UNFI’s Michael Funk

Posted on in People in Your Neighborhood by Rob Sidon

The Natural Products Icon
Who Began as a Trash Man


Michael Funk grew up in the Sacramento Valley and became a vegetarian garbage man after graduating from San Juan High School in Citrus Heights. From his vantage point loading open trash in the ’60s, he could see America’s unimpressive eating habits and developed a passion to locate and source pesticide-free, unprocessed food. After scavenging enough money to buy a small truck to resell organic food regionally, he slowly expanded to the point where United Natural Foods Inc. (UNFI) is an $8 billion publicly traded company, the leading distributer in the natural products market. A self-described hippie and passionate advocate for GMO labeling, Michael lives off the grid in the mixed oak conifer forests near Nevada City with his wife, Alicia, a passionate land conservationist.

Common Ground: As founder of United Natural Foods Inc. (UNFI), you enjoy 100% recognition and iconic status within the natural products industry, but everyday folks might be unaware of you. What is UNFI?

Michael Funk: We are a classic distribution link that connects the growers or the manufacturers to the retailer. Since the healthy kinds of products we handle tend to already be more expensive than their conventional counterparts, it’s critical to have an efficient distribution system to further keep the pricing affordable to end consumers. We’re in the middle of that.

You’re one of the people who helped built an impressive industry, but it wasn’t always big. Didn’t you begin your career as a garbage man?

I was an early hippie, 18 years old out of high school who didn’t want to go to college, and was interested in what we now call a healthy, natural lifestyle. My first job out of high school was being a garbage man, and I joke about the inspiration it gave me for getting into the food business because I got to see what everybody ate. Back then, before recycling and nice plastic trash bags, you really could see everything people were eating when you emptied their garbage into the trucks, and it was pretty sad. All the junk food. I was an early environmentalist, not only concerned about my health but of the health of the planet. Hearing about and studying the pesticides and the herbicides they were putting into our environment is what struck me hardest. Rachel Carson’s book Silent Spring had a huge impact on me.

It was the dawn of the environmental movement but still the era when DDT was sprayed on crops.

In the ’60s everyone was in discovery: sex, drugs, and rock ’n’ roll, and the first Earth Day came in 1970. We were coming off DDT, which ironically parallels the contemporary GMO story. In both cases, Monsanto said, “Everything is safe.”

Anyway, I grew up in the Sacramento Valley, which is the great food-growing region. I became vegetarian, having read books on health and alternative lifestyle. Out of my passion for eating healthier and avoiding chemicals, I found growers that weren’t using pesticides and by accident started to sell that stuff. Originally, I sold on the street and found I could sell to retailers. From my garbage job, I was able to save just enough money to buy my first truck and inventory. Gradually, with a couple of buddies in Sacramento, we became wholesale distributors. We didn’t have any money or business experience—only a passion for changing the way people ate, or at least to give people the opportunity to buy something different than what was currently offered.

Did you have any inkling as to where this might go?

Not even a hair of thinking that somehow this would become an $8 billion company. We were UNFI’s Michael Funk The Natural Products Icon Who Began as a Trash Man BY ROB SIDON living week to week with insufficient funds in the checking account. We bounced checks regularly. Some of our suppliers were just as flaky. They had stuff one week but not the next. There was nothing to indicate “successful business model.” The organic produce was sometimes of such poor quality it’s amazing anybody bought it. Once I remember being so excited because we found somebody growing the first organic black beans. We started eating them only to discover they were full of rocks because the guy didn’t have the equipment to clean them properly. It was that kind of thing. The farmers and manufacturers were as passionate as we, wanting to grow organically, but they didn’t have any of the expertise either. It was a big learning experience for everybody.

You are a self-described hippie. What is the hippie ethos, and how has it played out in your life?

It’s an overused word that means so many different things. Back then it was a long-haired pot smoker lying around on the river or something. Everybody loved to call me a hippie, and I looked like one, with thrift store clothes, long hair, and a beard. I drove an old VW bus—all the classic stuff. The lazy hippie stereotype I didn’t relate to because I was a hard worker—ambitious and motivated to do stuff. There was the non-materialistic right-livelihood part—that I related to. Because we weren’t doing anything for money. That still has been an integral part of me.

What does it feel like to be a very wealthy hippie?

Money is concentrated power that you can use for good things or bad. I still have my ponytail and little gray goatee. I guess people would say I’m an ex-hippie with the unconventional idealism of wanting to change the world. We were fortunate, and we’re doing a lot of good things with the cash that we’ve managed to save over the past 40 years, supporting a lot of groups that are doing wonderful work. There are lots of things that need saving these days, and we’re happy to be able to participate in that. The money came after. We never made any money until the eighth year. For eight years we paid ourselves $100 a week and lived on that, which you could do back then. I wasn’t worried about what car I drove or what kind of house I lived in. A lot of entrepreneurs today want to start making money right away, but sometimes it doesn’t happen that way.

Might you describe the kind of philanthropies you’re involved in?

Basically, environment and food are the two strongest areas and stuff that’s close to home, like the South Yuba River Citizens League trying to get the salmon runs back. Land conservation is a big one with The Sierra Fund and Sierra Watch. We’ve worked with lots of food groups such as The Organic Center to help demonstrate that organic is superior to nonorganic. There are still a lot of people who don’t believe it and need to see the science behind it. UNFI has its own foundation helping to expand and educate around organic farming. My wife, Alicia, founded The Living Wild Project, which helps educate about California’s native landscape and biodiversity. The Non-GMO Project, of course.

You’ve been loyal to the Grass ValleyNevada City neighborhood.

From Sacramento, where we had our first warehouse, I was the delivery driver for the mountain run up here when I realized this was a great place to live, so we figured out how to move the business here. It was called Mountain People’s then. Ultimately, we outgrew the area and had to go to Auburn and Rocklin, where the nearest warehouse is. I live off the grid near Nevada City, which has been home since ’77.

What do you love about that area?

Rural nature. We’re in a mixed oak conifer forest, with clean air and free-flowing rivers. There’s also a lot of culture that attracts refugees from Southern California and the Bay Area. This area has the highest consumption of natural and organic food per capita—well above places like Boulder or San Francisco, or even Santa Cruz. The per capita consciousness is just great here.

You’re a founder of the Non-GMO Project, whose labels I now see everywhere.

Thank you, but let’s too give a shout out to Megan Westgate, the executive director, who is also one of the founders. She has done an incredible job growing and shepherding this project. When I first became aware of what was happening to our food in the late ’90s, I helped fund and support groups like the Campaign to Label Genetically Engineered Foods, which was such a long label. We had almost no success. We raised and spent a bunch of money way back then. A lot of people don’t even remember those initial battles. In those years I saw what an uphill climb it would be to get anything passed through legislation—it still is. And at first it was hard to convince people about the need for yet another certification, if they were already spending on organic certification—or Fair Trade, for example.

GMOs are so complex because they involve identifying DNA and complicated sourcing. There was this huge need to define and clarify all this, but we had to bend people’s arms to spend more money for certification. It was an uphill climb from 2005 to 2009, but manufacturers started finding out their sales went up when they put that label on. Gradually, they realized that consumers were hungry for this information, especially the more they realized just how much contamination was in the food supply. Now, a lot of people are doing testing because of the Non-GMO Project. It’s changing the whole supply chain as we speak. And we don’t have to wait for our government to take any action.

What do you predict?

At the consumer level, people are voting every day with their dollars, and companies sell what consumers want to buy—it’s that simple. That’s the reason you see Cheerios and Post Grape Nuts with non-GMO labels. Look at this experiment: If sales had dropped, we could say this is not going to happen for a while, but since sales increased, what do you think they’re going to say? ”Hey, how about we put out a few more cereals with non-GMO ingredients?”

Chipotle announced that they’re going nonGMO, and their sales go up. What do you think the other restaurant chains are going to do? Everybody is economically motivated in this game, so if consumers are demanding non-GMO products, everybody’s going to follow. It’s just a matter of how quickly. For me, it’s mind blowing that it has got to this point. Now I can envision a day, not too far away, where stores and restaurants will sell all nonGMO products.

Last year at this time, Costco placed huge shelves of Cheerios right at the entrance with a sign that said, “Now Without GMOs.” I walked in and just about cried. I took a picture.

Mainstream retail is getting the message.

What is your sentiment around President Obama with regard to GMOs?

I think if we had Obama in a room by ourselves, he would say, “I could support labeling.” The reality is that biotech is such a strong lobby. It’s a major contributor to all the campaigns in Washington. It’s virtually impossible to go against them. There are only a few people that have taken that path. While I wish Obama would take the st rong position he stated in 2007 during the Iowa campaign—that he was supporting GMO labeling—the realist in me also sees just how formidable biotech is. When politicians must raise so much money to get elected, you just don’t want to go against the big lobbies.

One insider I know suggested Obama might wind up in a pool of blood if he stood up to biotech.

I wouldn’t quote that, but Big Oil, Big Pharma, and biotech—there’s nothing more powerful. That’s why we have the kind of problems we do. Until we get campaign reform, I don’t know if we’re going to see any way of defeating biotech except by consumers voting with their dollars—and then the world changes.

Monsanto has a reputation for playing hardball. Do you have personal experience of being threatened or harassed?

Not at all. I was a member of the AC-21 committee that [Secretary of Agriculture] Tom Vilsack put together. It had about 22 members—17 from the biotech industry and five of us from the organic industry. We sat around and met for a couple of years. I always thought anyone that worked in biotech had to be part of the evil empire. But as I got to hang out with some of them, I realized that they are all people trying to make a living and in most cases really believed what their companies had sold them. A few of them even privately told me they did all their shopping at Whole Foods. That put a human face on the thing. I remember one woman saying that she didn’t want pesticides in her kids’ food. But then she backed up, saying, “But GMOs are okay.” I laughed under my breath because she must have known that pesticides and GMOs go together. That’s how it works.

Other food trends to watch for?

This industry is all about trying new stuff. Twenty percent of our sales are products introduced in the last two years, which is staggering. It’s the testing ground where some of it sticks and some doesn’t. You’d like to believe the new stuff is environmentally responsible, and I think in many cases it is. But we have to be vigilant about what’s in our food. That is how we all got started, and we have to continue to raise the bar on ourselves. We have to start thinking about nanotechnology and synthetic biology. Simple things like “natural flavors.” When I hear that label, it drives me nuts. We don’t know the half of the little additives that go into food, such as ascorbic acid made from GMO corn. We all deserve to know exactly what is in our food, without masks or filters from the truth so we can make up our minds whether we want to feed this to ourselves and our kids. That is the transparency we need to achieve.

Do you have any special messages, perhaps to young readers who are attracted to natural products as a career option?

For entrepreneurs, the people I have seen come in with more passion than money are the ones that in many cases have made it. The ones with the five-year business plans and venture capitalist money from the start who lack the dedication and passion are a different breed. For employees, I hear from people who used to work at conventional food manufacturers. They tell us how different the feeling is on this side. Not cutthroat, more respect for individuals, better business practices, more honesty, ethics. I want to believe this is still a really good place. It’s still fresh, new, and exciting and growing faster than anywhere else.

It must have been so much fun to literally come of age along with the industry and so many characters, such as George Simeon and Teresa Marquez of Organic Valley, Michael Potter (Eden Foods), Gary Hirschberg (Stonyfield), John Mackey and Walter Robb from Whole Foods, Arran and Ratana Stephens (Nature’s Path), the Straus Family (Straus Creamery), Andy Berliner (Amy’s), Patricia Bragg (Bragg), and so many more. John Roulac (Nutiva) and Jordan Rubin (Garden of Life) came along a little later. All are changing the food landscape forever.

Yeah, for those people it’s the same story over and over: they started out of passion. Nobody was really looking to make money. And nobody did make any money for many, many years. From my experience, we talk about income inequality and no opportunities for people, but for a long-haired outcast with no education or money, I was able to start a business and build it over the years. I guess for me the American dream still lives on. I have gratitude for everything that happened to me.

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