Tom’s of Maine founder: It’s ‘smart business’ to give back to the community

From the left: Alan Caron, executive director of Envision Maine; Tom Chappell, founder of Tom’s of Maine and current owner of Ramblers Way Farm; and Don Gooding, executive director of the Maine Center for Entrepreneurial Development.

At a breakfast event in Portland, Tom Chappell, founder of Tom’s of Maine, gave a talk about entrepreneurship and why it makes good business sense to embrace a triple-bottom-line approach.

Chappell was the first in Envision Maine‘s new speaker series, entitled Pioneers of Maine’s Next Economy. The idea being that well-known entrepreneurs have experiences to share with the new pioneers.

Alan Caron, Envision Maine’s executive director, launched this morning’s event with a simple proposition:

“We can’t keep doing what we’ve been doing for decades and then expect a new result,” he said. “We cant go backwards into tomorrow’s economy, and I would add to that that we can’t build a new prosperity by focusing on only what’s wrong. We have to have a positive plan for the future.”

Of course, any plan for the future is useless without people to carry it out. But we have the people, and some of them were in that room with me this morning — people like Bob Bruce of Zylo Media, Johann Sabbath of Tide Creative, Wells Lyons of Rogue Industries, and John Sharood of Farming Fungi, are active in launching and growing companies in Maine.

“The engine of change and growth in Maine is going to be the resourcefulness, tenacity and ingenuity of Maine people. It always has been; it always will be,” Caron said.

Tom Chappell and his wife, Kate, founded Tom’s of Maine in Kennebunk in 1970. By 2006, when they sold to Colgate Palmolive, they had grown the company to $45 million in sales and 165 employees. Colgate, which bought Tom’s of Maine for 3.3x enterprise value, is now investing $1 million each year in infrastructure in southern Maine, Chappell said.

HIs message for the entrepreneurs in the room, and throughout Maine, was simple: Consumers are more interested in social responsible solutions now than ever before, and so will identify with a company that embraces that same mission.

“We might ask ourselves at his point why on earth would you want to develop a business idea and hassle with the needs of the community? Well, first of all it’s smart business to be concerned about the things your customers are concerned about,” he said. “It says you’re on the same planet, that you care about the same things. A shared value — i.e., appreciating what we have in the community or appreciating what we have in the environment — says to the consumer: That company is concerned about the same things I am and it isn’t taking its rights as a license to run roughshod over raw materials, communities and people … there is a built in respect because of that mindset. And that respect is what it is consumers emotionally and intellectually tap into.”

Don’t believe him? Chappell used Tom’s of Maine’s as an example. The company still gives 10 percent of its profits to local nonprofits, and 5 percent of paid employee time is committed to volunteering in the community. The result, according to Chappell, is this: In the natural toothpaste business, Tom’s of Maine has more than 50 percent market share. The closest competitor has 14 percent.

“That’s called dominance, pure and simple. We’re not supposed to use that word in board rooms or anywhere else, but you’re looking at brand dominance,” he said, adding that the company’s share is nearly as much in the deodorant and mouthwash markets.

Today, the Chappells own Ramblers Way Farm, a sheep farm and wool apparel manufacturer based in Kennebunk. Like at Tom’s of Maine, Ramblers Way donates 10 percent of profits to nonprofits and 5 percent of employee time to volunteering. The company, launched in 2009, now has 20 employees and sells products in 375 independent stores around the country.

“The model is no longer an odd-ball model,” Chappell said. “Whether you invest in socially responsible mutual funds, which do very well, or whether you actively participate in your own business to try to contribute to the greater good while you’re making money. Whatever the case may be, this model of doing something to make a difference for society and the world we live in is growing and is beyond the form of being a niche idea.”

Whit Richardson

About Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.