Dr. Bronner's Cleans Up by Cleaning the World and Its Supply Chain

By Scott S. Smith | Friday, 23 July 2021 | Feature, Business

North America's top-selling natural soap line, Dr. Bronner's, has had a cult following since the 1960s for its purity and the spiritual and moral messages on every bottle and bar.

In a new book, “Honor Thy Label: Dr. Bronner's Unconventional Journey to a Clean, Green, and Ethical Supply Chain,” Vice President of Special Operations Gero Leson discusses how the company manages its supply chain to ensure that major ingredients are certified organic. It also encourages the practice of regenerative agriculture, which enriches the soil and reduces the greenhouse gases that cause climate change. It works closely with farmers and workers to be sure they are paid and treated well, known as "fair trade."

The book was written to not only provide a model for other companies on how to work through these issues but to spread the idealistic gospel of Emanuel H. Bronner, who founded the firm in 1948. It may be the ultimate example of a business doing well by doing good. Still owned and led by his family, the Vista, Calif., company reported 2020 revenues of $190 million, while it gave 40% of profits to a wide range of worthy causes (8.6% of its revenue, compared with most other socially active firms that may donate 1% to 2%). Its 2020 annual report listed nearly 200 recipients, including groups involved in helping the homeless, reforming drug policy, advocating for animals, and addressing environmental dangers. To enable it to be so generous, it caps executive salaries at an almost unheard-of five-to-one ratio to that of its lowest-paid warehouse workers.

"We call our approach Constructive Capitalism," David Bronner, the founder's grandson, told Startup Savant. He is CEO: Cosmic Engagement Officer, an indicator of the company's counterculture roots. "For those of us in business, we have the responsibility to remake the market and create alternatives to a status quo of corporate greed that benefits few and robs so many of the joys of life and the beauty of the earth."

There are actually many studies that show that companies that contribute to their communities (in the broadest sense) actually do better financially in the long run than those who believe in making a profit without regard for customers, employees, or the harm they do to society and the environment. The pandemic and the numerous social justice crises have awakened the consciences of many leaders, who now realize that having a positive social impact is a pragmatic course when customers are voting with their wallets and workers with their feet when assessing the values companies stand for.

Mission on a Moral Soapbox

The Dr. Bronner brand has deep roots going back to the Jewish quarter of Laupheim, Germany, in 1858, when Emanuel Heilbronner Sr. started a candle and soap-making business in his basement. His three sons moved the company to Heilbronn, where the family name probably originated, around 1900. One of them, Berthold, was in charge of finances, and his son Emanuel was born in 1908. Emanuel learned the family business, but anti-Semitic bullying in school opened his eyes to the implications of the rise of Nazism, so he emigrated to Milwaukee in 1929. His father, the lone survivor of his siblings, was forced by the government to sell their factory in 1939 to a non-Jewish owner. He and Emanuel's mother, Franziska, planned to move to the US, but after the attack on Pearl Harbor in 1941, they were blocked from leaving. They were deported with other Jews to Theresienstadt, where he died of exhaustion, while she was later sent to Auschwitz, dying in a gas chamber in 1944.

Because of the association of the word "heil" with the Nazis, Emanuel dropped it from his name and became involved in movements to promote universal brotherhood. He moved to Los Angeles, where he started his soap business as a sole proprietorship in 1948, moved it to San Diego in the 1960s, and incorporated in 1973 as All-One-God-Faith Inc. (with Dr. Bronner's Magic Soaps as a DBA added later).

Customers began calling him Doctor because of his lectures about the science of making natural, biodegradable soap and its benefits compared with commercial soaps. He realized that many in his audiences came primarily to get samples of or buy his soap, so he began putting messages on the labels about his "Moral ABCs": universal peace, cooperation among the masses, and saving Spaceship Earth (customers can still find them on every bottle and bar). They resonated with the times and created a passionate following for the products. In 2006, a documentary film on this history, "Dr. Bronner's Magic Soapbox," was released, and in 2017, a spoken word album of the good doctor's teachings produced.

Dr. Bronner wasn't much of a businessman, however, so his sons Ralph and Jim, and Jim's wife Trudy (now CFO), began running the business. Emanuel died in 1997, knowing that his family would continue with his vision. Jim passed away the next year, and his and Trudy's son David, a 24-year-old Harvard graduate, joined shortly thereafter. Their other son, Mike, became president in 2000 (their brother-in-law, Michael Milam, is COO).

The company pioneered the use of 100% post-consumer recycled bottles and in 2003 became the largest personal care company certified under the US Department of Agriculture's national organic program. "We were green before it was cool," Mike said.

The basic liquid soap recipe remains similar to what it was in the 1880s, a very concentrated formula based on either coconut or olive oil that reacts with an alkali, to which other ingredients, like hemp, jojoba, and essential oils (most notably peppermint), are added for their qualities. The bottles list over a dozen ways to use the soap, such as for washing body and hair, shaving, cleaning dishes, doing laundry, rinsing fruits and vegetables, washing dogs, and so forth.

The relative simplicity of the ingredients has made it easier than competitors' complicated products to be sure all the major ones are certified organic and fair trade. But Leson's book makes it clear that while any company can follow the path it has carved out, it will require tremendous dedication to the health and welfare of customers and the planet.

Creating a Clean, Green, and Ethical Supply Chain

Leson was born in 1955 in Cologne in what was then West Germany, and at 10, his father recommended he read “The Rise and Fall of the Third Reich” by William Shirer. Leson earned a master's degree in physics and he and his wife, Christel, moved to Los Angeles in 1986, where he earned a doctorate from the University of Southern California, Los Angeles, in environmental science and engineering. They now live in Berkeley.

Leson met David when the company was embroiled in a battle with the Drug Enforcement Administration over whether to keep products with industrial hemp on the shelves.

"Gero was well-qualified to design an experiment that proved that consuming hemp food products would not lead to positive drug tests, a crucial part of our ultimately successful defense of hemp foods," said David.

Leson joined Dr. Bronner's in 2005, as it was beginning its journey to ensure that its major ingredients were certified organic and would move the company towards a "climate positive" impact for all its operations and those of its sources. Minor ingredients would also need attention.

At the same time, they were creating new products and expanding into overseas markets. The increased demand and complexity meant they needed to carefully manage the sourcing from places as diverse as Ghana and Samoa, working with hundreds of smallholder farmers and processing operations, teaching them everything from how to build up soil and avoid contamination of nearby organic crops to bookkeeping and marketing.

"Most of the world's more than 570 million farms are small [less than five acres for field crops] and family-run," Leson wrote. "By helping them … we have the potential to reach 30% of the global population."

The company has played vital roles for producers by arranging distribution, providing purchase orders to incentivize lenders to extend credit, and paying a premium for organic and fair trade products that, to some extent, can be passed on to consumers who appreciate the value. It has also arranged numerous public-private partnerships (PPPs), matching grants from governments that often pay half the cost of a program. One allowed a Palestinian olive oil producer to build storage capacity and upgrade its bottling operation, as well as diversify its product line. Dr. Bronner's also has invested extensively in improved community services, from healthcare to clean water.

In the midst of the exploding expansion and sustaining the process of certifying organic and fair trade, the pandemic hit. Amazingly, Leson wrote that "it became clear in October that global revenues in 2020 would be about 40% above 2019 levels, with a corresponding growth in profits." Which meant, of course, that Dr. Bronner's customers had remained loyal, enabling it to be even more generous with donations to its worldwide humanitarian network.

At the end of his book, Leson shares another reason for the company's success, something few organizations practice in more than a superficial way: "Listen to your employees' needs and concerns, ponder how to accommodate them generously, but keep an eye out for abusive behavior. Act consistently. Occasionally remind people of these benefits without overdoing it. Be open and genuine."

About the Author

Scott S. Smith

Scott S. Smith has had over 2,000 articles and interviews published in nearly 200 media, including Los Angeles Magazine, American Airlines’ American Way, and Investor’s Business Daily. His interview subjects have included Bill Gates, Richard Branson, Meg Whitman, Reed Hastings, Howard Schultz, Larry Ellison, Kathy Ireland, and Quincy Jones.