How this founder built a billion-dollar ethical egg business

An ethical business strives to work in harmony with all of its stakeholders.

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In partnership with Conscious Capitalism

Prioritizing ethics in business doesn’t mean diminishing margins; in fact, it could mean quite the opposite. A growing number of consumers want to know that companies have values that are worth supporting. A survey of 25,000 people found that 50% pay close attention to the social behavior of companies.

Running an ethical business requires a genuine consideration of the degree of fairness and integrity in all areas of a company’s operations. This is primarily demonstrated in the way a company interacts with its stakeholders – the ones who make the product and business possible in the first place.

An ethical business makes it clear to employees, vendors, investors, and customers that socially responsible practices are just as important as profits. 

What Does an Ethical Business Look Like?

Consumers value authenticity. They can tell when a business’s purpose is bigger than its products, or when they’re only in it to fill up their pockets. This is why a must for any ethical business is having a strong mission statement that sheds light on the company’s values and practices.

Creating a company culture where all employees are respected is also important. This includes ensuring fair compensation and benefits, creating safe working environments, considering diversity when hiring, and establishing a code of conduct. Business leaders should also compile a set of core values that help guide operations at the company.

As far as external stakeholders are concerned, an ethical business strives to work in harmony with all of them. It maintains trust with vendors by meeting agreed-upon shipment dates and payments. It adheres to local, state, and federal laws, such as HIPAA regulations which protect customers’ private information. Delivering on promises made to customers is also a high priority. Ethical business leaders often ask themselves: is our product truly meeting our customers’ expectations?

Finally, they don’t forget that the environment itself is a stakeholder. One study shows that 87% of consumers have a more positive perception of businesses that support environmental issues. More and more consumers are starting to ask important questions like: What are big tech companies doing to reduce waste and pollution? How are farmers treating the land their goods are produced on?

Vital Farms, a growing company known for its sustainably produced food, has mastered the art of business ethics. The company has created a culture which focuses on the welfare of all stakeholders – even the ones laying the eggs. 

An Ethical Farm Shows Us How

Vital Farms started as an operation of two in 2007 when its founder, Matt O’Hayer, and his wife, Catherine, began with 20 chickens in Austin, Texas. From its onset, the O’Hayers’ primary purpose was to create a business committed to animal welfare and environmentally responsible practices. Today, their operations include partnerships with roughly 200 family-owned farms.

O’Hayer was a self-proclaimed “serial entrepreneur” before starting the company, with his sights set on obtaining wealth. “Early on in my career I was really focusing on getting to the exit,” he explains. “I found that very unfulfilling over the years. That’s when I discovered the concept of Conscious Capitalism.”

At Vital Farms, Conscious Capitalism means considering how operations will impact all stakeholders, from the consumers enjoying the products to the animals creating them. The company’s “Girls on Grass” policy requires that all animals have a year-round, free-range lifestyle.

“We require our partner farmers to allot at least 108 square feet per hen,” the website states. “We believe less outdoor space, like the minimum 2 square feet allotted to a free range hen, is far too little for roaming.”

To help partners create this humane environment for the animals, Vital Farms provides necessary support, such as monthly visits, and fair compensation – often more than they would earn running a traditional, larger scale chicken farm.

The cities in which Vital Farms operates welcome the business because it supports working families and community initiatives. They’re also incredibly conscientious that production doesn’t adversely affect the land on which they farm or the surrounding water – they don’t use herbicides or pesticides, and they practice pasture rotation.

Many investors have taken note of the farm’s clear commitment to ethical business practices and the equal inclusion of stakeholders, which serves to deepen trust in the company. Consumers want to support socially and environmentally conscious companies like Vital Farms, because they represent far more than just a product. They represent a movement toward positive change.

Profitability then becomes the byproduct of a business driven by a greater purpose. “I don’t think that being financially successful in terms of running your business and being conscious are mutually exclusive,” O’Hayer explains. “When you do the right thing for the right reasons, the outcomes always turn out to be better for everyone.”

And his approach is working – Vital Farms is now the nation’s top provider of pasture-raised eggs, which can be purchased in most neighborhood supermarkets such as Safeway and Sprouts.

In an industry that’s so often under public persecution for inhumane and environmentally destructive practices, O’Hayer has made it his mission to set a higher standard for ethical operations. By treating all stakeholders with an equal amount of care and respect, the business is an excellent example to entrepreneurs of how to build trust in a brand and product.

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