With the concept of corporate social responsibility (CSR) now well established, organizations continue to grapple with the question of how to integrate social and environmental concerns into daily operations. In the multimedia case “Burt’s Bees: Balancing Growth and Sustainability,” HBS associate professor Christopher Marquis uses text exhibits and video interviews to show how the small natural products company works to achieve its sustainability goals — and how it continues to do so even after Burt’s is acquired for $913 million by Clorox in 2007.

The case, produced with assistance from HBS’s Educational Technology Group, takes full advantage of its medium, painting a colorful, condensed history of a company that traces its roots back to 1984, when single mom Roxanne Quimby met Burt Shavitz, a bearded beekeeper living in a renovated turkey coop in rural Maine. The pair teamed up to sell beeswax candles at craft fairs before branching out into a few personal care products, including its (still) best-selling lip balm. The company relocated to its current home in Durham, North Carolina, in 1993 and focused exclusively on personal care; by 1998, its product line included more than 100 items and annual sales exceeded $8 million. In 2003, Quimby (who had bought out Shavitz ten years earlier) sold an 80 percent share of Burt’s Bees to private equity firm AEA Investors, which expanded Burt’s into stores like CVS, Walgreens, and Target.

Burt’s subsequent acquisition by Clorox raised eyebrows. After all, Clorox is best known for making household bleach. “We did not want to sell the brand,” says Burt’s then-CEO John Replogle (MBA 1993). “We wanted to find a new home for the business.” As it happens, he continues, Clorox was in the process of a significant shift in its strategic focus to brands associated with more natural, healthy, and sustainable lifestyles, such as its Brita water filters and Green Works cleaning line. The philosophical fit was there, he felt, even if it left many scratching their heads.

Currently taught by Marquis in the MBA elective course Commerce and Society, the case details Burt’s Bees’ pioneering initiative to formalize and institutionalize the industry-wide definition of “natural,” in addition to laying out Replogle’s “Greater Good” business model, which incorporates three elements: natural (product ingredients and processing); humanitarian (social responsibility in fair trade, employment, and human and animal rights); and environmental (sustainability all along the supply chain). Burt’s ambitious goal is to be a “zero waste, zero carbon company, operating on 100 percent renewable energy in LEED certified buildings” by 2020.

The case vividly documents some of the measures taken by Burt’s to meet that goal, such as a redesign of the packaging for its lip balm (a change, suggested by factory floor workers, that cut energy per unit of lip balm produced by 40 percent); “Dumpster dives” that bring employees face-to-face with the trash they throw away; and reimbursement for employees who buy and ride their bike to work at least sixty times a year. Replogle admits that such tactics, while effective, are the “low hanging fruit” in meeting sustainability goals.

“Going those last few yards to become 100 percent waste-free costs much more than the earlier steps,” agrees HBS’s Marquis. “The marginal economic benefit can be very small, while still representing a significant cost to the company. But at some firms, like Burt’s, it is also important to the companies’ mission and culture. That tension is an interesting thing to consider. How much should a company spend to be fully mission-driven?” (As an aside, Marquis notes that Burt’s had achieved 100 percent zero-waste-to-landfill in its manufacturing facility by the time the case was taught for the first time last fall, down from 344 tons in 2006.)

The question of how the relationship between Clorox and Burt’s will play out offers another meaty discussion point, Marquis adds. Three years post-acquisition, Burt’s is more than holding its own; in fact, Clorox has adopted many of its sustainability practices. “The idea that Burt’s Bees could in fact have a huge impact on Clorox’s culture is something that students find intriguing,” he says. “I think they were mostly optimistic that Burt’s would be able to preserve its culture and mission — that it may even be a situation where David is influencing Goliath.”

— Julia Hanna

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