Rick Mast, Mast Market
It’s a complicated time to be a big business. Consumers’ trust in tech companies and big businesses are at their lowest levels in the modern era (2022 Gallup poll), and their expectations for ethical corporate behavior are growing. Sixty five percent of Gen Z consumers try to learn the origins of anything they buy, according to a McKinsey study. Many businesses have responded with hurried facelifts. Fortune 500 companies rush to strap high-minded mission statements onto their existing businesses. Shell (the gas company) exists to “power progress together” (link) and Ford exists to build a world “…where every person is free to move and pursue their dreams” (link). While worthy ambitions, those examples generate more-than-a-little dissonance when held up against the reality of the businesses they describe.
There are more and more examples, however, of companies of a different breed who attempt to interweave mission and business so seamlessly as to make them inseparable. Perhaps no business in our existing portfolio better exemplifies that ethos than Mast Market. Brothers Rick and Michael Mast started Mast Brothers Chocolate out of their Brooklyn apartment in 2007 and have expanded to a space in Mt. Kisco, New York with a broader product set that includes coffee, flour, teas, and more. Each Walden partner-borrower is required to complete our Walden Impact Assessment as part of our due diligence process before the loan closes, and Mast excelled across each of the five impact areas (Governance, Workers, Community, Environment, and Customers).
The challenge of building a business in service to a specific mission is, at least in part, a question of design. Impact-driven entrepreneurs face an expansive set of choices – business models, organizational structures, operational processes, hiring. Each choice is a lever, pulling the business towards the realization of its mission…or tying its shoelaces together in ways that may not be apparent until later. For Rick Mast, it’s about alignment:
Personally and as a company, I love looking at every aspect [of the business] and trying to treat them all the same. For example, it's really sexy to talk about supporting healthy soil or our local farmers…But what about looking at logistics, operations, etc. and making sure that they're all aligned with our mission? As we’ve become more experienced, those are the things that really get me excited – when you can bring alignment to not only your supply chain, but to your entire operation. The whole thing is aligned on mission, values, purpose, etc. But that's difficult to do.
A clear articulation of the business’s mission is a key (and perhaps obvious) prerequisite. Mast and Walden share similar missional DNA; both exist to affect food systems change by facilitating deeper connections between people and the food they consume. As Rick says it, they’re focused on “connecting people to where their food is grown. As any parent knows, when your child helps you grow carrots in the backyard, they love carrots and they only want those kinds of carrots and they'll eat the whole carrot.”
Mission translates to values, which help take high-minded ambition down to the level of the day-to-day. An example at Mast: simplicity. Simplicity is the lens they use to attack many of the tactical and strategic questions they confront:
We use the word “simplicity” a lot around here. And I'm not talking about in any sort of aesthetic way; I'm talking about how we eliminate the noise and really get to the heart of the matter. Inevitably, that noise can mean you lose sight of making sure every decision you're making is evaluated against this filter of purpose. That’s why we make certain decisions: Why we're so focused on vertical integration, why we're really drawn towards direct-to-consumer as the future of our business. It's why we've really drawn a circle around using geography as a parameter.
Operating in this manner – designing a business in service to its mission, and letting values drive decision making – is often fraught. Reconciling a purpose-driven business model against the forces of a broader economic system that incentivizes a perpetual chase for “more” can be particularly challenging. Rick uses the word “sacrifice” when talking about those moments where mission and growth come into conflict:
The seduction of scale is a slippery slope. Once you make the determination that local food systems are an essential part of a nourished community (and that’s our thesis)…then the pursuit of a certain scale becomes outside of our values. That's a really difficult thing to say out loud if you're trying to raise capital – but you have to be careful about trying to have your cake and eat it too. There will be sacrifice to be values-driven; that's just a fact. You can't use your values and your purpose purely as a marketing treatment so that you can scale, and not think there will be inevitable conflicts. There’s a power in acknowledging the need for sacrifice if you’re trying to grow in a purpose-driven way.
In other situations, trying to live out a value in relationships with two different stakeholder groups can create tension. An example familiar to those working in food systems: equity as a value applied to food producers and consumers. Paying the farms in their supply chain fairly has obvious implications for how much it costs for Mast to produce its goods and the prices they charge their customers for their business to remain financially sustainable. In that sense, fairness or equity for farmers can imply financial inaccessibility for a segment of consumers. For Rick, reconciling that tension is a part of a long game:
The reality is that to make a financial impact in farmers’ lives, your product is going to be more expensive. So we are more expensive than alternatives from Walmart or 7-11. With that said, the phrase we use is “surprisingly affordable”. What that means is: We admit that we're an expensive place in the grand scheme of things, and that we’re still a long way away from being able to meet the everyday needs of a wider range of people in our region. That's going to come from being able to find efficiencies that allow us to reduce prices…but it's also going to come from consumer education: Talking about why it's important to spend more of our income on food, and to look at the true cost (in terms of health and ecological impact for example) of our food buying habits. Both of those things will need to come together as we grow.
Our objective is not to be as cheap as other products that might be problematic. Because part of what's problematic is that these items are irrationally and unethically priced low – as the result of exploitative labor or other unethical behavior. They're not just cheaper because they're cheaper; they’re cheaper because people are hurt.
At the end of the day, what we’re trying to do is build a financially sustainable business model that hopefully others can replicate in other regions throughout the country. And that model needs to both support local food systems and make everyday sustainable living possible in a convenient way. In my opinion, the most critical part of building a sustainable, values-driven business is understanding your financials. They’re the spinal cord of the business. Our purpose is to make impact – both at Mast and Walden Mutual – and if that's not a financial impact, then we're not doing our jobs. Impact needs to be felt in people's wallets. That's what pays farmers. That's what puts food on the table. That's what provides living wages for people. That's what's truly sustainable in a holistic sense.
That type of long-term thinking about systems-level change requires patience, and an appetite for slow and gradual progress. “One word that we use here a lot is ‘incrementalism’. Nice, old, boring, business word. But that's been our mindset since we started. Honestly, when we got away from incrementalism is where we got in trouble.” The other side of that coin is staying present, not succumbing to the temptation to let attention drift towards a theoretical future – especially important for new ventures like Walden Mutual and Mast Market. For Rick, this is the fun part:
What's so exciting about where you're at – which is exactly where we are with Mast Market – is the chance to design all the systems that will guide you going forward. Right now, we're working on operational guides for the Markets, deciding things like should everybody be wearing branded aprons in the market? These little things are important and deserve our attention; being present in the moment to make the best decision possible. Knowing that you might want to change it slightly in six months, and that’s okay. It’s just really an exciting thing. It’s easy to fall victim to this idea that there's going to be a mountain top, and once we get there, everything's going to be fine. And that, of course, never has existed in our 15 years.
Photos courtesy of Kate Jordan