DOING BUSINESS THE “VERMONT WAY”

In Business, July-August, 2004, Vol. 26, No. 4, p. 18

A visionary leader in Burlington has provided great energy to revitalize the Intervale while working towards a triple bottom line: environmental improvement, community development and financial success.

Molly Farrell

WILL RAAP of Burlington, Vermont doesn't do “business as usual.” Founder and CEO of Gardener's Supply Company as well as founder of the Intervale Foundation, Raap started Gardener's Supply in 1983 as a mail order catalog firm with eight employees. In 1985, he moved the company's headquarters to the Intervale, a once-flourishing 700-acre floodplain of farmland and fields in Burlington that had become a dumping ground for trash, tires, appliances and abandoned cars.
For thousands of years, Native American Abenakis hunted, fished - farmed in the Intervale, and grew maize in its fields. Later, colonists and farmers, most notably Ethan Allen - grew crops and raised dairy herds there. The Winooski River, which runs through the Intervale, flooded regularly, keeping the soil rich for farming, and development at bay.
Up until the mid-1900s, the Intervale was populated by vegetable and dairy farms, and a gladiolus nursery. “After that, there was degradation,” recalls Raap. “The City of Burlington operated a landfill there, and once it was closed, residents continued to bring trash there.” By the time Gardener's Supply moved there, 350 junk cars, heaps of old tires and other refuse littered the landscape.
Raap began thinking about how to revitalize the Intervale to its former glory. “We had three goals,” he remembers. “First, to restore the Intervale so that the land could be remade as a commercial resource for organic farming. Second, to strengthen and build up the local economy through enterprises that could meet basic needs like food. Third, to create an economic development strategy to help businesses serve local economies through a triple bottom line return on investment: environmental improvement, community development, and financial success.”
To reach the first goal, Gardener's Supply employees began to clean up the Intervale. Employees from other like-minded companies, like Ben & Jerry's, also volunteered to help.

INTERVALE FOUNDATION
To meet the second goal, Raap founded the nonprofit Intervale Foundation. His vision for the Intervale was to use its land and resources as an incubator of economic activities that could serve local community needs. The nonprofit has met many of these needs by fostering a successful compost operation, 13 organic farms, a conservation tree nursery to protect Vermont rivers, and a system of anaerobic digesters and constructed wetlands to convert manure to energy and food.
The organization began acquiring land in the Intervale in 1990 through a series of purchases, leases and loans. It now owns approximately 10 acres and leases several hundred acres from private and public land owners. It currently has 12 employees.
Originally, the foundation was funded entirely by Gardener's Supply. Now, approximately 60 percent of the foundation's revenues come from its nonprofit ventures, says Stephen Morris, executive director of the Intervale. The rest of the budget is met with private and federal sources, as well as community support.

INTERVALE COMPOST
To fertilize the land so it could be used again for farming, the nonprofit opened Intervale Compost Products in 1987, down the road from Gardener's Supply. “I've always seen the Intervale Foundation as the advance guard and the cultivator of needed changes in the marketplace,” says Raap. “We started the compost project both to restore the Intervale's depleted farmland and to create a model closed-loop recycling business of food waste being composted-and compost being used to grow more food.”
The first “closed loop” customer was Fletcher Allen Health Care (FAHC), Vermont's largest hospital complex. Food waste from FAHC was composted at Intervale Compost, and in turn, FAHC agreed to purchase produce from an Intervale farmer who used the compost to grow more food. “The model with FAHC really worked,” notes Raap. “The hospital wanted to reduce its waste. We said we'll take your food waste and in return, you agree to buy X amount of food from our farm.”
“We were doing composting in the Intervale six to eight years before the economics of it could make sense,” says Raap. “We knew that the market wasn't ready for compost yet, but that it should be happening. Landfill prices rose to the point where a reduced tip fee could be charged to collect organics.” It is now Vermont's largest composting operation.
Intervale Compost is now self-supporting. “It operates like a for-profit, but is owned and operated by the Intervale nonprofit, and its revenues are used to support other Intervale programs,” explains Morris.
One of the nonprofit's primary goals, says Raap, is to have ten percent of Chittenden County's (the county in which the Intervale is located) solid waste brought to the Intervale. Currently, Intervale Compost is processing six percent (18,000 tons) of the county's solid waste and selling more than 15,000 cubic yards and 30,000 bags of compost products.

INTERVALE FARM PROGRAM
Another of the nonprofit's goals is to produce ten percent of Burlington's fresh produce in the Intervale. To attract organic farmers, the foundation created the Intervale Farm Program. “We made it easy for people to get into small-scale organic farming,” notes Morris.
“We started a training center for farmers in the Intervale, so they could learn their skill or business and gain resources,” continues Raap. The foundation leases land and farming equipment to beginning (incubator) farmers at a reduced rate, and provides technical and marketing support. The more experienced farmers act as mentors to the incubator farmers.
In 1989, Intervale Community Farm (ICF) - Vermont's first CSA (Community Supported Agriculture) - opened in the Intervale. ICF sold shares to member households before the growing season began, so the farmers would have the resources to purchase seeds, tools and equipment. Shareowners then go to the farms each week to collect vegetables, fruit and flowers. Today, several CSA farms operate in the Intervale and some deliver to workplaces and households.
“Ten or 15 years ago, the demand for organic food was not mainstream yet,” notes Raap. “We had to develop the markets to support it. People bought organic food at their local food co-op, but not directly from farms. With a CSA membership farm, the farmer knows in advance how much he'll sell and how much he'll make, so he knows how much to grow so that he can justify making a high quality product.”
ICF is one of 13 farms operating in the Intervale in 2004. The farms - ranging in size from one-half acre to more than 20 acres - produce a variety of organic products, including vegetables, berries and flowers, eggs and honey. Maggie's Tomato Patch specializes in heirloom tomatoes and Half Pint Farm in minivegetables. Franklin Heyburn produces honey from his “bee yard” of beehives. Farmer Abby Duke grows dozens of varieties of herbs, salad greens and speciality vegetables on two acres in the Intervale. She also is a partner with the chef of Sugarsnap, a takeout restaurant and catering business located at the top of Intervale Road. Together Intervale farms produce six percent (500,000 pounds) of Burlington's fresh produce. Of this amount, 50,000 pounds are donated to local social service agencies.
Initially, the majority of compost produced by Intervale Compost was used to restore Intervale land; now production levels allow most of the compost to be sold to the public. “Once the land is brought back to top fertility, it is up to the organic farmers to maintain it and buy compost from Intervale Compost to do that,” says Raap. Eighty acres are currently being farmed organically, and another 350 acres sustainably managed by the Intervale nonprofit.

CENTER FOR FARM INNOVATION AND CONSERVATION NURSERY
One foundation project is transforming animal manures into fuel, food and plants by processing animal manure in an anaerobic digester. Guy Roberts, PhD, is the director of the project. It has received funding from the USDA, DOE, Vermont Agency of Agriculture, Vermont Department of Public Service, and Vermont's Lake Champlain Basin Program.
Roberts sees this project as the next step beyond traditional composting. “Composting is a great thing - it stabilizes organic materials and converts them from smelly, rotten stuff to rich soil,” he says. “However, the compost process releases a lot of carbon dioxide. If we can get something we can use as fuel like methane, why wouldn't we want to?”
Going ahead of the present market demand the foundation has created the Intervale Conservation Nursery. Lakes and rivers in Vermont are being polluted by nutrients in fertilizers and other soils. “These nutrients are being washed into rivers because farmers have removed the trees along the waterways so they can plant right up to the river banks,” explains Josie Hannon, the nursery's director. “The riverbanks start to erode, the nutrients clog up the rivers and make their way to lakes where they cause algae blooms.”
“The demand will rise in the coming years for plants to restore and stabilize watersheds,” predicts Raap. “When we went to order trees for a riverbank, we found that there were no sources for native species within Vermont,” says Raap. “The closest nursery was in Michigan.”
“We had questions about the hardiness of using plants from other climates,” says Hannon. “We didn't know the long-term repercussions.” Hannon began collecting maple, birch, dogwood, oak, willow, and other tree seeds and cuttings throughout Vermont. She does the planting, transplants seedlings, harvests the trees (mostly in bare root stock), sells the stock, and delivers them to customers.
Approximately 25,000 trees are currently being grown in the conservation nursery from native genetics. Hannon says the goal is to grow 40,000 native plants annually for Vermont riparian restoration projects. The nursery sold 4,000 trees in spring 2004 to school groups, conservation districts, watershed organizations and environmental consulting firms. “We are ahead of the curve in being able to provide the product,” says Raap.
The conservation nursery is funded by the Lake Champlain Basin Program, Vermont Conservation License Plate Program, Davis Conservation Fund, Sweetwater Trust, Vermont Fish and Wildlife Department, U.S. Fish and Wildlife Service, Conservation and Research Foundation, and Waterwheel Foundation.

RESTORING BUILDINGS AND YEAR-ROUND MARKET
The foundation is restoring old buildings in the Intervale, including one of the oldest houses in Burlington. The Calkins Farmstead, an 1860s Italianate-style building, is the former home of the Calkins, who ran the last dairy farm in Burlington. A community kitchen is being built in the back of the building. An old horse barn near the farmstead is being converted into a community center.
The next plan, says Raap, is for a public market. “The facility will have the capacity for a year-round farmers' market,” he says, something that cannot be done now in Vermont's cold climate. A food processing center for Intervale farmers is planned for a second phase. One of Raap's ultimate dreams is to rebuild the old dairy barn behind the farmstead so that cows can return to the Intervale. “I hope that the site of the last Burlington dairy farm will become the site of the next dairy operation,” he says.
SPREADING THE WORD
Raap is currently pursuing his third goal, of developing a strategy to help businesses generate a triple bottom line return by generating environmental and community benefits as well as financial capital. Raap and a group of 14 business people and educators formed the nonprofit Vermont Social Enterprise Initiative to develop a curriculum to teach social and environmentally responsible (triple bottom line) business practices to local, national and international audiences. “The Social Enterprise Initiative will offer courses in doing business “the Vermont Way”, explains Raap. Vermont has been an incubator for many successful social enterprises, including Garden Way, Ben & Jerry's, Green Mountain Coffee, Vermont Bread Company, Seventh Generation and Gardener's Supply Company.
“There is a whole emerging world of social enterprise,” notes Raap. “Six business schools, including Berkeley, Columbia and Yale are focusing on how to train managers to have a social purpose. The Intervale Foundation will be a part of this new initiative as a nonprofit that has spawned commercial enterprises to support its mission programmatically and financially, including the compost project, farms, conservation nursery and other projects.”
The planning group includes Raap, Wayne Fairbush, Director of Vermont Sustainable Jobs Fund; Spencer Putnam, Director of Vermont Businesses for Social Responsibility; Cynthia Belliveau, Director of Continuing Education at the University of Vermont; and Chuck Ross, Senior Chief of Staff for Vermont Senator Patrick Leahy. The curriculum will be designed for matriculating students, business leaders, and entrepreneurs involved with existing and start-up businesses.

GROWTH AT GARDENERS' SUPPLY
Meanwhile, Gardener's Supply continues to grow. Sales are projected to reach more than $60 million in 2004. The catalog company now includes retail and Internet sales, and is the home of Dutch Gardens, which sells bulbs and perennials direct from Holland.
Gardener's Supply has 250 full-time employees and 100 seasonal employees. Thirty percent of the company is employee-owned through its Employee Stock Ownership Plan (ESOP). The company provides 100 percent medical coverage for full-time employees and medical and dental coverage for domestic partners. Employees can receive eight hours of pay a year to volunteer with the Make A Difference program.
From its start, the company has donated eight percent of its pre-tax profits to community organizations dealing with food, hunger, agriculture, gardening and the environment.
After receiving an MBA from the University of California at Berkeley, Raap during the 1970s was a city and regional planning consultant in California, also teaching at UC Davis and Golden Gate University. In 2004, he received Vermont's Entrepreneurial Success Award from the U.S. Small Business Administration, and the first annual Vermont Business for Social Responsibility Award for excellence in socially responsible business.

Copyright 2007, The JG Press, Inc.