How to Impact the Way Business is Done (and the story behind the invention of cookie dough ice cream)
According to Deloitte, 9 in 10 respondents between the ages of 18–45 believe that “the success of a business should be measured in terms of more than just its financial performance.”
Many businesses believe in investing in their employees, building a strong culture, and delighting their customers. Some businesses even cite improving social or environmental conditions as a core part of their mission.
But very few companies have cracked the code on how to measure their impact beyond their financial performance. Even fewer can cite examples of how “doing good” has helped fuel their growth as a company.
Rhino Foods, an inventive manufacturer of ice cream ingredients, is one of those companies. I sat down with Ted Castle, the founder and owner of Rhino Foods, to learn more about how his company set out to impact the way business is done and what all of that has to do with cookie dough ice cream.
Tell me about the origin story of Rhino Foods. How did you get your start?
Growing up in Rochester, New York, I loved going to a frozen custard shop named Abbott’s. For those who don’t know, frozen custard is like soft-serve ice cream, but it has a higher percentage of egg yolks so it’s much richer and creamier. I thought to myself, “why don’t I try to create something similar here in Vermont?”
In 1981, my wife, Anne, and I founded a frozen custard shop named “Chessy’s Frozen Custard.” I was working as an assistant hockey coach at the time for the University of Vermont. The store was initially a way to make a little extra income on the evenings and weekends.
We got off to a rocky start. I made a lot of mistakes in the beginning like spending a good chunk of our initial funding on countertops for the store. We also ran into a marketing challenge early on when nobody in Burlington could wrap their heads around what we sold. People thought frozen custard was like a cold version of crème brûlée — not exactly what we had in mind!
I remember we had one day where we did approximately sixty-five dollars in sales after being open for twelve hours. At that point, I knew that I had to get creative fast and explore new ways to make a profit.
When did you decide to start selling to other businesses?
I can’t remember a moment when we made a formal decision. It ended up being a natural next step for us as a business.
Beyond the ice cream, we started selling sandwiches, baked goods, and coffee in our shop. Eventually, we connected with a couple of other local businesses interested in selling ice cream cakes, ice cream pies, and ice cream sandwiches.
As time went on, the wholesale area of our business started to take off. We began making desserts for Bruegger’s Bagel and Ben & Jerry’s, another Burlington-based company, which was a pivotal turning point for us as a business.
Most people are familiar with cookie dough ice cream, but I bet few of us know the role you had in the invention of the flavor first made popular by Ben & Jerry’s. Can you tell me the story?
By 1985, we had begun our partnership with Ben & Jerry’s to make frozen ice cream products for the company to sell locally. One day we were invited to their factory in Waterbury. During a tour of their R&D department, we saw a Ben & Jerry’s staffer playing around with putting our raw cookie dough into their vanilla ice cream. That’s where the idea was born.
From there, it took us about two years to figure it out, but as many know by now, we were successful. The flavor was an instant success. At one point, Ben & Jerry’s had trucks showing up at our production facility that only wanted pints of cookie dough ice cream and no other flavor. We had an incredibly hard time meeting the demand for those first three years until the rest of our business caught up.
Initially, I had made an informal agreement with Ben & Jerry’s to only sell the cookie dough ice cream inclusion to them. After about three to four years, I approached Ben & Jerry’s and told them I was going to sell to other ice cream companies. Luckily, they understood. After that, we started selling to other companies and effectively scaled our operations to reach a whole new level. And thankfully, we had a great team in place to do it.
According to your website, around this time you started to experiment with new workplace initiatives like your Employee Exchange Program. Did you have a name for what you were doing at the time? And what sources did you look to for inspiration (if any)?
I don’t know if we had come up with a name for it yet, but it was around that time that we started to get clear on our purpose statement: “to impact the way business is done.” In addition to developing our employees and giving back to our community, one of the primary means through which we accomplish our purpose is through sharing our innovative workplace initiatives with others.
We’ve always been committed to this philosophy since our founding, but our mindset was also largely influenced by companies like Patagonia, the Body Shop, and Ben & Jerry’s who were really pioneers in social responsibility for business. For example, Ben & Jerry’s three-part mission statement that aims to create prosperity for everyone connected to their business is certainly something we were inspired by.
But most of our policies themselves have originated from our employees. For example, in 1993, we were faced with the issue of excess staffing brought on by efficiency improvements and an unexpected drop in sales. Ice cream is a seasonal business so winter is a period of low demand for us. Twenty-six employees volunteered to form a committee to brainstorm alternatives to layoffs.
Through a series of creative brainstorming meetings, we created our Employee Exchange Program where we partner with other area businesses like Lake Champlain Chocolates and exchange our employees during periods of low demand. The initiative benefits us as a business because it saves us the cost of having to train new employees. Plus, our employees come back with new ideas that they learn on the job from other companies, which benefits the employees themselves and also gives us a fresh perspective on ways to improve our operations.
Any other workplace initiatives that Rhino has pioneered?
Open book management isn’t a concept I coined, but it’s a management philosophy we’ve been a practitioner of for over twenty-five years. The idea is to take transparency with your employees to the whole next level. It’s not enough to simply share the numbers with your employees if they can’t tie it back to a number they can actually impact.
So, we spend a great deal of time educating employees on the finances of the business. We share revenue, expense, and profit numbers. In addition, we have a Bonus on Goals Program where goals are reviewed on a monthly basis and a bonus pool is potentially paid out every six months. As a result, we have been able to increase efficiencies in our product line, reduce scrap, lower our workmen’s compensation rates, and improve our customer service level — all of which helps us improve our bottom line.
Another program we’ve received some attention for recently is our Income Advancement Program. (Author’s note: Read this WSJ article on Rhino for more on the program.) We noticed employees needed loans in the manner of $500-$1,000 for when life gets in the way like when a car breaks down or a water heater breaks. Life events like this were impacting our employee retention rates and the ability for employees to show up for work on time.
So, we partnered with the North Country Federal Credit Union. Employees can get a loan within twenty-four hours. No questions asked. The amount is subtracted in increments from their subsequent paychecks. In many cases, this is the first time many of our employees have had credit — a great benefit for them — and the program itself doesn’t cost us as a company any money.
Why did you choose to become a BCorp? And how would you describe the term to someone not familiar with what that means?
I think BLabs, the organization that oversees the certification process for becoming a BCorp, explains the concept the best on their website:
“B Corp is to business what Fair Trade certification is to coffee or USDA Organic certification is to milk. B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.”
The comprehensiveness and rigor of the assessment itself is what attracted me to becoming a BCorp. Any company can have a mission statement or their values written on their walls, but how do you know whether you’re living into that purpose?
Because we’re in the food business and produce products for consumers, I compare it to how we have third parties come in to evaluate whether we meet food safety requirements. We wanted the same level of objectivity and fairness when it came to whether or not we were continuously meeting the purpose and principles we had laid out as a company.
The assessment breaks itself down into four categories — governance, workers, environment, and community. The assessment has provided us with a baseline for our performance and provides us with areas for continual improvement, which is what I love about it.
Can (and should) all businesses become BCorps? Or find ways to measure their impact beyond their financial performance?
Beyond maintaining the financial health of your business for your shareholders and stakeholders, I don’t think there’s any right or wrong way to run a business. A lot depend on whether the ownership of a company believes it’s a priority to measure impact beyond the typical metrics. Ownership is usually where it starts.
The good news is that many companies believe in the BCorps philosophy from the beginning because it’s in their DNA. Maybe they already have been giving back to their communities, investing in their workers, and measuring beyond their bottom line. So, it’s really about helping push those companies over the edge. (Let’s say that’s about twenty percent of all companies.)
Then, there’s the twenty percent of companies who are unlikely to be interested. Companies that are looking to scale as quickly as possible and perhaps be bought out in a few years are less likely to be a good fit.
Finally, that leaves you with sixty percent of the market left to influence. It’s like a pendulum. You find the companies most likely to champion your cause, and try to gain momentum from there to shift the market.
Do you see the market shifting towards more businesses being founded with “doing good” as a part of their mandate?
To be honest, I don’t know where the market is headed. I think you see more and more pockets popping up across the country of more socially and environmentally minded companies like the community we have in Burlington. The BCorps movement has really started to take off both in the United States and internationally, which is a fantastic sign.
But a lot remains to be seen. Of course, starting a company is one way to influence the course of the movement, but I think you’d be surprised by how much you, as an employee, can make a difference by starting conversations with your boss or the owner of your company.
Ask questions about metrics you, as an individual, can influence. Take the 30-minute quick assessment offered by BLabs to see where your company stands. These are little examples, but you might be surprised by the opportunities you uncover or the ideas you inspire.
