Thoughts from Testa Produce

I just came back from an industrial tour of Testa Produce, one of the world's leading green produce distributors, thanks to a recommendation that my classmate, Tatiana, made to our Being Corporate Class, and I had some thoughts regarding the future of infrastructure and corporate organizing principles under capitalism.

For those unaware, Testa Produce is privately-owned and operated by Peter Testa, whose father owned and operated the company before him. Being privately owned allowed Peter to seek greener means of growing, storing, and transporting produce, because it could all be at his expense and direction. He was not beholden to shareholders or financial entities with exterior interests. In that regard, when Peter set forth to create a facility that was LEED Platinum certified (the highest rank that any building can earn under current national environmentally conscious construction efforts) that produces 30% of the energy it consumes with solar panels and wind turbines, and that powered its vehicle fleet with exclusively low-emission fuel, he was told it could not be done.

And for good reason, because up until then it had never been done. But this was primarily due to the public nature of other companies in the produce market, run by shareholder interests and directed by quarterly gains. However, Peter did not set out to pay so much cash out of pocket for a facility like this just because of his altruism: it was actually about the cash in the long-term.

See, where other companies are able to skate by with cheaper equipment, dirtier facilities, and destructive means of transportation, they are similarly forced to pay hand over fist when the inevitable consequences of their miserliness begin to realize. Peter Testa told us how his years in the industry taught him that going cheap in the short-term would lead to greater overall repair and reservice fees in the long-term: the real expense came from upkeep rather than foundation. And so Testa Produce constructed this facility as a means to guarantee its long-term viability, sacrificing some short-term profit potential in the future.

What does this mean for companies like Sysco and US Foods? Well, maybe shareholders and executives could take a hit to bonuses to work towards constructing these all-around more efficient, effective, and ecological facilities. But this kind of coordinated voting effort almost never comes out of intrinsic motivation, rather it must be extrinsically incentivized.

I think this is where public policy and social planners must step in to provide tax subsidies, grants, and allocate funds towards the greener infrastructure updates needed to carry us through this century. We are at a pivotal moment in our country’s economic development, wherein an environmentally sustainable and arguably more long-term cost effective refocusing of the central organizing principle of corporations is necessary.

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