The Earth’s Best Story:
Lessons Learned from the Organic Baby Food Pioneers
An Interview with Founders Ron and Arnie Koss on Their New Memoir
Trailblazers not only clear a path that makes it easier for others to follow—they also prove that something no one else has done before can actually be done. They are the idealists who bravely take action to make their dream become reality.
In the organic industry, we all have trailblazers Ron and Arnie Koss, the founders of Earth’s Best baby food, to thank. Bushwhacking their way through challenge after challenge, they developed the first major organic processed product that broke through to nationwide mainstream distribution. When the twin brothers started Earth’s Best, there was no organic infrastructure to speak of and national regulations were still a dream. Yet today, due to the twins’ perseverance, Earth’s Best is sitting next to Gerber and Beech-Nut in grocery stores throughout the world and has opened the door for many other organic products to enter the mainstream as well.
Trailblazing has its risks, though. The Koss brothers risked it all to bring their dream to life, but in the end, they lost ownership of their company. Along this emotional adventure of entrepreneurship they learned some valuable lessons in business—and in life—that are still very relevant. Their recently released memoir, The Earth’s Best Story: A Bittersweet Tale of Twin Brothers Who Sparked an Organic Revolution, offers insight into everything from raising capital and product development to learning how to better relate to everyone you do business with. The Earth’s Best Story is a must-read for anyone who wants to start, or already owns, a business that seeks to make a difference. It’s a good dose of reality—a glimpse into how unfair the business world can be. But, it’s also full of inspiration and proof that idealism combined with action can change the world.
Today the Koss Brothers have moved on to other ventures that include an organic-based meal replacement ice cream and an innovative meal supplement bar developed to help undernourished people in developing countries. Recently, between book signings, Ron and Arnie took time to share some of the “wisdom and warnings” from The Earth’s Best Story.
OP: What inspired you to start Earth’s Best?
Arnie: In the early ’70s, Ron and I dropped out of college and were looking for our place in the world. We took a road trip to California and as we drove through the agricultural regions, we were horrified by the aerial pesticide spraying we saw. We had just read Rachel Carson’s Silent Spring, and felt like we had to do something. Ron and I could not stand the idea that the earth was being attacked. We had read that pesticides were being found in breast milk and that farm worker families were having a disproportionate number of birth defects. That led to years of fruitless discussions between us about what could we do.
Ron: Then there was this “aha” moment. I realized that organic baby food could become a national product and create a huge demand for a diverse mix of organic fruits and vegetables—especially those that did not have to look perfect for the fresh market. This would make organic farming more viable and provide a new choice for parents. But we had no money, connections or food processing experience—at first it just seemed like a great idea for other people to do.
Arnie: I think what drove us to actually start and sustain Earth’s Best through all the challenges was the fact that we were fighting for something that was so much greater than ourselves. It wasn’t about us. If it had just been about making a bundle of money, I don’t think we could have endured the tests we suffered through during the start-up period. The bottom line was that we were fighting for the future and we thought that the future would be brightest with organic foods.
OP: What are some of the key insights of your entrepreneurial philosophy?
Ron: Arnie and I define ourselves as “mutt-entrepreneurs” versus people with pedigree or people who might be locked into an established career path. We weren’t thinking about our resumes, or whether organic baby food might be a bad career move because it was so risky. I really believe that innovation often comes from people who are passionate and aren’t second-guessing their dream and are willing to leap, not blindly, but willing to take chances.
Arnie: We may come off as very idealistic, but we’re also very practical. The reason Earth’s Best happened was because we brought together idealism and realism. People can be labeled as idealists, but in so many ways, it’s those people who are actually realists, because they understand that there’s so much that’s not working, that our planet is in distress, and that we need to challenge the paradigms that are in place. Idealism by itself is something that may not ever make it beyond talk, but when people can bring together their ideals and practical ideas, then there’s potential for manifestation and change. And that’s what I hope people who read The Earth’s Best Story get. They don’t have to be an expert or well-educated. What they need is to have a dream, and be passionate about making a difference.
OP: What practical advice can you offer to other entrepreneurs out there?
Arnie: One thing that’s critically important for anyone trying to birth an idea is to understand that stubbornness doesn’t necessarily win the day. It’s about listening to feedback and instead of taking it personally, reacting and digging in—take to heart what’s being said and look to where you can adapt and evolve.
Ron: For example, when we first envisioned Earth’s Best, the formulations that I was working on were so complex—they were gourmet to the 10th power. It reflected the fact that I wanted Earth’s Best to be a “super baby food,” but I was overshooting. I was being impractical about food processing and the complexity of mixing so many ingredients together. I was also ignoring the fact that at that time, 1987, many of the raw organic ingredients were just not available. Adapting was listening to investors, family and friends who were saying, “You don’t have to make this so complicated.”
Most importantly, you have to figure out where you should compromise. If someone had said, “Well, you need to make this 50 percent organic because a 100 percent product is just too much and you’re going to run into trouble,” that would be a compromise that we would not make.
OP: In your book, you talk about “grokking.” What is grokking and how did it play into the success of Earth’s Best?
Arnie: Robert Heinlein coined the term “grok” in his 1961 book Stranger in a Strange Land. Basically, grokking is a deep connection; it’s vibrating on the same frequency and wavelength with someone or something. For example, it’s key for those in production who are watching the line quality to grok the importance of everything being perfect. We had a deep peace in knowing that the amazing people who were in charge of our baby food production were aligned and connected to the purpose and values of Earth’s Best. It was like having us there. That kind of connection—that grokking with the production employees of Earth’s Best—was the difference between a restless night and a good night’s sleep.
Grokking happens when people see that your words and actions line up—that you are for real. For example, we started making applesauce and there was a slight off flavor. We had 30 people watching us like hawks, lots of money tied up in the production run and 500 gallons of applesauce waiting to be filled. But it wasn’t right so we made the decision to dump it. And the next two days it got better but still wasn’t right so we dumped it again. By doing this we showed that we were walking our talk. We were starting Earth’s Best Baby Foods, not “Earth’s Good Enough.” People became believers.
Much of our success was due to the fact that we focused on relationships from the beginning. We knew that our production workers were the gatekeepers and we genuinely cared about their working conditions and ideas. We developed a rapport with them and in turn, they became champions for the quality of the product.
Ron: Our employees knew that we would get on the production line with them and do whatever it took to make Earth’s Best. When you have the bosses out on the floor, listening and treating employees as partners, then you get this grokking. This trust is seldom seen in a manufacturing environment, where there is too often this silly line drawn between blue-collar and white-collar. The relationships Arnie and I built with the production workers made our baby food manufacturing plant a very special place to work.
OP: What role did relationships play in developing supply?
Arnie: Early on, I made a trip to California to buy apples and met many of the growers. I got the impression that they were frustrated. Why were they frustrated? Because they weren’t being paid enough per ton for their processing-grade apples to afford to properly take care of their orchards. I could have been the next guy to come along and beat the grower up and get the apples as cheap as possible, but I didn’t. I asked Jordan Smith, one of the growers at the time, “How much do you need per ton to be here next year and to take care of your orchard?” Now, that’s almost an unimaginable question for a buyer to ask a supplier, but that was my question. And when he told me, I believed him. And I said, “Okay, I’ll pay you that and even when there’s a bumper crop and the price is low, and others are paying you $120 a ton, I’m still going to pay you $170 per ton. However, when there’s a short crop, and the price goes up to $250 a ton, I expect to pay you $170 per ton.” What I was doing was creating a way of relating. I wanted to show Jordan I cared and simultaneously I wanted him to care about what we were doing, too—and it worked.
OP: In your book you say, “An entrepreneur needs to learn to recognize that the red flags, voices, twitches and butterflies that surface momentarily are gifts from your entrepreneurial angel and present opportunities to morph now to succeed later.” What were some of the red flags you saw?
Ron: One red flag that we ignored early on was the importance of location. Once we realized that Vermont didn’t have a 365-day-a-year growing season, and that California had much more of an organic agriculture infrastructure in place, we had plenty of reasons to build Earth’s Best in California. But, we resisted because we wanted to stay in Vermont. We came up with a lot of seemingly logical reasons of why it would work, but in hindsight, they were mostly wishful thinking. The bottom line is that we avoided facing the real issues confronting us in Vermont that we could have arguably met much earlier. In no time flat we started paying the financial consequences for our aversion to that red flag. We began shipping just about everything from California to Vermont.
Arnie: We did pay attention to other red flags, though. After working on building our business plan for two years, and trying to raise money to get started, we finally had a gentleman who was willing to invest $1 million. It looked positive but then unexpectedly he refused to invest unless we agreed to turn our back on past-due debts totaling $20,000 that we owed to those who had been helping us develop the business. Ron and I walked away from the deal. We could have said that $20,000 isn’t a reason to walk away from $1 million. We could have rationalized that the people who were owed that $20,000 weren’t going to be hurt.
Ron: We also had almost $300,000 in seed money that had been invested into research and development that we were putting at risk, but we felt that twitching. We knew it was wrong. We saw that red flag. If that guy was willing to screw those people out of $20,000, what else was he going to do?
OP: Financing was one of your biggest challenges. Do you have any advice on this?
Ron: For one, I would recommend that people start out as compact and conservative as possible. We could not start an organic baby food company the way that Ben & Jerry started—making 10 or 15 gallons of ice cream at a time. Even if we could have, we wouldn’t have. We weren’t trying to buy 25 pounds of plums and 100 pounds of apples. We wanted to buy millions of pounds because we wanted to dramatically impact the organic food industry. But to people starting out today, I would say start small and local.
Arnie: I would also add that whatever scale you’re starting at, the first round of financing is the most important. If you are realistic about what you need and raise enough money to break even before you need more money, then when you go out for more funding, you’re going to have a much happier story to tell to potential investors. In the end, this means that you’re going to be able to raise more money and give away less of your company. In our case, we burned through our initial round of equity of $500,000 in a matter of months. We needed many times more than that. We were on the verge of collapse and bankruptcy almost from the beginning, and so when we went for new money, we were in a weak position and the investors in turn naturally saw that investing further was more risky. If the risk is greater, then you have to give more to entice people to take that risk. Ron and I ultimately ended up giving up most everything.
Whatever your circumstance, strive to come to the table from a place of strength. Do not acquiesce prematurely to venture capital. Be proactive, and try to find investors that relate to you and give you confidence that they actually get, or grok, what it is you’re up to. Entrepreneurs need to approach potential investors with the idea that they are establishing a relationship and make sure the investor is the right match for them, too. Easier said than done when you’re in the thick of it, but it’s worth the effort.
OP: Do you have any insight on working with venture capitalists?
Ron: If your company is not in desperate straits, but actually gaining market share and has gross margins that are viable, the venture capital arena will be a lot more friendly and acceptable. But if you fall into a situation like ours, where you need the money to survive, then there’s a good chance that you’re going to lose control of your company. That’s why managing growth is so critical. Arnie and I were not able to do this as well as we needed to.
Arnie: Anyone that’s considering venture capital really needs to take stock of their business objectives. Do they want to cash out? Do they want to stay with the business indefinitely? Do they want to keep the business in the family? When a venture capital group gets involved, they typically have an exit strategy from day one. They want to grow the company to a certain size and then they want out. Maybe that’s 3 or 5 years, maybe it’s longer. But once you get involved with venture capital, you’re getting involved with institutional investors who have an agenda. They have shareholders or investors who are expecting an aggressive return on investment and that can create pressures that compromise the vision of the business or force it to grow too fast. I would advise anyone that’s considering venture capital to also have several different approaches to financing, such as private investment or a strategic business partnership.
OP: You call your story “a bittersweet tale.” What is the sweetest part of your story?
Arnie: What we want everyone to understand is that Earth’s Best was not about us. Ron and I had a dream. Our dream wasn’t to get rich. Our dream was to help the organic foods industry move from the fringes to the mainstream—and baby food was the vehicle to do that. We were not going to let the company die to protect our own interests. Ron and I were devoted to protecting Earth’s Best. It was our baby and we somehow knew that if it survived, it would be a game-changer and a force to advance the movement. The bitter part of our story is traumatic, but the sweet part is truly amazing. Millions of babies have grown up on Earth’s Best. Organic acreage is expanding exponentially. Fewer farmers are exposed to pesticides. Our success even pushed Gerber, Beech-Nut, and Heinz into the organic baby food business. And it opened the door for so many people to introduce their own organic food ideas. That’s what we had dreamed about more than 30 years ago. It doesn’t get much sweeter than that.
Ron: But there is still so much more work to be done. The organic food industry is just a fraction of the overall food industry today. I think that the key to succeeding is having a community where people are working together, knowing that the importance of the task to build the organic foods industry is much bigger than any individual gain and is necessary for our planet and the health of everyone on this planet.