Regenerative Organic Alliance and Stakeholder Capitalism in a Mindful Economy
As the sun sets and the streets of Los Angeles turn dark, nameless street vendors keep the city’s blocks warm and fed with some of the tastiest Mexican food outside of Central America. Hot tacos are served religiously through the late hours of the night providing nocturnal customers with a delicious meal at prices fast food chains can’t compete with. The spicy, greasy, decadent cuisine pairs perfectly with an ice-cold cola. Consuming tacos and soda daily may not be a mindful dietary decision but the unsurpassable deal that is a two-dollar street taco, a one-dollar soda and the opportunity to contribute to local economy encourages even mindful consumers to occasionally ignore the cost to their health. Consumers pursue the maximum satisfaction of their needs and desires with a holistic mindfulness, a consideration that tends not to be mirrored in the economic pursuit of profit when producing edible goods. To ensure the long-term health of an economy, firms cannot prioritize the maximization of short-term profit with disregard to the environmental and ethical health of all stakeholders in an economy despite the financial appeal, just as cola cannot reasonably be enjoyed with every meal despite its desirable sweetness.
Maddy Rotman is a 29-year-old mindful consumer and entrepreneur that grew up like many Americans eating the delicious name brand foods that have flooded the shelves of grocery stores for years like Yoplait or Ben and Jerry’s. She is one of two founders of Anytime Foods LLC., a food and beverage company built around quality, transparency and sustainability, qualities that are regularly missing in the operations of large name brand food and beverage firms. A career in online grocery retail and passion for agriculture led Maddy to question the options most readily available to consumers like those she and many of us grew up on. In an interview discussing her brand, Maddy describes the food and beverage industry as full of shadiness when it comes to the production of consumer goods. Labels can be misleading when it comes to ingredients, flavors almost never come from the source of the flavor, and agricultural producers lack representation in the industry. Anytime is a startup in the food and beverage industry that prides itself in having a Regenerative Organic Certification (ROC), making it the world’s first producer of Regenerative Organic Certified spirits and a food and beverage firm with production practices reflective of mindful consumption practices. More than just a firm, Anytime’s ROC operations are the blueprint for how firms must operate in an economy that prioritizes holistic mindfulness over maximum profit.
The Regenerative Organic Certification (ROC) is a certification for farmers and producers in the food, textiles, and personal care products industries granted by the Regenerative Organic Alliance (ROA), a non-profit organization with companies on the forefront of sustainable production like Patagonia and Dr. Bronner representing the board of directors. It is a certification class above USDA Organic Certified that ensures the use of ethical and environmentally healthy practices throughout the supply chain. Regenerative agriculture captures and stores atmospheric carbon dioxide, reducing carbon emissions as it produces workable produce and materials. The ethical and environmental benefits of regenerative agriculture are fundamental to a mindful, regenerative economy; however, these values are incompatible with Shareholder Capitalism the prevailing form of capitalism in which the interests of one stakeholder, the shareholder, dominate over all others.[1]
The grain used in Anytime Spirits is 100% Regenerative Organic Certified wheat grown in Hudson, NY. Anytime Foods also features a line of canned cocktails that follow the same 100% Regenerative Organic Certification. In the pursuit mindful production practices and a product that can be mindfully and trustfully consumed, Maddy created a model for how firms can operate economically while taking environmental and ethical costs into consideration. The success of her model can be seen by looking at various studies on the effects of regenerative agriculture on various stakeholders within the industry. Aside from the environmental benefits of regenerative agriculture, the practice has been found to have a significant, positive impact on farmer’s satisfaction with personal health and purpose. [2]
In the food and beverage industry, most success is reliant on distribution. The most profitable companies can put immense amounts of capital into worldwide distribution, making it difficult for startups like Anytime Foods to gain market share. Anytime Foods cannot compete with larger firms when it comes to price or distribution, so they focus on the quality of their product. The mission of Anytime Foods is to provide customers with a thoughtful, high-quality product and bring sustainable farming to the forefront of the supply chain. As Anytime Foods sees success and gains market share over time, they represent a shift in the economics of the food and beverage industry.
Ultimately, standard economic logic does not allow firms with less consideration for financial profit compete with industry leaders and regenerative agriculture has been seen to produce lower crop yields. The product that the farmers took the extra time and care to produce however is much more valuable. A 2018 study written by Jonathan Lundgren of Ecdysis Foundation and Claire LaCann showed that in 20 newly regenerative farms there was a 29% overall loss in yield from previous years, yet these plots were 78% more profitable than conventional plots. The increase in profitability primarily due to decreases in input costs, seed costs, irrigation, and fertilizer. For ROC to make a genuine impact on the minimized scale that it operates, it must see widespread adoption to compete with the mass production and supply of unsustainable edible goods.
In conventional economics, prioritizing short-term profit is how we survive as a business; thus, sacrificing profit for environmental and ethical goals is not worth it in any industry. The current economic system, Shareholder Capitalism, does not consider environmental and ethical costs as measures of success and punishes companies like Anytime Foods. Anytime Foods chooses to face higher costs and profit cuts in exchange for the ethical and environmental value they create. By continuing to successfully operate however, Anytime Foods provides an example of when shifting an organization’s focus away from achieving highest possible short-term profits leads to value creation in environmental and ethical measures.
ROC companies focus on mindful operations rather than profit in the short-run. By taking ethical and environmental costs into account when making decisions they challenge the definition of economic success provided to us by Shareholder Capitalism. This way of thinking encourages constant growth within all industries. According to economist Kate Raworth such growth is unsustainable in the long-term and must slow down. The next step after a growth economy is an economy that is regenerative rather than competitive. [3]
Given the current market share of regenerative agriculture, ROC companies are reliant on production at a smaller scale. Anytime Foods is a perfect example of what a successful ROC startup looks like in the food and beverage industry, but ROC will not see mainstream growth without a limit on market share within relevant industries. ROC firms utilize local farms, smaller production quantities and discourage overconsumption. The lack of prevalence in regenerative agriculture makes it difficult for companies like Anytime to produce goods a scale that competes with large name brand food and beverage shares. Because of this ROC firms suffer from a lack of obtainable market share until regenerative agriculture becomes widespread practice. By creating stricter limits on market share, large companies are forced to split or downsize to a level that ROC firms can compete at. Furthermore, a limit on market share reduces incentive to grow financially once a firm is near a share limit. This encourages firms organizational focus to shift away from achieving highest possible profit and pay greater attention to mindful business practices. Regenerative agriculture is slow and small, meaning the regenerative model requires scale to be spread amongst a greater number of firms within the market.
Obtaining Organic certification is its own barrier to promoting environmental and ethical business practices. ROC has high up-front transition costs that are an even greater barrier to gaining the recognition for healthy farming and production practices. Despite this, a 2023 study conducted by BCG found that over time regenerative agriculture can increase farmer’s profits by 120%, but it must be noted that we are interested in this for the practice, not the certification. Certification provides companies with legitimacy, which can lead to greater outreach and profitability but if companies are undergoing regenerative agriculture practices they are contributing to a mindful economy. Just like Anytime Foods, the ROC is a framework for healthy business practices in the 21st century.
Anytime Foods ensures the grain used in the production of their spirits is farmed using practices such as: crop rotation, cover crops, low-to-no till, and zero use of chemical pesticides & fertilizers. Their supply chain is the baseline for building healthy soil, supporting pollinators, and a healthy farm ecosystem that generates rich nutritious soil that can hold water and sequester carbon. All these practices are examples of regenerative agriculture that result in higher costs for Anytime Foods making it difficult for them to scale. Due to greater financial costs in maintaining ROC even successful firms with the certification will have trouble competing with the monopolies in the food and beverage industry. ROC companies cannot compete with large firms in economies of scale when it comes to pricing until new limits on market share have been introduced. Once large corporations are forced to operate on the scale of ROC there will be less price competition, and ROC companies will find success in having a superior product to non-ROC firms. Only then will ROC companies be rewarded for the ethical and environmental economic value they create.
Successful ROC businesses shift economic focus away from seeking short-term profit to maintaining long-term profit, sustainability, quality, and ethical conditions. Until there is clear interest in creating limits to market share, ROC companies must continue in their mission to create a mindful economy. Anytime Foods brings attention to the farmers, the land, and the customer by being mindful in their production and provide companies with the blueprint to operate successfully in a mindful economy. Maddy hasn’t created a new product segment for consumers, but her mindful practices of production are rather innovating the current forms of production in the food and beverage industry. Grocery stores could be filled with the products we know and love and can confidently consume mindfully without making sacrifices. Street tacos may never have a better pairing than an ice-cold cola so there must be a world where it can be enjoyed with the comfort of knowing that the environment and ethical stakeholders will always be carefully considered.
Works Cited
Brown, Kimberly, et al. “Regenerative farming and human wellbeing: Are subjective wellbeing measures useful indicators for sustainable farming systems?” Elsevier, 24 June 2021. Science Direct, https://www.sciencedirect.com/science/article/pii/S2665972721000337.
Bugas, Jack, et al. “Making Regenerative Agriculture Profitable for Us Farmers.” BCG Global, BCG Global, 15 Aug. 2023, www.bcg.com/publications/2023/regenerative-agriculture-profitability-us-farmers#:~:text=Yet%20the%20case%20for%20regenerative,revenues%20from%20additional%20crop%20rotations.
Raworth, Kate. “A Healthy Economy Should Be Designed to Thrive, Not Grow | Kate Raworth.” YouTube, Ted, 4 June 2018, www.youtube.com/watch?v=Rhcrbcg8HBw&ab_channel=TED.
Levesque, Sarah Day. “Is Regenerative Agriculture Profitable?” EcoFarming Daily, Acres U.S.A Magazine, July 2022, www.ecofarmingdaily.com/is-regenerative-agriculture-profitable/#:~:text=The%20researchers%20looked%20at%20soil,more%20profitable%20than%20conventional%20plots.
Schwab, Klaus. “Stakeholder Capitalism, Shareholder Capitalism and State Capitalism.” World Economic Forum, 26 Jan. 2021, www.weforum.org/agenda/2021/01/what-is-the-difference-between-stakeholder-capitalism-shareholder-capitalism-and-state-capitalism-davos-agenda-2021/.
[1] Schwab, Klaus. “Stakeholder Capitalism, Shareholder Capitalism and State Capitalism.” World Economic Forum, 26 Jan. 2021, www.weforum.org/agenda/2021/01/what-is-the-difference-between-stakeholder-capitalism-shareholder-capitalism-and-state-capitalism-davos-agenda-2021/.
[2] Brown, Kimberly, et al. “Regenerative farming and human wellbeing: Are subjective wellbeing measures useful indicators for sustainable farming systems?” Elsevier, 24 June 2021. Science Direct, https://www.sciencedirect.com/science/article/pii/S2665972721000337.
[3] Raworth, Kate. “A Healthy Economy Should Be Designed to Thrive, Not Grow | Kate Raworth.” YouTube, Ted, 4 June 2018, www.youtube.com/watch?v=Rhcrbcg8HBw&ab_channel=TED.
