Businesses with sustainable practices and positive impacts on their communities will be the winners next decade, the former chief operating officer of Starbucks Corp. and now founder, president, and CEO of Ocean5 in Gig Harbor told South Sound business leaders Nov. 7.
“I think who wins and loses in terms of business in the ’20s is going to be driven by people that embrace a broader sense of their impact on people and on profit,” Troy Alstead said during a CEO roundtable, the second such event organized by South Sound Business publisher Josh Dunn and sponsored by Heritage Bank in what is planned to be a biannual series for leaders to openly discuss key business topics. “Find those ways to have an impact in a way that is a competitive advantage, and is good for what your customers are looking for, and what employees are looking for, and what’s impactful for the communities we’re in. That’s who’s going to thrive in the next 10 years, I’m sure of it.”
Alstead, a South Sound resident who was born in Tacoma and grew up in Puyallup, shared how his views on business and sustainability were shaped by his 24 years with Starbucks and current roles on the Levi Strauss & Co., Harley-Davidson Inc., and Topgolf boards of directors.
“Customers will give far more loyalty to companies that take a step toward something that stands for — and has impact in — the community,” whether social, environmental, educational or other causes, he said. While customers’ average expenditure with such companies might not be higher, “they will go to those companies more and more that stand for something that aligns with what matters to them — and I think that’s important for all of us to just know and understand.”
Harley-Davidson, for example, an icon of thundering gasoline-powered motorcycles, recently introduced an electric motorcycle to reflect changing consumer views and wants, he said.
Aligning with what customers and employees value, find meaningful, or impactful, and increasingly demand is one of the “3½ reasons” Alstead believes businesses should be thinking and doing more about sustainability. But they shouldn’t be financially reckless, which isn’t sustainable for business.
Another reason is cost and efficiency, things like more efficient heating, lighting, and building design that save energy and money.
A third reason, Alstead’s No. 1, is that it’s the right thing to do. For example, his building uses carpets made from nylon fishing nets that a company purchases from anglers, largely in Asia, who otherwise might abandon old trawler nets, which then become “ghost nets” fouling beaches and water, and harming marine life. The program provides anglers another source of income by selling their nets, or ones they find, thus incentivizing sustainable behavior.
Alstead assigned a half-credit to the final reason for sustainability: Legislation increasingly requires it. While important, he doesn’t believe it’s the best reason to direct businesses’ sustainability efforts.
“It’s not the best motivator, number one; and number two, legislation will never, almost never, be on time or enough,” he said, preferring to focus on the other reasons.
To make sustainability broadly work for business requires an equilateral triangle of sustainable impact on people in communities; positive impact on the planet; and shareholder profitability, he said.
Alstead joined Starbucks in 1992 as a financial analyst when it was still private and retired in 2016 to pursue his vision for Ocean5 — a combination entertainment, meeting, and restaurant facility. The facility was designed as a place for community to connect and have fun through its bowling alley or laser and game rooms, meeting spaces, or over food at its Table 47 restaurant.
The eatery is heavily sourced by local farmers and ranchers to support the community and also reduce food shipping. Environmental and social connections, and impacts weave throughout Ocean5, literally and figuratively, including geothermal energy for heating and cooling. Such sustainability projects help drive change and behavior, and hopefully influence other companies to consider things they can change, Alstead said.
The Ocean5 name reflects the five connected oceans, the health of which is important to Alstead and the business mission to protect them. Table 47 reflects the connection point for people around a dining table, with 47 representing the local latitude.
After Alstead’s talk, attendees shared some of their sustainability efforts, successes and challenges.
Bryan Reynolds, CEO of Anthem Coffee & Tea, said his company emphasizes sustainability, minimizing waste, and maximizing profit, adding: “This has been very eye-opening … to hear from other folks what you’re doing, (which) is providing a lot of context for us to go back and think about more ways that we can be sustainable — so thank you for this.”