How Dr. Bronner’s Turned a Soap Company into a Blueprint for Regenerative Business

Patagonia’s Vincent Stanley told Yale Insights that his company looks to Dr. Bronner’s when thinking about how to improve its environmental and social practices. How do you approach your sustainability efforts?

I think often about something Professor Heidi Brooks said on the first day of her class on interpersonal dynamics. She said, “The most important thing you will learn at Yale SOM is how to learn. You will use the technical business skills you learn here in your first years out of school, but after that, you’ll need different skills. If you learn how to keep learning as a manager, as a leader, as a professional, that will allow you to succeed in your career.”

At Dr. Bronner’s, I oversee four functions: innovation, quality, compliance and regulatory affairs, and sustainability—although I think that term is a misnomer. We’re not just trying to sustain or keep things neutral or net zero. We want to heal, restore, and regenerate.

That’s hard. None of us know how to solve the most important and intractable challenges, so we’ve got to take a learner’s mindset and move forward one experiment at a time, one lesson at a time. That requires optimism, because it’s hard enough that otherwise you’d just give up. So I try to approach the work with a learner’s mindset, optimism, ambition, and hope that we can leave things better than we found them.

Dr. Bronner’s makes soap, but you’re talking about making the world a better place as part of your job. Could you give some context?

Dr. Bronner’s is a fifth-generation, family-owned, family-run California benefit corporation. Our mission is to make products of the highest quality and dedicate our profits to making a better world. It’s a for-profit enterprise committed to being a force for good—a beautiful example of the Yale SOM “business and society” vision.

Emanuel Bronner was a German Jew and a third-generation master soap maker. He came to the U.S. in 1929. When his parents were killed in the Holocaust, and the Nazis stole the family soap business, he had what he described as a moral reawakening. He believed that if we do not realize our transcendent unity across everything that divides us, we will destroy each other and the planet. He founded Dr. Bronner’s in the U.S. as a way to spread that message of unity and peace.

To this day, the label is still covered with his “all-one” message in tiny font. It’s a case study in bad label design—except that at this point it’s iconic. And the mission to make the world better is still at the heart of the company. I think business has incredible potential to build a different world. And any business can do it.

How did environmental and social responsibility become a systematic part of the company?

When Emanuel’s grandsons, David and Michael, took over in the late ’90s, early 2000s, they asked, “What does highest quality and most responsible look like today?”

They decided that Dr. Bronner’s ingredients should be Certified Organic. The USDA National Organic Program standard was just being developed. Initially USDA Organic certification wasn’t allowed for a non-food product. So the company sued the USDA for $1, arguing that if the agriculture that produces the ingredients is Certified Organic, it doesn’t matter if those ingredients go into a brownie or a bar of soap; the product should be certified as such. We won and were the first non-food product to hold USDA Organic certification.

In 2005, we made the commitment to be Certified Fair Trade so that we could honor the people in our supply chains. We started with coconut oil, the number-one ingredient in our liquid soap. But no one produced fair trade coconut oil and there was no standard for coconut in the fair trade marketplace. So we worked with a certifier to develop the standard and helped found Serendipol, a sister company in Sri Lanka that now works with over 1,200 small holder farmers to produce Certified Organic, Certified Fair Trade coconut oil.

Organic and Fair Trade Certified ingredients became the pillars of our product integrity and defining characteristics of the brand that we are proud of to this day. And we keep learning and seeking out the most responsible approach to making products as the world has continued to become more complex.

Could you give an example?

Organic Certification is critical because it prevents pesticides, fungicides, and herbicides from being used in agricultural production. But it doesn’t address soil health, animal welfare, or social fairness for farmers or factory workers.

We decided there should be a higher bar. And we worked in partnership with Patagonia and the Rodale Institute, a leading research organization on organic agriculture, as well as other domain experts in animal welfare and labor justice, to develop the Regenerative Organic Certification (ROC). We launched it in 2017 and continue to work with the Regenerative Organic Alliance, the nonprofit that holds the ROC standard, to expand the number of crop types, producers, and products that are certified.

Is Dr. Bronner’s approach profitable?

Yes. Profitable and growing. When I joined the company in 2013, I was the 112th hire. At that time, we were doing $63 million in revenue. We now have over 420 employees and last year we did $220 million in revenue. This is a 75-year-old brand experiencing startup-like growth.

Where did the growth come from?

It really started as we got into the mass market. For a very long time, Dr. Bronner’s was only in mom-and-pop natural food stores. And we continue to offer our steepest discounts to the independent small businesses that have sustained Dr. Bronner’s for so long. But we also recognized that people are shopping in different ways today. We want to provide an organic and fair trade option wherever people shop for soap. That means that our strategy now needs to be omnichannel.

Dr. Bronner’s has historically held about 80% of the market share for natural soap, so when mass-market retailers want to bring in an organic or natural soap, they choose the marketplace leader. We’re in Whole Foods, Target, and Walmart and on Amazon.com.

We want to be in all of these channels today, and we want to be mindful about how we do business with them. For a time, we did not sell to Walmart because of what we understood to be true about their labor practices, such as paying female employees less than male employees. When they changed those practices, we were excited to work with them.

We’re preparing for the day when e-commerce is a quarter of our business. That’s not true yet, but it’s coming. It’s creating real conflicts between mission and reach. To ship soap directly to a consumer, the easiest way to meet Amazon’s requirements is to wrap the bottle in a single-use plastic bag; and that’s not how Dr. Bronner’s wants to operate. The emissions associated with last-mile delivery are really high; and that’s not how Dr. Bronner’s wants to operate. But if that’s how people want to shop, we need to figure out how we can be there with integrity.

With plastics and transportation emissions, you’re pointing to some intractable challenges. Could you share a case study of how you try to be there with integrity?

I’ve been working to address issues with plastic packaging for years; the company has been at it even longer. There isn’t a simple solution.

Dr. Bronner’s became the first company to use 100% post-consumer recycled (PCR) plastic for the liquid soap bottles. That was in the early 2000s. PCR plastic cost more and the quality was lower, but the company decided reducing its impact was worth it.

As we’ve learned more about the plastic pollution crisis, the limitations of recycling, and most recently microplastics, our consumers have definitely asked us to do more. We consistently hear, “Come on, Dr. Bronner’s, what’s inside the bottle is fantastic. The bottle itself is not.”

It has become clear to me that the only way we as manufacturers stop contributing to these problems is to stop using plastic packaging. But liquid soap generates over 60% of our revenue, so we’re not just going to stop selling liquid soap in single-use plastic packaging overnight.

So what are you doing?

We’re working on multiple fronts and multiple time frames. We take responsibility for our plastic emissions, advocate for system-level change, and push innovation.

I think of our short-term approach as, how can we be less bad? We’re nudging up the recycled content and recyclability of our current packaging. Based on the weight of plastic we use each month, we put money into a fund that pays for plastic waste collection in the community around where our palm oil is produced in Ghana, as a way to take responsibility for our plastic pollution impact. And we’ve created a paper-based refill carton that has over 90% less plastic than our existing bottle.

In terms of advocacy, we supported and gave money to the California ballot measure for extended producer responsibility (EPR) legislation that holds producers responsible for their packaging, funds the improvement of recycling and composting infrastructure, and forces innovation around packaging. That led to California law SB-54. Three states now have EPR laws and more are in development.

But what I’m most excited about is our circular bulk refill program.

What is that?

In the CPG space today, everything is linear. Manufacturers make stuff and sell it to distributors, who sell it to retailers, where consumers buy their individual package; when they’re finished, they throw the package away. It’s all linear.

Given the impacts of packaging, ideally, we’d deliver our soap without packaging or at least without any single-use packaging. With bulk refill, consumers bring their own container. It’s not rocket science; stores have sold bulk product for decades. But from the manufacturer’s perspective, bulk systems generally just use larger packages—often a one-gallon or five-gallon jug that’s made out of virgin material and isn’t recyclable. And there’s no system to send it back to be refilled.

But we realized the cold brew and kombucha kegerators in our employee lounge do work on a circular, refill model. So we talked with our distributor. He handles 15 different organic refrigerated liquid beverage products. When we asked if he would be able to distribute organic liquid soap, he was happy to do it.

We also have a great relationship with Jimbo’s Naturally, an independent retailer here in San Diego County, and they offered to be our laboratory. We designed a beautiful endcap refill station where a consumer can bring in an empty bottle to refill.

We sell refillable drums of soap to our distributor. He uses the drum to fill refillable containers that go into the stations at Jimbo’s locations, where he already distributes beverage products. Since refilling a drum cost less than filling individual containers, we can cover the costs of the circularity. Consumers get Dr. Bronner with a lot less plastic impact. The system is not plastic-free, but it’s single-use plastic-free.

We now have 17 stations in California: 12 at independent retailers in Southern California and 5 in Whole Foods Market locations in Northern California. In stores with refill stations, we’ve seen an average 50% sales lift of liquid soap. And bulk sales are cannibalizing some of our single-use sales. It’s working—less plastic, more sales. That’s the goal. We’re happy, retailers are happy, and consumers are happy. This is the kind of win-win-win that we like to see in business.

Can you scale that?

That’s a huge challenge; we’re working on it. We don’t yet have a national distributor who’s set up to do the reverse logistics. My work right now is brainstorming and networking with logistics professionals, startups, and other potential partners who might be able to scale it nationwide for Dr. Bronner’s.

But my vision is not just liquid soap or body care; it’s a fully circular product-delivery system that works for everyone involved. Part of this effort is making clear to the business community that it’s possible. From an operations standpoint, we are doing it, and it’s profitable.

How much of this is possible because Dr. Bronner’s is a private company?

As a family company, Dr. Bronner’s can set its own priorities. The Bronner family has chosen to use this company as an engine for good. If we were beholden to the public markets and shareholder primacy, it would be harder but not impossible.

The owners have capped their salaries and all executive salaries at five times what the lowest-paid, fully vested worker makes. As a senior executive, I can say my compensation is just fine.

When companies cap executive compensation, they have flexibility to do things like develop Fair Trade supply chains, establish a Regenerative Organic Certification, and pilot circular bulk refill systems.

Looking ahead 5 or 10 years, what are you hoping for?

The natural products industry is littered with companies that start out mission-driven and then, once they reached a certain size or were acquired, their mission eroded. We just launched an initiative called the Purpose Pledge, which is a community of practice aimed at helping natural products companies stay true to mission as they grow.

There are 16 pilot companies, including Dr. Bronner’s and Seth Goldman’s Just Ice Tea. It’s still an early experiment, but we see it as a way to hold each other accountable, not just to stick to the status quo, but to continue to improve. There’ll be a funding piece that supports mission-driven companies that need outside capital that won’t erode the mission.

And there’s a piece aimed at supporting systemic change. There will be an opportunity for policy advocacy and an opportunity to pool buyer power and support pilot projects that cross into other industries. For Dr. Bronner’s, over a third of our carbon emissions are due to the transportation of our ingredients and our products. The transportation industry is slow to innovate. But Purpose Pledge companies working with freight companies might be in a position to help innovate around electric freight transportation or fuel innovation. Maybe that helps scale the circular bulk refill system? Maybe we even develop options that help with our last-mile emissions?

If we can make circularity possible for a significant segment of CPG and for a segment of transportation, it turns a win for a handful of companies into something that can make a difference for society at large. Looking forward, that’s the work that I’m excited about. And I think the Purpose Pledge can be a vehicle for that kind of collective leadership.

How did Yale SOM fit into your journey?

That’s pretty simple. I would not be in this role were it not for Yale SOM. I find my work incredibly exciting and rewarding. I’m so grateful for everything I learned and for the chance to spend time with other students, faculty, and alumni who were interested in using leadership and management to make the world a better place.