone trying to leave a purpose led organization, stay 549 00:32:03,000 --> 00:32:08,959 Speaker 1: with us before you head to the break. We'd love 550 00:32:09,000 --> 00:32:11,560 Speaker 1: to hear what you think about the show. Maybe you 551 00:32:11,600 --> 00:32:14,880 Speaker 1: were inspired to take action, maybe you disagree with today's 552 00:32:14,920 --> 00:32:18,200 Speaker 1: bullshit rating. Either way, we want to hear about it. 553 00:32:18,520 --> 00:32:21,120 Speaker 1: Leave us a message at two one two five oh 554 00:32:21,200 --> 00:32:25,880 Speaker 1: five five, or send a voice memo to CBS Podcast 555 00:32:25,960 --> 00:32:29,440 Speaker 1: at co collective dot com. You might even be featured 556 00:32:29,520 --> 00:32:48,560 Speaker 1: on an upcoming episode back with Vital Farms CEO Russell 557 00:32:48,680 --> 00:32:51,920 Speaker 1: Diaz Conseco talking about how they do their best to 558 00:32:52,040 --> 00:33:00,520 Speaker 1: truly live their mission. So I guess in the realm 559 00:33:00,800 --> 00:33:04,719 Speaker 1: of advice to other leaders now that you you know 560 00:33:04,920 --> 00:33:08,320 Speaker 1: you have made this transition. You know, Vital Farms began 561 00:33:08,680 --> 00:33:11,200 Speaker 1: as a purpose led business, but there are now a 562 00:33:11,280 --> 00:33:15,480 Speaker 1: lot of companies that didn't begin as purpose led businesses 563 00:33:15,520 --> 00:33:19,640 Speaker 1: who are really trying to make that transition. So what 564 00:33:19,760 --> 00:33:23,760 Speaker 1: advice would you have for other CEOs who are beginning 565 00:33:23,800 --> 00:33:27,920 Speaker 1: that journey. Great question. I had the luxury of coming 566 00:33:27,960 --> 00:33:31,600 Speaker 1: into it sort of already rooted in in this place. 567 00:33:32,000 --> 00:33:34,040 Speaker 1: I do get calls occasionally from c e o s 568 00:33:34,080 --> 00:33:36,520 Speaker 1: who asked, how do I do that? And it's often 569 00:33:36,560 --> 00:33:40,080 Speaker 1: in service of a financial goal. Hey, I'm thinking about 570 00:33:40,080 --> 00:33:41,960 Speaker 1: having an I p O. What do you think the 571 00:33:42,080 --> 00:33:44,160 Speaker 1: impact of my valuation would be if we had a 572 00:33:44,160 --> 00:33:47,960 Speaker 1: purpose Hey, I'm thinking about doing a fundraise and I 573 00:33:48,000 --> 00:33:50,080 Speaker 1: wanted what what it would it mean if I were 574 00:33:50,120 --> 00:33:52,160 Speaker 1: a B corp? Could I if I were a B corp? 575 00:33:52,280 --> 00:33:54,280 Speaker 1: How how much is that worth? And it's almost like 576 00:33:54,280 --> 00:33:57,920 Speaker 1: a checklist item, and I got to tell you, I 577 00:33:57,960 --> 00:33:59,760 Speaker 1: think you don't get the value of it if you 578 00:33:59,800 --> 00:34:03,160 Speaker 1: think about it that way. And the example I would 579 00:34:03,160 --> 00:34:06,000 Speaker 1: give is our crew members. I believe that we have 580 00:34:06,120 --> 00:34:08,560 Speaker 1: some of the best people working at Vital Farms that 581 00:34:08,600 --> 00:34:11,439 Speaker 1: you'll find anywhere. But one of the things that all 582 00:34:11,480 --> 00:34:13,279 Speaker 1: those people have in common, and it shows up in 583 00:34:13,280 --> 00:34:15,440 Speaker 1: our engagement surveys, that shows up in our town halls, 584 00:34:15,520 --> 00:34:19,839 Speaker 1: is their role as stakeholders and their expectations of us 585 00:34:19,840 --> 00:34:22,480 Speaker 1: in terms of the transparency, the way we treat them, 586 00:34:22,520 --> 00:34:25,520 Speaker 1: the way we behave. Their expectations are perhaps higher than 587 00:34:25,560 --> 00:34:27,880 Speaker 1: any other stakeholder group. They're in a position to know 588 00:34:28,000 --> 00:34:30,600 Speaker 1: exactly what's going on in the business and they have 589 00:34:30,840 --> 00:34:35,040 Speaker 1: zero tolerance for any bs. So, if you have a 590 00:34:35,080 --> 00:34:39,120 Speaker 1: purpose but it's just on the wall and you're not 591 00:34:39,160 --> 00:34:41,880 Speaker 1: really living it, or if you have a purpose but 592 00:34:42,280 --> 00:34:45,160 Speaker 1: it actually isn't the thing that the people you've hired 593 00:34:45,800 --> 00:34:49,000 Speaker 1: are wired to be excited about. It's not going to 594 00:34:49,040 --> 00:34:51,360 Speaker 1: inspire them and it's not going to be a reason 595 00:34:51,400 --> 00:34:54,000 Speaker 1: for them to come or to stay. And so you've 596 00:34:54,040 --> 00:34:56,279 Speaker 1: got to do it for real, and you've got to 597 00:34:56,320 --> 00:34:59,120 Speaker 1: start with the purpose and let the business model come 598 00:34:59,200 --> 00:35:01,640 Speaker 1: from that as a pose to trying to stick a 599 00:35:01,719 --> 00:35:03,840 Speaker 1: purpose on top of a business model that you already 600 00:35:03,840 --> 00:35:07,239 Speaker 1: think is the right one. Right back to that, I 601 00:35:07,280 --> 00:35:12,239 Speaker 1: thought your insight about thinking about being purpose led through 602 00:35:12,280 --> 00:35:14,319 Speaker 1: the lens of how is this going to add to 603 00:35:14,360 --> 00:35:18,000 Speaker 1: our valuation is the wrong way to think about it. Um. 604 00:35:18,000 --> 00:35:20,239 Speaker 1: But it leads to another question that I wanted to 605 00:35:20,239 --> 00:35:23,040 Speaker 1: touch on, which is does being purpose led mean being 606 00:35:23,480 --> 00:35:27,480 Speaker 1: less competitive? God, so let me talk a little bit 607 00:35:27,480 --> 00:35:29,279 Speaker 1: more about what a purpose does for me? And I 608 00:35:29,400 --> 00:35:31,600 Speaker 1: totally did not get this twenty years ago, right I 609 00:35:31,760 --> 00:35:33,640 Speaker 1: I want to be very humble about the fact that 610 00:35:33,880 --> 00:35:35,759 Speaker 1: I'm a work in progress and the company's of work 611 00:35:35,800 --> 00:35:37,960 Speaker 1: in progress, and we're still figuring this out. There's a 612 00:35:38,000 --> 00:35:40,839 Speaker 1: lot of talk about strategy and about the CEO being 613 00:35:40,840 --> 00:35:44,120 Speaker 1: the chief strategy officer, the chief vision officer, and they 614 00:35:44,160 --> 00:35:46,200 Speaker 1: got to set the direction and set the guardrails and 615 00:35:46,200 --> 00:35:50,760 Speaker 1: then unleash the potential of the organization. I would argue 616 00:35:50,800 --> 00:35:54,120 Speaker 1: that nothing is a better north star than a purpose 617 00:35:54,200 --> 00:35:56,560 Speaker 1: that you're all aligned around. And that's not just for 618 00:35:56,680 --> 00:36:00,319 Speaker 1: you and your employees. That's for your shareholders, that's for 619 00:36:00,360 --> 00:36:05,480 Speaker 1: your customers, right, that's for your board the purpose and alignment, 620 00:36:05,480 --> 00:36:10,920 Speaker 1: amount of purpose and progress towards your purpose is the 621 00:36:10,960 --> 00:36:14,279 Speaker 1: thing that calvanizes us all. It guides people in the 622 00:36:14,360 --> 00:36:18,560 Speaker 1: moment when nobody else is watching, about maybe what the 623 00:36:18,640 --> 00:36:23,320 Speaker 1: right decision is. It can guide us in our strategic conversations, 624 00:36:23,360 --> 00:36:25,919 Speaker 1: how does this help us achieve our purpose? It can 625 00:36:25,960 --> 00:36:29,640 Speaker 1: embolden you to take risks and do things that might 626 00:36:29,719 --> 00:36:31,440 Speaker 1: not pay off in the short run but pay off 627 00:36:31,440 --> 00:36:33,560 Speaker 1: in the long run. And you know, the example that 628 00:36:33,600 --> 00:36:34,880 Speaker 1: I like to use, and it may or may not 629 00:36:34,920 --> 00:36:41,200 Speaker 1: seem relevant to little food company like Vital Farms, is Tesla, right? 630 00:36:41,400 --> 00:36:45,360 Speaker 1: I mean, look, a lot of people have strong opinions 631 00:36:45,360 --> 00:36:48,640 Speaker 1: about Alan Musk and about Tesla, But regardless of where 632 00:36:48,640 --> 00:36:52,160 Speaker 1: you sit in all that debate, I think it's fair 633 00:36:52,200 --> 00:36:55,879 Speaker 1: to say a lot of Musk said many, many years ago, 634 00:36:56,520 --> 00:37:00,320 Speaker 1: I want to move this planet to less dependence on oil, 635 00:37:00,360 --> 00:37:02,319 Speaker 1: and I'm going to do that through a bunch of things. 636 00:37:02,320 --> 00:37:04,000 Speaker 1: But the first one is going to be electric cars. 637 00:37:05,360 --> 00:37:09,680 Speaker 1: And and look what he's done. He's not. I mean, 638 00:37:10,440 --> 00:37:14,040 Speaker 1: so many companies are tripping over themselves making announcements about 639 00:37:14,040 --> 00:37:16,239 Speaker 1: their electric cars that are coming out after years of 640 00:37:16,280 --> 00:37:20,640 Speaker 1: ignoring it. He lit the flame were all, so many 641 00:37:20,800 --> 00:37:24,400 Speaker 1: cars are going to be electric, maybe a fraction of 642 00:37:24,440 --> 00:37:27,160 Speaker 1: him will be Tesla's. He didn't start Tesla to make money. 643 00:37:27,160 --> 00:37:31,359 Speaker 1: He started Tesla to electrify the auto industry. No, that's right. 644 00:37:31,480 --> 00:37:33,560 Speaker 1: And one of the proof points along the way that 645 00:37:33,840 --> 00:37:37,800 Speaker 1: people some people may have forgotten, is that he actually 646 00:37:37,840 --> 00:37:42,080 Speaker 1: opened up their patent portfolio to competitors in order to 647 00:37:42,280 --> 00:37:46,080 Speaker 1: actually make that happen. He was like, the more electric 648 00:37:46,080 --> 00:37:48,040 Speaker 1: cars there are in the world, the better off the 649 00:37:48,040 --> 00:37:49,920 Speaker 1: world is going to be in, the better off we 650 00:37:49,960 --> 00:37:54,719 Speaker 1: will be as a company. Yeah, exactly. So, yeah, we 651 00:37:54,719 --> 00:37:57,680 Speaker 1: we would call that an iconic action at our company, 652 00:37:57,760 --> 00:38:01,080 Speaker 1: Like there are things that that purpose companies ought to 653 00:38:01,120 --> 00:38:04,640 Speaker 1: do just because they will make people sit up and go, wow, 654 00:38:04,719 --> 00:38:09,280 Speaker 1: they really mean it. So pivoting back to entrepreneurs, because 655 00:38:09,320 --> 00:38:12,200 Speaker 1: there's a whole generation of purpose led businesses being born. 656 00:38:13,000 --> 00:38:16,080 Speaker 1: You know what advice would you give to the purpose 657 00:38:16,160 --> 00:38:20,160 Speaker 1: led entrepreneurs of tomorrow who are the next generation of 658 00:38:20,400 --> 00:38:24,280 Speaker 1: matdow Hairs. I think two things stand out as advice 659 00:38:24,360 --> 00:38:26,880 Speaker 1: that I would give to an entrepreneur who's kind of 660 00:38:26,880 --> 00:38:29,920 Speaker 1: thinking about this as a topic. One is, even in 661 00:38:29,960 --> 00:38:34,560 Speaker 1: those early days when you're stressed and bootstrapping and don't 662 00:38:34,560 --> 00:38:36,480 Speaker 1: know about making payroll and all the things that a 663 00:38:36,880 --> 00:38:41,839 Speaker 1: startup um founder is facing. Even then, you still have 664 00:38:41,960 --> 00:38:44,319 Speaker 1: to be choosy about who your partner with and where 665 00:38:44,320 --> 00:38:48,840 Speaker 1: you get your money from, because if you're misaligned with 666 00:38:48,920 --> 00:38:53,000 Speaker 1: your early investors on your purpose and your commitment to it, 667 00:38:53,000 --> 00:38:55,239 Speaker 1: it's going to be really hard to stick to it. 668 00:38:56,680 --> 00:39:00,520 Speaker 1: That's number one. And there were times in our growth 669 00:39:00,640 --> 00:39:03,799 Speaker 1: when I watched us not take the money we really 670 00:39:03,800 --> 00:39:06,360 Speaker 1: thought we needed because we couldn't get it from the 671 00:39:06,440 --> 00:39:09,200 Speaker 1: right place and we knew that would be disruptive. The 672 00:39:09,239 --> 00:39:12,279 Speaker 1: second thing I would say is you've got to live it. 673 00:39:13,000 --> 00:39:15,280 Speaker 1: You have to live it even in your darkest moment. 674 00:39:15,400 --> 00:39:17,400 Speaker 1: You can't cut a corner because you feel like you 675 00:39:17,440 --> 00:39:19,279 Speaker 1: have no other choice. As soon as you do that, 676 00:39:20,400 --> 00:39:23,759 Speaker 1: then it's a little bit of of a takeaway from 677 00:39:23,760 --> 00:39:26,880 Speaker 1: the purpose you've articulated and from the trust your stakeholders 678 00:39:26,880 --> 00:39:28,640 Speaker 1: have in you that you really mean what you're saying. 679 00:39:29,040 --> 00:39:31,680 Speaker 1: So two really hard things to do in those early days. 680 00:39:33,200 --> 00:39:38,520 Speaker 1: Choose your partners wisely and don't stray. Let's pivot to 681 00:39:38,600 --> 00:39:42,719 Speaker 1: the company culture because it's such a an important part 682 00:39:42,760 --> 00:39:46,760 Speaker 1: of the equation. How would you describe your company culture 683 00:39:47,040 --> 00:39:50,760 Speaker 1: at Vital Farms. Well, that's a great question. First of all, 684 00:39:51,080 --> 00:39:54,520 Speaker 1: it's absolutely rooted in the tenets of conscious capitalism. It's 685 00:39:54,560 --> 00:39:58,640 Speaker 1: something we sort of select for, it's something we manage against, 686 00:39:58,680 --> 00:40:01,000 Speaker 1: it's something we talked about in our day to day work. 687 00:40:01,560 --> 00:40:05,000 Speaker 1: The way that we bring those to life in UH 688 00:40:05,040 --> 00:40:08,000 Speaker 1: in terms of company values again, so that they can 689 00:40:08,040 --> 00:40:11,319 Speaker 1: be more tangible and so that we can recognize when 690 00:40:11,360 --> 00:40:14,399 Speaker 1: people are doing them and aren't doing them. Who articulated 691 00:40:14,440 --> 00:40:18,480 Speaker 1: five values that we believe are important ingredients to being 692 00:40:18,719 --> 00:40:22,359 Speaker 1: a part of a conscious company. The first is humility. 693 00:40:22,920 --> 00:40:26,399 Speaker 1: So we think humility is really important because if you're 694 00:40:26,400 --> 00:40:32,640 Speaker 1: going to have truly collaborative relationships with your stakeholders, you 695 00:40:32,719 --> 00:40:35,440 Speaker 1: have to be open to potentially them having some new 696 00:40:35,440 --> 00:40:38,360 Speaker 1: information or a different idea that you need to be 697 00:40:38,400 --> 00:40:41,080 Speaker 1: open to accepting and working with. You have to have 698 00:40:41,160 --> 00:40:45,000 Speaker 1: the humility to admit when you've got something wrong. Um 699 00:40:45,080 --> 00:40:47,400 Speaker 1: in order for people to trust you with their feedback. 700 00:40:47,840 --> 00:40:52,759 Speaker 1: Ownership again, in the spirit of collaborative problem solving across stakeholders, 701 00:40:53,080 --> 00:40:56,879 Speaker 1: we want our people to have extreme ownership over their 702 00:40:56,920 --> 00:40:59,879 Speaker 1: goal or the project they're managing or the result they're 703 00:40:59,880 --> 00:41:03,400 Speaker 1: going after. But that doesn't mean doing all the work yourself. 704 00:41:03,640 --> 00:41:07,840 Speaker 1: So ownership for the goal, but not necessarily working in 705 00:41:07,840 --> 00:41:09,759 Speaker 1: a vacuum to get it done. We want you to 706 00:41:09,800 --> 00:41:13,800 Speaker 1: have a growth mindset, this sense of we reserve the 707 00:41:13,880 --> 00:41:17,200 Speaker 1: right to get smarter over time, that in order to 708 00:41:17,280 --> 00:41:21,120 Speaker 1: disrupt the dominant paradigm of food production, you have to 709 00:41:21,160 --> 00:41:23,360 Speaker 1: be open to the possibility that some of the things 710 00:41:23,440 --> 00:41:26,480 Speaker 1: you have to do look impossible, and you have to 711 00:41:26,520 --> 00:41:30,040 Speaker 1: be open to the possibility that with enough human ingenuity 712 00:41:30,120 --> 00:41:34,760 Speaker 1: you could make them possible. And you need to have empathy. 713 00:41:35,320 --> 00:41:39,640 Speaker 1: It's very hard to really work in a true sort 714 00:41:39,680 --> 00:41:42,799 Speaker 1: of peer to peer relationship with a stakeholder if you 715 00:41:43,440 --> 00:41:46,000 Speaker 1: can't walk in their shoes. And the last one is 716 00:41:46,680 --> 00:41:50,200 Speaker 1: a competitive spirit. For this to be sustainable for the 717 00:41:50,200 --> 00:41:52,560 Speaker 1: long haul for all of our stakeholders, we have to win. 718 00:41:53,280 --> 00:41:56,680 Speaker 1: We've got to win, and we are passionate about winning 719 00:41:56,800 --> 00:41:59,799 Speaker 1: on behalf of our stakeholders. And that is part of 720 00:41:59,800 --> 00:42:03,040 Speaker 1: the true north or that you know that that purpose, 721 00:42:03,160 --> 00:42:05,480 Speaker 1: that that helps get us out of bed every morning 722 00:42:05,480 --> 00:42:10,160 Speaker 1: to go to go back to battle with whichever competitor 723 00:42:10,200 --> 00:42:13,080 Speaker 1: were focused on, whether it's competing for the best farmers, 724 00:42:13,120 --> 00:42:15,839 Speaker 1: competing for the best space on the shelf, competing for 725 00:42:16,360 --> 00:42:20,280 Speaker 1: scarce consumer attention, um competing for the best crew members. 726 00:42:20,760 --> 00:42:22,920 Speaker 1: So those are the ways in which I would describe 727 00:42:22,960 --> 00:42:25,640 Speaker 1: our culture and certainly at least the things that we 728 00:42:25,719 --> 00:42:29,440 Speaker 1: focus on reinforcing in our culture. Are there problems or 729 00:42:29,480 --> 00:42:32,200 Speaker 1: opportunities in your industry that you would like to see 730 00:42:32,239 --> 00:42:34,839 Speaker 1: the company take on in the future, And I mean 731 00:42:34,920 --> 00:42:38,680 Speaker 1: that broadly the food industry. Are there opportunities that or 732 00:42:38,760 --> 00:42:41,840 Speaker 1: problems that you'd like to take on in the future, 733 00:42:41,880 --> 00:42:45,719 Speaker 1: really use your purpose to take on or solve, you know, 734 00:42:45,880 --> 00:42:51,880 Speaker 1: they're seemingly limitless opportunity to disrupt both factory food in 735 00:42:51,920 --> 00:42:57,040 Speaker 1: the way that we discussed earlier and frankly sort of 736 00:42:57,400 --> 00:43:03,600 Speaker 1: factory management, factory corporate management. And so for me, it's 737 00:43:03,600 --> 00:43:05,680 Speaker 1: not so much that I would point to a specific 738 00:43:05,840 --> 00:43:09,160 Speaker 1: animal husbandry practice that we want to change, and I 739 00:43:09,200 --> 00:43:13,000 Speaker 1: would talk more broadly about the opportunity to really bring 740 00:43:13,040 --> 00:43:15,520 Speaker 1: a whole new way of doing business, the whole new 741 00:43:15,520 --> 00:43:19,720 Speaker 1: way of thinking about building trust and transparency, getting credit 742 00:43:19,760 --> 00:43:23,600 Speaker 1: for what you're doing. I mean, again, the biggest hindrance 743 00:43:23,640 --> 00:43:27,239 Speaker 1: in my estimation two people being willing to pay more 744 00:43:27,880 --> 00:43:30,440 Speaker 1: for food like ours that cost more to produce but 745 00:43:30,600 --> 00:43:34,200 Speaker 1: is meaningfully different. Is them trusting that it's meaningfully different. 746 00:43:34,600 --> 00:43:37,040 Speaker 1: A lot of consumers say, I'd be willing to pay more, 747 00:43:37,080 --> 00:43:40,280 Speaker 1: but I just don't believe what I'm getting. Small example 748 00:43:40,840 --> 00:43:43,400 Speaker 1: years ago, I got to meet with a grocery a 749 00:43:43,440 --> 00:43:46,680 Speaker 1: buyer at a grocery chain we hadn't met with before 750 00:43:46,840 --> 00:43:49,560 Speaker 1: to talk about our eggs. And we have our standard 751 00:43:49,600 --> 00:43:52,399 Speaker 1: presentation and we talk about what we're doing, and at 752 00:43:52,400 --> 00:43:54,440 Speaker 1: the end he kind of rolls his eyes and he said, 753 00:43:55,160 --> 00:43:57,280 Speaker 1: how do I know you're doing any of that stuff? 754 00:43:57,320 --> 00:44:01,160 Speaker 1: The eggs all look the same. In fact, at least 755 00:44:01,200 --> 00:44:04,160 Speaker 1: when I buy eggs from birds that are in cages, 756 00:44:04,600 --> 00:44:09,640 Speaker 1: I know what I'm getting, right. So people say, well, gosh, 757 00:44:09,719 --> 00:44:11,600 Speaker 1: are there really a lot of people in America that 758 00:44:11,640 --> 00:44:14,040 Speaker 1: could pay six bucks for a dozen eggs? And I 759 00:44:14,040 --> 00:44:16,200 Speaker 1: would push back and say, first of all, that's not 760 00:44:16,280 --> 00:44:20,200 Speaker 1: a whole lot, And actually six dollars for a dozen 761 00:44:20,200 --> 00:44:22,360 Speaker 1: eggs is fifty cents an egg. You can have breakfast 762 00:44:22,400 --> 00:44:25,400 Speaker 1: for a buck. Is that really a lot? The hold 763 00:44:25,440 --> 00:44:28,919 Speaker 1: back is not people who have six bucks. The hold 764 00:44:28,920 --> 00:44:31,640 Speaker 1: back is people who trust that it's worth more than 765 00:44:31,680 --> 00:44:35,160 Speaker 1: a buck for that thing we're producing. So that's what 766 00:44:35,239 --> 00:44:38,839 Speaker 1: I wanted to disrupt. I want transparency, I want to 767 00:44:38,880 --> 00:44:42,040 Speaker 1: create more and more jobs that are meaningful in a 768 00:44:42,080 --> 00:44:46,120 Speaker 1: purpose driven company, and I want more stakeholder alignment. I 769 00:44:46,160 --> 00:44:48,640 Speaker 1: think it's good for the world. That's what I want 770 00:44:48,680 --> 00:44:55,600 Speaker 1: for the industry. That Okay, last question. So we define 771 00:44:55,719 --> 00:45:00,240 Speaker 1: BS on this show as the gap between word indeed, 772 00:45:00,000 --> 00:45:02,279 Speaker 1: and so we have a tool that we call the 773 00:45:02,360 --> 00:45:06,200 Speaker 1: VS Scale where we rate organizations and ask them to 774 00:45:06,280 --> 00:45:10,279 Speaker 1: rate themselves on that gap. On that scale, zero being 775 00:45:10,320 --> 00:45:14,320 Speaker 1: the best zero gap between word indeed and a hundred 776 00:45:14,320 --> 00:45:18,080 Speaker 1: being the worst total BS. Taking into consideration that you 777 00:45:18,120 --> 00:45:21,719 Speaker 1: are on your purpose led journey, where would you rate 778 00:45:21,840 --> 00:45:28,120 Speaker 1: vital farms on that scale today? So you know, I'd 779 00:45:28,160 --> 00:45:30,880 Speaker 1: love to say zero. And the truth is, as I 780 00:45:30,920 --> 00:45:33,120 Speaker 1: think about it, I can't think of a of a 781 00:45:33,239 --> 00:45:36,799 Speaker 1: material way in which we should deserve something less than 782 00:45:36,840 --> 00:45:40,279 Speaker 1: a zero. But at the same time, I've been here 783 00:45:40,360 --> 00:45:43,280 Speaker 1: an awful lot of years, and there is a difference 784 00:45:43,320 --> 00:45:47,080 Speaker 1: between your good intentions and your actions. And I couldn't 785 00:45:47,120 --> 00:45:49,719 Speaker 1: tell you that on every day, every one of our 786 00:45:49,800 --> 00:45:53,120 Speaker 1: over two people and all of their partners are doing 787 00:45:53,160 --> 00:45:57,880 Speaker 1: everything exactly the way we would in the boardroom, and 788 00:45:57,960 --> 00:46:03,959 Speaker 1: so I'm gonna say, Ted, give us a little room 789 00:46:04,239 --> 00:46:06,120 Speaker 1: for the humanity of what we're doing and the fact 790 00:46:06,160 --> 00:46:09,520 Speaker 1: that we do get better every day. Yeah. I love 791 00:46:09,560 --> 00:46:12,960 Speaker 1: that answer, because nobody's perfect, right. And also, we really 792 00:46:13,000 --> 00:46:17,560 Speaker 1: believe that your purpose should transcend your current state. In 793 00:46:17,560 --> 00:46:20,400 Speaker 1: other words, you should it should be ambitious, it should 794 00:46:20,400 --> 00:46:22,560 Speaker 1: be driving change, it should be something that you have 795 00:46:22,640 --> 00:46:27,279 Speaker 1: to grow into over time. So Russell, thank you so 796 00:46:27,360 --> 00:46:30,480 Speaker 1: much for the time today and for your wisdom. We 797 00:46:30,520 --> 00:46:34,200 Speaker 1: really appreciate it. This was absolutely great. Thank you, Ti. 798 00:46:34,239 --> 00:46:43,920 Speaker 1: I enjoyed it very much. I'd like to end this 799 00:46:44,000 --> 00:46:48,120 Speaker 1: show by giving Vital Farms an official BS score. As 800 00:46:48,160 --> 00:46:51,080 Speaker 1: you know, the scale goes from zero to a hundred. 801 00:46:51,440 --> 00:46:55,239 Speaker 1: Zero means there's zero gap between word and deed, and 802 00:46:55,320 --> 00:46:59,359 Speaker 1: a hundred means complete BS. Russell gave himself a ten. 803 00:47:00,160 --> 00:47:02,880 Speaker 1: Based on what I've heard today, I'm going to actually 804 00:47:02,920 --> 00:47:06,640 Speaker 1: give him a slightly better score. I'm going to give 805 00:47:06,719 --> 00:47:10,440 Speaker 1: Vital Farms an eight. By the way, that's the lowest 806 00:47:10,440 --> 00:47:13,959 Speaker 1: score of our season so far. So why an eight 807 00:47:14,840 --> 00:47:17,680 Speaker 1: Because one of the key aspects of being purpose led 808 00:47:17,800 --> 00:47:21,040 Speaker 1: is transparency. It would have been easy for Russell to 809 00:47:21,040 --> 00:47:24,279 Speaker 1: give himself in the company a zero, but by acknowledging 810 00:47:24,280 --> 00:47:26,839 Speaker 1: that Vital Farms is on a journey and that there 811 00:47:26,960 --> 00:47:30,120 Speaker 1: is always more work to be done, he builds trust 812 00:47:30,880 --> 00:47:34,120 Speaker 1: and trust is the most important form of capital in 813 00:47:34,200 --> 00:47:39,520 Speaker 1: business today. And look, of course no company is perfect, 814 00:47:40,160 --> 00:47:42,560 Speaker 1: but I really believe that Vital Farms heart is in 815 00:47:42,600 --> 00:47:45,520 Speaker 1: the right place. They're trying to live their purpose with 816 00:47:45,560 --> 00:47:50,200 Speaker 1: transparency and integrity and backing up their words with actions 817 00:47:50,239 --> 00:47:54,759 Speaker 1: that build trust with all of their stakeholders. So, if 818 00:47:54,800 --> 00:47:57,440 Speaker 1: you're starting a purpose led business or you're thinking of 819 00:47:57,520 --> 00:48:01,160 Speaker 1: beginning the journey of transformation to become one, here are 820 00:48:01,280 --> 00:48:04,640 Speaker 1: three things that Russell said that you should take away 821 00:48:04,680 --> 00:48:10,120 Speaker 1: from this episode. One, if you're a purpose led entrepreneur 822 00:48:10,800 --> 00:48:14,640 Speaker 1: who you take money from, matters a lot. In the 823 00:48:14,680 --> 00:48:18,719 Speaker 1: early days, your bootstrapping and worried about making payroll, so 824 00:48:18,760 --> 00:48:21,560 Speaker 1: there's a lot of pressure to take any money that's offered, 825 00:48:22,120 --> 00:48:24,040 Speaker 1: but it will pay off in the long run. To 826 00:48:24,040 --> 00:48:28,280 Speaker 1: be choosy investors who align with your purpose and understand 827 00:48:28,480 --> 00:48:35,520 Speaker 1: all of the stakeholders you serve are vital. Two, your 828 00:48:35,560 --> 00:48:38,640 Speaker 1: purpose drives your business model, not the other way around. 829 00:48:39,440 --> 00:48:42,120 Speaker 1: If you're the CEO of an established company starting the 830 00:48:42,200 --> 00:48:45,680 Speaker 1: journey to become purpose led. A purpose isn't something you 831 00:48:45,719 --> 00:48:49,000 Speaker 1: slap on as an afterthought. It needs to sit at 832 00:48:49,040 --> 00:48:51,480 Speaker 1: the core of your business and it needs to be 833 00:48:51,560 --> 00:48:58,680 Speaker 1: operationalized throughout. This takes time and real work. Three purpose 834 00:48:59,120 --> 00:49:04,600 Speaker 1: drives culture. Any conscious enterprise needs to define its values. 835 00:49:05,320 --> 00:49:09,800 Speaker 1: At Vital Farms there are five Humility, extreme ownership of goals, 836 00:49:10,239 --> 00:49:15,440 Speaker 1: getting smarter over time, empathy, and a competitive spirit. Now 837 00:49:15,520 --> 00:49:19,160 Speaker 1: your values may be different, but they should be explicit 838 00:49:19,719 --> 00:49:35,360 Speaker 1: and they have to be driven by your purpose. To 839 00:49:35,440 --> 00:49:38,480 Speaker 1: weigh in with your thoughts on this episode, visit our 840 00:49:38,520 --> 00:49:42,680 Speaker 1: website Calling Bullshit Podcast dot com. You'll be able to 841 00:49:42,719 --> 00:49:45,719 Speaker 1: see where Vital Farms ranks on BS compared to the 842 00:49:45,840 --> 00:49:50,040 Speaker 1: other companies and organizations we feature on the show. And 843 00:49:50,160 --> 00:49:54,480 Speaker 1: thank you for joining us today, Russell Diez Conseco, and 844 00:49:54,560 --> 00:49:57,120 Speaker 1: thanks to the whole Vital Farms team for helping to 845 00:49:57,160 --> 00:50:01,360 Speaker 1: make this episode happen. You can find Vital Farms social 846 00:50:01,400 --> 00:50:06,200 Speaker 1: media handles on our site Calling Bullshit Podcast dot com. 847 00:50:06,360 --> 00:50:08,960 Speaker 1: Have an idea for a company or organization we should 848 00:50:08,960 --> 00:50:11,480 Speaker 1: consider for the show, you can submit that on the 849 00:50:11,520 --> 00:50:16,160 Speaker 1: site too, and if you thought this episode was clucking great, 850 00:50:17,040 --> 00:50:20,200 Speaker 1: subscribe to the Calling Bullshit podcast on the I Heart 851 00:50:20,320 --> 00:50:24,400 Speaker 1: Radio app, Apple Podcasts, or wherever you get your podcasts. 852 00:50:26,880 --> 00:50:30,920 Speaker 1: And thanks to our production team Hannah Beal, Jess Benton, 853 00:50:31,400 --> 00:50:38,480 Speaker 1: Amanda Ginsburg, Andy Kim Hailey, Pascalites, D S. Moss, MICHAELA. Reid, 854 00:50:39,040 --> 00:50:44,000 Speaker 1: Basil Soaper and me John Zulu. Calling Bullshit was created 855 00:50:44,000 --> 00:50:47,560 Speaker 1: by co Collective and is hosted by Me Time onto you. 856 00:50:48,320 --> 00:51:06,960 Speaker 1: Thanks for listening. Before you go, we'd love to hear 857 00:51:07,000 --> 00:51:09,920 Speaker 1: what you think about the show. Maybe you were inspired 858 00:51:09,960 --> 00:51:13,359 Speaker 1: to take action, maybe you disagree with today's bullshit rating. 859 00:51:13,640 --> 00:51:16,560 Speaker 1: Either way, we want to hear about it. Leave us 860 00:51:16,600 --> 00:51:20,560 Speaker 1: a message at two one two five oh five zero five, 861 00:51:21,080 --> 00:51:24,000 Speaker 1: or send a voice memo to CBS podcast at co 862 00:51:24,000 --> 00:51:27,440 Speaker 1: collective dot com. You might even be featured on an 863 00:51:27,520 --> 00:51:28,520 Speaker 1: upcoming episode.