Hard Choices: Jeffrey Hollender on Doing Business with Wal-Mart

When we started Seventh Generation more than 20 years ago, we didn't just want to sell green products. I wanted the business itself to be an engine for positive change.

To me, Wal-Mart (WMT) was an icon of what's wrong with business. There were labor challenges, questions about their supply chain, and environmental issues. They put smaller companies out of business when they moved into an area. For years, in a very public way, I said we would not sell through Wal-Mart. I couldn't even shop there.

By 2006, I had become more pessimistic that government and NGOs could deal with the problems we faced. I began to think large companies had to lead the charge. I was invited to Bentonville, and met Wal-Mart's head of sustainability. At our first meeting they talked about selling our products. I knew any deal with Wal-Mart meant a lot of money, but I said no. I didn't want to sell them anything. It felt wrong, and many of our customers would have been furious. There was much to be done.

More than a year later, we did a study of retailers and found Wal-Mart's practices put them ahead of some chains we were doing business with. Their reputation hadn't changed but their behavior had. We announced a small test to sell in a few stores and got an angry response from our customers. The negative publicity cost us.

But I started to feel the judgments of some of our consumers weren't accurate. The more people I met at Wal-Mart, the more convinced I was that it was doing an exceptional job of trying to be a good corporate citizen. It no longer felt right to not do business with them.

Now we have struck a deal to sell in 1,500 stores. We're not going into all their stores because I'm not sure we can support that right now. But I feel great about who I'm selling to. They're not perfect. Neither are we. But they're trying to use their strength to do good.

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