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  • Sample Social Entrepreneurship

    In Sustainable Food Business

    NYU Stern School of Business Syllabus, Fall 2014

    Professor Hans Taparia

    New York University Stern School of Business

    E-mail: htaparia@stern.nyu.edu

    Course Number:

    BSPA-GB.2306

    Date/Time: Thursdays 6:45 8:25 pm

    Office Hours:

    To be determined

    Required Course Materials

    Kim, W. Chan & Mauborgne, Renee (2005). The Blue Ocean Strategy. Harvard Business School Publishing Corporation.

    Nestle, Marion (2010). What to Eat. North Point Press.

    Pollan, Michael (2008). In Defense of Food. Penguin Books.

    Coyne, Kevin. Enduring Ideas: The GE-McKinsey Nine-box Matrix.

    Hamermesh, Richard G., Marshall, Paul W., Pirmohamed, Taz. Note on Business Model Analysis for the Entrepreneur. Harvard Business School Publishing

    Corporation.

    Strategy: A Primer from Harvard Business Essentials: Managers Toolkit (February 18, 2004). Harvard Business School Press.

    Elkington, John, Hartigan, Pamela. Creating Successful Business Models, Lessons from Social Entrepreneurship (2008). Harvard Business School Publishing Corporation.

    mailto:htaparia@stern.nyu.edu

  • 2

    Guclu, Ayse; Dees, J. Gregory and Anderson, Beth Battle. The Process of Social Entrepreneurship: Creating Opportunities Worthy of Serious Pursuit (2002). Duke

    University, Fuqua School of Business.

    Colby, Susan; Stone, Nan and Cartarr, Paul. Zeroing in on Impact (Fall 2004). Stanford Social Innovation Review.

    Dees, J. Gregory. The Meaning of Social Entrepreneurship (2001).

    Recommended Reading & Films

    Campbell, T. Colin, Campbell II, Thomas M. (2006). The China Study. Benbella Books.

    Robinson, Jo (2013). Eating on the Wild Side. Little, Brown and Company.

    Nestle, Marion (2007). Food Politics. University of California Press.

    Pollan, Michael (2006). The Omnivores Dilemma. Penguin Books.

    Select industry specific books and journals, depending on team domain of focus.

    Food Inc. by Robert Kenner

    Fed Up by Stephanie Soechtig

  • 3

    Background

    Looking back over the past several decades, it appears as though the food and health care

    industries have been working at cross-purposes. Combined, they account for about $4.5

    trillion in spend or roughly 30% of U.S. GDP. While advances in medicine continue to

    drive up longevity [1], the quality of that incremental lifespan has continued to deteriorate

    with the rise in incidence of degenerative diseases such as diabetes, cancer and heart

    disease. Diabetes prevalence amongst adults in the US is up from 8% of the population in

    1994 to 11% of the population in 2008 [1]. Cancer incidence amongst adults rose 20%

    between 1999 and 2009 [1]. Finally, despite a significant drop in smoking, the prevalence

    of heart disease has remained stubbornly flat between 1994 and 2008 [1]. While there are

    many causes, much attention has turned to the impact of rising obesity and inadequate

    nutrition, and over the past decade or so, researchers have sufficiently demonstrated their

    link to the rising incidence of these diseases [2].

    Between 1994 and 2008, the percentage of American adults who were obese rose from

    22% to 34% [1]. The prevalence of obesity amongst children age 6-11 almost doubled

    from 11% to 20% [1]. Nutrition indicators are no better. In 2007, only 24% of adults ate

    more than five servings of fruits and vegetables everyday, and more than 60% of

    Americans consumed more than the Dietary Guidelines for Americans recommendation

    for saturated fat [3].

    Authors, filmmakers, scientists and policy makers have attributed a variety of causes to our

    obesity epidemic. They can be segmented into a few categories: policy-driven, societal,

    and commercial. An important example of a policy-driven cause, as Michael Pollan has

    famously suggested, is that the US governments farm bill heavily subsidizes corn, which

    in turn serves as a subsidy for animal feed and meat. In his words, the bad calories are

    being subsidized by the government and are cheaper than the more nutritious calories [4].

    An example of a societal cause would be the increasingly sedentary lifestyle of Americans.

    According to the CDC, only 48% of adults in the US meet the 2008 Physical Activity

    Guidelines. The commercially-driven causes of the problem are several. The first is the

    rapid proliferation of unhealthy fast food chains. There are approximately 160,000 fast

    food restaurants in America today, serving 50 million consumers daily and generating

    annual revenues of about $110 billion. The public health impact of this is enormous,

    particularly in neighborhoods with a preponderance of fast food restaurants, but no grocery

    stores. In Chicago alone, it is estimated that 400,000 people live in such neighborhoods.

    Unsurprisingly, a number of studies show correlations between proximity to fast food

    restaurants and deteriorating public health outcomes [5], [6]. This leads us to the next

    commercial cause, which is poor access to healthy food options. In America today, healthy

    food options are still limited or non-existent in locations as varied as airports, highways,

    hospitals, movie theaters and schools. In communities with vulnerable populations, the

    situation is desperate. According to a recent US Department of Agriculture report, about

    2.3 million people live more than a mile away from a grocery store and do not own a car.

    Another major commercial cause has to do with the rapid growth and widespread

    availability of manufactured food items that are high in sugar, fat or sodium and low in

    fiber, vitamins, minerals and other micronutrients. Food manufacturers have every

  • 4

    incentive to optimize products for increased addiction [7], market aggressively to children,

    and reduce cost by scaling the use of a small number of ingredients (two-thirds of todays

    calories come from just four grains).

    To control many of the commercially-driven causes of obesity, policy makers have begun

    to step in more aggressively. A new farm bill has been passed, calorie labels have become

    mandatory on menus in parts of the country, trans-fats have been banned in many cities, a

    new food nutrition label has been proposed and subsidies for retailers in food deserts have

    been instituted, amongst others. While many of these have the potential to influence public

    health, their pace of implementation is slow, and often inhibited by interested parties such

    as large, entrenched food companies and the legislators that represent them. These

    interested parties argue that ultimately, the consumer has choice and has full control of her

    consumption decisions. They argue that regulation is both unnecessary and goes against

    the grain of Americas free market ideal.

    This course sees the free market as an opportunity to drive change in the food supply chain,

    leading to better public health outcomes, and even to serve as a catalyst for policy. As

    Gary Hirshberg, the founder of Stonyfield, states, we exercise our vote with how we

    shop. This course will make the case that the market for food is still highly inefficient,

    often monopolistic at times, and that choice is still limited and hard to fulfillall this

    against a backdrop where consumer demand for healthier food options is growing

    dramatically. This is not to suggest that by simply offering healthier food options,

    consumers will choose them. Several recent studies have shown that this does not

    automatically happen [8]. After all, food choices are based on a variety of factors including

    taste preferences, cost effectiveness, ease of availability and brand image and messaging.

    This is where social entrepreneurs can play a pivotal role. Through a mix of passion,

    persistence, vision, innovation and marketing savvy, social entrepreneurs can develop and

    market desirable products and services that capitalize on this need-gap. They can create

    new choices, serve as economic engines and drive positive public health outcomes all at

    the same time.

    There are a number of organizations that have arguably already embarked on this path.

    Today, nearly 1 in 5 products sold in the US are either all natural or organic [9]an

    industry cultivated by companies such as Stonyfield, Amys Kitchen, Clif Bar and others.

    Retailers such as Trader Joes and Costco have shown how, through hyper-efficient supply

    chains, high quality food can be priced competitively. Quick service restaurant chains such

    as Panera, Chipotle and Pret a Manger have proven that a fresh food offering can be scaled

    nationally. Meanwhile, a number of next generation food business models are emerging.

    Oakland, California-based Revolution Foods (http://revolutionfoods.com) makes and

    delivers one million fresh meals to one thousand (mostly public) schools every day across

    the country. Its meals are free from high fructose corn syrup, trans-fats, hormones,

    antibiotics and are sometimes organic. Blue Apron (http://www.blueapron.com), based in

    Brooklyn, New York, delivers to its 500,000 customers just the required fresh ingredients

    along with a recipe for dinner three times a week for $10 a meal. Each meal is different,

    but pre-determined. Therefore, consumers get variety, while B