Welcome to the sixth season of the Troubleshooting Innovation podcast. Joanie Spencer, editor-in-chief for Commercial Baking, visits with various members of the team at New Haven, CT-based Chabaso Bakery. Hear about their journey to becoming a Certified B Corporation and building a business as a force for good. Sponsored by JLS Automation.

This week, we’re chatting with Charlie Negaro, CEO, and Reed Immer, director of sales and marketing. They unpack the challenges and rewards of pursuing B Corp certification, and why the long, arduous process was worth it.

Learn more about this season here, and listen to Troubleshooting Innovation on Apple, Spotify, Google and Stitcher.

Joanie Spencer: Hi, Charlie. Hi, Reed.

Charlie Negaro: Hey, Joanie.

Reed Immer: Hi, Joanie!

Spencer: I am really excited to dive into this. I know there’s a lot to unpack in the discussion that Charlie and I had last week. It’s very clear that Chabaso was already living many B Corp values in its daily practice. But you all still put in the effort to seek certification, which is a long, and I’m assuming somewhat arduous process. So in this episode, we’re going to explore this journey with the two of you and sort of uncover the reasons behind the process and what it took to gain that certification. And I want to start the conversation with a straightforward question. And that is, why?

Negaro: Yeah, so why? Why try to obtain a certification for something that you feel like you’re already doing? I think for us being an extremely entrepreneurial company, it really spoke to us to have something that helps you to refine what you’re already doing.

Spencer: Yeah.

Negaro: We’ve never been the best at putting words succinctly, for what we do. Kind of like my answer to your question. Just like manufacturers have quality programs, to have a tool that helps you put words to it and that helps you get better. When you go through the process of answering the questions for B Corp, it also challenges you to think about things in ways that you never may have approached it. And then also, once you get into the world of B Corp, you realize that there’s this cohort of like-minded people that can support you in your day-to-day journey of trying to be a business that does good in this world. And also just the standard day-to-day challenges of running and operating a business in the world today.

Spencer: You know, I really liked what you said last week, Charlie, about just like mission and vision statements. Sometimes it’s hard to sort of formulate those words, and they can change. But your actions sort of represent you with more continuity. It truly is actions speak louder than words. But I liked what you said that the B Corp certification helped put words to your actions.

Negaro: Exactly.

Immer: And I would just add to Charlie’s statement that a lot of the stuff that is part of B Corp has been part of Chabaso’s DNA for the history of the company. And there’s always been this interest in using this as a force for good, and all these amazing programs have popped up. But sometimes when you’re in your own world of doing those things, it’s easy just to focus on the highlights and not necessarily look at it from a higher level view of all these different stakeholder groups that we interact with. Are we holding ourselves up to the same level of standards that we’re doing in these little silos of the organization? So it’s helped us to have this more 360 view, and actually start to walk the talk of, are we actually as good of a company in terms of goodness as we like to think we are? And I think often when you really go through this rigorous assessment, you realize there’s some great stuff we’ve been doing. But there’s also a lot more work we can be doing to live up to this level that that we’d like to be doing. And I think like Charlie said, in terms of it functioning as a tool for us, the specific tool that I see it as it’s almost a compass, in terms of if you have this larger vision of force for good. Sometimes it’s easy to get a little lost in the sauce and do a million things at once. But this is a way that kind of helps structure it into a manageable framework that can be delegated throughout the organization, that kind of different departments and folks can learn how they fit into more focused responsibilities, and how that contributes to the overall force for goodness of the organization. It’s a way that you can bring it out of the CEO’s head and have it be something that affects the day-to-day operations of everybody across the whole organization.

Spencer: So here’s something that I found to be really fascinating from my particular perspective, as a B2B journalist in the baking industry, the network of Certified B Corps is more than 3,000 companies [in the US and Canada]. And when I went on the website and went to the database, you can search by keywords and I typed in “food manufacturing,” and a little less than 400 names came up. And when I typed in a search for “bakery,” 34 names came up. So you are really breaking ground in our industry, and sort of paving the way I think, for doing good through baking. What do you guys think are some of the barriers? Why is it that there aren’t that many food manufacturing companies, relatively speaking, and there aren’t very many at all that classify as bakery? What do you think the barriers are for bakeries to gain this certification?

Immer: I think one of the challenges is that the B Corp Impact Assessment that you need to go through to get the initial certification doesn’t change that much depending on the type of business you are. I think just from a manufacturing organization, where you’re making physical goods, it’s sometimes harder to live up to those same environmental waste standards than an ad agency or some other white collar business. It’s easier for them to do that. So even though there might be a lot of other folks in the manufacturing and food industries that see this as a good thing to do, and something they’d like to have be part of their business, there are just some hurdles from being a manufacturer of physical goods that makes it a little harder to live up to the requirements. So I think that’s one thing. I think, also, the baking industry is a little bit old school, which is really cool in some ways. But I think in some other ways, there’s some businesses that are family owned that have been around for a while, and to some of them they have a great product and a good thing going. And there’s not necessarily always a critical motivation to kind of jump to this next higher level, especially when there aren’t that many businesses that have done that in your sector. One of the things we’re hoping to do is to prove and be an example of all the benefits that can come to a manufacturing organization from receiving the certification. And hopefully inspire some other folks to tread forward on that path as well.

Spencer: I agree. I think you guys have an opportunity to be a beacon for our industry and how to do things differently. Why do you think it’s important for baking companies to seek and achieve B Corp certification? How can having these tools change our industry?

Immer: A few of the big benefits that we’re seeing early on, but we’re still pursuing is, first off, attracting high quality talent for a manufacturing organization. It has always been a challenge and is increasingly more and more of a challenge. And so there’s this aspect of your organization’s employer brand. Why do I want to work for you? Why do I spend my day in day out, years of my life kind of being part of this organization? And so we found a lot of other organizations that have made progress with this B Corp and all the other related aspects of goodness for your stakeholders. You start to attract the type of person that wants to work really hard, that wants to make a difference in the world, that wants to build something and that aligns with a lot of what Chabaso has been up to over the years. So we see this as reinforcing the pitch for folks to kind of come join the organization and make an impact in the world. So we see that helping with building that team internally. And then also, bread is a commodity product. One of Charlie’s big things is “How do we de-commoditize bread?” And we found that having these trustworthy third-party certifications, that’s not everything, but that’s one aspect of helping to stand apart from other products in the bakery category or in a grocer and other food sales operations and help build our business to have more of a meaning for the shopper. Have them see this as, “Okay, this is worth spending a buck more on this loaf of bread because I know it’s part of a good organization that’s making a difference and a little bit of voting with your dollar.”

Spencer: For sure. I think just especially in the past decade, food manufacturing has gotten a really bad rap. And it’s frustrating for me when I hear people talk about big food and food manufacturing, when I see through a different lens. Because I’m sort of on the inside, and it’s not what people assume, and I feel like the more baking companies and food manufacturing companies that can gain B Corp certification, the sooner that curtain is going to come down and the general public is going to see that it’s not this dark, we’re trying to just profit off of people. There’s more to it.

Immer: Absolutely.

Negaro: Yeah, everything we do as food manufacturers affects so many core things of life. Going back to what we talked about last week, we’re using this thing that a lot of people, specifically in the baking world, take for granted, which is flour, specifically commodity flour. I think in the last couple of years consumers have gotten a new awareness of grocery stores, what they mean for us, how we access food when we can’t leave the house, and what people are doing for you that have to leave the house when you’re stuck inside for whatever reason. That has created a lot of challenge that we’re still grappling with as a society and as a world. And I think for us, it’s helped us double down our effort on making sure that we’re connected with our staff and our customers and consumers in a way that feels sustainable and genuine and helps us think about how we do better.

Spencer: I want to take a look at your specific journey to gaining this certification. And like you said, you spent 15 years trying to get here. Not necessarily doing the certification process, but doing what it takes to get there and how you’re forming your mission as a company. But when you sat down to do that B Impact Assessment and fill out that form, what was that initial impression? What kind of self-reflection did that trigger for you?

Negaro: I don’t want to scare anybody away by being like, “Wait, it took you guys 15 years? What have you been doing?” So I think with most things that I get interested in, you see a group of people or person doing something and think, “Okay, I want to go to there. I want to be like that person. I look up to this, or that’s a challenge that I have no idea what this is, but I want to understand it.” And I’m just like, “Okay, I’m gonna cannonball into the deep end.” One of the beautiful things about B Lab and what they’ve done with this is you can just go and take the Impact Assessment. I mean, it takes you forever. When we first started this, and I think it’s still the case, anybody can just go on and do the Impact Assessment. And I did that like a bajillion years ago. I probably made it halfway through, probably at the expense of not doing my day job for a week. And you have that experience of, “Okay, yeah, we’re doing a lot of stuff. This is cool. But we’re really not doing a bunch of this. And there’s questions in here that I’ve never thought of.” And like you said, there’s a period of self-reflection, which is always hard to hear that you’re not quite there yet. Sometimes part of that is stepping into that unknown and going, “Okay, I don’t really know what I’m doing, or I’m not quite there yet. Or we’re not quite there yet. Let’s let’s go for it. Let’s do this.” Having people on our team like Reed who will sustain that effort and spend more than a week on it, and still do their day job is the key to chipping away at it. I could see how somebody might get discouraged at it. But it’s about being up for the challenge of wanting to evolve or change how you do things for the better.

Spencer: We talked a little bit about how the process is about taking that self-reflection and knowing how you want to do better, and then turning that into something that’s quantifiable. How hard is that? And I’m guessing that this is going to be a question for Reed. Can you talk to me about what it’s like to turn something that’s so qualitative into hard numbers? How long does something like that take and still do your day job?

Immer: Exactly. So for this most recent run of us attempting to do the Impact Assessment, it took the better part of two years to collect all the data from all these different departments and input that into the assessment. We have a lot of great internal reporting at Chabaso, usually more on the typical manufacturing stuff, such as how many ingredients we use to make this batch and what our sales are, but there’s all these other areas that are a part of the B Corp assessment that we didn’t really have reporting setup for already. Part of it was having these conversations with the team and figuring it out while still balancing the day to day. How can we be chipping away at getting this report on our environmental footprint or difference in pay between different levels of the organization and all this other stuff? It’s not like any single question was insanely complex or difficult to gather, but just the combination of them all combined together can be a little bit of a daunting process and required a little bit of just blind stubbornness on my part of just keep pushing forward. And I think also part of that is, it’s such a large project that it’s so important that the top level of the organization really sees the value of this just in terms of it being a force for good. Because otherwise, it’s really easy to lose steam.

I’ve been at Chabaso for about five years now. When I first joined, we had done another attempt at doing this and probably got like a quarter of the way through. And then just there’s so much other stuff going on that we decided we got to put this on pause. That kind of made me realize, if we really want to do this again, it’s going to require X amount more energy, but still having that top level interest in it. That makes a difference in whether you feel that support to keep moving forward with it or if it becomes something that’s just kind of nice to have, but we don’t really need to be focusing on it. And when you go through these hundreds of questions for the Impact Assessment, Charlie and I have found things that would be a good for us to be doing. Or things we haven’t really thought about. If you already had that reaction of, “Oh, yeah, that is good. We should be doing that,” I think that’s a really good sign that there’s some alignment. If you read through the questions, and you think “Why the heck do I care about this? That’s not part of our DNA at all,” then I think that’s a sign that maybe the values aren’t initially aligned.

Spencer: Right.

Immer: And that’s a big difference maker.

Spencer: I have this vision in my head of someone looking at it and going, “Oh, that’s a really great idea,” or “Oh, there’s more to do.”

Negaro: Exactly right. There was a conversation, around two years ago, where Reed turned to me and was like, “Okay, is this something you actually want to do or not? If you want to do it, we have to actually do this.” And some of that has come through Reed and I knowing each other for a long time. And knowing when you have to level set and check in. And we got very fortunate because as I mentioned in the last episode, New Haven Farms was somebody that incubated out of Chabaso, and the former director of that is Rebecca Kline Coffey. She went on to work for a company that helps aspiring B Corp companies get their certification. And Rebecca is someone I’ve known my whole life and having that additional person that can hold you accountable, and that you don’t want to let down … there were definitely times that if it wasn’t for her, and if it wasn’t for Reed, I would have punted on this. Having people who believe in this is essential. It’s not a one-person job.

Spencer: Did you build a team? And how big was that team?

Immer: Rebecca and I worked really closely together. We’d focus it with a respective department of Chabaso and all the questions that were relevant to that department. And I tried to schedule a few meetings or video calls with respect to folks at Chabaso that were the experts in these questions and could help me answer them. But the core group was me and Rebecca working weekly, with Charlie being part of the scene and maybe doing some check ins every other week or monthly. A lot of the coordination work fell on my shoulders, which was a really amazing process and tough and educational in a way to learn a lot more about the whole organization than kind of just from the sales and marketing side. But definitely having some sort of internal champion is very important. Having that support from the top from Charlie and folks was really important. And I think from here, one of the things that we’re starting to clarify is some sort of official internal committee that is more efficiently looping in folks from across the organization to have this be part of their monthly projects or whatever. There’s different ways to tackle it. Because we’re a small company, we just didn’t have the resources to hire somebody just be the internal B Corp person, full time, day to day. In larger organizations, you have your sustainability or your impact team and all their work incentives are revolving around bringing this to the finish line and keeping this moving forward. I think in the small organization, the challenge is how do you still do the day-to-day stuff, which is still a huge challenge with limited resources, and how do you find a way to kind of work that in without overburdening yourself. It was definitely a complex dance over those two years to figure that out.

Spencer: I feel like when you’re a small company, that you have to just pull from those internal resources, as opposed to a huge company that, like you said, has a team of people who are dedicated solely to sustainability and impact those small teams. It says so much about who you are as a company, because you have to be really passionate about it in order to take that on, and wear that hat in addition to all the other hats you’re wearing.

Immer: Absolutely. And I think Charlie and I share a lot of these same interests with using this business as a force for good. And for me, it was like, how do I want to live my life day to day? And having this feeling that you’re contributing to some sort of smidgen of goodness in the world, that’s just how I’d rather be living my life. And if it takes all of us working a little harder to be making that happen, I’d still rather all of our collective days be involving that stuff. And Charlie and his dad and the whole DNA of Chabaso, were already on that path so much. And there are already so many folks in the organization that just kind of naturally saw the value of this. So it wasn’t really that hard of a sell of why this is important. Of course, managing it and having it be a not too burdensome day-to-day thing, that was the bigger challenge. But already having that internal interest and the direction we want to be moving in, that was essential for a small business like us to really make this work.

Spencer: The assessment revolves around this idea of measure, compare and improve. You had Rebecca as kind of a North Star, but how was it to measure what you’re doing against other B Corps and see your benchmarking and tangible ways? Did you look at other companies? And who were those companies you used for specific benchmarks during the process?

Immer: Our biggest goal for this was to get over that 80 minimum point score you need to achieve it. I think beyond that, we know there’s a lot more we can be doing. We were worried it would become a little too burdensome, again, to use that word. If we’re trying to go too much farther than that. For years, Charlie, and I’ve been saying that we want to be the Patagonia of bread, which is relevant in some ways and not relevant in a lot of ways. But just an organization that, within their own industry, is pushing the edge and seeing all the benefits that come from being part of leading the pack. And a few other organizations as well. But that was a really inspiring thing, and we thought, “There’s something about that, and we want to be applying to this.” And then of course, from working with Rebecca and the Impact Growth Partners organization. They were really helpful in sharing references with us of both manufacturers or folks in other industries that were both small businesses and large businesses. We were able to check out their websites, hop on some calls with some of those folks that were facilitated by Rebecca and her team. I think that whole combination of having a few organizations that Charlie and myself others at Chabaso really were inspired by, and then being able to have these connections with other emerging B Corps across the country, all formed as a really valuable reference to help us see kind of how we could fit into that whole ecosystem.

Spencer: It’s funny that you mentioned Patagonia because very early on in this conversation, I was thinking about Patagonia. And when I mentioned that, I think if more baking companies could become B Corp certified, it could change the general public’s perception of what food manufacturing really means. And I was thinking you’re off to such a great start because you are in company with companies like Patagonia and that says so much about you as a bakery.

Immer: I think it’s really exciting to be given some access to the same room as all these folks. It always feels good to be the dumbest person in the room. That’s what I tell myself.

Spencer: I love that.

Immer: But we’re in the room. So we have a lot to learn.

Spencer: I love that. Let’s talk about that overall impact score. You had to get an 80, and it looks like you landed at 85.4. So that’s pretty great. You nailed it. But how many tries did it take? Two? Three?

Negaro: This is our only actual formal try of submitting a score. Every other attempt was still the internal challenge of making it totally through the Impact Assessment. And that assessment is the bulk of the work. You get to question 140. And you’re like, “Oh. This is hugely challenging to either extract the data to answer the question,” and we stalled out three or four times.

Spencer: These aren’t like multiple choice questions or yes/no questions. These are hundreds of really hard questions that require a lot of information, right?

Negaro: Yeah. And some of them actually are kind of multiple choice and depending on how you answer them, you get varying degrees of points. There’s an opportunity in all of them to think about how you do things. To get to the point of actually submitting what you think your score is to B Lab, to get vetted, is a huge effort.

Immer: I think one of the few differences between this most recent effort and past efforts at Chabaso was … there are a few initiatives / internal projects that started at Chabaso that really aligned with the B Corp questions and helped us to push ourselves over that finish line, which we weren’t necessarily doing to that same level in the past. There are certain questions that you can get point five points if you do this thing. And there’s other questions that you can get 10 points out of the 80 to do this thing. And two quick examples of that, we’ve really formalized some of our bread donation processes over the past year. Donating bread has always been a huge part of Chabaso’s DNA, but I think we got to a point where we had established a lot stronger relationships with these food banks and food donation agencies in the area that made it so much easier for them to be picking up product that we were hoping to be donating.

And then also kind of a big thing for this time around was we had changed some of our hiring processes and partnered with a resettlement agency called IRIS that helps refugees and displaced peoples from different countries around the world that are arriving in New Haven. They help them get housing, learn English, figure out their healthcare situation and get them job opportunities. And we’ve already had a relationship with IRIS for years. But we started to really make that a part of our hiring process. And that really gave us a lot of points. It’s an amazing thing that we’re doing, and we do it just for the sake of doing it, and it also helps a lot with our hiring struggles at Chabaso in terms of finding folks that really want to take on this really tough job of working in a manufacturing facility. But connecting those dots with that area was a major difference between this time around for the assessment in terms of getting us over that 80-point minimum and previous iterations.

Negaro: It’s things like someone listening to this could be like “That’s not a big deal. We donate stuff or anybody can donate stuff, or anybody can hire people from different groups.” But it’s the actually formalizing it in shifting the organization towards being able to know how to do this in the most impactful way that makes you realize how actually important these things are. Like Reed was saying, we’ve always donated bread. We’ve always had this relationship with IRIS. Some of these things is also just the luck of the timing. It’s because there’s this huge number of Afghan refugees coming into this country right now that need a stepping stone into a new life. And it’s not a temporary thing. And IRIS sets them up, and we were happy to help them with that first stepping stone of getting a job. And at one point in January, we had more than 20% of our hourly workforce was Afghan refugees. And 2022 would not have been possible without them, for us. Some of them have gone off and started their own businesses or they’ve gone and got other jobs. A lot of them are still with us. Manufacturing has been the first step for a lot of people. Like Reed was saying, it’s a hard job. But it gives a lot of people a first start. I guess the secret sauce in all of this is like we were talking about before, it’s the formalization of it that makes it work even better.

Spencer: That’s a good lead-in to the last question for this episode, and that’s circling back on that self-reflection. Do you think that this process took you from feeling like, this is the kind of company that we want to be or that we believe we are, to this is who we are?

Negaro: Yeah.

Spencer: Did it change how you see yourself as a company at the end?

Negaro: At beginning of this, Reed said that we’re always trying to basically de-commoditize a commodity product. And I think it’s important to say that it’s not like we’re doing anything different with bread. We make artisan bread, and it’s the highest quality we can make. The bread is not changing. It’s how we do things and with whom we do it is what becomes the most instrumental thing that we do. People use the word culture with some reckless abandon sometimes. But when you’re in a culture — or lucky enough to be leading or responsible for a culture — that’s clicking, you really start to feel pretty protective of it, and you start to feel very fortunate to be a part of it. It’s a daily reminder that this took a lot of work, so let’s make sure we keep this thing going. I have this probably terrible metaphor, where to get a speedboat out of the water it takes a lot of effort. But once you get it up on the plane, you can throttle back and keep it there. But if you take your foot off the gas too much, it’s back down on the water. And you’ve got to put all that effort back into it to get it back up there. It’s really important that we have this compass, like Reed called it, to help us navigate how we do things.

Immer: Joanie had asked if we’re more confident now that this is who we are. I think, definitely, we are a B Corp now. And that’s in writing; we got that proof, but not necessarily in terms of we’ve reached the end point of what it means to be a force for good in the world and a good business. I think the importance is in seeing this as a starting point and who we are. We’re somebody who, day to day is working to chip away and push forward in these areas to more and more be developing this and bringing these ideals into reality. Because there’s still a lot of work of us communicating the value of this throughout the organization and seeing how this relates to folks’ day-to-day responsibilities, and how this can help us do a better job, and have everyone be more proud of what we’re spending our time doing. So I think seeing this as a starting point and who we are as somebody who’s willing to keep that hard work day to day and more and more trying to chip away and bring goodness, however we’re defining it, into the world. I think that is who we are. But we’re not trying to be like, “We did it, we’re perfect, we’re all good now time to go home, guys.” And I think that’s an important attitude to have.

Spencer: That’s such a good note to end on. And a great way to plug the next couple of episodes because we are going to get into that. So today, we really dug into what it took to get here. But now that you’re here, you’re right, it’s not the end. So we’re going to look at what’s next and how you use this. Next week, we are going to look at how Chabaso operationalizes these values on the bakery floor. And Reed, like you said, being a B Corp in a manufacturing space is very different than in a white-collar environment. I’m very interested to uncover the ways that Chabaso’s values as a Certified B Corp is shining through for the workers and in the process on the plant floor. We are going to visit with Rich Jamesley, the VP of operations and supply chain, to get his perspective on what it’s like from the operations perspective as a Certified B Corp. So I’m really looking forward to next week. But for today, Reed and Charlie, thank you so much for your time and sharing your perspective on the hard work that you put into gaining this incredible certification.

Immer: Thanks for having us.

Negaro: Thanks, Joanie.