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January 14, 2004
Book Review--True to Our Roots: Fermenting a Business Revolution
    by Willliam Baue

Paul Dolan, president of Fetzer Vineyards, promotes sustainable business practices by relating his personal transformation committing to organic growing practices.


True to Our Roots: Fermenting a Business Revolution opens with author Paul Dolan's "aha!" moment, when he made a life-transforming (and business- and industry-transforming) realization. Then head winemaker at Fetzer Vineyards in the "crush" (or grape-pressing period) of 1987, Mr. Dolan tasted two grapes grown fifteen feet apart, and was blown away by the disparity in flavor. One was "infused with the lush, creamy flavors of ripe figs and melon, perfect for Sauvignon Blanc," and the other tasted bland, "less flavorful, less expressive."

The difference? One was grown organically, the other conventionally, with pesticides, herbicides, and fungicides, the industry standard at the time. Guess which was which.

This experience, which inspired his writing of the book, also inspired him to commit to sustainable business practices. In 1992, Brown-Forman (ticker: BF.B) bought out Fetzer and appointed Mr. Dolan its president, positioning him to apply his vision of sustainability company-wide. He converted all Fetzer vineyards to organic, and is convincing his growers to do the same.

However, Mr. Dolan didn't stop there: he helped influence the Wine Institute and the California Association of Winegrape Growers (CAWG) to create a Cod e of Sustainable Winegrowing Practices for the state. His vision is to influence the transformation of the global wine industry to sustainability as a stepping stone to inspiring similar revolution in all agricultural practices and, indeed, in all business practices.

"Fortunately, no one has to be overthrown in this revolution; we just need to replace standard operating procedure with something more sustainable," writes Mr. Dolan.

The book provides a strong business case for sustainability with the example of Fetzer, which increased earnings 15 percent per year on average in the 1990s while doubling production volume. Fetzer also reduced waste generation by 93 percent over the past decade. The equation for success was Eł, shorthand for economics, environment, and equity in Fetzer-speak, a reformulation of the triple bottom line of profits, planet, and people.

However, the strength of Mr. Dolan's appeal lies not in such statistics or codewords, but in his mode of conveying his case through personal anecdotes. These anecdotes illustrate his six core beliefs of what distinguishes sustainable business from business as usual.

For example, he tells a story about when he was taking a management class in problem solving and teamwork. His pre-judging of a classmate as less capable led him to behave in ways that prevented his team from succeeding in a task. However, once he shifted his mindframe to consider her as a capable team member, he recognized the validity of her suggestions. This recognition had the cumulative effect of improving the team's performance.

The lesson he learned has served him will. At Fetzer Mr. Dolan conducts "Straight Talks" with his employees, where he listens to their ideas and takes them seriously. The results? At the suggestion of Fetzer's barrel cooper, the company started reconditioning its old casks, thereby reducing environmental impact and saving money. Now, the company not only builds its own wine barrels, but it spun off this cooperage into a successful business venture in its own right.

Socially responsible investment (SRI) practitioners, who often screen out alcohol producers from their portfolios, might find Mr. Dolan's take on alcohol consumption interesting. After seeing a 1994 60 Minutes segment on the "French Paradox"--the French eat a higher-fat diet than Americans but have a lower incidence of heart disease--Mr. Dolan was intrigued at how drinking red wine in moderation lowers the risk of heart disease. He decided to try to increase American appreciation of red wines through a marketing campaign. The campaign was a success; he surpassed his goal of selling half a million cases of Merlot a year by 1999.

Although some may question whether selling more red wine is truly socially responsible, the experience did inspire Mr. Dolan in 1994 to draft his vision of Fetzer as a leader in sustainable business practices by 2005. Social investors would likely applaud this vision statement. Readers of True to Our Roots will find it to be an apt ending to the book.

 

 
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