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Healthy Eating, Healthy Employees, Better Bottom Line

With more than half of us overweight -“ and many of us saying we are so stressed we don’t have any available timeslots for eating healthily -“ 14 years ago one man started a crusade to change what we grab to keep us going. Meet Chris Mittelstaedt: The FruitGuy. And, he’s making inroads.

The FruitGuy,Chris Mittelstaedt.

Mittelstaedt is based in the San Francisco area, the home of Silicon Valley and its classically stressed-out techies. “The thing that started our movement was the dot-com boom,” Mittelstaedt explains. “Back then it was all Jolt Cola and those chocolate-coated espresso beans. It was a ‘treat’ mentality to keep people motivated so they could spend tons of time at work.”

“I had a number of friends in the industry and when I talked to them they would ask me, ‘Don’t you know of anything we could snack on instead of Jolt Cola?’ That’s when I said I’d bring them fresh fruit. One thing led to another and I started building wooden crates and stenciling them with my home telephone number on the side, filling them with fresh fruit and taking them to offices in my car,” he recalls.

Mittelstaedt, now calling his delivery service The FruitGuys, soon moved on to a U-Haul truck and started hiring people. “In the first three years we grew from nothing in revenue to $1 million in sales by year three. We thought the world could never end. I bought five new trucks and two months later the economy cratered. We had five new trucks and had lost half of our revenue and had mountains of bad debt because a lot of the Internet companies shut their doors and never paid their bills.”

That’s where, in effect, Mittelstaedt’s operation became a startup company all over again. “I got personally in debt on my credit cards trying to keep my family going. A hundred grand in credit cards. I had to make the mental shift from being a growth-oriented CEO to becoming a delivery truck driver once more. It was tough. We had just had twins. But, we believed in the concepts and we always have.”

The FruitGuys grew to $1 million in sales by the end of its third year in business.

“Out of that experience,” Mittelstaedt says, “came the idea of expanding nationwide and not being so focused on one local economy. We could divide our risk among different localities, with different economies. That’s served us very well. We’re very evolutionary-based in the way we grow.”

A challenge to geographic expansion for a fresh produce company is ensuring adequate supply. Mittelstaedt addresses that by saying, “In order to grow the business we had to have as many local resources and people on the ground as we could. In order to really affect change in behavior for people’s health you have to know the people you’re dealing with. Having a national brand is good but it’s even better if it has a local implementation and local flavor. One of our goals as we open facilities is to work with as many local growers on the ground -“ when in season -“ as we possibly can.”

The caveat is well taken. “In season” is a much shorter period for growers around Philadelphia or Chicago than it is for The FruitGuys’ home territory of California or even Florida or Texas.

The end result of healthier eating trumps short growing seasons as far as Mittelstaedt is concerned. “I would much rather have people eat a piece of fruit rather than a Twinkie. So, we buy as much locally as we can in season. When they’re not in season we’ll bring in fresh fruit because we want people to eat healthy rather than junk food. We take that approach with organic versus conventional produce. It’s much better to introduce somebody to a conventional piece of fruit and get them going away from a Twinkie -“ and later introduce them to organics if I can.”

“We see it as a step-by-step process. It’s not something we do overnight. It’s a longer-term change issue,” Mittelstaedt explains.

One thing The FruitGuys does to effect change is to have a customer relations program that’s so ingrained in the company’s DNA that Mittelstaedt has copyrighted it as the Five R’s:

  1. We’ll be Respectful of you at all times.

  2. We’ll be Responsive to your needs.

  3. We’ll be Realistic with you about what we can or cannot do.

  4. We’ll take personal Responsibility to provide a positive outcome.

  5. We’ll work hard so that you’ll Remember us positively.

“Realistic” is something Mittelstaedt says is an important ingredient in the success of the business. “I’m not a vegetarian, I’m an omnivore,” he laughs. “I still like my dark chocolate and coffee. But,” he continues, “it’s all about balance and measure. Eating fruits and vegetables should be an important part of your life but we can’t be extreme about it and still expect to make real and lasting change.”

Change seems to be taking hold in the areas The FruitGuys serve and in more ways than one might expect. “We’ve seen it go from a very white collar kind of customer -“ law firms and things like that [and Jet Blue, Yamaha and Yahoo] -“ to everybody. We’ve got plumbers and lumber yards as customers. What it tells me is that it’s not just a benefit to keep people at their desks, it’s people actually changing.”

Working with as many local growers as possible to provide produce to clients is a goal of The FruitGuys.

The FruitGuys also number several schools as customers. “We fulfill a federal grant program that is targeted to low income schools. A lot of people just fulfill that with produce, but on our own dime we provide educational materials, curriculum support materials for teachers -“ so it’s a lot more than just feeding kids. It’s helping them get excited about getting healthy and taking their health as a personal responsibility.”

Mittelstaedt’s comment about enriching his school customers “on our own dime” provides a clue to his business philosophy that takes “Rs” numbers four and five and expands on them. “I believe very personally that if you are somebody who’s been successful in business you have a responsibility to give back. Culturally in this country we need more examples of that and more commitment to it as well. You can’t take your business with you when you die, so how are we going to be remembered positively, what kind of vital contributor role did we play?”

“Because we’re in the produce business,” Mittelstaedt continues, “we look at our supplier chain and try to make a sustainable difference. One thing we do on the front end of the chain is we support farmers to help make their businesses more successful. We’ve done a number of different projects around the United States. Everything from giving microloans, to tree plantings where we’ve donated thousands of dollars worth of trees to help a farmer get a new crop in, to pollination projects where we’ve put bees on site so that a grower doesn’t have to rent hives -“ which can be expensive. With one installation we even bought the honey and used it in our corporate gift program. We have a video on our website that has gotten thousands of hits from around the world because it shows a very docile way to put the queen in a new hive.”

On what Mittelstaedt calls the back end of his supply chain is The FruitGuys’ “Good Works” project. “It’s really focused on low income food access issues,” he explains. “Our customers can afford to buy our food. But, we also have a responsibility to those who can’t afford it. We donate more than 100,000 pounds of produce a year to various agencies around the United States. We’re also looking at other kinds of projects where we can help people by getting involved in local food movements.”

A growing trend in business, particularly the largest ones that self-fund much of the health care coverage they provide employees, is to work with established health care providers as partners in “wellness programs.” The FruitGuys is right there, helping to support the providers by providing their fresh fruit and vegetables. “These companies are thinking about how food and health care management affect their business. They’re saying they want to provide healthy food to their employees -“ and they’re using us to do that.”

“As a marketer and a capitalist, I believe that the company that creates the greatest access to its products generally wins -“ think of Coca Cola. If you can create access to healthy foods and healthy environments the way Coke did with its soft drinks -“ where you usually don’t have to walk more than 100 yards to find a vending machine to get a Coke -“ then you could create a groundswell of change for healthy eating as well. It is all about access.”

“We’ve created a category,” Mittelstaedt says proudly, “an industry that didn’t exist before. I constantly get e-mail from people in Africa, India, Australia, as well as in the Western world -“ all over the world -“ who want to start a business based on our model. It’s neat to know we started that spark.”

Michael Carmichael

Contributing Editor Michael Carmichael, part of the Corp! family since its inception, has turned his Northwestern University Bachelor of Science degree into a diverse career in media. Counted among his many awards is a United States SBA Journalist of the Year as well as a Clio. Carmichael can be reached at [email protected]

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