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Chapter 13 Case: The First B-Corp Certified U.S. Grocery Store: The Case of New Seasons Market
Read the Chapter 13 case in Appendix A on New Season’s Market and answer the corresponding questions.
CHAPTER 13 EMPLOYEE AND LABOR RELATIONS
The First B Corp Certified U.S. Grocery Store: The Case of New Seasons Market
New Seasons Market is an Oregon-based grocery store chain founded in 2000 by three families who set the goal of “rethinking what a grocery store could be.” The store is known for offering local and organic products. As of 2019, the company had 21 stores and more than 3,253 employees.
From the start, New Seasons Market was dedicated to both socially and environmentally responsible initiatives, including advocating for raising the minimum wage and the need for affordable housing. The stores divert more than 90% of all their waste from landfills via programs focused on composting, donations, and recycling. Fulfilling the company’s mission statement “to be the ultimate neighborhood store,” New Seasons Market offers events and classes, provides opportunities for its employees to do community volunteer work, and gives back 10% of after-tax profits to nonprofit organizations.
In 2013, New Seasons Market became the first grocery store in the United States to achieve B Corp certification. B Corps are for-profit companies that are certified by the nonprofit B Lab if they meet rigorous standards of social and environmental performance, accountability, and transparency and strive to use the power of markets to help solve social and environmental problems. B Corp certification is voluntary and can be changed at any time. B Lab is not a legal designation but it is seen by some as important. For example, Rose Marcario, CEO of Patagonia, argues, “The B Corp movement is one of the most important of our lifetime, built on the simple fact that business impacts and serves more than just stakeholders—it has an equal responsibility to the community and to the planet.” While New Seasons Market is not a publicly traded company, one key aspect of B Corps in general is that they don’t have to focus solely on maximizing shareholder value. More than 2,000 Certified B Corps exist in 50 countries across 130 industries. Many of these companies are small to medium sized, which is where much of the growth in this type of company has emerged. This certification is an independent, third-party certification that consists of an application of 170 questions covering such aspects of the business as energy efficiency and employee programs and practices. As a result of a company’s answers to these questions, a total of 200 points is possible, but the certification does not expect that any company will ever be able to achieve a perfect score. In fact, a score of 80 points is enough to become certified. In its initial application, New Seasons Market earned 121 points, which is higher than the average of 97 points and higher than some companies known for their environmental and social responsibility missions, such as Patagonia. Other notable companies with B Corp certification include Ben & Jerry’s (the first wholly owned subsidiary to get certified), Etsy, and Kickstarter. Natura, a Brazilian cosmetics company, became the first publicly traded Certified B Corp in 2014. Beyond those companies that formally apply for certification, more than 40,000 organizations use the free self-assessment tool available at www.bimpactassessment.net to help them benchmark and improve their social and environmental impact.
One major challenge for New Seasons Market is to manage relations with its workforce as the company continues to grow and expand into new parts of the country. Its expansion in 2016 to Mercer Island, Washington, was met with resistance by the United Food and Commercial Workers union’s UFCW21 over the lack of a unionized workforce and concerns over the number of hours worked required for employees to receive benefits. Also, some workers in Portland, Oregon, began a union drive in 2017 as benefits were changing as part of the growth of the company. Effectively managing employee relations will continue to be a major part of New Seasons Market’s strategy for success.
Case Discussion Questions
If you were a manager at New Seasons Market, how would you have reacted to B Lab certification? Would your answer change if you were an employee?
What are your thoughts regarding the pros and cons of measuring social and environmental impact of organizations? How would you know if a particular question on the certification is effective?
Prior to reading this case, had you heard about B Corp certification? What new things did you learn about this concept from the case?
Do you agree or disagree with Patagonia CEO Rose Marcario that “the B Corp movement is one of the most important of our lifetime”? Please explain your answer.
Do you think that New Season Market’s B Corp certification has positive or negative implications for employee relations? Please explain your answer.
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