Transcript

Chobani & Patagonia CEOs break down where values meet profit

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0:53 Hey folks, Jeff Berman here. I am thrilled to share some of the new names who will be joining us at this year's Masters of Scale summit. This may be our biggest stage yet. Reed Hastings, Meredith Whitaker, Van Jones, Amjad Masad, and more. Will be there with us October 20th through 22nd in San Francisco. If you're building something great, or you want to build something great, We want you there with us too.

1:20 Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. What you might describe as speaking out, I just think is tone of truth about what's going on in the world right now.

1:41 Okay. Healthy planet. Thriving communities depends on a functioning democracy, and I have real concerns about the future of something I took for granted for the vast majority of my fifty-three years. We got death threats and you know boycots. You gotta do the right thing regardless of you know what Lawyers and communication experts will say.

2:05 Every challenges we face, we don't want it. But when that happens, It's an opportunity to make things better than ever before. And that excites me. That's Patagonia CEO Ryan Gellert and Chobani CEO Hamdi Ukaya recorded live at the Masters of Scale summit in San Francisco on October eighth. In this special episode, Ryan and Honde talk about the intersection of values and commerce, moderated deafly by New York Times reporter and author David Gellis.

2:39 The two CEOs share their different strategies for dealing with an activist White House, the pressure for what David calls anticipatory compliance, and how they grow their businesses while also prioritizing causes like environmental conservation and immigration. Along the way there are personal stories, advice, and yes, even a few F bombs, so Let's get to it. I'm Bob Safian and this is rapid response

3:13 Patagoni and Chibani are two companies that have long been defined by their purpose as much as their products. But Both of your companies are showing up in very different ways. At a moment when it can be hard. Or even dangerous.

3:28 To say what you really think. So we're gonna get into all that and more, and I wanna start with you, Hamdi. Chivani, you've always cared about more than just profits. For almost twenty years now, the company has been doing this work. and been committed to more than just making great dairy products and all the other expansions you've done. But to taking care of refugees.

3:48 Immigrants. Farmers. And at a moment when many companies are running away from anything. That has a whiff of politics. You're looking for common ground.

3:59 Including with this administration. At a very divisive time. You've worked with the White House. You co authored an op ed with Ivanka Trump, you're working on initiatives there. Take us inside this moment. How do you think about staying true to your values?

4:15 At a moment when the country can seem so divided. Yeah. David. You know, starting from Turkey and then In the hills of

4:24 Eastern part of Turkey has no mat family. to making myself to this country and Age of twenty two and And finding myself in upstate New York. you know, working on a farm. I have gone and made you know this

4:37 Long journey, yeah. And and but I can't remember and that Into this old yogurt factory was shut down and closed and left. And finding that similarity between Where I come from in the mountains of Kurdish

4:50 you know Scottish mountains of Turkey Turkey To this You know, upstate valley where the small town And seeing the people and communities left behind. by the businesses.

5:04 And the people in power, and the ordinary people suffering. Yet We are thousands of miles away from From each location that where I

5:14 When I when I have. So when you look at from that perspective, you cannot react. You know, daily politics. or four years of politics. There are

5:26 Timeless truths. And there are timeless challenges that we face as humanity. And in there I grow up As someone who hate biz Literally? And I hate the bitch.

5:39 And I I I the reason I left the country because I got into trouble because I was Kinda Borderline. You know. Criminal.

5:48 And I end up I end up being in jail. For days and lucky to get out. And find myself here. And we don't want to get into that trouble that that that journey right now. I think we do. I think we just don't have enough time. Um

6:04 I found A dimension of the business. Yeah. That is so powerful. And and I've been into NGOs, I've been into political activities, I've been into all kinds of stuff.

6:17 And and and seeing that old factory close down. And I say if I can bring this back, if I can fix it with the way that Not ko against the kid that grow up. Yeah. And still make it work.

6:29 And there could be some some some some solution here. So then I come back. to this is like I cannot follow Every other playbook I have to follow my instincts, my way of doing things, and I've said and I I had no other choices anyway. So

6:46 In that David, I found That if you go employee first, if you go community first, if you create an environment where everybody's welcome. If you embody and realize what makes this land so special that everybody wants to come and make something out of it. And if you can look from a lenses of Not the city activist and country

7:07 Um Conservative eyes, but through United Human Dimensions. then you find them a lot more similarities than differences. And if we can look on the

7:21 Perspectiva similaritys Understand that there are some different zes. But respectfully disagree. I think that's that's that that's what I try to practice and that's what the tribal n knowledge I have. That's beautiful. And I think we could all use a lot more of that.

7:38 in this country this day. Ryan, Patagonia is a very different sort of company. This company has been meddling in politics, sometimes quite loudly, for more than fifty years now. That was a gentle word. in twenty sevent Patagonia sued President Trump and his

8:02 Cabinet? Yeah, it's better. That's meddling. Uh and you still, even at a moment when most CEOs Mm-hmm. about this administration. raising the alarm almost every single week, it seems.

8:16 When your business is selling clothes. Why do you spend so much time talking about politics and policy? Yeah, it's um well, first of all It's super interesting. being on the stage with you, Hamdi, and with you, David. You know, I think you made reference to it. You wrote a book that's just come out in the last month about our founder and our fifty-two year history. You and I have gotten to know each other quite well over recent years.

8:39 And I think there's a a lot that we have spiritually in common as companies. And then I think to the nature of your question to each of us, there's a lot that's actually quite different in how we navigate that. I think for us to now answer your question, we Are focused on protecting the natural world, period. That's why we exist. It's not about making money, it's not about being the biggest player in outdoor apparel and equipment. It's about protecting the natural world, and so that's what we do. And we exist in a world right now here in America. Where the threats are absolutely unprecedented. And I think that, you know, what you might describe as speaking out, I just think is telling the

9:16 Truth about what's going on in the world right now. We said Food before. Yeah. There's a whole long list of things we weren't supposed to do. Mm.

9:35 It's the end of the day. We'll get to all of them here. Um so you know Climate's at risk. Pollution and polluters, the regulations are coming off, and conservation, particularly public lands here in America. I mean, it is one goddamn threat after another, every single day. And so what are we speaking up on? Those things that matter. Same things we've spoken up on for fifty-two years. As the CEO of a company and a as an individual. Do you ever worry?

10:01 About the fact that this is a moment and an administration that has shown a willingness To be Retributive. Yeah, of course. And how do you navigate that? I mean the word is anticipatory compliance.

10:15 Are you holding back at all? I think we have to be very strategic. I think we have to be very considered. I think what we talk a lot about is where do we have authenticity? To offer an opinion on something. And where can we be truly additive? If it's performative and we're just offering an opinion to offer an opinion, it's just not that's not a space we're gonna play in right now. I don't think the times benefit from that. I think where we can be truly authentic are two places. One is we're a business and so we can speak from the business sector and the other is on on environmental and climate issues. We've got a fifty two year history. We work our asses off to minimize our footprint.

10:55 As you made reference to, we've supported grassroots activism for forty years in counting. And so that's who we are, what we do, and I think we've earned the right to offer opinions on that. Okay. You get a sense of the different approaches to really uh s very similar and consequential set of issues. We're going to talk about more than politics, I promise, but I do want to come back to this issue of how you navigate a moment like this and when you decide even to work with Evans Trump, even when you decide to work with the White House. It can seem like a no-win situation. You work with someone, you piss one side off, you say something, you piss the other side off. How do you think about Engaging in these partnerships where you are trying to find common ground without alienating any of your consumer base.

11:38 Yeah. What I do and what we do at Chobani is you know, really we do we have the The known instinct or reflect that we react. Ivanka actually

11:52 It's not started now. I I work with her in In Idaho Um after Um

12:01 President Biden. Get into my house. Actually. And what we did is we made boxes of food from the farmers and and we delivered to people in needs. In in communities at that time.

12:12 And later on Before even the election. uh she and her partner they they create this organization called Planet Harvest and says do you realise That in California

12:23 Forty percent of all the fruits and vegetables are wasted and left in the left in the land. Yeah. Because they don't look it. And there's no buy and and I couldn't believe it. I am aware of these things, I didn't even realize and I went to the land And I saw it And and and partner with her.

12:39 her and her partners have at started quite knowledgeable that I didn't realise. Absolutely will do it. Absolutely we'll do it. I'll invest with it and I'll need it.

12:49 uh and and and prove the concept. So When I said We're going to hire refugees, you know, during the first Exactly.

13:00 I don't know how many years ago. Uh we get dead threats and Yeah, boycotting the first time. You brought it, and New York Times and we got that threat. The stuff is We are all have to react as human beings who we are. And businesses are a combination of people. You gotta do the right thing regardless of, you know, what

13:19 lawyers and communication experts will say. Um Okay. Yeah, another thing. I'm getting text from your communication expert right now.

13:34 I want to invite everybody to We have some serious, serious issues that we have to bring everybody to table to. Yeah. Like we really do. There is I do see some dem some egocentric reaction, just anger because the other person the other person Okay, there are enormous about the differences. Yeah. Yeah.

13:54 I was invited to buy house because I was uh I'm announcing huge investment in Idaho and another one in in in in Rome and New York. And being part of Invest in America. I don't have any working relationship with my house. But My view on immigration and and and refugees is the same. Yeah, I have a organization called Tent I just came from Mexico, I'm meeting all those

14:16 people that encouraging people to hire refugees, entrained refugees, these are timeless truths. You know, these are timeless truths. People are going to move. And we have to make a system that works for every single person. And we proved it in our factories, in our communities, and today You волна хав

14:34 Farm workers. Oh you will not have functioning farms and agriculture without immigration. Everybody knows that. Amen. Everybody knows. Timeless truths do make a difference, especially in times of disruption. So to discourage, which Homdi and Ryan both demonstrate as day-to-day leaders, and in their willingness to be blunt publicly about operating in such politicized times. So how much do they each prioritize growth versus values? and what most gives them hope for the future. We'll hear about that more after the break.

15:10 Stay with us. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday we release a second rapid response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford's CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.

15:54 Humans will never be more intelligent than AI. There's gonna be two types of companies. Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Chayubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone.

16:22 Every week, I sit down with the pioneers shaping our future, and we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. Before the break, Patagonia's Ryan Gellert and Chobani's Hamdi Ukaya talked with David Gellis of the New York Times live at the Masters of Scale Summit about how they've expressed their values in the face of an historically activist Trump administration. Now Ryan explains why Patagonia doesn't always equate business growth with impact, and Hamdi explained. how independent ownership structure can enable freedom of action. They also each share personal stories of key decision points for them and their companies, and they share what most gives them hope for the future. Let's dive back in. A lot of people in this audience are looking to grow and grow fast. I think, Ryan, it's a it's an incredible point of distinction that Patagon is a company that over the years has deliberately restrained its growth. You made reference to it earlier. You said we are not trying to be the biggest apparel company. And I think that mentality can just be like anathema.

17:32 To a lot of founders. And I wonder when you think about all the things that I've written about, uh stopping distribution in retail partners where you have ideological differences, not selling on Amazon, uh all these decisions, how do you Keep a sense of forward momentum. And keep your team motivated. When you're sort of stepping on the brakes at the same time. I think we're stepping on the brakes in that We're still growing. Um we're growing modestly in this environment, but we're still growing for the most part. And I think having a dynamic organization.

18:06 one that has a a reason for being and Ford momentum I I think I think the whole concept of growth's quite a reductive definition of of or the the concept of Revenue. being the s the defining element of growth and momentum, I think, is a reductive idea. I think Say just a bit more then. Because I I can feel it in the energy. People want to know more. I am

18:31 Із бій пропонен в гроз. Is there is in this room. It's growth in impact that I think is most important for us. I think growth in revenue can allow for some of that. And so I think it's it's some ways a necessary evil. I think when we're taking it from competitors who we think might be making lesser product. Or think about business differently. I'm unapologetic about that, but we don't have our foot mashed on the accelerator.

18:58 Trying to chase every distribution opportunity, partnership opportunity, collaborative opportunity, or entering new markets. This is not how we think about it. That's the uh a refreshing take uh at a moment when I think so many companies, you get the sense, are just mashing it on the gas. Hamdi, you've been able to grow extraordinarily uh well over almost twenty years now. I think 18 years since you sold your first cup of yogurt. I think publicly reported just shy of three billion dollars in revenue recently. An amazing American success story. I wonder, though, as you've hit those inflection point moments, those years, I mean even I think recently you had a 17% growth in one year. When you're growing that fast. How do you work to maintain quality and make sure the product

19:43 And the service and the integrity not only of the products but the the company doesn't slip. Yeah. Yeah. I started in the wrong place. I should have started here. Um But I where I started business is country. Mm-hmm. Where the cows are, where the land are, and no bars and no restaurants, nothing. Um so you sleep in the factories.

20:03 And My first five years, David, I never left the factory. And then when I built a factory in Idaho I never left for I don't know, six months, seven months in the factory. So

20:13 These are commitments. You gotta make those kind of commitments. Unless you make those kind of commitments, things that will go especially in a high growth environment will go down It will go south really fast. Today we grow Twenty five percent to thirty percent. Uh we add a billion in sales almost every year.

20:32 I have to build infrastructure. We make hundred percent every single product that we sell. And we have one single line. Anything that I would not or we would not feed to our own children, we would not make it.

20:47 You just bought Angstine beer. That's not part of Shobana. No. So What What I So the fo food is a little different. Food is especially fresh food, the the type of food that we make. We we said everyone deserves good food, right? I mean we know that the challenges are. You have a lot of options and small

21:15 formats and specialty stores and that stuff, but How do you make Products that can go all across the country, right? And that is one of the hardest things to crack. Yeah. It's almost impossible. Every small startups

21:29 And th you know what they do with it. Yeah. So we might be the one of the few companies, if not the only one, in that space or Aggressive space that not only stayed independent, grew and

21:46 And Took the number one position. Yeah. And when you are in that dimension, like minimum you kept You can't what makes you so special. But you expand it and you grow, you you you you you um maintain your independency then

22:01 Then it gets some kind of Good position. Yeah. But we are today. Eighteen years. But coming back to your question, fifteen years of it, I am either in the factory or in the field. Yep. I mean that's that that's what it takes, that kind of commitment. It's important to know both of these companies, Chabani and Patagonia,

22:19 real legacies of independent ownership, which I posit gives both of your organizations the freedom. to really stay true to your values in a way that would be much more challenging with a bigger, more diverse set of s stakeholders. I'm happy to be with Ryan here and this stage with him and be mentioned with Patagonia. I there are only few corporate example. You wrote the book. Congratulations by the way, the book that you just wrote uh about Patogania.

22:48 There is only few examples of this story. There is not such thing. And and Patagonia has passed. Every single test that there is in a corporate and still maintains absolute good. And then

23:03 There are a lot of teachings for us. Every single employee of Chobani is a shareholder. of Chobani. Including every single line f line line line workers, factory workers, refugees, immigrants, everybody. That that that is these are the stuff That is going to make a difference tomorrow. Ryan, Hamdi was just talking about

23:25 Ownership and the fact that he has included employees in ownership. Patagonia made the absolute opposite choice. Three years ago, Ivan Chinard and his family gave away the company. We don't have time to get into the details, but you were a part of that process. And I'm curious, as as a relatively new CEO at the time, when he came to you And he said, I want you to help me give away the equity of this. Company. And Create a new situation by which all the profits that aren't reinvested in the company go out the door to charity. What was your response and how did that change how you think about your role as a leader?

24:01 You said I was a relatively new CEO. I think I w it was the first time or second time I had seen Yvonne and his family um after moving over from Europe uh in this role. So I couldn't have been newer. It was in the depths of COVID. Yeah. They were not as specific as you just said. What they said is we want to. sort out the future ownership of this company and Take it away. And a week after them saying that, I I went over to meet with Deshnards again and they said, How's that going? I said, God, you got to be kidding me. I've ignored you the whole week intentionally. I thought you I can't believe you're asking me to do this. So we started putting a process together, and what we started to understand was what are all the things you want to be true? What are the things you wouldn't accept? And we landed really on two central elements. One was continu

24:45 Ensure that Patagonia will continue to exist in the world. imbued with the values that we have created within it. And the other is cash flow the environment in much bigger ways right now. So that was the nature of the reorganization. Very briefly. Referenced earlier, your deep Commitment to

25:04 to refugees. Your own Experience. As an immigrant. When you

25:09 See what's happening on the streets of this country right now. How does that make you feel about this country that has given you so much to which you have given so much? And and I invite everyone to. You know, s focus on that line. This country is a very special country. It has given us all of us so much. And I'm lucky, I'm one of the lucky, and I I I find it's my responsibility be be part of Whatever the future looks like, and do my part right now. But I come back to this one particular picture.

25:41 I walk into this Town. I see this factory. close after seventy five years. Fifty five workers.

25:50 In this distance from everywhere. Everybody. For them that was the end of the world. The steam finally Off. Their source of

26:01 Meal for their kitchen is gone. And I show up. The first thing I do I I've I I I hire four people from the fifty five people. They don't believe this will ever come back to life. The largest company in the country has gone, and this Guy who doesn't even Speak the language and doesn't even have a car, he's gonna do something about this?

26:22 Four people, the first thing I said to them. We're gonna paint the wall ourselves. One of the guys who retired from there, his name is Mike I said Handy. Those walls outside hasn't been painted for the last twenty five years. Tell me you have more ideas than that one. I said I do, but we gotta start with somewhere. The point I'm making is two years after that I launched the brand Chobani. Four and a half years years later it was a billion dollar sale sales, we have thousand people. That place was hundred times bigger and better than ever before.

26:53 So if you ask those people when the factory was closed what was the worst thing ever happened here, they would say That factor was closed. If you ask them today what was the best thing ever happened to this town, they would say that factory was closed. But the point I'm making is Every challenge that we face, we don't want it. But when that happens It's an opportunity to make things better than ever before.

27:14 And that excites me. Ryan final question. You on the one hand referenced and you see every day. the damage that is being done to the natural world. It's something you care about deeply. It's something this organization has cared about deeply for decades now. At the same time, you're funding the frontline grassroots activists. You're funding conservation projects that are blocking the market.

27:35 Detrimental. projects that might impact pristine natural environments. When you Take the whole picture in.

27:43 Where are you? And our ability To take care of our common home.

27:50 I think that A Healthy planet. Thriving communities depends on a functioning democracy, and I have real concerns about the future of something I took for granted for the vast majority of my fifty three years. So I'm really concerned. I I think

28:10 You know, on the positive end, what gives me hope it it's It's spending time in nature, and it's spending time increasingly with younger leaders. Who are not debating the existence of these issues, debating the science or the facts. They're just pragmatically charging ahead and so that's the thing that gives me hopes in spite of it all. Hambi and Ryan, thank you very much.

28:44 Many thanks to David Gellis for leading such a thoughtful conversation. Hamdi and Ryan are compelling figures because they run their business in unconventional ways and arguably outperform because of that. Holding fast to values doesn't need to be a road to divisiveness and distraction. It can be fuel for empowerment, engagement, when implemented with care, discipline, and a long-term perspective. We'll continue to share the freshest exchanges from the Masters of Scale Summit as rapid response episodes. including rapid fire sessions on new branding buzzwords with Autodesk CMO Dara Treseder, and on today's myths around tariffs with Flexport CEO Ryan Peterson, plus a surprising pairing of the commissioner of the National Women's Soccer League and the CEO of the Honest Company. You can catch up with videos from the Masters of Scale Summit on the Rapid Response YouTube channel. I'm Bob Safian.

29:38 Thanks for listening. Rapid response is a wait what original. I'm Bob Safian. Our executive producer is Eve Tro. Our producer is Alex Morris. Associate producer is Mashimaku Tonina. Mixing and Mastering by Aaron Bastonelli. Our theme music is by Ryan Holiday.

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