history of soy yogurt, soy acidophilus milk and other ... - SoyInfo Center

Dep. of Human Ecology, Univ. of Maryland Eastern Shore,
Princess Anne, MD 21853.
525. Kotzsch, Ronald E. 1984. Natural foods pioneer
Erewhon (Continued–Part II). East West Journal. Feb. p. 24-
29.
• Summary: Continued: “In these years the company was
unique not only in its activity in the marketplace but in its
internal organization as well. Erewhon was basically an
extended family, held together not by blood bonds but by
common beliefs and aspirations. The Kushis, ‘Mom and
Pop,’ exercised an ultimate but benevolent authority. Day
to day management and much long term policy making was
in the hands of a succession of young, idealistic ‘adopted
sons,’ Hawken and Tara, followed by Roger Hillyard, Bruce
MacDonald, Ty Smith, Bill Garrison, Jeff Flasher, and
others. Most of the employees at all levels were macrobiotic
and were committed to the Erewhon mission. Hence there
was little or no gulf between managers and workers. All
wore the same outfi t of jeans and vests, and went to the same
lectures and parties. All ate their macrobiotic lunch provided
free in the company lunchroom. People worked hard for
modest wages but were recompensed by a clean, harmonious
environment, and by job security. One could leave for
an extended period and return assured of a position. The
company took care of its own.
“There were of course tensions, but they were minor
and in retrospect seem almost humorous. There was the great
debate, for example, over whether the retail store should
carry tomatoes, potatoes, bananas, and other reasonably
wholesome but not strictly macrobiotic foods. The decision
in the end was ‘yes,’ the rationale being that if people wanted
these foods, Erewhon should give them the best available. It
couldn’t expect every customer to be macrobiotic. In general
it was a heady, idyllic period.
“Somewhere, somehow, though, things began to go
wrong. A decision was made to move the factory and
warehouse to a large facility in East Cambridge and to
expand the product line and the distribution network. The
transfer and expansion took much more time, energy, and
money than anyone expected. Large bank loans were made
just when interest rates were skyrocketing. Suddenly the
company found itself deeply in debt, struggling to keep
up repayment schedules. Meanwhile, because of rising
production costs, smaller profi t margins, and increased
competition, revenue from sales decreased. Anxious
to generate more cash, Erewhon expanded its product
line even more, including yogurt and cheeses, vitamins
and supplements. Amid an atmosphere of ideological
compromise there were more loans, more interest, more
pressure.
“Within the company serious problems of morale and
loyalty were developing. At the new expanded facility the
family model of organization ceased to pertain. Fewer and
HISTORY OF SOY YOGURT & CULTURED SOYMILK 207
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fewer of the employees were actually macrobiotic. It was
growth and size that led to diffi culties among the lower
echelons, the people roasting granola and loading rice on
trucks. Doing dull work for a large impersonal company,
even when it has a grand, altruistic design, is still doing dull
work for a large impersonal company.
“There were indications of theft, waste, malingering,
and abuse of privilege throughout the company. Between
the managers and the workers a perceivable gap opened.
Separation was followed by resentment and discontent.
There was a unionization initiative, a strike, and then a
movement to ‘de- unionize’ the company. In the end the
union was voted out. The cost, in legal fees, was a quarter of
a million dollars, and in time, energy, and harmony, almost
incalculable.
“As a result of these various pressures the company
became less and less able to pay its bills. Finally, in the fall
of 1981, it fi led for bankruptcy under Chapter Eleven–a front
page story in the Boston Globe. The natural foods industry’s
Rock of Gibraltar had begun to slip beneath the waves.
“Every failure has much to teach us. In Erewhon’s near
fatal crisis one key lesson may be that ‘small is beautiful.’
For an organization fueled by idealism and held together
by personal commitment, growth past a certain point is
a dangerous gamble. Many, perhaps most, of Erewhon’s
diffi culties stemmed from the decision (perhaps never
explicitly made) to expand as much as possible. This led to
a rate of growth which the company simply was not able to
handle. An organization presided over by ‘Mom and Pop’
and managed by ‘inspired amateurs,’ few of whom had
prior management training or experience, was not ready to
cope with the pressures and decisions. Educated, shrewd
professionals were needed. When high-priced consultants
were fi nally brought in, it was too little too late.
“The disaster could perhaps have been avoided.
Erewhon might have consciously rejected the intoxicant
of growth and decided to remain small. It could have
remained a local purveyor of macrobiotic products and
used its resources to establish similar fi rms or franchises
in other regions. The bananas, yogurt, and vitamins might
have been left to others. Even had it not chosen to limit its
size, Erewhon might have avoided serious problems with
preemptive innovations. A few competent business people
early on might have helped. The labor relations crisis might
have been avoided by introducing job rotation, a profi tsharing
plan, and employee stock options. Had the Kushis,
who remained sole owners throughout, been more willing
earlier to share that ownership and control, fi nancial partners
could have been taken in. The cash fl ow and interest payment
problems would have been eased.
“Of course, with the cheap wisdom of hindsight, it is
easy to array above the smoldering ruins the ‘what if’s’
and the ‘might have been’s.’ The fact remains that as it was
organized and run the company could not survive in the slack