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Blow Your Own Horn

From the January/February 2008 Issue

There’s no contradiction between making profits and respecting the environment, says David DeLorenzo.

Blow Your Own HornAs he tells it, David DeLorenzo became CEO of Dole Food Company Inc. the “old-fashioned way.” He joined the company straight out of business school 37 years ago and worked his way up to the top posi­tion last June. He moved 13 times with Dole and spent 10 years in Central America. Dole, based in Westlake Village, near Los Angeles, has $6 billion in annual sales and 75,000 employees around the world. It is privately owned by David Murdock. 

David, Dole was taken private in March 2003. How has that changed the company?
Not much in terms of the outside world. Internally, going private helps in the sense that we are focused on the long term. We are not wor­ried about a stock price or the quarterly reports. It released some of the external pressures that other CEOs feel about the short-term results. 

What sectors is Dole involved in?
We have three primary industries. One we call fresh tropical fruits. The banana business is actu­ally our largest. Another business is packaged foods. The base of that is our canned pineapple business. Third is the fresh vegetable industry, which is based in Salinas, California. We’re in the packaged salads business. We helped begin that whole industry. 

And you are a global company?
We’re in about 93 different countries. We source a lot of our fruit in the tropical world, and we are in the more remote sections of developing countries. 

As a result, you provide services and infrastructure that most businesses do not. Can you explain?
Many of our divisions are quite old, and a lot of the places we’ve gone to had hardly any roads, let alone any big infrastructure. So we have a her­itage of pioneering. We not only go into remote areas, but we go on a large scale. 

For example, when we went into Honduras over 100 years ago, we built a port there. We put in all the schools in the area. We brought in a whole order of Catholic nuns, actually. They were missionar­ies, but they acted as nurses and schoolteachers. We founded the first bank, the largest bank in Honduras today. We put in dairies because there was no milk. We know it is important to be not only a good corporate citizen but a lead corporate citi­zen. We joke sometimes that we’re working where other people are fighting or afraid to go, yet we seem to survive and thrive in those areas.

Where exactly?
I just got back from the Philippines, down in Southern Mindanao. I took four days flying around the island in a helicopter. We have about 30,000 people working there. We have an operation that is almost completely self-sufficient—from nurser­ies where we are growing seeds for agriculture, to farms spread all over the countryside, to packing plants. We have two big industrial complexes for box manufacturing. We make our own plastics. We have a big printing company for labels for our boxes. We have schools, hospitals, and ports. 

What about labor standards?
Whatever standards we put on ourselves—employment, child labor, sanitation—we enforce the same conditions with our associate growers. We teach them the right way to do things. 

In Ecuador, for example, when we got there 40 years ago, it was mostly small banana growers. And it was pretty primitive—very small pack­ing houses, unsanitary conditions. So we went in over the years and cleaned everything up, brought up all the environmental standards, and basically raised the standards of an entire indus­try. Even these small growers have places where the employees have dining rooms, where there are proper toilets and washrooms, where their packing plants are as clean as a whistle. 

It sounds as though Dole is simply doing business in a way that is the most beneficial to you, but that means being socially responsible. Is that right?
Absolutely. We depend on our employees. You are who your people are, and we depend on a good, solid workforce. They need a good work­ing environment, and we need to be free of the political or military influences around us as best we can. 

How do you balance com­mercial demands with environmental demands?
We don’t think you can hurt the environment and expect to survive. Sustainability in agri­culture is part of our culture. We have farmed some farms as long as 100 years, and we have to be sure that the land continues producing. Science has helped us do things better. Certainly, reducing chemicals and pesticides has always been one of our goals. Right now, we are pushing what we call natural farming, which is trying to get back to reincorporating into the soils micro­organisms that might have been taken away over the last 15 or 20 or 100 years. 

Do you see more of a demand for organics, or more natural food?
There is a greater demand for healthier food, and then there is the perception that organics are healthier for you. That might be debatable, but there is no question that there is a big demand for environmentally good practices and clean prod­ucts. There is certainly a demand coming out of the retailers. It’s being led by Europe, but in the United States the supermarkets are also following. 

We are in developing areas where there has been a lot of slash-and-burn agriculture because of the agrarian reform movements over the years, where the governments have taken away these big tracts of land and given one acre apiece to thousands of people. It is very difficult to make a living off just one acre. What they end up doing is burning off the land. Those areas tend to surround ours, so we have reforestation projects in most of the coun­tries to try to bring back some proper balance. 

For example, we’ve got a great program in the Philippines called “Chairs for Trees.” Out of our big pineapple cannery there, we’re taking any kind of leftover wood that we have—a lot of our stuff comes in by ship on pal­lets—and we’ve set up a cottage industry making tables and chairs. We donate them, the wooden chairs and tables, to local schools in Mindanao. We have given out over 44,000 chairs so far. 

In return, the schools have to have a program where the kids plant a tree or two for each chair that we give out. Reforestation is important to us, and it’s not just for the environment. Our research believes that the deforestation does affect weather patterns. We need a lot of rain. 

Are you surprised that some of the criticism says, “These businesses put profits ahead of people”?
Yes, I’m continually surprised, shocked, horri­fied. Unfortunately, you get that thrown in your face more times than not. 

You’re a business, so you are trying to make a profit, but it makes sense to be what’s called “socially responsible,” right?
There is no contradiction there. We have people in all these developing countries and they are very, very proud of what they are doing for their envi­ronment. And I don’t think Dole is unique. Large corporations in general get a very bad rap, and it’s partly because we don’t blow our own horn. The people that are against the multinationals tend to be a minority, but they are such a vocal minority that you sure hear a lot about it. 

And you do not get a great deal of sympathy in the press?
You get almost no sympathy. 

What are the main areas of public policy that Dole involves itself in?
We’ve always been proponents of free trade and free competition. A lot of times we will be working to get duties from, say, the Colombian flower industry into the United States reduced. Bananas and pineapples have duty into Japan; we try to get those reduced. 

We had a big blowup with the European Union where they closed their market for a while to Latin American bananas. It lasted for about 15 years. They lifted that in 2006, but they still have a very big tax that the countries in the region and the importers are fighting to get reduced. 

What is your relationship with Castle & Cooke?
Castle & Cooke was our parent company. Around the early 1990s we changed the name to Dole because it was better known. Now, we are the food company and they are the real estate company. 

Castle and Cooke were two young missionar­ies who graduated from Harvard when they were 19 years old. They got on a ship in 1851 and sailed off to do missionary work in Hawaii. When they got there, they ended up setting up a community store that became the foundation of our com­pany. They got into the steamship business and then hotels and then pineapples. Castle & Cooke became one of the big-five companies in Hawaii. It’s a pioneering spirit. We send young people off in fairly remote areas and they’ve done wonder­ful things.

Image credit: photograph by Jonathan Exley.

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