Where values meet profit

RYAN GELLERT: What you might describe as speaking out, I just think is telling the truth about what’s going on in the world right now. A healthy planet, thriving communities depends on a functioning democracy, and I have real concerns about the future of something I took for granted for the vast majority of my 53 years.

HAMDI ULUKAYA: We get death threats and boycotts. You got to do the right thing regardless of what lawyers and communication experts will say. Every challenge we face, we don’t want it. But when that happens, it’s an opportunity to make things better than ever before. And that excites me.

BOB SAFIAN: That’s Patagonia CEO Ryan Gellert and Chobani CEO Hamdi Ulukaya recorded live at the Masters of Scale Summit in San Francisco on October 8th. In this special episode, Ryan and Hamdi talk about the intersection of values and commerce moderated deftly by New York Times reporter and author David Gelles. The two CEOs share their different strategies for dealing with an activist White House, the pressure for what David calls anticipatory compliance, and how they grow their businesses while also prioritizing causes like environmental conservation and immigration. Along the way, there are personal stories, advice, and yes, even a few F-bombs. So let’s get to it. I’m Bob Safian, and this is Rapid Response.

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DAVID GELLES: Patagonia and Chobani are two companies that have long been defined by their purpose as much as their products. But both of your companies are showing up in very different ways at a moment when it can be hard or even dangerous to say what you really think. So we’re going to get into all that and more. And I want to start with you, Hamdi. Chobani, you’ve always cared about more than just profits.

For almost 20 years now, the company has been doing this work and been committed to more than just making great dairy products and all the other expansions you’ve done, but to taking care of refugees, immigrants, farmers. And at a moment when many companies are running away from anything that has a whiff of politics, you’re looking for common ground, including with this administration at a very divisive time.

You’ve worked with the White House. You’ve co-authored an op-ed with Ivanka Trump. You’re working on initiatives there. Take us inside this moment, how do you think about staying true to your values at a moment when the country can seem so divided?

Copy LinkHow Hamdi Ulukaya is approaching this political moment

ULUKAYA: Yeah, David. Starting from Turkey and in the hills of eastern part of Turkey as nomad family to making myself to this country at the age of 22 and finding myself in upstate New York working a farm, I have gone on this long journey and where I come and where I end up into this old yogurt factory was shut down and closed and left.

And finding that similarity between where I come from in the mountains of Kurdish mountains of Turkey, to this upstate valley where the small town and seeing the people and communities left behind by the businesses and the people in power and the ordinary people suffering. Yet we are thousands of miles away from each location where I grew up and where I lived. So when you look at it from that perspective, you cannot react to daily politics or four years of politics.

There are timeless truths and there are timeless challenges that we face as humanity. And in there, I grew up as someone who hated business literally, and I hate the rich. The reason I left the country was because I got into trouble because I was kind of borderline criminal politically. And I end up being in jail for days and lucky to get out and find myself here. And we don’t want to get into that journey right now, that story.

GELLES: I think we do. We just don’t have enough time.

ULUKAYA: I found a dimension of the business that is so powerful. And I’ve been into NGOs. I’ve been into political activities. I’ve been into all kinds of stuff. And seeing that old factory close down and I say, “If I can bring this back, if I can fix it with the way that not go against the kid that grow up and still make it work, and that could be some solution here.” So then I come back to this as like I cannot follow every other playbook.

I have to follow my instincts, my way of doing things. And I said, “And I had no other choices anyway.” So in that, David, I found that if you go employee first, if you go community first, if you create an environment where everybody’s welcome, if you embody and realize what makes this land so special that everybody wants to come and make something out of it.

And if you can look from a lense of not the city activist and country conservative eyes, but through united human dimensions, then you find them a lot more similarities than differences. And if we can look on that perspective of similarities, understand that there are some differences, but respectfully disagree, I think that’s what I try to practice and that’s what the tribal knowledge I have.

Copy LinkWhy Patagonia’s Ryan Gellert is so politically active

GELLES: That’s beautiful, and I think we could all use a lot more of that in this country today. Ryan, Patagonia is a very different sort of company. This company has been meddling in politics, sometimes quite loudly, for more than 50 years now.

GELLERT: Meddling is a strong word.

GELLES: Meddling, oh, that’s a gentle word. Yvon Chouinard has been donating to grassroots environmental activist campaigns for more than 50 years. In 2017, Patagonia sued President Trump and his cabinet during the first…

GELLERT: Yeah, that’s meddling.

GELLES: That’s meddling. And you still, even at a moment when most CEOs are afraid to say anything about this administration, you’re still out there raising the alarm almost every single week it seems. When your business is selling clothes, why do you spend so much time talking about politics and policy?

GELLERT: Well, first of all, it’s super interesting being on the stage with you, Hamdi, and with you, David. I think you made reference to it. You wrote a book that’s just come out in the last month about our founder and our 52-year history. You and I have gotten to know each other quite well over recent years, and I think there’s a lot that we have spiritually in common as companies.

And then I think to the nature of your question, to each of us, there’s a lot that’s actually quite different in how we navigate that. I think for us to now answer your question, we are focused on protecting the natural world. Period. That’s why we exist. It’s not about making money. It’s not about being the biggest player in outdoor apparel and equipment. It’s about protecting the natural world.

And so that’s what we do and we exist in a world right now here in America where the threats are absolutely unprecedented. And I think that what you might describe as speaking out, I just think is telling the [expletive] truth about what’s going on in the world right now.

ULUKAYA: You said no F-word before.

GELLERT: Yeah, that’s right, but we also said no baseball caps, just to be clear. There was a whole long list of things we weren’t supposed to do.

GELLES: It’s the end of the day. We’ll get to all of them here.

GELLERT: Okay, so climate’s at risk, pollution and polluters, the regulations are coming off, and conservation particularly public lands here in America. I mean, it is one threat god-damn after another every single day. And so what are we speaking up on? Those things that matter. Same things we’ve spoken up on for 52 years.

GELLES: As the CEO of a company and as an individual, do you ever worry about the fact that this is a moment and an administration that has shown a willingness to be retributive?

GELLERT: Yeah, of course.

GELLES: And how do you navigate that? Is there any, I mean, the word is anticipatory compliance? Are you holding back at all?

GELLERT: I think we have to be very strategic. I think we have to be very considered. I think what we talk a lot about is where do we have authenticity to offer an opinion on something and where can we be truly additive. If it’s performative and we’re just offering an opinion to offer an opinion, that’s not a space we’re going to play in right now. I don’t think the times benefit from that. I think where we can be truly authentic is in one or two places.

One is we’re a business and so we can speak from the business sector and the other is on environmental and climate issues. We’ve got a 52-year history. We work our asses off to minimize our footprint. As you made reference to, we’ve supported grassroots activism for 40 years and counting. And so that’s who we are, what we do, and I think we’ve earned the right to offer opinions on that.

Copy LinkInside Chobani’s partnership with Ivanka Trump

GELLES: You get a sense of the different approaches to really a very similar and consequential set of issues. We’re going to talk about more than politics, I promise, but I do want to come back to this issue of, Hamdi, how you navigate a moment like this and when you decide to work with Ivanka Trump, even when you decide to work with the White House.

It can seem like a no-win situation. You work with someone, you piss one side off. You say something, you piss the other side off. How do you think about engaging in these partnerships where you are trying to find common ground without alienating any of your consumer base?

ULUKAYA: Yeah, look, what I do and what we do at Chobani is really we have the known instinct or reflex that we react regardless of what the world thinks and all that kind of stuff. Ivanka actually did not start now. I work with her in Idaho after President Biden got into the White House actually. And what we did is we made boxes of food from the farmers and we delivered to people in need in communities at that time.

And later on, before even the election, she and her partner, they created this organization called Planet Harvest and says, “Do you realize that in California 40% of all the fruits and vegetables are wasted and left in the land because they don’t look good and there’s no buyer?” And I couldn’t believe it. I am aware of these things, I didn’t even realize. And I went to the land and I saw and partnered with her, and her partners that had studied quite knowledgeable that I didn’t realize.

Absolutely we’ll do it. Absolutely we’ll do it. I’ll invest with it, and I’ll lead it and improve the concept. So to me this… And when I said we are going to hire refugees during the first, I don’t know how many years ago, we got death threats and boycotts, all that kind of stuff like that.

GELLES: The first I wrote about your company.

ULUKAYA: You wrote it in New York Times, and we got death threats. We all have to react as human beings who we are. And businesses are a combination of people. You got to do the right thing regardless of what lawyers and communication experts will say.

GELLERT: On the advisor council stuff right now.

ULUKAYA: I want to invite everybody to, we have some serious, serious issues that we have to bring everybody to table to. Look, we really do. I do see some egocentric reaction, just anger because of the other person. Okay, they are enormous about the differences. I don’t know. I was invited to White House because I’m announcing huge investment in Idaho and another one in Rome in New York, and being part of Invest in America.

I don’t have any working relationship with the White House, but my view on immigration and refugees is the same. I have an organization called Tent. I just came from Mexico. I’m meeting all those people that are encouraging people to hire refugees and train refugees. These are timeless truths. These are timeless truths. People are going to move, and we have to make a system that works for every single person.

And we proved it in our factories, in our communities. And today you will not have farm workers or you will not have functioning farms and agriculture without immigration. Everybody knows that. Everybody.

GELLERT: Amen. There you go.

SAFIAN: Timeless truths do make a difference, especially in times of disruption. So too does courage, which Hamdi and Ryan both demonstrate as day-to-day leaders and in their willingness to be blunt publicly about operating in such politicized times. So how much do they each prioritize growth versus values and what most gives them hope for the future? We’ll hear about that more after the break. Stay with us.

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Before the break, Patagonia’s Ryan Gellert and Chobani’s Hamdi Ulukaya talked with David Gelles of The New York Times live at the Masters of Scale Summit about how they’ve expressed their values in the face of an historically activist Trump administration. Now Ryan explains why Patagonia doesn’t always equate business growth with impact, and Hamdi explains how independent ownership structure can enable freedom of action. They also each share personal stories of key decision points for them and their companies, and they share what most gives them hope for the future. Let’s dive back in.

Copy LinkHow Patagonia and Chobani approach growth

GELLES: A lot of people in this audience are looking to grow and grow fast. I think, Ryan, it’s an incredible point of distinction that Patagonia is a company that over the years has deliberately restrained its growth. You made reference to it earlier. You said, “We are not trying to be the biggest apparel company.” And I think that mentality can just be anathema to a lot of founders.

And I wonder when you think about all the things that I’ve written about, stopping distribution in retail partners where you have ideological differences, not selling on Amazon, all these decisions, how do you keep a sense of forward momentum and keep your team motivated when you’re sort of stepping on the brakes at the same time?

GELLERT: I think we’re stepping on the brakes in that we’re still growing. We’re growing modestly in this environment, but we’re still growing for the most part. And I think having a dynamic organization, one that has a reason for being in forward momentum, I think the whole concept of growth is quite a reductive definition of or the concept of revenue being the defining element of growth and momentum I think is a reductive idea.

GELLES: Say just a bit more of that, Ryan, because I can feel it in the energy. People want to know more. Say just another beat there.

GELLERT: Let me say this, I am as big a proponent of growth as there is in this room. It’s growth and impact that I think is most important for us. I think growth in revenue can allow for some of that. And so I think it’s in some ways a necessary evil. I think when we’re taking it from competitors who we think might be making a lesser product or think about business differently, I’m unapologetic about that.

But we don’t have our foot mashed on the accelerator trying to chase every distribution opportunity, partnership opportunity, collaborative opportunity, or entering new markets. That’s just not how we think about it.

GELLES: That’s a refreshing take at a moment when I think so many companies, you get the sense are just mashing it on the gas. Hamdi, you’ve been able to grow extraordinarily well over almost 20 years now. I think it’s 18 years since you sold your first cup of yogurt. I think publicly reported just shy of $3 billion in revenue recently.

An amazing American success story. I wonder though, as you’ve hit those inflection point moments, those years, I mean, even I think recently you had a 17% growth in one year, when you’re growing that fast, how do you work to maintain quality and make sure the product and the service and the integrity, not only of the products, but the company doesn’t slip?

ULUKAYA: Yeah, I started in the wrong place. I should have started here. Where I started business is country where the cows are, where the land are, and no bars and no restaurants. Nothing. So you’ll sleep in the factories. And my first five years, David, I never left the factory. And then when I built a factory in Idaho, I never left for, I don’t know, six months, seven months in the factory. So these are commitments. You got to make those kind of commitments.

Unless you make those kinds of commitments, especially in a high-growth environment, it will go south really fast. Today we grow 25% to 30%. We add a billion in sales almost every year. I have to build infrastructure. We make 100% every single product that we sell, and we have one single line, anything that I would not or we would not feed to our own children, we would not make it.

GELLES: You just bought beer. You just bought Anchor Steam Beer.

ULUKAYA: That’s not part of Chobani. No, no.

GELLES: Well played.

ULUKAYA: There’s non-alcohol beer things we can do.

GELLES: This is breaking news, the category announcement.

ULUKAYA: So food is a little different. Food is especially fresh food, the type of food that we make. We said everyone deserves good food, right? We know what the challenges are. You have a lot of options in small formats and specialty stores and that stuff, but how do you make products that can go all across the country? And that is one of the hardest things to crack. It’s almost impossible.

Every small start-up getting to a certain level will be part of large, big CPG and you know what they do with it. You never see to the next level. So we might be one of the few companies, if not the only one in that space or grocery space that not only stayed independent, grew and took the number one position.

And when you are in that dimension, you kept what makes you so special, but you expand it and you grow, you maintain your independence, then it gets some kind of good position like we are today. 18 years, by coming back to your question, 15 years of it, I’m either in the factory or in the field. I mean, that’s what it takes, that kind of commitment.

Copy LinkHow independent ownership fuels Chobani and Patagonia

GELLES: It’s important to note, both of these companies, Chobani and Patagonia, real legacies of independent ownership, which I posit gives both of your organizations the freedom to really stay true to your values in a way that would be much more challenging with a bigger, more diverse set of stakeholders.

ULUKAYA: I’m happy to be with Ryan here in this stage with him and be mentioned with Patagonia. There are only a few corporate examples. You wrote the book. Congratulations, by the way, the book that you just wrote about Patagonia. There is only few examples of this story. There is not such thing. And Patagonia has passed every single test that there is in a corporation and still maintains absolutely. And there are a lot of teachings for us. We haven’t gone that far. We follow the other path, which is every single employee of Chobani is a shareholder of Chobani.

GELLES: Isn’t that interesting?

ULUKAYA: Including every single line workers, factory workers, refugees, immigrants, everybody. These are the stuff that is going to make a difference tomorrow.

GELLES: Ryan, Hamdi was just talking about ownership and the fact that he has included employees in ownership. Patagonia made the absolute opposite choice. Three years ago, Yvon Chouinard and his family gave away the company. We don’t have time to get into the details, but you were a part of that process.

And I’m curious, as a relatively new CEO at the time when he came to you and he said, “I want you to help me give away the equity of this company and create a new situation by which all the profits that aren’t reinvested in the company go out the door to charity,” what was your response and how did that change how you think about your role as a leader?

GELLERT: You said I was a relatively new CEO. I think it was the first time or second time I had seen Yvon and his family after moving over from Europe in this role. So I couldn’t have been newer. It was in the depths of COVID. They were not as specific, as you just said. What they said is, “We want to sort out the future ownership of this company and take it away.” And a week after them saying that, I went over to meet with the Chouinards again and they said, “How’s that going?”

I said, “God, you got to be kidding me. I’ve ignored you the whole week intentionally. I can’t believe you’re asking me to do this right in the middle of COVID.” So we started putting a process together, and what we started to understand was, what are all the things you want to be true? What are the things you wouldn’t accept? And we landed really on two central elements.

One was to ensure that Patagonia will continue to exist in the world imbued with the values that we have created within it.  And the other is cash flow to the environment in much bigger ways right now. So that was the nature of the reorganization.

Copy LinkChobani’s longstanding commitment to refugees

GELLES: Hamdi, very briefly, you referenced earlier your deep commitment to refugees, your own experience as an immigrant. When you see what’s happening on the streets of this country right now, how does that make you feel about this country that has given you so much to which you have given so much?

ULUKAYA: And I invite everyone to focus on that line. This country is a very special country. It has given us, all of us so much, and I’m lucky. I’m one of the lucky. And I find it’s my responsibility to be part of whatever the future looks like and do my part right now. But I come back to this one particular picture. I walk into this town. I see this factory close after 75 years. 55 workers in this distance from everywhere, everybody. For them, that was the end of the world. The steam finally off.

Their source of meal for their kitchen is gone. And I show up. The first thing I do, I hire four people from the 55 people. They don’t believe this will ever come back to life. The largest company in the country has gone. And this guy, who doesn’t even speak the language and doesn’t even have a car, he’s going to do something about this? Four people. The first thing I said to them, “We’re going to paint the wall outside.”

One of the guy who retired from there, his name is Mike, has said, “Hamdi, those walls outside hasn’t been painted for the last 25 years. Tell me you have more ideas than that one.” I said, “I do, but we got to start with somewhere.” The point I’m making is two years after that, I launched the brand Chobani. Four and a half years later, it was a billion dollar sales. We have a thousand people. That place was a hundred times bigger and better than ever before.

So if you ask those people, when the factory was closed, what was the worst thing ever happened here, they would say that factory was closed. If you ask them today, what was the best thing ever happened to this town, they would say that factory was closed. The point I’m making is every challenges we face, we don’t want it. But when that happens, it’s an opportunity to make things better than ever before. And that excites me.

Copy LinkWhat gives Ryan Gellert hope

GELLES: Ryan, final question. You, on the one hand, referenced and you see every day the damage that is being done to the natural world. It’s something you care about deeply. It’s something this organization has cared about deeply for decades now. At the same time, you’re funding the frontline grassroots activists, you’re funding conservation projects that are blocking detrimental projects that might impact pristine natural environments. When you take the whole picture in, where are you on the state of this country and our ability to take care of our common home?

GELLERT: I think that a healthy planet, thriving communities depends on a functioning democracy, and I have real concerns about the future of something I took for granted for the vast majority of my 53 years. So I’m really concerned. I think on the positive end, what gives me hope, it’s spending time in nature and  spending time increasingly with younger leaders who are not debating the existence of these issues, debating the science or the facts. They’re just pragmatically charging ahead. And so that’s the thing that gives me hope in spite of it all.

GELLES: Hamdi and Ryan, thank you very much.

SAFIAN: Many thanks to David Gelles for leading such a thoughtful conversation. Hamdi and Ryan are compelling figures because they run their business in unconventional ways and arguably outperform because of that. Holding fast to values doesn’t need to be a road to divisiveness and distraction. It can be fuel for empowerment, engagement when implemented with care, discipline, and a long-term perspective.

We’ll continue to share the freshest exchanges from the Masters of Scale Summit as Rapid Response episodes, including rapid-fire sessions on new branding buzzwords with Autodesk CMO Dara Treceder, and on today’s myths around tariffs with Flexport CEO Ryan Petersen. Plus, a surprising pairing of the Commissioner of the National Women’s Soccer League and the CEO of The Honest Company. You can catch up with videos from the Masters of Scale Summit on the Rapid Response YouTube channel. I’m Bob Safian. Thanks for listening.