Decarbonizing Commerce

Introducing Mike Newman, founder and CEO of Returnity Innovations, a partner to retailers and brands for reusable packaging, Keith Anderson talks to Mike about his venture and lessons he’s learned. With a blend of entrepreneurship as well as environmental science and policy experience, Mike has a practical view of the immediate impact that reuse can have in commerce.

You'll learn about some of the reasons that the internal logistics leg is one of the most viable places for reusable packaging in commerce today, and some of the challenges and barriers and opportunities and what would have to be true for reuse to be economically and operationally viable in some of the other consumer-facing areas that we continue to see interest and innovation.
Learn more about Mike Newman:

• Link to Returnity’s website
• Link to Mike’s LinkedIn

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TRANSCRIPT BELOW:

Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e-commerce, and consumer products through the lenses of low carbon and commercial viability. 

Welcome to the Decarbonizing Commerce podcast. I'm Keith Anderson. And today I've got Mike Newman, founder and CEO of Returnity Innovations, a partner to retailers and brands for reusable packaging, mostly in the internal logistics leg of the supply chain. And I don't think we were recording when Mike told me he's sometimes referred to as the 'reuse realist.'

And having spoken to him for a while, I can appreciate why. Mike's background is, a blend of entrepreneurship as well as, environmental science and policy experience. And that's one reason that I think he's got a realistic view of the impact that reuse can have in commerce, but I think.

Another reason is the, the part of the supply chain that he is most focused on, and where he's guided returnity. And as, as you listen, I think you'll, you'll learn as I did about some of the reasons that, the internal logistics leg is one of the most viable places for reusable packaging, in commerce today, and some of the challenges and barriers and opportunities and what would have to be true for reuse to be, economically and operationally viable in some of the other consumer facing areas that we continue to see interest and innovation.

So, here's Mike Newman, founder and CEO of Returnity Innovations. 

Mike, good to see you. Thanks for joining the Decarbonizing Commerce podcast.

Mike Newman: Great to be here. Thanks for having me.

Keith Anderson: Why don't you tell us a bit about Returnity and where it fits in the reusable packaging landscape?

Mike Newman: Well, Returny really helps brands and retailers to reduce the impact of their packaging, certainly from a sustainability standpoint, less material and less waste, but also, more operationally efficient and ideally and ultimately less expensive. Usually what we focus on is what would be called secondary packaging.

So it's the packaging that the brand uses to get the thing to the customer, shipping boxes, reusable shopping bags, and the like, and they're really just innovating on how to implement those in a way that can work on all levels for the retailer.

Keith Anderson: And how did you end up in this business?

Mike Newman: Well, my background has been in sustainability and growth companies. I've always had a passion for the space. I did an environmental policy degree as an undergrad. I spent five years at the Sierra Club as part of their D.C. lobbying and legislative team. And then for the last 20 years, just working on supply chain and logistics.

Returnity actually had a bit of an atypical origin story. It was originally a reasonable shopping bag business. Just making shopping bags for companies primarily to use as like swag at corporate shi at like conferences. And thredUp and James Reinhart, which has become this publicly traded huge company focused on apparel and sustainability, asked us if we could make them a reasonable shipping bag.

So it was actually his impetus, and he was the original investor, liked what we came up with as a reasonable bag for shipping, and here we are over seven years later now, keep, keeping on innovating in the space, but it, it actually was his first, request that sent us on this journey.

Keith Anderson: Some of the most interesting businesses come directly from a customer request, and sounds like this was a pretty interesting one.

Mike Newman: Yeah, I love, you know, you, you love that sort of, "I don't know, but let me try" and, that, "I don't know, let me try" moment led us down this path that's been really quite fulfilling. So, we, we, every time I see him, I remind him that, it's all, it's all that one ask that he had and how much we appreciate it.

Keith Anderson: So secondary packaging covers, both, I guess, customer facing, you know, direct to consumer or even indirect e-commerce, but I suppose also internal logistics.

Mike Newman: Yeah, that behind the scenes is, is, obviously not something consumers will see, generally, but it's an enormous amount of packaging use. In the U. S. we use enough cardboard boxes to pave a cardboard road from New York to L. A. and back three times a year, so, you, it's a shocking amount of cardboard, and just what's used to get goods to stores alone, is billions of, of dollars worth of packaging, so.

It all adds up, what, what every leg of the supply chain, you're, you're seeing packaging being used.

Keith Anderson: And are you seeing any, any split in interest or demand among retailers and brands that you work with, are they responding more to consumer interest and want shoppers to be able to see something, or is just a pure operational efficiency play in the internal side where the action is?

Mike Newman: I think it's been an evolution. Certainly they, they're aware that consumers have a sort of broad frustration with packaging so that, you know, if you poll consumers and say, "are you, do you prioritize brands that offer more sustainable packaging options? Will you spend more on more sustainable packaging options?"

The consensus, and growing consensus is, 'yes,' that's a, that's nice in a poll. In practice, I think, the evidence is much more, wanting. So brands are having to, like, confront this duality of, expectations from their end customers of what, you know, how they're addressing sustainability issues, but not necessarily taking personal action as individuals.

And so figuring out solutions that can kind of align to that, but still make sense economically has definitely been a journey. And then our ability to support them through that has evolved too to figure out, you know, what's the right path.

Keith Anderson: Well, I know you're going to help me unpack these topics much more reusable packaging, really, I think of two challenges in a sense. One is the economic side, which you mentioned, which don't get me wrong, I'm not saying it's by definition a challenge. It's just a different economic model than single use.

And the other is sort of the behavioral side. So I'd love maybe to take those one at a time and potentially, in each of those different contexts, that is, on the consumer side and on the internal side, you know, in your experience, how are each of those stakeholders, approaching reusable packaging, at least as you're delivering it?

Mike Newman: Well, I think that the, there's a lot of flirtation with reusables for e-commerce over the last five years, and those have largely, kind of tailed off for the reason that it just doesn't work, frankly. It,

Keith Anderson: Why doesn't it work?

Mike Newman: Yeah, it's a, you know, there's isolated cases, like, you know, clients like Rent the Runway, rental brands, things like that, where it's going to come back, because that's part of the business model.

But that's, few and far between. In an open context e-commerce setting, you really need to get 75, 80%, ideally 90% of the packaging returned from the end customer to make it work environmentally, let alone economically. The evidence is, is that generally it's going to be about 50 percent or less of consumers will return it, even If they opted in at checkout, even if they paid a premium, which some, some companies have tried, you're still just not going to get it back enough.

So, on top of all the challenges for an e-commerce brand, now I have to have paper or cardboard and the reusable, and I got to train my team to remember which stock to pull from, depending on what the customer, it just creates a lot of challenges. And given that it's more expensive and you're not going to get it back enough, unfortunately, it's just not really proven viable in that context.

So, you know, brands have just learned that, you know, as they all know, it's very hard to change consumer behavior, particularly at scale. To do it as an individual company is almost impossible. These are sort of society-level evolutions that we need to be thinking about. And so, putting it in a reusable to ship you your order is not victory.

Victory comes when it keeps getting reused. It just doesn't happen right now. So, they've had to look at other applications where reusables can actually be viable. Today, and, and fortunately, you know, we, that's been a challenge for us too as a business to make sure we have, have, a growth and a future.

And fortunately, we've been able to find those applications, but they tend to be internal logistics, employee or employee-managed processes rather than, than consumer behavior driven.

Keith Anderson: Yeah, in the past life, I used to say, "it's a lot easier to get people to use what we're making when we're paying them as employees than if we're asking them to pay us as customers." And it's an interesting point in terms of adoption and viability. If what you're really doing is reengineering an internal workflow, you know, and it is part of your training and can be measured as a KPI, it's a lot different than something you're asking a busy household to handle.

Mike Newman: That's right. And you know, if you ask people how they feel about packaging, they'll tell you, "I don't like packaging," but people don't interact with packaging, like this broad concept that they individually, they impact, interact with a package and then another package, another package, they're busy, you know, the, the kid needs a diaper change, they got to run to work.

It's very hard to expect consumers to really profoundly change how they interact with every individual package at every moment. It doesn't mean we shouldn't consider that as an important evolution as we look at our impact as a society. But look, I got to run a business that makes money today and that serves my clients.

And today consumers just aren't ready for this, no matter what they might respond to in a poll. So you have to adapt and, and, and adjust.

Keith Anderson: So, you said something interesting, which is, you know, putting something in a reusable package isn't the, the win, it's hitting the reuse rates. How do you define success in the context that your, that your business has sort of gravitated towards?

Mike Newman: Well, I think that, you know, we use these three pillars of economic, operational, environmental, the environmental it's contextual, you know, what are you replacing and what are you replacing it with? How far is it being driven between locations and things of that nature? But generally, as long as you can get the reuse rate up above 90%, every life cycle assessment and study that's ever been done, you know, private or, or there's a number of them out there that are public show that it, it creates a profound environmental benefit. So, not having to keep making new packaging when you can keep it in circulation 10 to 20 cycles is clearly better from a climate standpoint, water use and so forth. So then it just comes down to like, you know, does it work economically and can your operation absorb it? And so, it has to work on all three.

We look for those cycles and those segments where we know the circulation rate is viable and possible, and then make sure that we're designing the system and the package so that it does become cost efficient. You know, you got to use it. It's reusable. It's going to be more expensive to manufacture up front, but over time, you know, you'll start to benefit. And our pitch to retailers and brands is we're only going to do this.

We've learned we should only pitch you if it's going to save you money. So, you know, can we go in and say, "look, you're wasting money on single use. You're going to save money when you switch to reusables." Or when you didn't have a choice, because regulations or sometimes C suite, directives forced you into reusables, but, companies are just not going to switch to reusable unless it's economically viable.

And generally they're not going to do it unless it's cheaper. Because they don't do anything unless it's cheaper. That's the whole point, is, you're trying to optimize your business. So, we have to find those segments where it's going to save you money, really.

Keith Anderson: And is that sort of long term payback something you find, everybody understands and is, is willing to come with you on that journey for, or are they just used to unit economics that are, listen, the cost of single use per unit is so low that it's easier just to keep doing what we're doing?

Mike Newman: It's usually not that hard to get a first meeting. But, sustain... because, like I said, it's packaging, spend, and impact, it's, there's a lot of attention to it right now. So, you know, I think companies are really aware that they need to show progress, not just for the optics of it, but these are humans who read the climate news too.

It's not, you know, that, and it's not like it's the sustainability team that's like dragging the purchasing department around. Like we're finding that the purchasing group is also open to the conversation, but the realities of the implementation challenges can't be overlooked. And, you know, a very common thing, for example, is

if we are implementing reasonable packaging for, say, a retailer, and they're using it from their, you know, shipping from their warehouse to their stores, the team that manages that leg has their own P&L and their own budget, and then the store team has their own budget. And what our companies who use us have learned is that they save a lot of labor in the store because our boxes are a lot more efficient to open up and break down and the retail team doesn't have to spend nearly as much time in the store just opening boxes and taking out merchandise.

So they get this labor savings, but that's usually on the retail team's budget, not on the logistics team budget. So the logistics team has a budget for cardboard. And we say, well, look, here's one of the really compelling reasons to switch. And they're like, well, that's not my budget. I'm not going to get credit for that.

That goes on the other guy's budget. So those are the real, I mean, that's the real nuts and bolts of it. You have to, you know, you have to understand and address those things straight on. And that's where a lot of this stuff either moves faster, moves slow, is that just day to day challenges of individuals in large companies.

And what they manage and control and what their personal impact from taking on that project might look like. And sometimes it's maybe not compelling enough for them in their seat and you have to figure out a way to move past that.

Keith Anderson: I was smiling because in my past life consulting, we worked with a lot of retailers that were early in the omni-channel evolution, and were starting to offer things like fulfilled from store, order online, pick up in store, and the exact same dynamic was a big part of it. Their labor was going to be used to pick and pack the order.

But the online team got all of the credit for the sale. And so there was a lot of internal tension for years about how do we incentivize people just to do the right thing for the business and the customer. And then, you know, we don't want them working against their own comp model, but our current comp model doesn't incentivize the desired behavior.

So it is interesting though, again, because to all the good points we've made about consumers, you can influence behavior in an organization through a lot of those, you know, how you define and measure success and, you know, what you're incentivized and compensated to do.

Mike Newman: Yeah. And at the end of the day, everyone likes being a hero because they save money for their company. So. You know, leading with that is usually a good place to start, and we've been doing it long enough now to kind of be able to identify where are those, those cycles within the logistics of a brand that we can create, you know, hero moments for them.

And, and so when, when you have that, you have that product market fit and can just really lean in hard on selling it there. That's, that's when you're feeling good and, you know, it only took us seven years, so, yeah, but here we are, so.

Keith Anderson: So, looking at some of the clients that you list on your website, I, I see some patterns, but where have you found that density of, demand or a good fit? Does it, does it? Is it stuck in a certain profile of product category, you know, how would you just characterize where you see the pattern of interest?

Mike Newman: Yeah, I think today, it's sort of settled in most prominently in two use models. One is that internal logistics kind of warehouse to store or store or the reverse, for product returns. And generally for apparel and shoes, I mean, those are high volume product categories, obviously, they don't need a lot of specialized packaging, usually they tend to just use the same size cardboard box over and over again. It kind of lends itself to a first adoption. It's a lot harder. We work with Target and Walmart and others, but they sell everything ever made anywhere. And so that's its own logistics challenge of if it's a bicycle or a snowblower or a you know, a bottle of Coke, like, it's a little bit harder not to crack from an op standpoint.

Today it's mostly shoes and apparel for that reason, though, you know, we have examples otherwise. And just set a cardboard, it's going back and forth, and reusables, and they can keep it in circulation and save money. The other application is, frankly, reusable grocery bags, because single use grocery bags are getting banned, which is often a good thing, but can have these knock off impacts that still are a challenge, so, you know, instead of getting a really thin, single use plastic bag, people are using dozens, hundreds a year of reusable shopping bags that they don't reuse, which are more plastic, so they're sort of consuming more plastic in these reusables than they were in single use and now retailers are having to kind of figure that out. And that's where, you know, we're, we've been stepping in to kind of create these loops and reuse cycles that can allow it to, to make some sense.

Keith Anderson: And, and did you participate in the Closed Loop Partners initiative on that front? Am I remembering that right?

Mike Newman: We've done a couple of different projects with them. Yes. A project through them with Walmart and, and one just this past year with CVS and Target and, all around that. And, and obviously, you know, look, it's happening at the same time that. In store retail, particularly for grocery, has been evolving so much as well because now you have, obviously, you have in store shopping like you always did, but then you have people buying online and driving up into a parking spot to get their order brought to their car, and you have home delivery through, Instacart and other vendors.

So, there's all these different customer journeys that are happening for the retailers, and the absence of single use shopping bags only complicates those journeys. And so, I like to say that packaging, reasonable packaging, becomes both an enable, enabled by and an enabler of a lot of this evolution in retail because you have this tool.

You got to give them, particularly if they're pre-buying it, you have to transfer it to the customer somehow. You're giving it to them in something. It's no longer a single use shopping bag, so how are you dealing with that? That's an example of that segment I said where, companies are being forced into reuse whether it made sense or not economically and operationally and environmentally.

Oh well, you know, that's the reality like in New Jersey. No single use shopping bags, period. Not even paper, since last May. So you gotta do something. So that's where we're coming in to help those brands and others to sort of implement reuse systems that can, that can work within that constraint.

Keith Anderson: Yeah, got it. So, just stepping back to apparel and footwear, you know, if I can observe a couple characteristics, just to echo a little bit of what I heard you say, those are obviously non perishable, solid products, so they're not going to leak, they're not going to spoil, they don't need a lot of secondary packaging, higher price point than the bottle of coke that you referenced. Do you see other categories with similar characteristics that may also have potential?

Mike Newman: I mean, really, you just need just, but you really, well, you need two things for reusables. You have to get them back a lot and you have to get them back cheap. And so cheap is never one at a time. You know, that's the big problem with a lot of those e-commerce models is that I'm buying a pair of jeans.

It's sent to me in a reusable. I'm mailing you back one reusable package at a time. Very expensive. And also, as we touched on, consumers just won't do it enough anyways. But anyway, they did. It's, it's, I'm taking a 20 cent poly mailer bag or a dollar cardboard box and I'm replacing it with an asset, a reasonable package, and I'm paying UPS three or four bucks to get the thing back.

It's just way more expensive. So, you have to be able to get them back in bulk, and you have to get them back a lot. And retail footprint creates a lot of attractive opportunities for that. If it's an employee managed process, they're taking all the empties and putting them all together and sending them back at once.

So the cost is really reasonable. And then like those reasonable shopping bag programs and similar, they're being returned to the store. So now you're having this consumer-led re-aggregation. You can bring it back in bulk. And so it's, it's actually less important what the thing is that's being shipped and what kind of package.

We've done wine. We have reasonable wine box that we've done, for a company in Europe. Certainly electronics and others, you know, the, the box works. It's the, it's that logistic system that has to underlie everything.

Keith Anderson: Yeah, as you're talking I'm thinking of all these programs that I've seen piloted. And some have worked, some haven't. Most of my focus has been in grocery and CPG, and you, you know, the value of the store in that logistics equation, I think is pretty profound. You know, one example was Loop by TerraCycle.

When I first participated in the pilot, it was a doorstep delivery program and it's since evolved into, Brick and mortar only, integrated model. And I think a lot of what has been learned over decades of online grocery in general, in terms of the superior economics of having shoppers do a lot of the work versus having, you know, picking, packing, and delivery done by the retailer, it, it, it helps to have the store as a central point of logistics for the customers and the, the operator.

Mike Newman: Yeah, it's just, you know, this is the, the real, the real, it's just math. It's just, you know, like, at the, at the end of the day, it's fun to work in a category on a product that has the potential for social value and reducing impact, but it only happens with scale and scale only happens if it's a good business and it makes economic sense.

So those are the sort of building blocks of how you create scale and how you have economic success is logistics are expensive. You got to figure out your way through that. And, and having a consumer play a part is, has been one important strategy.

Keith Anderson: Are there other things that you can do to increase the, number of circulations? Is traceability a big part of this? Are, are you, you know, do you track individual assets and say, "hey, we actually know where it is," is that, does that pay back?

Mike Newman: Somewhat. It has to be the icing, though. It can't be the cake. So, that kind of stuff like data and tracking, is, I think the instinct of a lot of reuse companies has been, well, the basic model isn't cost effective today, so, we're going to create other sources of value like through data. And it's so you're over, you're just adding complications and layers to the process.

And, if the, and that's usually not a very good business strategy is like, "well, my basic thing doesn't work. So let me make it more complicated and harder and more expensive. And then somehow I'm going to reach some point where I'm crossing a threshold and all of a sudden it's victory." I try and run in the exact opposite direction and say like, what is the dead simplest thing we can do here, to make this a viable approach?

You know, cardboard is dumb and cheap and easy, which is what makes cardboard really great. You know, it's not like, so if I'm going to compete with dumb and cheap and easy, generally, I need to be dumb and cheap and easy. So like the base foundation for, I think, reuse needs to be like, "no, it just works because it works."

Then you can layer in things like data and customer engagement and things like that, you know, ways of building a brand loyalty that just make it even that much better. They better be the icing. Otherwise, I think, you know, the evidence is pretty strong that it, it's not sufficient to take a bad model and make it a good, it takes a good model and it makes it a better model when you have that in place.

So, and the other thing I would say is that if you have a really highly effective circular system in effect. The tracking becomes like a lot less important because they just stay in circulation. You don't need to invest in a lot of active management of the asset because the asset is doing what it's supposed to be doing.

So a good system negates the need for a lot of active management and that's our goal because it's cheaper. So in general, everything is individually barcoded. We have RFID packaging for some clients, etc. But that becomes sort of the fallback rather than, you know, the star of the show.

Keith Anderson: Fair enough. So what is it then that defines a functional efficient, you know, in the absence of those things, what sets you up for success?

Mike Newman: I, I think it, it is that, it's a simple process that, you know, the, the users are trained on and then they just execute. And, um that's true, certainly for the internal logistics, you know, clients like Vuori or Happy Returns that UPS just bought who use our packaging for the forward and back. You spend 10 minutes training them on what you do with the box, and then they just do it.

You know, and that's that, and they keep going, and we have, you know, we have, with Happy Returns, we have boxes that we made for them three, four years ago that are still in circulation. And I know because I'll go into one of their drop locations and I'll see the box behind the counter and I can tell by the design that that's one we made over three years ago for them because the designs have evolved and the branding's evolved.

And so, and they don't actively track each box and keep an eye on how many cycles it's had, right? Because they've just learned it. They don't have to. And on the consumer side, it's similar, like with the reasonable shopping bag programs. The initial instinct was okay, "we need to have an app, and they're going to download the app, and there's going to be this whole thing, and they're going to have a coupon, and they're going to scan, and we're going to scan the bag out, and we're going to scan the bag in, and everyone's going to know all the stuff," and that just adds a lot of layers of, of, of cost and, and organization and training, and it doesn't move the needle that much, you have to just align it to how consumers are living their lives, and they're going to do the thing, they may do it less, and but the cost of implementing it is so much lower and the cost of running that program is so much lower that you're, you're ahead of the game compared to some profound behavior change app-driven Silicon Valley dream utopia future.

It just, it's not generally going to pay off.

Keith Anderson: Even if there's augmented reality involved?

Mike Newman: I know it's a, well, the internal joke

Keith Anderson: What if it's powered by AI?

Mike Newman: I had a joke with the, well, I had a joke with the team that I said, "I wonder how long it'll be until somebody in the reuse community posts about how they're implementing AI for their reuse." And it was not even a day. I mean, that was the thing that was insane.

It was not even a day until I, someone saw someone posting how AI was somehow magically now going to make reuse work where it hasn't. Good luck. That's not, that's not what I'm doing.

Keith Anderson: Yeah. I don't want to take the conversation too far in that direction, but there's, there's always a buzzword that finds its way into pretty much every business model.

Mike Newman: Well, yeah, I mean, before we were, we had people asking us if we were using blockchain. So, yeah, it's the same. It's always something new. Yeah.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of Decarbonize.co, stay tuned for the rest of the episode.

Well, this has been fantastic. If folks want to learn more about Returnity or get in touch with you, where would you send them?

Mike Newman: We'd love for people to check out our site. It's returnity.co. You can email us through there and reach out. You know, I'd love to, love to chat about anyone interested in the space. And yeah, thanks for all the great questions.

Keith Anderson: Thanks again. 

Thanks for listening. I'm Keith Anderson, the executive producer and host of Decarbonizing Commerce. Sonic Futures handles audio, music, and video production. If you enjoyed the show, we'd really appreciate it if you took a moment to subscribe and leave a review or share it with a colleague. For the full episode and more member exclusive insight and analysis, join the Decarbonizing Commerce community at Decarbonize.co. Thanks for listening and we'll see you on the next episode of Decarbonizing Commerce.



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Learn more about David Kat:

• Wastless’s website
• Link to David’s LinkedIn

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Episode resources:

• Tackling the 1.6-Billion-Ton Food Loss and Waste Crisis | Boston Consulting Group 
• Why is one-third of our food wasted worldwide? | UC Davis

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TRANSCRIPT BELOW:

Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Welcome to the Decarbonizing Commerce Podcast. I'm Keith Anderson. And when a guest tells me one of the things they're most looking forward to over the next few years is the dawn of 2D barcodes. I know we have a winner on our hands. But seriously, this episode has something for everybody. AI, dynamic pricing, electronic shelf labels, 2D barcodes. My guest is David Kat, SVP Business Development for Wasteless, which is using AI to dynamically price and mark down perishables, helping grocers sell what they otherwise might have wasted. David has been with the business nearly since its founding, and he's got a really informed perspective on the challenges and the opportunities of using dynamic pricing and markdowns to, help mitigate food waste in brick and mortar grocery in a way that is really accretive to earnings.

So I'm excited for you to hear from David and get to know Wasteless.

David, good to see you. Thanks so much for joining the show.

David Kat: Thanks, Keith. Great, being here, from, Amsterdam.

Keith Anderson: Yeah, I appreciate the time difference. Scheduling is always an adventure and it's good to have you with us. So I thought you could kick us off just by telling us a bit about how you ended up at Wasteless in your career.

David Kat: Yeah. So I've, so I'm an Amsterdam native. I lived in London for a couple of years in Paris. Started in publishing right when, at the advent of the internet. So, I worked with a company that eventually bought AC Nielsen, and I was, an online publisher there. And then like working with data started a couple of, companies of my own.

And then I was approached by one of the, one of the founders of a company a founder. who I knew from a previous company, and he asked me to help him. And, it's Odette Omar. He had just, exited a data for foods company, an IoT company. They sold it to AB InBev, the biggest beer brewer in the world.

And he told me of his, findings in data for food, told me that, data for food is, can be extremely profitable, but that, he was not, in this world to make big, brewers even more profitable, in the long run. So, and he saw that in the food system, there's a couple of, real issues that are hurting the entire planet, and we'll, we'll, we'll go into that in a second.

And he said food waste, even in, in, in the beer, like bars and restaurants is a huge thing. And then he started investigating, where, how the causes are of food waste. And he discovered that, in grocery retail, about almost 90 percent of food waste is caused by products running out of expiration date.

And when you're a date of a food person and you hear the word expiration date, you might think that might be a date problem. There might also be a date solution. So, so they investigated and they come up, they realized that, if you go to your local supermarkets, there's, food with different dates and the same price.

So different values, but the same price. And that's, that's really driving food waste. So he asked me to investigate and, well, lo and behold, before I knew it, I joined as, right at the start. We had our first beta and I've been with the company now for six years.

 Keith Anderson: That's great. So for those that may not be as familiar with what Wasteless does, can you just walk us through the technology and where it fits into a grocer's operations?

David Kat: Sure. So, you know, grocers, there's a lot to admire in what grocers do. it's a tremendously, it's a, it's it's a tremendous job to get all these products at the right time, at the right moment in a, grocer to keep the shelves filled. But in this tremendous, Herculean, labor, something goes tremendously wrong as well.

Supermarkets, grocers know about the inventory, know about quantities, and they have no visibility whatsoever on the freshness of their fresh produce. And that's a, massive problem that surely we'll, discuss. We are solving that massive problem by applying dynamic markdowns, optimal pricing.

So we're looking at the vintage, the expiration date that is most likely to expire on the shelf. And we do price experiments, multiple per day, per item, where we're trying to get an item sold. Rather than let it expire on the shelf, and there is billions for supermarkets to be earned by selling foods that they would otherwise discard.

 Keith Anderson: So, I heard you say fresh. Are you focused entirely on perishables or are you also working with shelf stable foods that have an expiry date or a best by date?

David Kat: So, what we're seeing is that, food waste is a massive problem, and it's also a massive opportunity. Food waste is mostly, it occurs mostly in products that have a shelf life of between two up to 30 days. So our algorithm, our reinforcement model, so it's, an, it's self improving machine learning model.

Gives like the, low hanging fruit is really in, in perishables. Shelf stable is kind of a, like a bonus, but we, were not going to make those kind of return on investments,, on, on the cookies that we would be, that we would do on, on, meat, dairy, ready made meals, convenience food.

Keith Anderson: Got it. And you said that the grocers don't often have an idea of when these goods are going to expire. I, I assume in a conventional operating model, they've got staff that are going and inspecting the produce on a daily basis. Where does the data in your platform come from?

David Kat: Yeah. So, I love it where you, that you're very familiar, obviously, with, with the way crosses work. So they're sending staff on a daily basis to, to check on the, inventory, meaning that they, that you're going to make the same mistakes day in, day out, the, problems that you're finding today in, expiring products, you're also going to find tomorrow.

So it's, it's very repetitive. We have a, various ways of, of, of, sucking up that data from the system, from the, retailer system. So we're going to be, we're using replenishment data. We're using letdown messages. So we know what goes into the shelf, onto the shelf, into the store.

 Stores typically lack level granularity where you can see not just quantities, but also the time dimension of your inventory. And to prove a business case, we have to collect the data manually, which is a 10, 15 minute job per day. It's really part of the gross routine. That way we prove a business case that gives an ROI of 10 or 15X.

And then you get into, a conversation, a partnership with a retailer where you're, where we're showing that actually that manual collection of data is unnecessary and we're going to be integrating in more parts of the business to understand, to actually get automatic feeds of stock in and of stock out, meaning, replenishment, onboarding, but also, POS data and sales data.

Because if we know that a, an item that we mark down is sold, we see that as a successful price experiment and it reinforces our model.

 Keith Anderson: So. I think many folks may be familiar with some of the, sort of third party, customer facing platforms that are, doing dynamic markdowns, through a stand alone application or something. Let's talk a little bit about how this comes to life through, an online grocer's own site and, then secondly through the store.

You know, this is, happening when somebody is browsing the online grocery site and they're seeing, depending on the, how close to the expiry date, they're seeing these prices in the context that they're typically shopping in, correct?

David Kat: Yeah. Well, we, are focused on, on, brick and mortar, grocery retail. Because there, the food waste problem is a, lot more pressing than in, well run, online, grocers, you know, a company like Ocado or Picnic here in the Netherlands, they actually know exactly, they have a lot more data and a lot more insights and they do the picking themselves.

The real problem occurs. When you have a, physical shopper, a consumer that goes onto the shelf, your neatly stacked shelf and is like going to the back of the back of the shelf, rips everything apart because they don't like the shelf life that's left on the, customer facing, side of the, of the shelf.

So we, and we see that in those retailers, not only is about 90 percent of their food waste, caused by products running out of expiration date. It's a massively costly problem. If you go in the US, and this is Refed Deloitte data, the, this is data from 2019, the cost price, the purchasing price of the foods that US retailers,waste, is, oh, it's like around, it's around $18. 2 billion. However, if you compare that to the EBIT, the combined EBIT of those US retailers, the EBIT is only $9 billion. So the purchasing price of what they're throwing out is double their EBIT. Well, then you have a, if I tell this to a, CFO or a CEO you, get their attention.

Because what we do is we don't just sell the wasted foods, you don't just sell it at cost price, you sell it with a margin. So we're actually able to, to sell it with a substantial margin. We just mark down by 20, 25 percent on average. And we prevent more than half of the food waste. So that's a, significant, positive impact on your bottom line. to put that in perspective, EY or Sinyan. In Germany calculated that grocery retailers with dynamic pricing, like we do, can improve their EBITs by 10%. And we're, actually, with US retailers even, we're, showing that it's more than 10 percent EBIT growth.

 Keith Anderson: You know, it's interesting, you mentioned the EY study. I also saw an academic study. That, I think was done in partnership with Mariano's and Roundy's here in the U.S. that similarly found that, dynamic pricing was more effective than some of the other approaches to mitigating food waste.

I don't know if you saw the same study.

David Kat: Yeah. From, out of, U. S., UC Davis in San Diego, I think

 Keith Anderson: I think so. I'd have to check my notes, but, I think so. So

David Kat: We contribute data to that. I mean, if it's UC Davis, we contributed, data from our retailers to, to actually substantiate those, those, those claims.

 Keith Anderson: gotcha. So in a brick and mortar grocery environment. One question I have is about the price execution. That is, you know, if you're somewhat dynamically marking down, it, it strikes me if you're in a chain that's got electronic shelf labels and you can link to those, it's pretty straightforward, but how is it happening in the formats that don't have those yet?

David Kat: Yeah. So, electronic shelf labels really make this straightforward and those are often difficult, investment decisions. And we are obviously changing the paradigm on the, return on investment on those, if you manage to leverage them. In US retailers that we're working with at the moment, in the Midwest, , we're, using, we were actually, upgrading their existing markdown process.

So where they would usually put a sticker with 50 percent discount or 40 percent discounts. They're scanning the, items, they're telling us the, actual inventory and the, shelf life of that, inventory, and we then print the stickers. It's by no means ideal because it's, you know, it's, you need staff training, et cetera.

However, we're using this to, to prove a tremendous business case where we're, we're increasing margins substantially. And then you can take additional steps to actually get more data into the food system. And I wholeheartedly believe that more data in the food system will help this, tremendous industry to, to make, a next step.

And it's a required next step, because margins are low and it's, all, okay because the volumes are so massive. But, imagine you you can lift your margins by. 20, 30, 40, 50 percent. Then suddenly the entire paradigm of food pricing and, paying suppliers and even food waste are, changing.

And this is something that we're really seeing happening slowly, but pretty surely.

 Keith Anderson: Have you learned much about the consumer response? That's the other thing that I, see about some of these, dynamic markdown and pricing models is, particularly in certain economic environments, there seems to be a lot of consumer demand for product that's, still good, but they're finding it at a savings.

You know, we, just did a episode with, a recently funded company based in the U. S., Marty, that's sort of a national, closeout platform for shelf stable foods. But when you look at their value proposition, it's so focused on the pretty extreme savings they're offering to shoppers. Are you seeing something similar?

David Kat: You don't even need pretty extreme savings on, fresh food. But this is exactly what we do. So we gauge all the time the price elasticity of perishable fresh food, fresh produce, not just, but with a, with the additional insights of, of shelf life. So we call this freshness sensitivity. It's the likelihood of a consumer to forego a little bit of freshness or a little bit of shelf life for a slightly lower price. And we run price experiments on a continuous basis. If you have electronic shelf labels as a retailer, we would do this three, four times a day. And we're trying to find the sweet spot where price and consumer appetite meet. And it changes all the time, and it's specific per store, per product, time of day, of the week.

And we're, we're, and this is where really, where reinforcement learning and AI steps in, because it's humanly impossible, even if you're a very, experienced supermarket, associate to exactly price those thousands of items, at the exact right time. And that's what we do.

And AI can, can do this, can support the, associates. And can, if you, if, retailers integrate, can actually do this completely automatically so you can free up associates to deliver more services, because that's, that's what, AI ideally, obviously, achieves.

 Keith Anderson: Well, that raises a good point. I, I confess, I'm not up to speed. The way I once was on dynamic pricing, but that balance, between sort of, human intervention and, autopilot for as long as I've been working in this area has been an interesting topic. Are there rules based, constraints that your customers are putting on what the platform can do?

Are you looking at cross elasticities with other products or on a basket level? I mean, this, dynamic pricing world can get pretty sophisticated and complicated pretty quickly.

David Kat: Yeah, So human intervention or business rules,, are typically gut feel, so we try to dissuade them as much as possible. Obviously, we won't, mark down beyond a certain discount percentage, so that would, there will always be like a threshold there. But for example, you know, the influence of the weather, you can't write a business rule what happens if there's a blizzard or there isn't a blizzard.

It's because Imagine, like, then you would have to kind of weigh, if the blizzards last 12 hours, what's the, weight factor as opposed to 24 hours. And when it's like, you know, so it's, so we tend to use as little business rules as possible. The core of the matter is that it has to always fit with the strategy and the policy and the philosophy of the retailer.

So the retailer has a certain way of dealing with this customer. That's what they really know best. And that's really their, that's a tremendous asset that we will leverage. And then we leverage it with our data insights where we try to, mark down as little as possible. And as little as, like, so we try to extend discounts that are, the minimum that we can get away with.

And at the exact right moment, because no, no retailers interested in, in, in extending discounts in the blind.

Keith Anderson: Yeah, beyond where you

David Kat: By the way is what they're doing at the moment. They're discounting food that they don't really have to discount just because it's policy.

 Keith Anderson: Yeah. Yeah. And when you say, you know, they've got their strategy and it integrates or it aligns with their strategy. Does that include things like competitive pricing? Are you linking in any way to a loyalty program? To

to

David Kat: We haven't yet, but obviously that's really where the, sweet spot is. So once you have data in the food system, you can leverage the data, upstream and downstream. Imagine, you know, I have two daughters. Imagine that, every Monday night, I shop and I don't, I buy four times the minced meat amount that I buy on any other day in the week.

It's because my girls come back from, soccer training and bring back four friends. I'm, cooking pasta bolognese. That pasta bolognese doesn't need a shelf life of another five days because it's going to be devoured in four hours time. So if you add loyalty card data, you see that I am, my appetite for discounted food, in large quantities is bigger on a Monday.

So, and you can extend, if you're not talking about meat, but other foodstuffs, you can extend points for sustainable purchasing behavior, or you can, you can actually, send people, messages that their favorite food is at the discount if you shop tonight. So there's, once you work it into the loyalty program, then, individualized, personalized, policies that take freshness of, perishable items into account suddenly become a reality.

And that's, that's where we're headed, but we haven't done those cases yet. So if any of your, any of your, your, your fan base is interested, we're, we're, extremely keen as well.

 Keith Anderson: Opportunity to be a first mover? You've mentioned the,

David Kat: be a good, mover. It's just, it's not just about being good at first, it's about being, doing it right.

 Keith Anderson: Fair enough. Yeah, I, I agree. You you've mentioned the value of data a few times, and we've, we've really focused so far on the grocery side of the equation. Is there value in this data for suppliers?

David Kat: Definitely, and the low hanging fruit is for integrated supermarkets. Where they're over dimensioning, food production because they, you don't, you know, you don't want, empty shelves. So an integrated supermarket is losing every step of the way if you're going, going upstream, because of this lack of data.

So we've been talking to CIOs of some of the largest retailers in the world that have really, they really got this, that you could really, we had a discussion, they asked a couple of questions and they suddenly understood that they could actually turn part of their supply chain around into a more demand driven production system.

But also we're, seeing that a lot of producers, and this is, maybe difficult to wrap your head around, but a lot of suppliers, know that a substantial part of what they're, what they're producing is never going to be, consumed. But they also know that if they start consuming to match demand in a better way, that they can actually produce less and, and obtain higher prices per quantity per unit.

So, it's a bit of a perverse system where you're just, focused on, on. quantities and production and sales. Once you start understanding collaborating around data, there's a tremendous opportunity that, by the way, Boston Consultancy Group calculated already in August 2019, they calculated that more, collaboration around data in the food system is a 400 billion opportunity.

It's a very useful study and, I'm, I'm, I try to quote it at least once a day. So, I ticked my box for today.

 Keith Anderson: I can't believe that I, haven't come across that one because, I, I've also spent a lot of my career focused on data and food and CPG,

David Kat: I'll share the report so maybe you can, you can stick it in the notes for the podcast.

 Keith Anderson: That would be great, along with the other study that you mentioned, you contributed to anything like that, that you think would help enrich, listeners understanding of this topic and what's working. I think we're always happy to include.

David Kat: That's a very valuable remark because

this is not just marketing fluff. It's not just PowerPoints and, and, and, you know, there's a scientific basis underpinning it. So also our models are, developed, by a professor in, UC Davis. And that's why we contribute a lot of our data to academia because it's, no good that a supplier like us, you know, like a software company, blows their own, trumpet.

It's really about verifying data, because that's the only way that we'll become smarter and get rid of this scourge of food waste, one day. Food waste, you know, the WWF calculated that up to 40 percent of all the food produced is never consumed. And, then if you do the math, you understand that about 11 percent of all greenhouse gas emissions are wasted food. So, so every, you know, every, tangible, scalable impactful reduction that we can achieve as, there's a lot of leverage, a lot of minus there.

 Keith Anderson: Yeah, agreed. it's already emerged as, one of maybe five major themes and what we're focused on and as I'm sure you know, a huge percentage of food waste happens at the household level, but there's a lot that happens upstream and so much of what I think we find fascinating are these, mechanisms that are easily integrated and embedded in the food chain.

Ways that we already know, people shop and buy and consume that, you know, are still economically and commercially viable, and in, in some cases, not just viable, but, you know, really accretive to margins and earnings and, work with, work with existing behaviors. So, obviously, some of what we're going to have to do is going to involve significantly changed behavior, either on the consumer's part or the ways that we work.

But these are really interesting areas where you're not changing what you're doing so fundamentally, but you're still able to make an impact.

David Kat: Sure. And the beauty about the food system is that as a consumer, you can make a decision three times a day and basically preventing food waste is, there's a double, it's, you know, it's a double whammy. Because you save money and you can feel good about it as well. So there's really this, dopamine rush, by finding a good offer, finding a good discount for something you want to eat anyway, or that you, that really whets your appetite, but that you also know that it's, completely, or not completely, but it's, guilt free.

It is less guilt than I'm not the, I shouldn't even talk about guilt, but it kind of, you know, you're doing, it, you're doing something good while you're also taking good care of your family or your friends.

Keith Anderson: I mean, that, that actually highlights something that I hadn't thought about until you mentioned it and we haven't discussed. Is this being communicated to the shopper in any way beyond simply a different price than earlier in the day or yesterday?

David Kat: Typically it is so, and, and we help retailers with the marketing idea of it. So we have marketing in Spanish and Italian and in all these countries where we're active. But not always. Some retailers, they don't really want to talk about sustainability. They don't really want to talk about food waste.

They just want to talk about value. But more and more demographics are also in the U.S, are interested in, you know, getting a good deal for doing something, for doing a good act. So, I really think it's very strong. Being sustainable, it doesn't make things more expensive. You know, you don't have to buy a Tesla to be sustainable.

You can also just eat differently. And, and, and, and actually the impact is a lot larger and a lot more immediate. So it's, so, so saving money and saving the planet is really within grasp of, of large swaths of the population.

Keith Anderson: Yeah, I, I wonder if there are examples that we can share with, the audience of what it looks like, that might be interesting. And,

David Kat: show you some photos. I'll show you some photos from Germany. From Italy. Yeah. It, sounds really beautiful in Italian. It's like sprezzatura alimentaria, food waste. That's sounds a lot more poetic, doesn't it?

 Keith Anderson: Well, and, I think it's interesting, even if there's no reference to food waste or sustainability, part of my curiosity is, are shoppers aware that the price is lower? Is this all based on their own mental price anchors?

David Kat: They're made aware because you're, you give them the, option. Do you want a product with a longer shelf life? That you can stick in the back of your fridge or are you going to eat a sandwich anyway today or a piece of meat anyway in two days and you don't really need it to have another five days

 Keith Anderson: Yeah, I got it.

David Kat: and that's really what we do.

So the freshness sensitivity is making people aware of how special it is that we have, that we're able to put food on our tables. How that it's, not just, it's not just a given, it's really something that, that, that, that has to be valued. And, we're, we're showing that, that price reflects that freshness, as well.

So it's, it's purely economical, but there's also a very strong psychological, marketing angle to it.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of Decarbonize.co, stay tuned for the rest of the episode.
Keith Anderson: Well, I wish we had more time, David, because now you've got me thinking about hunger and how that fits into all of this, but unfortunately, we're going to have to leave it there. If people want to connect with you or learn more about Wasteless, where would you direct them?

David Kat: You can go to wasteless.com or email me at [email protected] or, look us up on the, on LinkedIn. But we're going to be at, I just returned from NRF in New York. We're going to be there as well. We're very active in the U.S. So, um,

 Keith Anderson: Will you be at any other conferences over the next few months?

David Kat: My CEO, was just at, was at FMI, this week, last week.

I'm thinking of going to a Refed conference. Yes. So any suggestions that anywhere where you're going and where you think we should, we should be, continuing this conversation with a couple of decision makers?

Keith Anderson: This is not an advertisement, but I'll be at Shoptalk in Vegas in March, and, they have a sister event that is typically in September or October, if memory serves. Well, that's true, but they run another one in the U.S. called Grocery Shop, that's even more targeted. There's food tracks at the big one, but, you know, that's one to our discussion before we started recording.

You, you won't typically find sustainability practitioners or a big focus on sustainability as a discipline, but it is one of the events where a lot of the folks, to your point, with decision rights and budgets, convene. And so, anyway,

David Kat: Well, I, anyway, I prefer to talk about enhancing performance of retailers by preventing food waste rather than the other way around. It's food waste is really, it's really where you can make a tremendous financial impact and reduce your carbon footprint. But it's the financial impact that is really the driver.

So let's, see if we can get something together for, forDavid Kat, SVP Business Development of Wasteless grocery shopping, after the summer.

Keith Anderson: There you go. Maybe we'll see you there. Well, David, thanks again for joining.

David Kat: Thanks very much for, for inviting us, for having us, and, I'll, I'll make sure that there's some, links, to, to research, in the, in the line of notes. Thanks very much.

Keith Anderson: Thanks for listening. I'm Keith Anderson, the executive producer and host of Decarbonizing Commerce. Sonic Futures handles audio, music, and video production. If you enjoyed the show, we'd really appreciate it if you took a moment to subscribe and leave a review or share it with a colleague. For the full episode and more member exclusive insight and analysis, join the Decarbonizing Commerce community at Decarbonize.co. Thanks for listening and we'll see you on the next episode of Decarbonizing Commerce.Have a question or feedback about Decarbonizing Commerce. Record an audio message https://s.castplus.fm/decarbonizing-commerce?episode=68rk2w6n

In this episode, Keith Anderson interviews Kari Morris, co-founder of Martie, a venture-backed online surplus discount store specializing in shelf-stable groceries. Kari shares the company's inception, emphasizing its mission to address surplus in the food industry. The conversation explores Martie's rapid evolution, its retention mode, and the strategic balance between discount and higher AUR items. Kari also discusses customer engagement through live shopping events, the role of influencers in their model, and Martie's unique approach to capturing a new customer base. 
Learn more about Kari Morris:

• Link to Martie's website
• Link to Kari's LinkedIn

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TRANSCRIPT BELOW:
Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e-commerce, and consumer products through the lenses of low carbon and commercial viability. 

Welcome to the Decarbonizing Commerce Podcast. I'm Keith Anderson, and my guest today is Kari Morris, a serial entrepreneur, but most recently co-founder of Martie. Which is a just venture backed, online, surplus discount store for the moment for shelf stable groceries, but who knows what the future holds.

And I find this entire, surplus grocery space so fascinating because in the landscape of solutions for Decarbonizing our industry, they are among those that are the most commercially viable. That is, consumers love them because, as you'll learn about Martie, they can get great food products anywhere from 40 to 60 percent off.

What they're, maybe even more, what they're used to paying in conventional brick and mortar grocery stores. The suppliers love them because they get to recover some revenue of inventory that otherwise might have gone to waste. And it, it's a good business for Martie as well. And all of that is independent of some of the, climate and environmental benefits.

So I was really eager to learn more about Martie and how they arrived at the business model that they're in and where they see it playing alongside some of the other models that exist. And I learned a ton. So I'm excited for you to hear more from Kari Morris, co-founder at Martie. 

Kari it's great to see you. Congrats on the fundraise and thanks so much for joining us.

Kari Morris: Thanks so much for having me.

Keith Anderson: Well, fundraisers are always exciting. And when I first saw the news, I was mistaken. I thought the company was just launching, but in fact, the company's been around for a few years. I thought maybe to start, you could tell us a little bit about Your journey to co-founding the company and then as we get to the funding, maybe talk a bit about the evolution from then to now.

Kari Morris: Yeah. Yeah, of course. So, Martie really is, uh, born out of necessity. My background really is in food production. I had a brand called Morris Kitchen in New York about 10 years ago, producing small batch syrups, cocktail mixers, and, sort of found my way to Los Angeles after selling the company. I met my co-founder, Luis Fritjofsson, and she and I, started working on some concepts in food, building CPG brands, that were direct to consumer, and really sort of like pushing, pushing that envelope of what we could do with, with influencers, which was, which was, which was interesting.

We found ourselves in December sitting on quite a big load of ginger holiday cookie mix, which we knew come January, we weren't going to have a place to sell it. So we sat there and we thought for a minute and, and, you know, our goal always was to really push the envelope in the food industry.

Really do something that was meaningful, impactful, was going to We wanted to be a way to bring better for you brands and quality ingredients to the masses. We sort of knew at that moment that we weren't going to be able to push to this next level, with our own sort of CPG brands. We sold off the holiday cookie mix and the wheels started turning.

And about four months later, we had created, the first sort of iteration and, and deck for Martie and went out to fundraise on this new concept. And about four months after that, we launched our site. So I think that's, that's sort of like the, the initial phase, the push into, concept to reality.

It happened pretty quickly for us in 2021.

Keith Anderson: Four months is pretty quick.

Kari Morris: Yeah. Yeah. We, we move fast. We move fast. And so we really set, we, we set out really to, to find brands that had this product to really create like the value prop around needing to offload, but also this is still good quality food and we can offer it to our customers at a discount.

So better for you brands, but really like. Meeting, meeting the masses where they are, offering discount. At the time we were going through COVID, there were supply chain issues. There was a lot of inventory available. People were getting very comfortable with shopping online. And so we sort of hit this spot where we loaded an inventory.

We put it up on the site and we, you know, we kind of instantly found our, our customer. And started to then build out, you know, the value prop even more to say, well, what are the products and what's the product mix that we need to sustain within this, to really get people to come back every month? Like, what is that retention model that we have that's really sticky?

And Martie is a shelf stable. We, we are grocery first and foremost. And. So within that, we really stuck to like, those core shelf stable grocery items that we knew people would come back for. Your coffees, cereals, nut butters, jerkies, fruits, nuts, like snacks. So much of, you know, that CPG marketplace, especially with better food brands, is dominated by snack.

And so, we leaned into that pretty heavy, and Really, yeah, built out the model on that, first and foremost.

Keith Anderson: So, you've already mentioned the retention model and driving that return trip. Doesn't look like there's a membership at the moment, is that something you considered?

Kari Morris: Absolutely, yeah. Yeah, it's, it's, it's something that we believe will benefit our customers. If not today, in the near future. In terms of what, you know, adding more value and sort of creating. Creating the ability for, for members to have more perks, whether it be discounted shipping rates or, first dibs on limited products that we have.

Those things all sort of get baked into the model, but for now it's really, as we build that SKU count and, you know, find our footing there, I think it's, it's more important for us to allow people to come in and shop and learn what Mart 

Keith Anderson: Makes sense. And you mentioned building the skew count. Roughly, how many skews are in the assortment? I'm sure it's a moving target, just given the nature of the model, but roughly how many skews?

Kari Morris: Yeah. Right now we're, we hover around 500. And so for, for grocery, that's quite small. When you think about like center store shelf stable, it can be, you know, up to 3000. So we're, we're, 

we're just sort of crack cracking that, and figuring out what are the things that were critical to the model.

Keith Anderson: And how do you think about what optimal might be? Is it a function of What you can source based on who has surplus inventory, is there a sweet spot where you've got enough selection that, you're driving the Return frequency that you're looking for, or?

Kari Morris: It's a, yeah, it's a, it's, it's a good, it's a good question. And it's sort of a moving target. You know, we, we need to, we need to put every order in a box and send it to your house. So as you can imagine, we have to sort of optimize that box. So we're looking to sort of have a product mix that allows us to get people great value, whether it's through discount or, you know, lower priced groceries.

But then also some higher AUR items that help balance out that basket and get us to a place where. All of a sudden the unit economics makes sense for us to then put a label on it and ship it to your door. So core categories like we've talked about are, you know, essential, coffees. Bars, higher AUR items.

We always want to have, plenty of these items so that when you come back to Martie, if you've bought it before, the site is going to optimize to show you that again. We have implemented some tools in the site experience, so when you are logged in, based on what you've purchased in the, in previous, orders, we'll start to feed you things that are more customized to you.

Do you have kids? Do you have a pet? Those things will start to be in your feed more, so sort of like learning who the customer is and then feeding them the right product mix. That is a retention play, but also. Yeah, just looking at like that mix of AUR and making sure that like, when you check out, we've done our best to try and get you into one single box with a high AOV.

And then you're going to go through that in about 30 to 45 days and come back. We kind of think of it as like shop Martie first. So of course you're not going to get your produce or you're frozen. But if you scan the site before you go to the grocery store, chances are you're going to be able to fill your basket with things that you would otherwise buy.

And you're going to have a really nice feel good moment when you say, I just saved 50 or you know, whatever that moment, that total cash value is, it's real and it's a really like kind of fun moment to fold that into the shopping mix for the customer and really see that value. 

 

Keith Anderson: I, I think you've definitely got the treasure hunt, dynamic going for you, and I think that there's all kinds of discount models, but as I browse the site, to your point about the, materiality of, of the savings, I think it, it's a clear contrast to a lot of the discounting that You see these days in the sense that it's a pretty significant savings per item.

You mentioned building baskets and unit economics. There's no order minimbut there is a minimum for free shipping. Is that right?

Kari Morris: So it's 25 to check out

Keith Anderson: Okay. So there's a 25 minimum. Gotcha.

Kari Morris: then 50 for free shipping.

Keith Anderson: And are there any other behavioral nudges or incentives you're using to keep growing the basket? Or is it for the moment, mostly about inspiration and personalization?

Kari Morris: Yeah, there, there, there's some tools that we have in terms of, as you're checking out, we, we have sort of built in suggested for you, sort of moving inventory through that, you know, isn't slated to sell through those will get discounted. Those higher discounts always move very quickly for us. So we use those as incentivizing tools and emails and push notifications to sort of

get people, over the line, if you will. And then using back in stocks as well on like brand level or category level.

Keith Anderson: Oh, got it. So if something that I saw and was interested in, is no longer available, I can set a notification or is it happening automatically?

Kari Morris: Um, It's not happening automatically yet, but it's something that we will push out as we get things back in. So, Peace Coffee sells out really well. When we get it back in, we will send out a push notification for those who purchased in the past. so much for

Keith Anderson: And I, I also see things like, you know, 

Kari Morris: we look 

Keith Anderson: the detail page. So somebody that is on the fence can see if, if they don't act now, they might miss it. One aspect of the model that you've mentioned that, I'd love to learn more about is the influencer side of things. I see the live shopping, section on the site, but maybe you can talk a bit more about

the role that influencers play in the, in the model.

Kari Morris: Mhmm, yeah. Uhm. What we actually... we, we use more of an affiliates model. We, we've seen a lot of organic growth through those channels. Uhm. The, the live shopping is really cool. It is, for us it's like a way to really engage with the customer and I think the way that I like to think about it is like at Home Shopping Network, modernized. But really it's a way for people to get to know some of the products we have. Because they're such a deep discount, I think it's important for us to really showcase those products and, give people an opportunity to ask questions and sort of validate that these are quality products.

Just at a discount because they need to move quickly or, you know, needed to find a new supply chain channel. So it's, it's, the live shopping really is like a, it's a, a marketing play if you will. And it's sort of like an open, place for our, our community to come and ask questions and learn.

And then, yeah, affiliates, influencers, you know, that, it, it, it's a steady growth, and the more that we get out there, the more that it sort of snowballs and takes. It takes on a life of its own. We do use a referral program. So there's a give 10, get 10. Which is an easy way for people to, to kind of latch on and try before you buy.

Or, you know, try the product and try the service. And, yeah, get a little cash back in your pocket for making the recommendation. So, yeah, all of these sort of play into our, our overall capturing new customer model.

Keith Anderson: And think I saw in the fundraise announcement that there may be ambitions or plans to broaden into other categories. Is there anything you want to share about that?

Kari Morris: Yeah. It kind of goes back to that, product mix and talking about what is our customer looking for? Where are they looking to save? What helps us continue to offer the best discounts on grocery and still make the model work? Right? So you think about like health, beauty, home goods. Typically the margins there are much stronger than you'll see in food.

And so as a whole, as a basket, when you balance those out, it helps everything come together in a more sustainable way for, for us as a business, because at the end of the day, we really want to continue to offer quality foods at a great discount. In order to do that and ship it to your home, we have to continue to innovate what that means to us as a company and how we can continue to add value, keep those discounts incredibly high for the customer.

And yeah, work on that, that, that AOV basket mix.

Keith Anderson: Yeah, it's sort of the story of, modern retailing history in a sense. You know, marrying the high velocity consumables with the high margin non consumables or non edible consumables. So the, the slogan or the tagline is savings for the pocket and the planet. Maybe we can spend a little time unpacking what role some of those principles play in, you know, everything from how you've decided what to carry to how you operate and what are some of the savings for the planet.

Kari Morris: Yeah. Yeah. So big picture, I think, you know, these numbers are, are pretty staggering, but 38 percent of food in the U. S. goes unsold or uneaten, right? So there's a lot of opportunity to improve that. And we all play a part. A lot of that's happening, you know, at the farm, foods that don't even make it to market, some of it's happening, sort of more in our bucket, which is, post production and on the way to grocery channels, and that's where Martie really has an opportunity to help, and then, you know, some of that's happening at home.

So, I think, for me, Martie plays, plays a role in this in part by educating the consumer about why this food exists here. It fell off the supply chain for a reason, and it's perfectly good food, and you're getting it at a discount, right? So educating the consumer about that, and as well as, expiration dates for Best Buys.

And sort of giving, like, empowering our customer to know that, like, just because something says Best Buy, It doesn't mean you need to throw it in the trash, right? So we can get more comfortable with pushing those limits and opening up, like, what we're comfortable with in terms of best buys. And I think there's a lot of education that can still happen there.

And so that, that's something that we really like to push through the site experience, through Martie, who is our, our Earth mascot, you know, the idea is really that he's there to help guide you through and learn about food waste and, and how to really like feel like you have a part that you can play to help, move the needle here.

And on the vendor side, the supply side, you know, that a lot of these brands we work with are just emerging. They're, they're finding their footing within this, this landscape of food and they've chosen to really invest in, in more sound. Sustainable supply chains, ingredients, packaging, et cetera. They, they're, you know, they're competing with, the larger CPG portfolios that have the shelf space.

They're paying to, you know, to be on the shelf and to hold that space down and, It's, it's challenging, right? So, Martie is a way for them to reach new audiences, which they wouldn't, might, might not otherwise reach, and really to take excess inventory, from a failed purchase order from a store, seasonal products, or things that just didn't sell through and have kind of come to their last, expiration date.

Line where it can no longer be sold in a traditional grocery store. So we're talking about maybe 60 days to expiration or best buy. That product through Mari, they can realize some cash. Typically if they were to donate this product, there wouldn't be like a tax benefit. At, at early stage, you know, CPG brands.

So we can turn around, pick up the product. Give them cash, allow them to continue to sustain their next production run, focusing again on the products that are thriving for them, right? So there's always going to be a need for balancing inventory, in this space. And, so for those brands that are investing in better ingredients, It's, it's really an opportunity for them to thrive. 

Keith Anderson: Is, is there a set of criteria that you've established that, a brand has to clear in order to play on the platform.

Kari Morris: We kind of let our customers drive that, you know, what are they looking for? What are they coming back for and asking for? That will help us decide whether or not we want to bring a brand on site. We do have some larger, more commercial products. And. You know, from where we sit, that, that's okay.

We don't, we don't discriminate on food. We want to get as much food as we can into as many hands as we can. So while we might focus on some quality, we're not going to say no because, because of a specific ingredient, you know, we have our values, but we're, we're really here to say food should not go to waste.

It shouldn't end up in a landfill. It should be distributed and eaten. Especially at a discount when people need it,

Keith Anderson: Yeah, as I, as you and I were speaking before we started recording, one of the first things that occurred to me when I was getting acquainted with your model was it seems to sit nicely alongside some of the local store based, surplus food marketplaces like Flashfood, like Too Good To Go, even Olio, which is sort of a peer to peer, at least in the U.S., there really hasn't until, until Martie been sort of a national ship, centrally fulfilled, shelf stable, surplus food platform with, this kind of selection and, and, Value proposition.

Kari Morris: right? And, and, you know, I'll say, like, closeout liquidation, opportunity buys, it's not new. It's, it's always been around. I think, and I'll speak for myself, being on the other side of it, it was, it was just sort of an icky word. And it was something that as, like, a supplier, a vendor, you wanted to stay away from, and you kind of wanted it, that inventory to just disappear or go away, and I think what Martie is doing is really taking the idea that surplus food or this like liquidation doesn't have to be, you don't have to be ashamed of it, it exists, and we can, you know, we can interact on the internet and talk about the discounts we have and why we have them in a way that, I think brands can now celebrate and instead of saying like, I'm going to just try and sell this off and I don't want to see it, it's going to be a, you know, lower price, we can talk about what we're doing here, you know, we're we're making a difference in, in, food waste, carbon emissions, you know, we can break it down to all the things that, you know, having food just end up in landfill does.

And for our brands, you know, we can deliver back to them, you know, metrics around what they've done and how they've contributed and, and that's a fun share back for, for them as well.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of Decarbonize.co, stay tuned for the rest of the episode.

Kari, if people want to, get in touch with you or learn more about you, where would you send them?

Kari Morris: Gosh, good question. LinkedIn or, yeah, through the site, you can always get in touch with me, through our customer support.

Keith Anderson: Very good. Well, thanks again so much for joining us.

Kari Morris: Thanks so much for having me, Keith. 

Keith Anderson: Thanks for listening. I'm Keith Anderson, the executive producer and host of Decarbonizing Commerce. Sonic Futures handles audio, music, and video production. If you enjoyed the show, we'd really appreciate it if you took a moment to subscribe and leave a review or share it with a colleague. For the full episode and more member exclusive insight and analysis, join the Decarbonizing Commerce community at Decarbonize.co. Thanks for listening and we'll see you on the next episode of Decarbonizing Commerce.




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Today's guest is Francesca Hahn, vice president for digital commerce, U.S. At Mondelēz, the multinational snack leader. Francesca is responsible for the strategy, vision, execution, covering everything about how Mondelēz brands are discovered, shopped for, purchased, fulfilled online, including two direct to consumer sites. Before Mondelēz she had roles of increasing responsibility in category management and sales, at Britax, Colgate-Palmolive (including the Hills Pet e-commerce team), Acosta Sales and Marketing, PepsiCo, & Diageo. Mondelēz recently added sustainability as its fourth strategic pillar, and Francesca is a sponsor of the sustainability team for the U.S. In this episode we discuss introducing sustainability across such a large enterprise, the intersection of sustainability and climate work and e-commerce.
Learn more about Francesca Hahn:

• Link to the Mondelez Website
• Link to Francesca’s LinkedIn

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TRANSCRIPT BELOW:
Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Welcome to the Decarbonizing Commerce podcast. I'm Keith Anderson, and today's guest is Francesca Hahn, vice president for digital commerce, U.S. At Mondelēz, the multinational snack leader. And in that role, which, she started in April of 2021, Francesca is responsible for the strategy, vision, execution, covering everything about how Mondelēz brands are discovered, shopped for, purchased, fulfilled online, including two direct to consumer sites. And she's got a great career, even before Mondelēz with roles of increasing responsibility in category management at sales, at Britax, Colgate Palmolive, including the Hills Pet e commerce team, Acosta Sales and Marketing, PepsiCo, Diageo.

And I was really interested in having Francesca on the show because Mondelēz recently added sustainability as its fourth strategic pillar. And Francesca is a sponsor of the sustainability team for the U.S. And I was really interested and curious to learn more about what it's like trying to, introduce sustainability across such a large enterprise, including to so many people who don't have sustainability in their titles, they aren't sustainability experts or full time practitioners.

And given her personal interest and passion for the subject, I really wanted to hear from Francesca, how she thinks about the intersection of sustainability and climate work and e commerce. So we talk a lot about her own journey and trajectory into, roles dealing with sustainability and, how she and the rest of the organization are working to bring sustainability into the roles of everyone at the company.

So I'm really excited for you to learn more from Francesca Hahn of Mondelēz.

Francesca, good to see you. Thanks so much for joining us for the show.

Francesca Hahn: Thanks for having me, Keith.

Keith Anderson: Well, as regular listeners know, I love to start just by, helping people get to know you a little bit and your current trajectory and specifically how you became interested and involved in sustainability. So why don't we start there?

Francesca Hahn: Sure. I have grown up in consumer packaged goods. I early in the career did category management when it was just exploding and then moved into sales leadership and center of excellence roles, did some company integrations, worked on some amazing brands at PepsiCo, at Colgate-Palmolive, at Britax, carseats and strollers, and now I'm at Mondelēz.

I got into e commerce by accident about eight years ago. I was in Germany doing an integration of two companies, and we needed to create a little e commerce strategy, which became a Europe e commerce strategy, and then became a global, because at that point it was still fairly new. And, ended up doing e commerce for Hills Pet Food as my job, as it was emerging as a big thing at that moment, and have really enjoyed doing that for the last eight years.

I now lead digital commerce for Mondelēz, the company known for Oreo, Sour Patch Kids, Toblerone, and many other amazing snacking brands. And I am responsible, or my team is responsible, for anything to do with finding, learning, buying, and fulfilling products online. And it's really been, of course, an amazing journey in that sense.

There's a lot going on there. And I got into sustainability early when I started working with Amazon as part of e commerce and it's just been a passion point ever since. Trying to make sure that as we're making choices that we're doing the right things for our people and our planet.

Keith Anderson: And how does it intersect with your role now at Mondelēz?

Francesca Hahn: So for sustainability purposes, I have two major roles besides the everyday work. I both support our DEI initiatives in terms of being an executive sponsor of the Women's Sales Leadership Network, which is a group of about 800 women and allies. And we work to advance, attract, and retain, women and their advancement. And then I'm also the sponsor for the U.S. Sustainability Team.

Keith Anderson: Can we talk a little bit more about what it means to sponsor that team?

Francesca Hahn: The U.S. Sustainability Team is activating sustainability initiatives in the U.S. And of course it's supported by a global sustainability team. We actually call them the Global Impact Team. And so they're thinking short term, mid and long term initiatives to support our business and think for the future.

We ultimately want to create a future where together the people and our planet can thrive together. As a sponsor, I am helping to give advice on how to think and influence the organization. And if you can imagine, with digital commerce, it's very similar. It's trying to ensure that everyone is thinking about it, making it front of their minds in everything that they do.

Keith Anderson: Yeah, I mean, that was a big part of why I wanted to have you on the show. I see so many parallels between the way that e commerce has grown and evolved within the CPG industry and what's happening now with sustainability. And as you just said, the role of influence is huge. I I'm sure it's shifted, but when I was in my past life consulting, we used to say.

In your first year as director of e commerce, roughly half of your effort is going to be spent selling internally. That is, you may be responsible for selling online through and with retailers, but to do that, you've really got to, shift thinking and behavior internally as much as externally.

Francesca Hahn: Well, and if you think about it, digital commerce is an end to end game. You've got to think about all the areas of what you look like on the shelf. You have to think about your packaging. You've got to be thinking about. How you're advertising, how you're efficient, with everything that you do. And, and that's, I mean, from example, I, when I started at Hills Pet Food for Colgate as leading their e commerce, we were trying to ship bags of pet food, 35 pounds of kibble across the country efficiently. And that was a really big challenge. And, Amazon actually brought us together. To show us that our bags were getting pierced in distribution centers and causing hazards by the product, of course, rolling around on the floor and, it had oils on it. So it could make it slippery. It could be, mice or something else could be, a challenge with it as well as, ensuring that it was, packed efficiently in boxes with other products.

So we were tasked to try to find a solution. And we did a ton of test and learns to figure out what the solution could be and ended up in a, with a bag in a box solution. And not only did we do that, we also added a shopper message to it, to the pet parent to say, you know, tell them that they've got this and they're doing the right thing by choosing the Hills Pet Science Diet product for their pet.

And it ended up getting highlighted by the sustainability team because they felt like it was such a nice combination of doing the right thing, making it a more efficient experience, and then also an amazing marketing brand opportunity as well.

Keith Anderson: Yeah, as, as you and I were, speaking a few minutes ago before we hit record, I, I mentioned In one of our, research reports on Winning with Amazon on Climate, we actually feature that Hill's case study and you shared with me, that was you so.

Francesca Hahn: It was my team, a big team that figured it out together, but it was really cool that I was able to be part of that. And it became an example, which I think is positive to inspire other brands to do the same.

Keith Anderson: Yep. Well, you've had experience in a pretty diverse set of, CPG and consumer product categories. What have you learned about, where CPG and sustainability intersect and, you know, where to focus and what some of the biggest challenges are?

Francesca Hahn: I think typical in a big CPG is you need goals, things that you can strive for. And of course, we have our own goals from a sustainability perspective. And then you need to develop a path to reach it. And, and, and it's important that the whole organization is pointed in that same direction. And when you think about Mondelēz, it's a massive company.

And so, it's so important that everyone is moving towards that same spot, because if not other business priorities can come up. Obviously we had COVID, other things happening at the same time, right? So how do you ensure that as an organization, you're still working on it together? I'm really proud of Mondelēz as in their path to our vision 2030.

We added sustainability as the fourth pillar. There's a growth execution culture, which we've been talking about for a few years and we added sustainability to it. And why that's so important is then everyone is inspired or motivated or, you know, expected to have objectives that are moving towards that goal.

And in 2023, we started creating objectives as part of your, it's your everyday performance plan and in some cases, that was easy for some people that were closer to sustainability, but for others, they hadn't had the chance to read our ESG report or understand really what does it take to win? And then how does my job interact with that?

And, and so how can I help in that sense? And so I think by making it an objective for everyone, then we all are lined up together and really making much more genuine impact together.

Keith Anderson: If I'm in the e commerce organization, or any part of the business, but just for the sake of proximity and familiarity, let's stick with e commerce. Maybe I'm, you know, involved in, I'm on an account team, or you probably have a better example than I do. What is that process like of identifying objectives for somebody who's a non sustainability specialist or practioner ?

Francesca Hahn: Well, it's typical objective building or thinking about what's our priorities for next year. It's saying, okay, like, let's look at what we're doing and are we doing enough? Are we taking it to the next level of sustainability? So let's, as an example, an easier one is customer service and logistics. How am I making an impact with sustainability?

And then you look around and you go, okay, are there areas that I can already amplify? Example would be Dropship or direct vendor shipments. And, and for those not as familiar, that means that when you order online, the product doesn't ship to a DC, a distribution center, and then to the shopper. Instead, it directly ships from the manufacturer warehouse to the shopper's home.

So in that case, you are taking out a one line of transportation. And so you're being more efficient in that case. And by the way, also you're eliminating damages, potential products, you know, that could get lost or something could happen to it on the way. So it's just a more efficient overall. So experience.

So if that's that customer service and logistics, if we can lean into that, or how do we, you know, make that more prevalent with other retailers, then you're helping on the focus of getting more sustainable customer service.

Keith Anderson: Yeah, you had mentioned how much of what's going to have to happen in sustainability is going to be long term and, sort of heavy lifting in a sense, but I think with examples like those, it gets clearer and clearer that there's a lot that's immediately actionable and tends to align with commercial objectives as well as climate and sustainability goals.

Francesca Hahn: There are little things that pop up all the time, and you don't, you can never underestimate that. Small choices are being made constantly. For example, packing a box. for e commerce making sure it doesn't have plastic in it , it has paper you're, you know, easier to recycle, is, is an example. There's so many little choices that if you're more aware of, of these things, you can be making more impact every day.

Keith Anderson: I'm glad you mentioned that one. Because I think it'll serve as a nice segue. This year, both Amazon and Walmart introduced new programs or initiatives specifically related to omni channel and e commerce fulfillment. They're both getting more focused on right sizing. They're both doing something I think is pretty cool with automated box printing.

If you've never watched the videos of these, it's pretty fascinating to watch. Everybody has opened a box and found, you know, a tiny product inside and wondered, why am I getting such a huge box for such a small product? And You know, the logisticians have started, working on that problem through on demand box printing that aligns the size of the box with the products in the order, and they're also shifting to more, Paper and other, you know, non plastic forms of secondary packaging.

And the reason I say I think it's an interesting potential segue is, so much of what is happening is really. The result of work between the retailer and the brand. I mean, take the example you shared between Amazon and Hills earlier. How do you think about the relationship between CPG and, and retailers as it relates to sustainability?

Francesca Hahn: Well, I'll go with your example there about, about the, the box printing and forming to the product's exact shape. Our products, we, we also sell chocolate and, candy products that have multiple challenges during the summer in the U S and so having a relationship with the retailers, because it's in their best interest and it's in our best interest, it's stated goals, everyone's working towards it.

We've been having conversations about how to do cold ship more effectively. In nature of cold ship, it's not been very sustainable. So we need to work towards. Better solution. So by being partners, I mean, we'll get there quicker. I have a lot of, faith that, that we will get there, but yeah, so being partners, I feel like there is so many opportunities, and frankly, retailers need CPGs because they're really a house of brands and so they need us and then we need retailers.

Because they're both the way our products are delivered to the shopper. So how do we do that the most efficient way? As well as, I think there's a lot of opportunities as well for them to be recycling centers too. You know, when you think about some of the big retailers, they're often in environments where there may not be a recycling infrastructure yet.

I think of my, actually my dad and my parents are in an area that they are. Not having recycling coming at their pickup at their house still, which just kind of blows my mind still that you don't have recycling. And so they have to take it somewhere. And so when you think about retailers, they can actually be that point to help in an environment where the infrastructure is weak.

Keith Anderson: Yeah, yeah, I, it's been an interesting three or four years in, in the recycling infrastructure. Landscape. I, I think the retailers, some retailers are, you know, headed in the right direction. Others, I think, are in a holding pattern trying to assess how do we do this at scale in a way that is going to work across different packaging formats.

So I'm glad you called that one out.

Francesca Hahn: I think it's another synergy or analogy to, e commerce, right? There were some retailers that were slow to the game and they let. Other retailers get ahead of them and, and get their, you know, get their website online in a way that really made sense to shoppers and others. There were people, retailers, that did not have websites early, if you can remember that, Keith.

And, and so, it's the same thing with sustainability. We gotta, everyone needs to be moving towards it. It's again, not a perfect path, but you've gotta be making steps. And, and to your point, I think there's some retailers really, innovating here. They have chief sustainability officers who are very influential and are great connection points for, for CPGs to come in.

And, and partner together.

Keith Anderson: Do you see those retailers? Gaining commercial advantage because they're moving earlier and sort of the flip side of that coin. Do you see upside for CPG companies that are leaning in? Are the retailers rewarding you in some way?

Francesca Hahn: Yes. And yes, Amazon is big focused on Climate Pledge. There's a filter online. So if, if, a shopper, that's incredibly important to them, they can click that button and you're only seeing the products that are. Marked Climate Pledge. Now, it's complicated to get Climate Pledge acceptance. Maybe we talk about that later in our, our, double click, to your, your detailed audience.

But, it's, it's a challenge, from that perspective, but, but yet. It is something that they're offering and it allows people to find and get the products that they're looking for and thus the CPG who can qualify wins and there is reported lift percentages if you can achieve that.

Keith Anderson: Ooh, from, from where? And I only ask because

Francesca Hahn: They've been published a few times, Keith,

Keith Anderson: By

Francesca Hahn: don't want to quote it.

Keith Anderson: No, of course.

Francesca Hahn: it's, some other third parties have published that there's a lift associated when you have that. I mean, like any badges that you would often get, it attracts your attention on the digital shelf automatically. And then, and of course, now that you have this filter, I think it's, it definitely helps.

Keith Anderson: Well, I, I was going to say, in my past life, I did analysis on the list of those badges. Not the Climate Pledge Friendly badges, but Amazon Choice, Best Seller, and so I, I know based on data that those both drive traffic by attracting people from search result pages to product pages and can increase conversion.

The open question that I'm trying to get more facts on is, well, what about Climate Pledge Friendly? So if anybody in the audience has seen hard data on that, let Francesca and me know because, uh. I think it's a safe assumption that it has an impact on You know, how many people see and buy, but I like data.

Francesca Hahn: Me too.

Keith Anderson: Well, while we're on the topic, do you want to go any deeper on, the complexity or some of the challenges of, of qualifying for some of those things?

Francesca Hahn: Well, there, I think at this point, there are some general big challenges and you've talked about it in your other podcasts, but of course the recycling infrastructure is major challenge for us, as we mentioned earlier. Also materials. And when you think about the size of Monsali's, if we make a major change in packaging, as an example.

It causes, a real challenge in availability of that, of that supplier, materials that we need. So I think working with suppliers to have a long term plan on how to achieve these, so I think, you know, again, keeping your own partners very close on that journey that you're taking so that you can implement those changes so that you have more sustainable products.

It's very important and there aren't that many vendors in general. So it, it, so I think it's going to be a continued challenge as we're all navigating towards this, that we, and it's why I love the things that you're doing here, Keith getting kind of the word out, is we need more vendors, suppliers that can produce the, the, the source materials so that we can achieve these all 100%.

Keith Anderson: Materials, ingredients, packaging, yeah, I mean, you mentioned, you mentioned some of the, complexity of making shifts in the production process. I, I've been looking at, a universe of roughly 400 companies that have basically raised capital for some sustainability related solution oriented to retailers and brands.

And one Interesting pattern I've noticed among a subset, especially those that are focused on packaging and, and, you know, largely packaging actually is where it's the case they're plug and play. That is, it increasingly looks like,, success factor. To be able to directly substitute for an existing material or ingredient that you, need a replacement for without having to adjust or adapt other processes, other machines and systems and, you know, to your point in a majority of cases, looks like Longer term planning is going to be necessary in many cases, but I am starting to see companies promote themselves as, hey, we've got something that you can drop into your existing production run today.

There's not a lot, but it's an interesting point to me, because especially for the larger CPG majors, you can't just, switch a material out if it doesn't have most of the same attributes and characteristics as. Whatever it's supposed to replace. And the other, the other factor I'm noticing is some of the, suppliers that seem initially promising, as you peel back a couple layers of the onion, they just don't have the scale to move the needle at this stage.

So there's a lot of early stage, you know, pioneering work being done, but. A lot of what I think is going to happen over the coming 5 to 10 years is seeing what clears the stage gate and actually ends up reaching a critical mass that can become part of the CPG majors way of working, as opposed to so many of these things that sort of get stalled in pilot test and learn stage.

Francesca Hahn: I'm hoping that because we, and many other CPGs are publishing these long term plans, that it's motivating for more positive change on the vendor side. And, and, and also there's examples of regenerative farming and, and, and. You know, as we engage in and drive more farmers to think that way, we can drive more, you know, more expansion and, and people see that the possibility is there to, to drive something that's also good for the planet, but hopefully also good to drive their own business.

Keith Anderson: Yeah, where do you or where do you see the industry searching for those kinds of. Partners or suppliers are their full time dedicated roles the same way that many companies now have e commerce capability leads or or similar? Is it the corporate venture team, sustainability team? You know, how do you even go searching for those kinds of cutting edge capabilities?

Francesca Hahn: We have a sustainability team and locally, and then also globally, that they're both chasing the bigger innovations and, and, as opportunities. So sometimes it's partnerships. These sometimes come through from retailers, sometimes they come through from government, author authorized groups that are pushing, and giving opportunity.

For example, we are now part of a cargo. Owners for Zero Emission Vessel Group, it's a group that brought, was brought to us from a retailer and now it, now we're part of 35 or so freight buyers who are focused on zero emission ocean transport. I mean, it's not something I would have known or heard about before, but it came to us via a retailer and now we have signed in on it and we are focused on container utilization.

Opportunities as, as well as reducing distance traveled. So again, trying to do the right thing for the planet, but also trying, you know, it's also more efficient for business as well. So I think those are some of those opportunities that come to us and, and you need a team who can focus on these. If you, you know, this is where you need, you do need the specialists who can focus and, and understand it, and then they can teach the rest of us, to understand.

And then also we can talk about it, with other retailers and try to encourage the same kind of behavior.

Keith Anderson: You know, I've, I've definitely seen an acceleration of those kinds of consortia and cross industry initiatives. The NRF just launched a center for, for sustainability. The UK, there seems to be a lot of activity too. They just formed, for the major grocers there, just formed a group to try to develop standards for product level, carbon footprinting and labeling.

And I think with so many of these. Bigger, longer term challenges, part of what's held it back is, you can go try to do it in a vacubut if nobody follows you, it's almost destined to be,, certainly destined to be a cost center and nothing more, it's not going to reach the scale to move the needle, it's not going to change chopper consumer behavior, so the appetite for participating in these Sort of pre competitive or on some level collaborative initiatives to accelerate getting to a standard across the industry.

I just see those things proliferating pretty quickly at the moment.

Francesca Hahn: I agree. I think it helps everyone raise up together. And I love the ones that are both CPG and retailer, cause then you're collaborating on all parts end to end. of, of the whole, supply network. And, I agree. I, I think it's hard. There are a lot of groups. So, you know, our team spends a lot of time analyzing if this is the right choice.

And, but. You know, I see us signing more and more agreements where it makes sense globally and locally.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of Decarbonize.co, stay tuned for the rest of the episode.

Thank you for listening, and we hope you've enjoyed this episode. If you find value in what we're doing, we really appreciate your support. Please consider leaving us a review on Apple, Spotify, or your favorite podcast platform, or share this with a colleague to help us reach more listeners. To hear the complete episode and find more news, insight, analysis, and to join the Decarbonizing Commerce community, please visit decarbonize.co. Thanks for listening, and we'll see you on the next episode of Decarbonizing Commerce.



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Keith speaks to Catherine Conway, Director and Reuse Lead for GoUnpackaged, one of the UK's leading consultancies specializing in reuse and refill packaging. Catherine has been working in the reuse refill space since 2006. We discuss her work with the Refill Coalition, which is a group of UK based retailers that are working together to develop a standardized, but also modular and adaptable approach to reusable and refillable packaging.We also talk about some of the drivers and barriers as it relates to reuse, refill and some of the pending legislation in Europe and beyond. 
Learn more about Catherine:

• Link to GoUnpackaged’s website
• Link to the Refill Coalition’s website
• Link to Catherine's LinkedIn

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TRANSCRIPT BELOW:
Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Hello, and welcome back to the Decarbonizing Commerce podcast. I'm your host, Keith Anderson, and today's guest, Catherine Conway, is Director and Reuse Lead for GoUnpackaged, one of the UK's leading consultancies specializing in reuse and refill packaging. Catherine has been working in the reuse refill space since 2006.

So, certainly one of the most experienced and tenured people working in the space. She and GoUnpackaged caught my attention because of the work they're doing with the Refill Coalition, which is a group of UK based retailers that are working together to develop a standardized, but also modular and adaptable approach to reusable and refillable packaging.

And in our conversation, we certainly get into that initiative, but talk about some of the drivers and barriers as it relates to reuse, refill. And even some of the pending legislation in Europe and beyond. I think reusable and refillable packaging is a topic that we're going to continue to talk about and learn about together.

And I'm really delighted to have kicked the conversation off with Catherine Conway of GoUnpackaged.

Hi, Catherine. Great to have you. Thanks so much for joining us on the show.

Catherine Conway: Hi, thanks for having me.

Keith Anderson: Well, I'd love to start by asking a bit about your background and how you ended up doing what you're doing now. So maybe you can tell us a bit about GoUnpackaged and your path there.

Catherine Conway: Happy to. So GoUnpackaged, we are a specialist consultancy in the UK, focusing on the transition to reusable packaging. And we do this through sort of three different ways. So we kind of dream up solutions. So we actually dream up reusable packaging systems and get them into reality. We do consultancies to any type of business or brand that wants to do something within the world of moving from single use to reusable packaging.

And then we do lots of policy and research work as well. So helping NGOs, government trying to sort of understand what the regulatory framework needs to be for reuse to thrive. So those are sort of the three kind of elements of our work. I have been doing it for 17 years, so I now have two co directors who work with me, but 17 years ago I set up the first modern zero waste store, because I had this, well, I used to go and refill things in lots of different shops, so I would go to somewhere and refill my olive oil and somewhere to refill my washing up liquid, and I just remember standing there going, why isn't there one shop where everything is refillable?

So I took, you know, I'm not saying I ever invented the concept of selling things loose, but I took the solution of selling things without packaging and married it to an environmental narrative of, we've all got too much single use packaging and we need to make a change and sort of put the two things together.

And that's how the original unpackaged shop was born. And we went through market stalls, shops, and then I started working with Planet Organic. So we've got concessions within Planet Organic, who are a chain of 12 organic supermarkets in London. And I guess that was the first foray from having an independent shop and trying to do it all myself to becoming a consultancy where we've got, so my colleague, Helen is an innovation expert.

My colleague, Rob is a supply chain, expert, and I'm a reuse expert. So between the three of us, we can actually have a lot more impact than we could when I was just running my little shop.

Keith Anderson: Well, it's exciting and am I correct that this year there's been a bit of an evolution of, of the consultancy?

Catherine Conway: Yes, so the brand, so we used to be called Just Unpackaged, and we have evolved to GoUnpackaged, which I'm still getting used to saying, obviously, after 17 years of saying unpackaged. But yes, I think it reflects, it reflects who we are, it reflects the three of us and our partnership, and it reflects what we want to do in the world, which is to work on these sort of much bigger, bigger impact, cross supply chain projects, because if everybody, you know, our clients keep trying to do little individual reuse trials.

We're never going to get to system change. So the refill coalition project, which I can talk about later is the sort of best example of that, where we've got a load of retailers to work together, a load of equipment suppliers to work together on a big, global logistics brand. And together they have all worked to get, to create a standardized, solution for bulk.

And it's those kinds of projects that we really want to work on as a team, because that's where we can have the most impact.

Keith Anderson: I, I'd love for us to go deeper, about the refill coalition and, and maybe as a set up to that, a bit about why those kinds of value chain and cross industry efforts to collaborate and standardize things. It's so important, just as an observer, and, you know, certainly, an observer over a shorter timescale than you've been working in the space, it's clear there's been a lot of, what I would characterize as experiments and pilots, and there's also a lot of brands in certain categories, you know, particularly in cleaning and personal care, I think some of the, refill at home models seem to have gotten some promising adoption, but, the, the prevailing attitude among the multinational retailers and brands seems to be without infrastructure and standardization for this to scale in either brick and mortar retail or e commerce, the economics are not favorable . So, what would you tell us about some of those barriers and what are you optimistic about in some of these cross industry initiatives, especially the one that you're driving?

Catherine Conway: Okay. Lots of things to tell you. So I think the first of when we talk about just for the benefit of your listeners, when we talk about reuse, when I talk about it, I'm talking about it in its widest sense. So you use some of the language in, in our industry at the minute. So there's, there's really sort of four different reuse and refill models.

So there's refill at home, which as you've mentioned, which is something like a pouch. So getting something like head and shoulder shampoo in a pouch that you then put into a bottle at home. There's refill in store, which is you bringing a container down to some sort of bulk bin and filling it up in a store.

Then there's return to home, which is a bit like the loop model, which is the company maintains ownership of the packaging and you either pay a deposit or, or some sort of a way of having access of it, and then you return it, and then there's return on the go, which is, you know, you might pick a reusable coffee cup, I'll put a McDonald's and return it to a Burger King, the dream.

So those are the sort of four different, models. So I'm just going to pick on the, I'm going to pick on refill at home for a minute, just because you say that brands have got a lot of adoption and they have, but the problem with most of the refill at home models is, they are still based on single use.

So they have really, you know, usually switched from a rigid plastic bottle into a multi laminate pouch that is totally, you know, and the rigid plastic bottle was probably a mono material and very easy to recycle, and the multi laminate pouch is absolutely not. And they're pretending that it's a, a reusable model.

So, there's an argument that you've got to take consumers on a journey, so I think a refill at home model using a single use pouch could be seen as a way of taking a consumer on a journey, but I would caution that it is not the end result of a, of a properly reusable system where, you know, the same bottle is being reused over and over again.

So, as you say, there's lots and lots and lots of pilots going on. And I think whilst I would love it to be different because I'm the eternal optimist and I think we should all be going further and faster and, you know, I always want more than I'm ever going to get in this space. I think everyone probably did have to start with pilots and experiments because everyone sort of went, Oh God, we've got a problem.

We need to do something with reusables. There wasn't sort of big systems that they could buy into. It wasn't the, you know, like the World Economic Forum or, you know, Consumer Goods Forum or any of these people were coming along going, Hey, here's the scheme. Just come into the scheme and you'll be able to have access to reusable.

Nobody had anything. So I think it was. Incumbent on brands and retailers to set things up themselves. And I think the real value of setting things up themselves is they started getting learnings from it. And also they put them out there so consumers could see them. So a lot of these trials have a very nice front end for the consumer to see, and a bit of a hacked backend because, you know, you can't suddenly change a whole automated supply chain, just for one trial and that's fine.

It's, it's, it's not about saying that that has to be perfect back of house. But it makes them really inefficient, and therefore the problem is it becomes this sort of slightly self reinforcing circle that they do a trial, the trial is designed inefficiently because it's effectively a hacked version of what it could be, and then that you can't build a commercial case around it, so it's almost seen like the trial or the pilot has failed, when in actual fact it wasn't designed for scale.

However It is very hard if they said, okay, great, so how do we design for scale? Well, that's the chicken and the egg, because the thing we need to get to is a shared infrastructure of washing and logistics in the same way that we have a shared infrastructure for recycling. So, you know, Tesco, all use the same recycling trucks and same recycling company.

They don't each have their own recycling service, which is sort of what we're doing with reuse at the minute. So we know what we need to get to, which is a shared infrastructure, but that doesn't exist yet, so the setting it up is also going to cost money, so we're in this real catch 22 at the minute, where I think lots of retailers and brands have realized that they can't keep doing these small experiments, and they want to do bigger things.

But there aren't that many projects for them to get involved with, although they're starting to happen. So the Consumer Goods Forum are doing something in Canada. We're doing the Refill Coalition in the UK. EMF has just done a big piece of modeling in France. So there are these, the UK's doing something with milk.

Like there's lots of these kind of collaborative projects that I think you're now, I think this is the next wave of reuse is going to be cross industry collaborative projects. So, what that means in practice is, so for, let's take Refill Coalition, for example, is we, you know, I went from having a zero waste shop where I personally sat and cleaned out all of these dispensers by hand to keep them clean and hygienic.

And when we started doing those kind of projects with big supermarkets, we almost had to do it the same way. And I could see from the off when we first, when we first started working with Waitrose on the, on the big refill project that lots of other retailers then sort of copied on the back of. And I remember saying to them, we don't want to have your staff manually washing these hoppers in store because your, like supermarkets, you know, their, their staffing structure just isn't set up for it.

And they said, yep, we get that. But right now we want to get it out there. We want to test the consumer reaction to it. So that's how we're going to start. So that we started like that. And then this is sort of what we do at Going Packaged. We thought, right, well, what is the solution? If there was a solution, what would it be?

So the solution is taking the hopper that in your, in your listener's mind's eye, they can probably see, which is some sort of, you know, plastic dispenser with a handle in a store that you come along and dispense products out of. And what we've done is effectively split that in two. So the main bulk of the hopper almost becomes like a beer keg.

So a standardized vessel that can go around the supply chain that anybody can use. And then the front, the nice dispenser is a bit like the fancy beer tap that stays in the pub and has the nice branding on it and everybody knows what they're buying from. So that's what we did, which sounds so incredibly simple and is so incredibly hard not only to create but then to sort of birth into the industry.

So we've had various retail members of our coalition over the last three years. And our current members are Aldi, who are leading on this in store piece, and then Ocado, which I can talk about in a minute, who are leading on a sort of smaller version of it. So we call it mini bulk, but it's actually a returnable, so it'll come pre filled from, from the Ocado warehouse.

So Aldi has launched, in October, initial results are really favorable, so they're hitting some of their targets with some of the products already. Most importantly, there's been zero downtime, so the equipment has worked 100 percent of the time, which is never a given when you're installing these kind of new systems.

And it seems to be, popular with both staff and customers. You know, because you are asking staff to do different things than just putting things on shelves and collapsing cardboard boxes into a baler. So, so yeah, so that's what the Refill Coalition is. And what sits at the heart of it is how do you get four or five competitive businesses to work together to create a change, because this idea of changing from single use to reuse, this system change, is not a first mover advantage, you know, if only one retailer does it, they don't win anything, they just win a load of costs, but if they can work with their competitors and work with the supply chain, then actually that's how we can drive up volume and drive down costs and try and bring this in for the same price or cheaper than the single use equivalent.

Keith Anderson: Yeah, that, that point in particular seems to be thematic of almost all the postmortems that I've read, and I think it's consistent with so many sustainability initiatives. The behavioral change element of all this is pretty hard if the expectation is people are going to have to pay more for not even necessarily something that's not as effective or as positive an experience.

Just changing it all, is, is a hurdle. So I think, at least getting to parity, if not creating an incentive is something I've seen many retailers start to emphasize.

Catherine Conway: Yeah, and it, it can and it should be better, so I'll give you an example from my colleague Rob who does the supply chain modelling.

So if you think of a cardboard box with 12 bottles in it. And you think of the shape of the necks of those bottles. You're transporting about 20 percent air in every cardboard box.

If you were to suddenly redesign that with, you know, our vessels that are designed to cube out on a pallet load, then the idea is on every, say, every pallet load, you could transport 20 percent more stock. Now then you're taking 20 percent of your transport costs out, you're taking 20 percent of your, CO2 emissions out, and then at scale, you should be able to pass that saving on to your consumer.

So I think it's when we compare, you know, lots of people talk about reuse and they say, Oh, but you know, it's going to cost loads more money because you've got washing and cleaning and extra logistics. And yeah, yes you do, but let's not forget that there is waste. Both in terms of sort of financial, environmental, and operational in the current supply chain.

The linear supply chain in many ways is amazing and is also not perfect. So the shift to reusable packaging is a huge opportunity to redesign some of these things. You know, I found out that most lorries, you can't double stack pallets on them because the cardboard all collapses. Now what would happen if we could actually double stack rows of pallets on every lorry?

You know, we would, we would massively reduce our freight emissions. So, so I think there's a huge opportunity.

 And I think it's certainly our job as consultants working with our clients to make them aware of where those opportunities might lie beyond this kind of just a sustainability play, which is the, oh God, we know we should be doing something about plastics.

And, and our customers are writing to our customer service emails saying, can you do something? There are actually huge potential efficiencies, that can be gained by redesigning some of this stuff.

Keith Anderson: Well, and, and you've brought me back to the earlier conversation about the refill at home model because, what I had in mind when I mentioned it were some of the concentrated products that, to your point, you know, so much of the product in personal care and cleaning is basically shipping water or water and air around the country, if not the globe.

And so, I, I see the same sort of, multinational examples that are in, flexible plastic, but are still liquid. And I, I don't view that as the end game on any level. How do you think about the relationship between product formulation and product form and packaging, as part of the overall, evolution that might unlock, more, more economic benefits?

Catherine Conway: I think one of the things I've learned over doing this work is I am amazed at how many people design a product without ever really thinking about what packaging it's going in and what's going to happen to that packaging at its end of life. You know, I spend a lot of time at packaging conferences and nobody talks about it or is thinking about it, which to me has always been fascinating, and that's because of the way the regulatory economics is set up that nobody pays for, so we call them the negative externalities of packaging waste.

So that's the cost of disposal. Whether it's recycling, burning it, exporting it. So we've got a huge problem in the UK that we export so much of our plastic waste to other countries who have even less capable infrastructure to do things with them. And then we dutifully record that all as recycled, just because someone's ticked a box saying, yes, it'll be recycled in its end country.

So that's an absolute, sham that needs to be stopped. But yeah, I'm, I'm sort of, I, I love the ingenuity of packaging and packaging designers, the message I take to those conferences is, is that people like me don't think it's the end of packaging, it's just we've got to now redesign packaging to make it fit for purpose in a world with a growing population and dwindling resources.

And the fact that we have quite frankly, in the West, got away with shipping our waste to other countries so we don't have to deal with it, or look at it, or know about it. So I think if we can start being transparent about what's really happening with waste, what's really happening, you know, we know that most plastics are not actually being recycled.

You know, we've got this huge challenge that we don't want people to stop recycling, but everybody feels like they're doing the right thing when they're filling their recycling bins with all of this waste. And so much of it is flexible plastics. It's just impossible to recycle. There's no market for it at the minute.

And then, yeah, so much of it is exported. So reusable packaging has a double hill to climb at the minute in terms of the commercials, because you've sort of got the commercials against this very efficient linear supply chain that we've engineered over the last 50, 60 years, but then you've also got this sort of end of life, sort of lack of well, it's now called extended producer responsibility, that there has been a lack of EPR on brands and retailers who are selling this stuff.

So traditionally in the UK, brands and retailers have paid 10 percent of the cost of waste disposal of all of the packaging. And we pay 90 percent of it. We as consumers pay 90 percent of it through our council tax and how that gets paid for. So government, the direction of travel around the world is, is that governments are no longer prepared to pay for that. And there is this, trend within all regulation, wherever you are, which is coming towards what they call a polluter pays framework, which is, if you create this stuff, you will ultimately be responsible for its disposal. Now, I think the more that we can change that EPR, Extended Producer Responsibility framework, Then that will start to make the economics of reuse work, because if we make it more expensive in the same, you know, in the way that we are at the minute in the UK with the plastics tax, you know, we make it more expensive to put quote unquote bad packaging on the market, by which I mean single use packaging that is unrecyclable or isn't recycled, then that should start to tip the the balance in favor of reuse.

But we urgently need that and it's being forever delayed in the UK by the government.

Keith Anderson: Fair enough. I love the example or the analogy you gave a few minutes ago of the beer tab and it leads me to, in my mind, almost comparing and contrasting some of the retail attributes of the status quo approach to, packaging and merchandising product. At the point of decision, that is, you know, what P&G once called the first moment of truth, and what I sense is, a big part of the resistance among some brand marketers to a departure from the conventional, you know, glossy, single use packaging that you see at many retail displays.

So, what I'm thinking about is, okay, if I were a brand marketer, fast forwarding 10 or 15 years, and we had ended up in a world where if reuse isn't the dominant approach, it's at least mainstream and a significant percentage of the way people buy. How have we approached some of those considerations about, brand differentiation and, and attracting, engaging, and converting shoppers in the retail environment, how does it change the dynamic in a category?

Does it impact the amount of selection or choice that we're able to offer? Does it lead to concentration of sales to the brands that are willing and able to provide a refillable option and, raise the barrier of entry for those that, choose not to play? I, I know that's a lot embedded in a single prompt, but, you know, I'm just thinking a lot about if I were a category manager or a brand marketer or a shopper marketer and everything that you're hoping happens, happens, how does my job change?

Catherine Conway: Got to get more creative, that's how your job changes. It's a really good and important point. I think there's some truths in it and there's some, excuses that are made for brands to not have to go down this route. So I think, I think brands have a job on their hands in general. Because since the pandemic, there's, there's been lots of rationalizations of shelves, you know, retailers not having such big spaces, not wanting so many different options on, on shelf.

There's that. There's the growth of the, the Lidls and Aldis doing their own brand. And there's the growth of own brand in general. So I think that, that brands, I think it's coming up to a moment of truth. They call it the moment of truth. I think there's a moment of truth of really sort of what brands are and how they fit in this world moving forwards.

Because I think traditionally they have commanded a large premium. And I don't know how interested shoppers are when they're facing a cost of living crisis. In paying such a premium for what they're starting to perceive as quite a similar product. So I think all of this fits into the general anxiety that brands have got at the minute in general.

I think lots of things for, how brands can and should engage with reuse. I think we have to remember that there is so much standardized single use packaging in the market. You know, whether it's 33 centilitre bottles, whether it's aluminium food cans, whether it's beer cans, you know, brands are very capable of using standardised shapes, like a tin can that's filled with soup, or a standard jar that has pickles in it or something, you know, they're very capable of using that and personalizing it enough to feel that, that their brand is, is, actively promoted.

So I think the idea that if we move to some sort of world of standardized packaging for reuse to succeed, which we have to, standardization is an absolute key to making reuse scalable. Then I think there is a huge scope. of products that already exist in standardised packaging that could just literally be labelled, you know, it's all about the labelling and the colours and the marketing that goes around it.

Now then, the question is, is what do you do with your brands that do have distinctive bottles, you know, the Coca Cola bottle,

but Coke is doing very well in terms of what they're doing in Latin America. They've standardised across their brands, so they've got a standardised bottle that works for, I'm gonna pull brands out of, you know, I don't know if they're all, but you know, like Fanta, Coke, Diet Coke, Coke Zero.

So they've managed to do some standardization within their own business, which is, you know, the size that they are is, is a huge step forward. So I think if you standardize reusable packaging and you get to what we need to, which is this super infrastructure to service it then you'll suddenly find you have packaging suppliers that can supply reusable packaging, you'll have people that can wash the standardized packaging and you'll have logisticians that can move it around. And that will enable your smaller players to have the same kind of access in the same way that I can go and get something filled into a flexible bag in the same way that, you know, a muesli company can go and do that. It's just going to cost me more because I'm smaller. So I don't think we need to think that only the big brands will, will sort of win in that scenario. But I do think that brands are going to have to consider what their position is and the type of businesses that they want to be, given this direction of travel and how much that it It can keep costing them because EPR is going to happen, whether, you know, they're all lobbying against it.

Now that might delay it by a few years, but governments don't have any money. They especially don't have money. You know, they don't have money for social care and old people, let alone trying to deal with packaging waste. So EPR is happening. And I think forward thinking brands are the ones that are thinking, what could my brand portfolio look like if I achieved what needs to be, which is sort of 30 to 40 percent reuse.

But this is, this is slightly the hilarious thing about it that's, if it wasn't hilarious, I would cry, but all the other way around, is the fact that even when we're talking about reuse targets, no one's even mentioned higher than 50 percent yet. I mean, maybe they have in terms of transit packaging or B2B packaging, but you know, we're still talking about a scenario in 2030, 2040, where we're sub 50 percent reusable.

So if I was a brand and looking at my packaging, I'd be like, right, well, we've got a load of products that are already in standardized packaging. CAMs and what have you, well let's convert those ones to a new standbys pack and then we'll deal with the really complicated personalized brand shapes afterwards.

So I think there's a lot of excuses that are going on because people don't want to change and this is where I would say that legislation in favor of reuse, and there's many different ways it could be done, is actually the key enabler to this. So I think those, there are lots of people who are lobbying very heavily in Europe at the minute against any reuse targets at all because they're seeing it as a blocker and red tape for business, and it's a hugely pushed by the paper packaging industry as well, who I think don't see a role for themselves as much in reusable packaging, and I understand the risk, but, you know, they're creating this narrative that somehow we're going to displace, you know, all of these industries that already exist, you know, even in a scenario that you had a 40 percent reuse reusable packaging in, in, in major brands portfolios, you'd still have 60 percent single use so you'd still have an entire need for the single use packaging industry, the recycling industry, you know, we've got to work out how everyone's going to coexist.

So yeah, so I have

I have some sympathy with brands of the complexity of what this transition is going to look like, but I don't have a huge amount of sympathy of those that are really lobbying against it very heavily in a way that's bringing such an amount of negativity towards reuse, when we know it is the only solution.

You know, so we know we have to reduce resource consumption. All right, we live on a planet with finite resources and growing populations. We simply don't have the resources. And we need to reduce the pollution arising from it. Now to do that, you've got two options. You either stop selling it, which none of them want to do.

Or you shift a huge amount of it into reusable packaging and treat it like an asset that you really design well. And that's where the opportunities for brands come up. Brands know how to sell us a lot of things that we don't need. They do that extremely well. So they could be putting that creativity working with their packaging designers to really make this stuff attractive, like you could be telling stories of how your products are made. You could be, you know, all of this extra stuff that, that consumers now love, where they can engage with products through QR codes or, or websites, or, you know, even like whatever AI is going to bring to this.

It's like, you could be creating this huge, compelling relationship between your customers and your brand through reusable packaging because it's something that you can invest in, as a long term asset. And that's my message to, to brands is that's the way you should be thinking about it rather than just thinking that this is a drag on things.

You just can't keep doing business as they've already always done it. We're beyond that point.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of Decarbonize.co, stay tuned for the rest of the episode.

Thank you for listening, and we hope you've enjoyed this episode. If you find value in what we're doing, we really appreciate your support. Please consider leaving us a review on Apple, Spotify, or your favorite podcast platform, or share this with a colleague to help us reach more listeners. To hear the complete episode and find more news, insight, analysis, and to join the Decarbonizing Commerce community, please visit decarbonize.co. Thanks for listening, and we'll see you on the next episode of Decarbonizing Commerce.
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In this installment, host Keith Anderson sits down with Danielle Jezienicki, Founder of Impact FWD, a consulting practice specializing in sustainability and impact. Danielle brings a wealth of experience, having previously served as the Vice President of Sustainability for Grove Collaborative, a pioneer in plastic-neutral retail. During this insightful conversation, Danielle shares her remarkable journey from an MBA program to leading sustainability programs at renowned brands like Williams Sonoma and Grove. Together, they delve into the intricacies of sustainability in the consumer packaged goods industry, addressing pressing issues such as the plastic crisis and discussing the transition from Sustainability 1.0 to Sustainability 2.0. 
Learn more about Danielle:

• Danielle’s LinkedIn

To listen to the full episode join our Plus or Pro memberships at decarbonize.co:

• https://decarbonize.co/member-benefits/ 👈

If you enjoyed this episode then please:

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• Learn more about Decarbonizing Commerce at decarbonize.co

Danielle's curated product recommendations for a more sustainable household:
Here are some recommended products that help you reduce your plastic footprint at home and in your routine:  
Compostable (and very cute) Swedish dish cloth (saves approximately 1M paper towels per toddler) 
Recycled or bamboo toilet paper (many traditional products are sourced from the Canadian boreal forest, one of the world's most valuable ecosystems. P&G continues to face criticism for this and refuses to change their practices, drives me nuts!) 
DYPER and the compostable diaper service in SF - Redyper/Earth Baby Also check out Healthy Baby, their products are great and EWG certified. #1 way parents can make a positive impact / avoid a negative one, plus you do not want your baby's bum near any of the chemicals in traditional diapers...
If you do nothing else, compost your food scraps! (I like this bin and these bags)
Concentrated cleaners (just add water) system and refillable hand and dish soap system, and a refillable wipe system. 
Reduce the plastic in your period care routine through applicator-free tampons, period underwear and menstrual cups. 
The world's best laundry detergent.  
For kids - shampoo bars and bubble bath that gives back. 
Personal care splurges: lotion, refillable lipstick, face highlighter. 

TRANSCRIPT BELOW:
Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Hey folks, I hope you've got a cup of coffee for today's episode. My guest is Danielle Jezienicki, founder of her new consulting practice, Impact FWD, where she supports investors and brands as a fractional head of impact and sustainability. Before starting Impact FWD, Danielle was vice president of sustainability for Grove Collaborative, the world's first plastic neutral retailer.

There she built their sustainability program and the industry's first plastic intensity metric. Channeled all measurement and was managing all ESG disclosure through the company's IPO. Before that, she was Director of Corporate Social Responsibility at Williams Sonoma. And in our discussion, we cover Danielle's journey to starting her own consultancy and what her experience has been from her MBA through the Williams Sonoma and Grove experiences, and we talk about in a CPG company, how to prioritize your sustainability efforts and initiatives, we go pretty deep on the plastic crisis and where the industry is falling short in many areas.

We talk about phases of sustainability and how she views Sustainability 2.0 as something distinct from Sustainability 1.0. And we even spend a minute or two on the COP28 Summit that's happening now. Strap yourselves in. This is a fun one. Let's meet Danielle Jezienicki of Impact FWD.

 Danielle, great to see you. Welcome to the Decarbonizing Commerce Podcast.

Danielle Jezienicki: Thank you so much for having me and great to see you too.

Keith Anderson: Well, we often start the discussion just by learning a little bit more about, the guest's career and what brought you to where you are and since you've got a recent career transition, I think that's a really interesting place to start.

Danielle Jezienicki: Yeah. Great. So, you know, kind of walking through a little bit of history. I think like many people you interview or in sustainability, it is a little bit of a lifelong passion. It was kind of what you were always going to do. The question was how you got yourself into it. And that's definitely my story.

 I started my career, I mean, really started my career as a ski instructor and then,

Keith Anderson: Where were, where were you as ski instructor?

Danielle Jezienicki: I was an instructor in Park City, Utah, after college.

Okay.

Keith Anderson: I'm from Colorado. That's why I had to ask.

Danielle Jezienicki: Oh, okay. Yeah, well, you know, the funny thing is I grew up in New York City, and I just, loved the outdoors, loved outdoor activities, and didn't have a ton of access to that growing up.

So, as soon as college ended, I wanted to go on this kind of adventure and try something really different, as every one of my classmates, you know, went into investment banking pre recession. So, started that off and I actually think it was really a formative experience in that I realized how much I liked, you know, kind of meeting people who didn't go to the same schools and same, you know, kind of path growing up.

 Spending more time outdoors and, you know, kind of really connecting to, you know, this bigger picture of meaningful work. You know, so from there I did go back to New York and was unfulfilled and and then I eventually moved out to California to, to really, I think, balance those two things. And in California, I worked, I started my career in corporate communications, which was really excellent training, just understanding, you know, market moving situations.

And, just, I mean, I think it's just a crash course in business to tell you, you know, to summarize a lot of, like literally overnights in the office. So started in corporate communications, refined that focus to investor relations, worked with clean tech companies out of this passion for sustainability and kind of figuring out what a career path that would tie to sustainability looked like, and in working with pre IPO companies, clean tech and, and traditional tech, I realized there wasn't really much of a distinction between the two in that you can have a semiconductor company that is much more energy efficient and, if you put it in a set top box of every, you know, every cable set top box in the us, you're gonna save a lot more energy than an electric car battery company that is, you know, using a coal-fired grid.

So, you know, by digging into Cleantech kind of realized. There was a lot more to learn, there was, you know, a lot more nuance. You had to really think in systems, and, and that distinction was something that really interested me. So, I went back to get my MBA in Sustainable Management. I did the program at Presidio and got great advice from a mentor saying, you know, MBAs are kind of a dime a dozen.

If you want to do sustainability, go get some experience and, you know, put your money where your mouth is. And so that program at Presidio was wonderful for me. It was very experiential, really hands on, because there's only so much about sustainability that you can understand in a classroom. So you have that classroom focus, but in my time at Presidio, I got to work with phenomenal companies, BlackRock, News Corporation, Acumen Fund, and really refined my focus on impact investing, you know, in, in kind of pursuit of that question of why do we not talk about sustainability when we talk about long term value?

 And that's really what I think I was you know, the most curious about like what really led me to, to, you know, and, and still continues to drive my passion for the topic is like, how do we really integrate sustainability with long term value? And so worked in impact investing for four years after grad school and worked as an impact analyst.

So, so really dug into what does impact look like in different asset classes, in different categories. And from there, wanting to get that hands on experience, you know, I think in a lot of ways, it's easier to be an investor and ask questions of why aren't you doing this? Or how come you haven't set a science based target?

But, you know, I did understand the nuance that, you know, there are operational challenges that I didn't understand yet. So that's where I spent the last eight years or so working in corporate sustainability for phenomenal companies. First at Williams Sonoma, managing sustainability for the West Coast Brands, so the Pottery Barn Brands, and the Williams Sonoma Brands, a few others.

And then you know, Williams Sonoma, really values aligned company, global supply chain of, you know, tens of thousands of vendors, no shortage of challenges related to material sustainability, and that was a phenomenal experience. And actually, you know, I didn't plan to leave Williams Sonoma, but the opportunity came up to join Grove Collaborative as the first head of sustainability and build a program out, you know, kind of from scratch to some extent for a mission driven, values aligned company and B Corporation.

So in 2019, I joined Grove Collaborative. As the first head of sustainability and built the program out, managed everything, you know, through the IPO and beyond, and, just left a couple of months ago to start my own consulting practice, which I've named Impact FWD, just kind of looking ahead to the future, answering that question of sustainability and long term value, and now I'm working as a consultant, working with a blend of investors and brands as a fractional head of sustainability, or on a project basis, really helping implement sustainability.

So, anyway, I share that long winded story because everyone in sustainability has this kind of like circuitous path, and I always give this advice of like, you know, you don't have to take, like there's, we put so much pressure on ourselves to take like the perfect job and the perfect job. And I kind of think of it as like, what do I want to learn next?

And like, that's really been my focus. So I hope I haven't lost all your listeners yet.

Keith Anderson: No, it's a much better introduction than I could have done. So thank you. And, you've used the word sustainability three or four times already, and, it's, it's heard me here a lot. How are you defining it in your new practice and how do you think about it?

Danielle Jezienicki: Yeah, I think of it as, when I think about sustainability, I think it's really, you know, this concept of materiality and externalities, like just taking a proper account of what is coming in and going out. So whatever resources you're using, where are they coming from? What happens to them at the end of life?

You know, I think kind of a more realistic accounting for the environments and people touched by everything we do. So that's kind of how I think about it, but it's a good question because it really does, we do kind of throw it around so much and, you know, I have started thinking more about like, you know, I, I purposefully didn't include sustainability in the title of, you know, in the name of my consulting practice.

And I focused on impact because I think that's really what we need to kind of orient ourselves towards is impact and regeneration and just thinking about, you know, what it is that we're trying to achieve. Not this like blanket term for feeling like, oh, we've done sustainability, we're done, but rather, you know, really kind of, let's be more specific.

Keith Anderson: Well, and that's, that's part of why I was curious about it. You, you used another word that I see more and more regenerative and I'm starting to see people debate. So is that a successor to sustainability? Or is it just a related concept, but part of why I'm interested in the vocabulary is sustainability is a discipline.

It's a function that a growing number of companies seems to me that a lot of what is likely to be necessary over the next few decades is, that function extending its purview across to your earlier point. Operational parts of a business and really embedding itself in different parts of the business.

Danielle Jezienicki: Yeah, no, I think so. And I think that's what we're shifting towards. And I think a lot of the policy changes that we've seen lately will help us get there. When you start talking about integrating climate related risk factors, all of a sudden sustainability isn't like, what charitable nonprofits, you know, like, what is our charitable giving?

But it's really about like, okay, where are our physical assets? Like where, where's our supply chain? What are our risk factors? And I think through that lens, we start to understand that what we've called sustainability is really a term that explains material, non financial risk and opportunities, right?

And so like, I get so frustrated. I actually like, cannot listen to this garbage debate about like ESG, this and that, and even on like educated. People, like people you expect to understand the topic. I heard like a pod, you know, whatever, I won't like point fingers, but I heard like an educated person on a podcast being like, Oh, this ESG thing is these ESG stocks think they don't need to be governed.

And it's like, what are you talking about? Literally, we're talking about material, non financial risk factors and how to measure them. And it's so frustrating to me as someone, you know, kind of in this space, that all we're talking about is like accurately measuring our risks and our opportunities and things that we just traditionally haven't shown up on a balance sheet, right? Like, do you have a factory on a Florida coastline? And how close is it to the ocean? Like, you know, like the, sure, call it sustainability or don't, but like, at the end of the day, those are dollars and like, you know, so it's, it's kind of head scratching as to why we're debating these things.

But anyway, here we are.

Keith Anderson: Well, I, I think you're right that the more you see it pop up in financial disclosures and earnings calls, the harder it's going to be to misinterpret it. Kathleen McLaughlin, Walmart's head of sustainability, said something at a Goldman conference in September that I've been sharing with anybody that will listen, she was just talking about supply chain and how they're already seeing issues with yield and surety of supply and when you have a retailer like Walmart starting to talk about it in terms like those, I do think it starts to anchor people that may not otherwise pay attention to what this really means.

Danielle Jezienicki: Yeah, exactly. And it really connects the dots, I think, between the financial, you know, and what we've traditionally kind of bucketed under ESG. And I don't think we have the language and the tools to totally kind of appreciate the shift of that change. Like, you know, when those horrible floods happened in Pakistan a long time ago, I just remember thinking, like, I wonder how this will affect all the textile retailers and how do they communicate something like that?

Because when you start thinking about a global supply chain, you know, in your company and textiles, a lot of cotton comes from there. So it's, you know, connecting these extreme weather events to the global supply chain. I mean, it only takes one event for people to connect the dots. And unfortunately, these are pretty catastrophic, catastrophic events.

But I just don't, you know, I think that's what's emerging now. And that's where the policy hopefully will be helpful in helping us build tools out to kind of more accurately measure that risk. But yeah, I mean, I think it's interesting. And I think for people who have kind of been in this space for a long time.

It is encouraging to see things moving so quickly finally, you know, even if that's unfortunately the result of, you know, catastrophe and, and necessity, but you know, we have to get here. So, I don't know. I guess we knew this. I don't mean to be like super dark. I don't want to be like, I told you, you know, the world, I told you climate related catastrophe was coming.

But, yeah, anyway.

Keith Anderson: I imagine it's hard for anybody that's been paying attention not to feel that way sometimes.

Danielle Jezienicki: Yes, absolutely. Yeah.

Keith Anderson: Now, when you say that it's moving so quickly, are you talking about the actual changing temperatures and extreme weather? Are you talking about the way industry and, and business is moving faster? Because you mentioned the regulation.

Danielle Jezienicki: I, I met businesses actually in legislation and just kind of the way, even five years ago, the way you saw companies kind of thinking about sustainability reporting compared to now, I think there's been a real sea change in terms of like pressure to disclose and, you know, kind of meet global standards in the EU and the US.

 But obviously I do think extreme weather has played a part into that and kind of lighting a fire under everyone. Of being like, oh, actually, you know, this is happening now. We really do need to take this a little more seriously. But, you know, I say that, and then like, we have COP going on right now, led by, I mean, what, what was it that like the fossil fuel, what, there

Keith Anderson: There's no, there's no science, supporting a case for phasing out fossil fuels.

Danielle Jezienicki: Right,

Keith Anderson: As I understand it, he's walked it back a couple times, but I don't know what you expect when you have a fossil guy presiding over COP.

Danielle Jezienicki: I mean, I would expect better PR preparation, like just like sticking to the talking points. That's pretty egregious. I don't know. Like, you know, you would just think they would pretend to be like playing nice with the climate people, but, I guess good for him for being explicit.

Keith Anderson: Yeah. Yeah, I mean, that, the role of, that industry and the transition I think is such a huge topic that I'm almost wary of opening that can of worms because, It's a huge one.

Danielle Jezienicki: Mm hmm.

Keith Anderson: Well, you've, you've been in the sustainability function at companies in fairly diverse categories at Williams Sonoma and Grove.

How did you think about, or how do you think about really establishing a function, defining a strategy, prioritizing where to make an impact based on not just category, but maybe other factors that I'm not even asking about?

Danielle Jezienicki: Yeah. You know, I think my approach is generally to assume I'm the least educated person in the room because you come to a company like Williams Sonoma, you know, I mentioned like the depths of the supply chain. If you think about all the categories, like we were talking about, like Easter baskets for kids all the way to textiles, furniture, you know, I mean, you can't imagine just the number of products that comes out of a company like that.

And so, sure, I lead sustainability, but I'm never going to be an expert in all of these categories, right? Same thing with Grove. Like, Grove creates its own products that, you know, largely household essentials focused on cleaning, but it's also a marketplace for third party brands. Everything from pet to diapers to, you know, hair care, everything.

So, my approach is always that concept of, like, let me bring everyone together, all these experts together and try to understand what is this concept of materiality. Like, what is the most important, you know, kind of organizing factor, for this group? And I think it's, you know, similar, similar process, William Sonoma Grove.

I mean,

the general concept is, bring these experts together, have them explain to you, like, what are the nuances? Because I, I think what doesn't work in sustainability as a leader. Is to come in to a company where people have been doing things and say, okay, now we're going to do this. Like, I'm not interested in what, you know, why this hasn't worked or what's been tried before, but we need to decarbonize and so we're going to do X, Y, and Z.

So, you know, I kind of try to take a backwards approach to that and like, tell me about your business. Tell me about the challenges. What have you tried? What are your goals? You know, like walk me through the process because I think a lot of times you do have a lot of motivated people who have tried to make changes and they've hit obstacles.

And so your job as a sustainability leader is to help them dismantle those obstacles, to make the business case for doing that, to escalate things to leadership, to set goals and kind of help them dismantle those barriers. You know, so my approach to sustainability has been focused on that and tying that concept of, you know, kind of removing barriers to the most material sustainability issues in the business.

 And so I think like that's where I come in and can offer some expertise of saying like, okay. William Sonoma, we make, you know, all these home essentials. I mean, obviously the goals predated me. So my responsibility was organizing the teams around the largest material inputs of, of wood and cotton.

 And so it's, you know, thinking about the supply chain and how to get better traceability and, and create tools so that people can, you know, do their jobs and integrate sustainability within those jobs. And so similarly at Grove, I think the challenge was. Yeah, a little bit different actually, because like Grove, Grove is, for those familiar, it's a B Corp, it's a mission driven company.

The whole reason that Grove exists is to offer sustainable products. So in some, you know, it's kind of a funny challenge to come into because you're like, oh, we're already doing it, right? Like we have sustainability. And that was the mindset when I joined. And plastic was a big topic. And obviously, for the CPG space, plastic, you know, single use plastic is.

So I think that was kind of like the biggest issue and that was on everyone's radar at Grove, but, I don't think, I think where I was able to lend some influence is when I joined Grove, they wanted to be plastic neutral. So to collect one pound of plastic for every pound that we shipped out to customers.

 And my feedback was, you know, that's nice. What are you going to do? How are you just going to keep shipping plastic? Like you've already acknowledged plastic is a problem. We can't just keep shipping it and say like, oh, we're going to pay someone else to pick it up. So, you know, I pushed pretty hard and, and was able to make progress on having growth set some real goals around plastic and acknowledging that for that industry, plastic is the single biggest challenge, you know, in terms of aligning the business, the business case with sustainability.

So I think when you come to any business, what you want to do is decouple the negative impacts of the business from growth. So, and, you know, and ideally connect the positive impacts to growth so that as a company grows and succeeds, you have additional positive impacts. And so when you apply that lens to Growth Collaborative, a company that's providing home essentials to people, what you want is for people not to be shipping more plastic, even if they're collecting it.

That's, you know, what I call, like, sustainability 1.0, right? Like, we do bad, but we pick it up. Okay, good. That's better than not picking it up. Sustainability 2.0 is Okay, well, how do we just do better to begin with? How do we design ourselves, you know, like design into the solution? And what that looks like, I think, is, you know, not sending a box full of stuff that goes into the recycle bin, even if it is going to get recycled.

So, you know, it's more of like the concentrated formats and the innovations and the plastic free this and the refillable, reusable. You know, kind of moving into that circular business model. And so I don't even remember what your original question was, but anyway, that's, you

Keith Anderson: It doesn't really matter because you've touched on, I think, a couple of topics that I'm certain are of interest to our audience, and maybe we can just expand on them. You mentioned that in CPG, plastic is probably the biggest issue. Can you just talk a bit about why?

Danielle Jezienicki: Sure. I mean, yeah, I can spend the rest of the podcast talking about why, so, you know, this ties, I think, back to the, what the fossil fuel, I mean. You know, let's just back it up and so that people have context on this. The fossil fuel companies have recognized that the world is decarbonizing. And so their growth and their survival is linked to new revenue streams, right?

And what those revenue streams are is plastic. So plastic, you know, whether or not it's a bottle or yoga pants comes from fossil fuel. You know, it's fossil fuel derived. So there is a lot of pressure to continue production of plastic at the pace. And, and actually much higher than the pace. So like, these companies need to kind of make up for lost revenue as people switch to electric cars and, and, you know, devices become more efficient.

 These companies need new revenue streams and what that looks like is, is new plastic facilities. And so, the CPG industry, where that comes in. So the CPG industry, I think a lot of its growth has, has been Really based on the premise of this, cheap and seemingly disposable material. I mean, it's an incredible material. It's light. It's easy to transport. It's flexible. You can make it look, you know, a million different formats. And, you know, so it's an incredible material. The problem is it doesn't go away. So plastic breaks down into smaller and smaller pieces of microplastic. And those pieces are quite literally everywhere on the planet.

You know, from the deepest parts of the ocean to the atmosphere, I mean microplastics are literally in air, water, soil, plants, human placentas, breast milk, like there isn't, you know, kind of a space on earth untouched by plastic. And if we allow these fossil fuel companies to keep on the trajectory that they'd like to be on, that's going to get exponentially worse.

 And, and I think for people who really, you know, are informed on this. It's already like horrible. So, you know, I don't want to be but we should be alarmist. Right. And so CPG companies are right in the middle of this same challenge of like their continued growth is based on this model of like, we're going to sell you.

We're essentially what we're selling you is clean hair. And you've been conditioned that, no pun intended, you've been conditioned. To understand that every product that you bring into your house comes in a plastic bottle and you use it. And when you're done with it, you put it in your recycle bin and through some magical process, it will turn into another shampoo bottle.

 The reality is there's two myths there. One is that clean hair doesn't require plastic, right? Like it's, it's a concept, that is like a marketing concept. And I think that there's a lot of exciting innovation there. And that consumers are understanding that they signed up for clean hair. They didn't sign up for packaging.

That last 500 years in a landfill, right? So, like, nobody asked for that, and so that's one challenge, I think, for the CPG companies is innovating out of that. And then the second one, oh, is this wish cycle? I mean, sure, you can put your, depending on where you live, you can put your cleaned out bottle in your recycle bin, and if it is, you know, type 5 plastic, maybe it will get recycled, it'll make it two more times into new bottles of some kind, and in a best case scenario, it will turn into a speed bump.

But realistically, plastic, you know, most plastic doesn't get recycled, only 9 percent in the U. S., I think we're now down to 5%, and most of that is PET, which is like plastic water bottles. And even if plastic does get recycled, it can only be recycled one, you know, two or three times max because of the chemical composition of plastic.

It starts to break down and become unusable. So there really is no end of life for plastic that's positive. And you know, which kind of drives me nuts, like all these brands that are like, buy yoga pants made of plastic bottles. And it's like, actually, that's worse because plastic bottles are the one thing getting recycled.

 And now you're putting them into yoga pants, which are going to shed microplastics every time you wash them, and then they're going to go to a land I mean, it's like, we're not chopping our way out of this problem, right?

So, CPG companies are right in the middle of this. They use plastic to package everything.

They've set goals, around recycled plastic that, are unrealistic. One, because they pretend that they can continue to use plastic, and that's fine, because they're going to use recycled plastic. And the second is that there isn't enough recycled plastic for these massive companies to meet their, recycled plastic goals.

So like Coke, Pepsi, you know, you name your CPG company, all of them have goals around transitioning to recycled bottles. There literally is not enough recycled content for them to all meet those challenges. They've all set the same timeline. the recycling infrastructure that we have in this country and elsewhere does not support the volume that they need to transition their business.

 And you know, that's number one. And number two is, it's still a problem, like, recycled plastic is just one step away from all of the problems that, you know, virgin plastic had, it just has a better beginning of life. So, you know, I think plastic and CPGs is a really nasty problem that, you know, we're starting to acknowledge, like, we don't, you know, we don't want to use plastic, but in so many ways, it's just become so difficult to avoid.

Like, even myself, I have little kids. I mean, I try my best, you know, but, like everyone else, like I really just, I like really strongly believe this cannot be a problem that you put onto consumers. This has to come from the brand level, these innovations. And I think the brands, larger brands, you know, have not been honest about acknowledging the scope of that problem.

And that's honestly a big reason I went into consulting is I'm really tired of the sustainability 1.0, you know, kind of pretending to be 2.0. Like recycled plastic goals are not real sustainability goals. They're pretend goals that you say to your investors. You know, whatever. I mean, it's, it's just like not a real solution.

Keith Anderson: I'm noticing in a lot of the reports that I read, the infrastructure, the lack of infrastructure is one of the big, explanations for why, I mean, almost none of these targets have been hit, on either the retailer or the brand side. And there seems

Danielle Jezienicki: in the beginning of that. Yeah.

Keith Anderson: to be a ton of, hope being directed at advanced or chemical recycling, which I'm guessing you have thoughts on?

Danielle Jezienicki: Uh

It's also not a solution. I mean, you know, I'm not an expert on it. I understand from what I do understand it is problematic and is being seen as a silver bullet solution that enables the continued use of plastic. I just don't think there is a solution that should allow us to keep using plastic the way we are, you know, chemical recycling included. It's an industry driven solution, put it that way.

Keith Anderson: What do you think of bioplastics?

Danielle Jezienicki: Same thing, they're really problematic from a recycling standpoint. They're better from the beginning of life because there's less fossil fuel, but they're more problematic for recycling and they don't biodegrade. I mean, this whole concept of biodegradability, for something to be composted or biodegraded, it needs certain conditions. Oxygen, water, air. And those don't exist in a landfill, so when you have bioplastics or pretend biodegradable solutions, only 2 percent of households in the U. S. have access to municipal composting, and I have it here in San Francisco, if you look out on trash night, not every house has their green bin out, so like, of that 2%, I would guess it's a lot lower than actually compost, so I think biodegradability is another one of these things where like, we're pretending we have a solution, it's not a solution because nothing is actually going to biodegrade in a landfill, and a lot of people I think are surprised by that.

But there just is no solution that involves plastic and I know, I'm not saying we should never use plastic, but I think the role plastic needs to play is in durable, refillable, reusable goods. So, you know, higher quality plastics like HDPE, things like that, made recycled products, made in a format that is meant to be reused, right?

And so you have to, recycling is part of it, but it's really more of like, you know, like, just thinking it from a modular perspective, like, how are we actually refilling, reusing products? Like, not in a recycling way, but just like changing the paradigm of like, sure, we can use plastic, but the point isn't to throw it away.

Like, let's take advantage of its qualities. The fact that it never goes away, and it will stay in its format forever, like, let's take advantage of that. That makes a great refillable product, right? So, how do we create systems? Like,

 rather than banging our head against the wall with recycling, which we need to do, I'm not saying we don't, I just don't think we should be throwing all our energy around, like, let's make it recycled.

Let's make it bioplastic. The problem is single use. Nothing single use. Single use aluminum is also problematic. Like, single use is the problem. And I think the CPG industry is a really, you know, it's a, it's a real reckoning, right? Because the CPG industry, like, wants you to buy things that are single use because you'll buy more of them.

 And that's really, like, the growth of the whole industry has kind of been built on that. So

from a sustainability standpoint, I would say, like, we kind of need to flip that. And I think there's tremendous opportunity there. I don't think it's, it means everyone's going to shop at co ops. I think we need to just flip our thinking a little bit.

And I would love to see retailers take, you know, a real stance there. Not like a, oh yeah, it's page 87 of our sustainability report stance.

Keith Anderson: Well, to their credit, they're also running a two store pilot that'll be shut down after a few months.

Danielle Jezienicki: Oh yeah. I've been in those. Yep. Exactly. It's really.

Keith Anderson: I don't know. I,

Danielle Jezienicki: That wasn't advertised in one location and, you know, again, page 86 of the sustainability report. Yeah.

Keith Anderson: Other than Grove, or if Grove is the best inspiration free to talk about it, but are there case studies or examples that you view as really, Inspirational in terms of designing plastic out, rethinking about how to decouple the growth of the business with that form of doing bad. I mean, as you just said, something I've been sort of going category by category, thinking about the applications, you know, between expandable consumption categories versus, you know, lower frequency, less expandable. In expandable consumption categories, so much of the business model is about how do we create demand where there may not have been demand, and there are some categories where I see a viable, prosperous future where they're not only changing things like packaging, but they're fundamentally changing the nature of how people engage with that category and so I'm curious if there are examples, even at a category level, that you think are really good food for thought as people think about what Sustainability 2.0 might look like.

Danielle Jezienicki: Yeah I think category by category is exactly right because there are nuances in each category that really matter and you have to meet consumers where they are. You really, I think if you try to push people too far, you kind of lose the masses and that's a problem. So I think Grove has a ton of great examples.

So I think that's, in terms of like, you know, I'm trying to think, I mean, the thing, I mean, I think Grove is definitely a good step forward, right? You've got your refillable products, everything is generally in aluminium which is the most recyclable material in the most places in the US. So I think that's a good start.

 If you look across the platform of brands that Grove carries, there's a lot of like really cool innovations. I mean, I was a Grove customer long before I worked there and, I think it's like, I can't imagine for people who understand how to use Grove, I think it is like irreplaceable, you know, because like, I'll go on and find, like, I can get compostable diapers, but then, you know, I have the earth baby service here in San Francisco, which is now rediaper, but anyway, compostable diapers, which is, I'll make a plug, like the number one thing that parents can do to, you know, kind of minimize their impact is diapers, like another case.

And also, Oh my gosh. Okay. Well, I get so overwhelmed because there's so much information when you start like looking around your house of things you want to share with people. But anyway, chemical safety really comes into this also. Like, if you start thinking about, you know, the health of your children, like you really don't want all these plastics in, you know, kind of sensitive parts of their body.

So this is a really important topic for parents. I encourage you to look at EWG and, and some of the research on diapers. Okay. But

Keith Anderson: What's EWG?

Danielle Jezienicki: Oh, Environmental Working Group. Sorry. They do, I think, like the best research out there for consumer products to connect them to chemical safety, which is another kind of peripherally linked topic of plastics.

It's like the chemicals you absorb by using Okay. So, you know, kind of thinking category by category. This is like such a hard question for me to answer because, I am so passionate, obviously, about sustainability in the home space. And so rather than trying to answer every category, what I will say is the advice I usually give people is you have to look at your own habits, right?

And, and look at your recycle bin and try to understand like, where am I using plastic? Where am I using waste? And solve problems based on that. You know, and I think like when I, so when I think about like my use of growth, so many great products, right? Like refillable soaps and you know, concentrated cleaning products, like things you use every day.

The Swedish disc cloth replaces like millions of paper towels. So you've got like kind of cleaning and home essentials. And I love what Grove is doing there. You know, and then when I think about other categories, for example, I think Nike does a cool job of reusing, you know, plastic into Flyknit, they, they come up a lot as like, just having innovated, I think, sustainability into the design process in a way that I think other brands haven't, you know, because I think a lot of brands.

We'll design something and then at the end, like the last step, it's like, okay, well, how do we source organic cotton or how do we kind of check a box for sustainability? Whereas I think Nike has flipped that and really integrated sustainability into every step of design. And that's a really difficult thing to do.

And I really applaud them for it. I don't think they get enough credit for the work that they do to design products with sustainability in mind, with recycled materials in mind. You know, and also, you know, I love kind of the social impact work and everything else they do. So credit is due to them there, you know, rather than, I think there's handfuls of kind of pockets of cool things happening in different areas, but in general, the thing that makes me the most excited are the areas that haven't set out to be sustainable businesses.

So like the RealReal, the Poshmark, you know, of the world, those kinds of things where you have, I mean, I'm, I'm an addicted Poshmark user, I try to buy, I set a goal for myself to buy 85 percent or 75, upwards of 75 percent of what I buy needs to be pre existing. So whether it's like used or like just exists already, like it's not new.

And so what, what makes me excited about consumer products is you have these marketplaces where people are so passionate about circular economy and reuse and resale, and they didn't come to it to be sustainable, right? Like. People at The RealReal are looking for a deal. They're like luxury fashion people looking for like a good deal.

People on Poshmark are just like, you know, a lot of these, like I got one product, which was like, you know, thank you for supporting like my, you know, Christian home and da, da, da, da, da. It was like, this is not your traditional sustainability messaging, but I love that it brings together people from just totally different backgrounds who are, you know, maybe like a stay at home mom, like finding a business by selling stuff online.

So what is most exciting to me are those innovations that haven't set out to kind of be a sustainability problem that haven't like set out to market themselves as sustainability. But like have done that. So like one kind of counter example, a company, you know, I think about a lot is Rothy's that uses plastic bottles and makes them into shoes.

It's a good start. And I think the problem is that people then buy Rothy's and they're like, Oh yeah, I wear sustainable shoes. And it's like, okay, well you wash them in the washing machine. And so you shed microplastics. And then. They don't have, like, no one sends them back. So then you just put them in a landfill.

So, like, these kind of halfway solutions, I think, are incremental steps towards where we need to be going. And I applaud brands that are doing that and at least using recycled materials to make new products. And I don't mean to talk badly about Rothy's. I think they're a great, they're, they're well along the way and well past where most companies are.

But we're missing that critical part of, like, closing that loop. So, in a very long winded way, I'm saying I love the companies that have closed the loop without intending to. Like you know, the circular, you know, you know, then I think another challenge we come into is, with this topic of resale is that all, all brands are now have their resale platforms, right?

And it's like buried on the website and there's 10 sad items on there. But you know, I think for the brands who are still in business to sell you stuff, as you said, like expandable consumption. I've not seen one brand take a meaningful stance on resale of like, we, like a revenue goal, basically like we want to see 10 percent of our revenue come from our resale business this year and 20 percent next year.

And, you know, dah, dah, dah, dah, like all of these brands, all of these innovations are not meant to replace the traditional part of the business. And so I think that's really the problem, that we're facing right now is like, yeah, sure. There's cool things happening. They haven't replaced the business, like the practical business.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of decarbonize.co. Stay tuned for the rest of the episode.

Thanks for listening. I'm Keith Anderson, the executive producer and host of Decarbonizing Commerce. Sonic Futures handles audio, music, and video production. If you enjoyed the show, we'd really appreciate it if you took a moment to subscribe and leave a review or share it with a colleague. For the full episode and more member exclusive insight and analysis, join the Decarbonizing Commerce community at Decarbonize.co. Thanks for listening and we'll see you on the next episode of Decarbonizing Commerce.




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In this episode of the Decarbonizing Commerce Podcast, host Keith Anderson delves into the world of supply chain adaptation in the face of climate change. Joining him is Berk Bahceci, Founder and CEO of Heraclea, a family-owned olive oil producer based in Turkey. Berk shares how his company has maintained supply chain stability and quality yield amidst industry challenges caused by climate-related impacts. They discuss the unique agricultural practices Heraclea employs and explore potential scalable solutions for the broader industry. If you've ever wondered about the relationship between climate change and the cost of olive oil or are interested in innovative supply chain strategies, this episode is a must-listen.
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• Heraclea’s Website
• Berk’s LinkedIn

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TRANSCRIPT BELOW:
Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Hey, everyone. We've got a great episode today, and candidly, it's a little different than what we've covered so far. I would say that most of what we've heard on the show to date has been about mitigating emissions. That is, things that we do to prevent or reduce emissions and today's episode, in many ways, is more about adaptation.

The end of September, I listened in on the Goldman Sachs Global Sustainability Conference and one of the more interesting sessions to me was Kathleen McLaughlin, Walmart's Chief Sustainability Officer and EVP. Who made a comment about supply chain impacts of climate change that I want to quote from just to set us up for today's episode.

And quoting, she said, a second impact that we experience is in supply chain in terms of surety of supply and shifts in yields and quality of commodities just based on, again, weather effects and so on. So those are some near and present things. And Kathleen and Walmart are not the first or only retailers to talk about challenges in the supply chain, transcending just the pandemic and some of those disruptions, but spilling over into what's happening as temperatures rise and more volatile weather impacts the supply chain.

And if you're like me, maybe you're a fan of olive oil, and if you are, you've probably noticed some pretty steep inflation over the last year or two. And, candidly, I hadn't thought much about what was driving it until I met and spoke with today's guest, Berk Bahceci of Heraclea. Berk is the founder and CEO of Heraclea, which is a family owned olive oil producer based in Turkey and he and his company are taking a pretty interesting and different approach to agriculture that has helped them maintain surety of supply and quality of yield while the rest of the industry has faced just incredible challenges and really significant drops in supply, at the commodity level. And so, Berk will be the first to tell you that at the scale that he and his company are producing product, some of the approaches and practices that work for them may not work for the industry at large, but he does have some ideas that he thinks will scale.

And, regardless, I certainly found it really fascinating to hear about. What led him to start the company and how he approached the decisions he's made about, how to grow and produce and package and, so many other decisions about the business. So, I'm sure you're going to enjoy hearing from Berk as I did, and let's introduce Berk Bahceci of Heraclea Food Company.

Berk, welcome to the show.

Berk Bahceci: Thank you very much for having me.

Keith Anderson: Great to have you. Well, why don't we start with your story and the story of starting Heraclea.

Berk Bahceci: I'll go back a little bit. I, I was born and raised in Turkey. I moved to the States 12 years ago for college first. And I always had the, intention of becoming, an attorney actually here in the States and I followed that route up to college. I went to law school. You know, took the bar exam, started working in DC, but at some point, and this is like actually my first year in the profession, I realized that it's not going to be, for me, the things that I'm looking for when I wake up and go to work are not, I couldn't find them in the work that I was doing.

And I wanted to, you know, develop something, a business that really reflected, my own self. Maybe it was a search for identity. And then it was that around that time that I started reflecting on my life, and myself and, you know what is it that I can do here in the States that shows a part of me?

So then we got to the olive oil. My family had always owned olive groves, not at the scale that we're currently at, but we did have some land. And I proposed the idea of turning our olive oil thing, family thing, into a for profit business. We started this in November of 2020. We started working on the idea.

Keith Anderson: So three years ago?

Berk Bahceci: Yeah. And then, but we did a lot of things in that three years. We, first we purchased, acquired more land to get it to a scale. We had like around 50 acres, and right now we have around 200 acres of olive groves in Turkey, Milas. And then we built, a processing facility from scratch. For storage of the olive oil, because it's the most important thing in olive oil production, I think, is the way you store your olive oil.

It has to have no contact with oxygen. The temperature must always be maintained at a certain level. There has to be no humidity, you know, a lot of different things. And I, we thought like, if we don't control this part of the business, then, I don't think we can claim that we're producing and selling high quality olive oil.

So we built that facility from ground up in six months. We got it, certified for food safety by international bodies. All of these things took a lot of time. And then we did the branding, of course, photo shootings, like sourcing of the bottles. We got that from Italy. We wanted it to be different, in the look.

So we spend a lot of time forming the business. Those three years were spent, towards that and then we launched on March of this year, 2023. And it's been going great so far.

Keith Anderson: Rocket ship ever since. So in a way you didn't choose olive oil, olive oil chose you. You know, part of the reason I thought it would be so interesting to meet and speak with you is you've already mentioned things like temperature and humidity. And I think we've all seen headlines about inflation in the olive oil category. What has your experience been about, the impacts of erratic weather and, and rising temperatures and how do you think about some of those factors as you're producing and building an olive oil business.

Berk Bahceci: Of course. So like in, in olive cultivation, there are, there are two, a couple of ways to do this. One is the conventional way, which is, you plant, olive trees, in certain distances across a huge land and then, you, do irrigation, you use fertilizers, you use pesticides, whatever you can think of to maximize the yields. And that's how it's done in, I would say, most parts of the world because, you know, at the end of the day, olive oil is kind of like a commodity. People need it. You know, you have to, you have to be producing at a certain level to supply the world's demand. I get it. But I think, and the recent developments in the olive oil industry is showing this, that the current conventional standards of olive cultivation aren't actually working.

And that is why we're seeing this drop happening. supply significantly being impacted. I mean, we're talking about, 80 percent reduction in, the world's biggest producers supply last year. Like, that's a huge number and it's not just about, oh, the weather got like hotter and now we're not able to produce. It's not just about that. It's about the way you treat the soil and the surrounding ecosystem for all the times up until that drop and that, decrease in supply started happening. So you have been using fertilizers, you have been using pesticides to kill the weeds, to beat the bees, bugs, and everything in the soil just for the sake of growing olives at like, you know, inflated amounts.

And now the soil or the ecosystem is basically dead and, a slight, an increase in temperature or a reduction in like water is now causing this huge impact on olive oil. So, we're not doing the same thing. What we're doing is, we, we, our production has remained notably resilient, like, in the face of the severe drought conditions, that, that we're seeing, which I mentioned in Spain and Italy, and I think it's, the way that we've been communicating able to survive is a direct result of our, commitment to sustainable farming practices.

 Not everyone can do it. I mean, if you're working at a scale of thousands of acres, I'm not expecting you to do it, but we're able to do it. Our position enables us to do it. We've focused on, responsible management of our land, paying attention to soil productivity through natural methods.

 Like, instead of using artificial irrigation, we're doing rainwater harvesting. What is rainwater harvesting? We brought, like, a couple professors from a local university and we've identified the paths the water, follows when, you know, there's, significant rain. And at the end of those roads, we built, we dug, big holes so to say , And then we collected that water and used it, as needed instead of just digging a well deep down and exploiting the, well, beneath the surface water resources, which are already scarce, like we're, we, we've treated the environment nicely so that now it's not treating us as badly as it treats, other producers.

I'll give another example. So in olive cultivation, there are certain elements called NPK, nitrogen, phosphorus, and potassium. And there are fertilizers named NPK in different ratios that, you know, farmers use. We don't use any of them. Instead of, like, when we see a deficiency in the soil, we try to take, an alternative approach.

What we did, for example, was to build, close to a hundred bird hives in our olive groves to attract birds. And we fed them and, in return, they're pooping on our land. And we found that this is maybe, a small contribution, but, small contributions like this, when they get together, totally they're impacting the MPK, nutrient levels of our soil, and we don't need to use fertilizers.

So things like this, green manure for nitrogen fixing. If there's a nitrogen deficiency, we use green manure. We plant it, we mow it, and then, we fix that problem. That's how we treat the soil. That's how we treat the environment, the ecosystem, I say. And I really seek to protect it. And in return, I think it's treating us well too.

 But this is something specific to the way we position the company. If we were a producer that supplied like 20 percent of the world's olive oil, we wouldn't be able to do any of this. So I agree, I understand those who do it that way, but we do it this way.

Keith Anderson: Well, you've mentioned the contrast in scale a few times. Is the ambition to grow the business to a larger scale? And how do you anticipate having to evolve some of these practices as you do get bigger?

Berk Bahceci: It is, I mean, it is never our intention to supply 50 percent of the world's olive oil needs, like, that, we're not talking about a scale at that level, but I, envisage Heraclea to be, an accessible, household brand in the States, providing, traceable, number one, and, sustainably, produced, olive oil throughout the United States.

And I think, we're able to do the things that we do this way. And scale our business by acquiring more lands and working with local farmers who also already own, those, huge acreage of lands and bring them up to our standards by being able to purchase their products from them at a premium so that they are incentivized to change the way they do business, the way they do farming and just, help us, grow our supply chain.

So I don't think, we're, we're able to, we're, we're able to scale, our business the way we do it. Of course, we can't do it in the way to supply the world's need of olive oil, but, we can, have ourselves a target market and, expand this business by the ways that I mentioned, and still be profitable because like, if you go to a grocery store, you're going to find an olive oil for 16.

9 ounce selling for. 10 or like 12. We won't, we will never be able to do that, because, you know, our costs can afford it, but at the level that we're selling the price point that we're selling, we're able to, scale this business to supply, you know, needs of people in the States looking for a high quality, traceable and sustainable olive oil.

Keith Anderson: Taking a bit of a step back. I, I knew there were supply issues over the last year or two. I didn't realize how profound they were. Was it really such an abrupt, precipitous drop from those leading producers? And well, I mean, you may not have the answer, but is that something that the industry anticipates is going to be, an ongoing supply issue?

What's the, how are the big players responding to something like that?

Berk Bahceci: So, this issue has been going on for two years. It's not new, first of all. Last year, this was also the case in Spain and Italy. And actually, in Spain, there are co ops that are, like, the biggest producers of olive oils. And, these co ops, because they're supplying, like, off the top of my head, I don't remember, but like, I am going to, I'm inclined to say like 40 percent of the world's olive oil needs, when they experience, a crisis like this in their supply chain, they look elsewhere.

I mean, they have to still be able to produce that olive oil. When I say produce, I mean, bottle it and then ship it to whatever customers they have. So they go and look out to places like Turkey, Tunisia, Morocco, Greece, and they talk directly with producers in these countries to purchase their olive oil in bulk, ship it to Spain or wherever their, bottling facilities are, and then, produce their, continue producing their bottles.

So, that's how they're, that's how they're, trying to, manage this issue with, to, to, with minimal damage to their business. But I think this, this is not a solution. The, the real solution is, actually in the way, we treat the, the soil, and it's been treated badly for generations now.

 So I think it's going to take time for it to heal. And we really, have to, not we, I mean, those people who are experiencing this really have to think about, the way they do all of cultivation and maybe change their farming practices. Perhaps this is going to be reflected in increasing olive oil prices. We will keep on seeing this because there's a, there's a mismatch right now between supply and demand. And I, I see all about pricing, prices keep increasing, this year, next year. And I think until this problem is, resolved.

Keith Anderson: You've mentioned changing some of the agricultural practices. One concept that I see mentioned more and more frequently by a lot of the major global brands that rely on agriculture as regenerative agriculture. Is that something that you consider yourself to be doing?

Berk Bahceci: Yeah, I mean, regenerative is a very popular name these days, especially in the United States. And yes, I mean, when I say, they have to change the way they do things, it doesn't necessarily have to be doing like regenerative agriculture only. I mean, it can be like over 50 percent of the carbon emissions associated with olive oil production from farm to mill until it reaches your table, comes from the use of fertilizers and pesticides.

The problem here is, that the producers are doing. What is called super high density farming. Super high density farming is let's say if just making this number up, but like if 100 trees could go into an acre, 100 olive trees, what super high density farmers do is they they plant 800 trees in that one acre and it is too many olive trees for that piece of soil to handle And then, to make it work, they pump fertilizers, they use artificial irrigation, and then, because the trees are so close to each other,

there are fruit flies, different kind of bugs, weeds, and to tackle that, then they use pesticides, you know what I'm saying?

And then, this is a cycle that keeps on repeating, and with every piece of chemical you use, your contributing another damage to the soil. I'm saying, maybe olive oil shouldn't be produced at this level, at this amount. You know, it's, unfortunately, it's something that requires a lot of time, care, and if you use these things, fertilizers, pesticides, or other chemicals, you know, we see, you know, in the long run, yields decreasing, drops happening, and output significantly being impacted, why, and I'm saying why not, like, let's use less aggressive, methods in our agriculture.

You know, let's not plant 800 trees in one acre. Let's plant like 300 trees and try to use less of these chemicals. And yes, the price will increase because supply will decrease, but maybe that that's the price that olive oil should be at for a sustainable production. And, I think, in time, I don't know how long this is going to take, but people will realize that. , The conventional methods have been working so far, but now with the drop and, impact on olive oil supply, we're seeing the mother nature is telling us you know, it's responding, it's saying, you know, like, I'm hurt and I don't want to, like, I can't continue doing this. And that's, that's like a very maybe romantic way of explaining this, but this is the truth. Like, the soil can't take it anymore. And this is not about like, olive cultivation only. This is something that we're seeing in other parts of, other areas of agriculture as well. But olive cultivation is kind of what I do, and I can speak for it. I, we're not observing any of the problems, that are being observed in other parts of the world in our own groves.

I mean, the, ecosystem is lively, there are bugs, bees, beads, we're not cutting anything out, you know, it's, it's, it's working great so far for us.

Keith Anderson: You mentioned some of these same issues are happening in other agricultural sectors. Where else do you see it being an issue?

Berk Bahceci: I mean, like I said, I, I'm not an expert in those areas. I'm just seeing inflated prices across, different commodities. And I think this is due to a general trend in the methods that are being used are supposed to be decreasing prices, increasing yields. That's why they're doing all of this, but I'm seeing lower output, higher prices, and part of it is due to global inflation, of course, but I think, we as like stakeholders in agriculture should also be looking and reflecting back on the ways we do things and assess, our, performance and try to, you know criticize ourselves and find ways. Is there anything that we're doing wrong that's contributing to this? Not just it's inflation, prices are increasing. That's a very easy explanation. Okay. I think, you know, more in depth explanation will include, answers to the ways we do farming as well so.

Keith Anderson: Yeah, again, part of the reason that I thought it would be so interesting to speak with somebody from the olive oil industry is I think one of the impacts that's a little under discussed is how some of these things are already impacting yields, quality. There was a with Walmart's global head of sustainability at a Goldman Sachs sustainability forum a few weeks ago, and she was pretty direct about mentioning that there are already issues with yield and surety of supply and I think it's pretty notable to have, among the world's largest retailers increasingly directly mentioning this isn't only something that we're trying to do, from a, it's the right thing, for from a mitigation point of view, it's increasingly becoming an issue of keeping the products that people want on the shelf and I, I see a couple of different philosophies about how to approach it.

You know, one thing that I've seen, you mentioned nitrogen and some of the fertilizers, there are companies like. Kula Bio and Nitricity. Kula is close to us. They're based in Natick, Massachusetts. Nitricity is in the Bay Area in California. These are companies that are developing decarbonized or more sustainable nitrogen fertilizers, and I'm sure there are others. And I think on that end of the solution spectr the idea is basically we can continue producing in a essentially conventional way, just with a decarbonized substitute for how we were getting to the same outcome. And then you, you said something that I think is pretty interesting, but really potentially controversial, which is, and these are my words, not yours, but effectively the managed decline of the category, which I, I find interesting because, again, I'm starting to see certain retailers for different reasons, sometimes because they're having these ongoing supply chain issues, and sometimes because they're on a net zero path that they don't see a way to get to while continuing to sell the same volumes of certain types of products that they've historically sold, but how do you think about maybe not just for your own business, but for the industry? How do you think the industry is and how do you think they should be approaching the sort of scale side of reinventing itself, both to adapt to some of these supply issues and to lower the footprint?

Berk Bahceci: First of all the concept of and this is not just about olive oil, but in general, for any business that is involved in production, the concept of doing your production and then if there are any carbon emissions, buying credits to offset and become a net zero is a concept that I'm very against, because I don't think the solution is you know, just offsetting your carbon emissions with credits elsewhere, the solution is, you know, really looking at your own production and mitigating and finding ways to make sure you are not emitting the carbons that you're already emitting.

Well, in our case, that is not using fertilizers, not using pesticides. We just, completed the project of putting solar panels above, our, storage and bottling facility. So the AC that's working inside the bottle, bottling machine when it's turned on, or, you know, even like the electricity that we're using, everything is solar powered now.

We haven't made any assessments of these because we're still in the stage of developing the brand, the company, and its, total, chain of, production. But once we finalize those things, we will do an assessment. And what, if there is, if there's a, if there's still a positive, carbon left, yes, I mean, we, we may buy credits, but like the, the real way that we're going to do is like, what else more can we do to make sure that this is not result producing, positive carbon emissions.

So I think with the, olive cultivation and olive oil industry, I think, these, producers that are producing at scale, first of all, should look into the fertilizers and other chemicals that they use. The ones that the companies that you mentioned, I haven't heard many of them. Probably because we're mostly reliant on the companies that are available in the region where we produce.

And, you know, we're not dealing with those companies too much because there's really no purchase, happening because we're not using any of this. But those that are doing this at like global scale, should, should really reconsider, the things they use, and the ways that they use it. But, and, if this is going to result in a lower output, so be it.

And I don't think it will result in an output, like last year, the drought caused 80 percent decline in the supply, okay? I think, if producers switch to, more environmentally friendly alternatives and the chemicals that they use and change the ways, like instead of doing super high density farming, if they choose to do high density farming, like not 800 but like 500 trees, still not 100, like

Keith Anderson: You're negotiating with yourself. It was 300 a few minutes ago.

Berk Bahceci: Or like, I mean, as I'm saying, like try to find a balance that is still going to make this business be at a scale, but not at the scale that it's currently at, because the decline of 80% is going to be much less, in my opinion. If you switch to these health, more environmentally conscious alternatives, maybe it's gonna be 20%, 30% decline in your deal, but it's not gonna be all of a sudden one year 80% decline and the prices.

I've tripled, like since 2020, I'm following olive oil prices every day. There's an international olive council that is, releasing daily, prices, from the major producing regions, high end in Spain is one of them. And if you, if you look at the graph since, 2020, all you're going to see is it's going up and it doesn't look like it's going to go down. So, I mean, we're at the same point. I mean, output is lower, prices are higher. What the things that you were doing was supposed to keep the output high, prices low, but obviously they're not working. I mean, they have been, have been working, but now we're seeing backlash from, from the earth.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of decarbonize.co, stay tuned for the rest of the episode. Thanks for listening. I'm Keith Anderson, the executive producer and host of Decarbonizing Commerce. Sonic Futures handles audio, music, and video production. If you enjoyed the show, we'd really appreciate it if you took a moment to subscribe and leave a review or share it with a colleague. For the full episode and more member exclusive insight and analysis, join the Decarbonizing Commerce community at Decarbonize.co. Thanks for listening and we'll see you on the next episode of Decarbonizing Commerce.




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In this episode of the Decarbonizing Commerce Podcast, host Keith Anderson sits down with David Bryngelsson, CEO and founder of CarbonCloud. With a background in climate science, David shares his journey from academia to founding CarbonCloud, a climate intelligence platform for the food industry. They delve into the challenges and opportunities of product-level climate footprinting and labeling, exploring why it's gaining traction and how it can drive sustainability in the food value chain. Tune in to discover how technology is revolutionizing climate transparency in the food sector and why it's becoming a crucial consideration for retailers and brands.
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• CarbonCloud’s Website
• David’s LinkedIn

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TRANSCRIPT BELOW:
Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Keith Anderson: Hello, this is the Decarbonizing Commerce Podcast. I'm your host, Keith Anderson. Today's guest is David Bryngelsson, PhD. David is CEO and founder of CarbonCloud, a climate intelligence platform for the food industry. Essentially, they help anyone across the food value chain calculate and reduce the climate footprint of food products.

Previously, David was a climate scientist. He spent eight years immersed in climate change mitigation. As a published researcher and lecturer at Chalmers University of Technology before he made a career pivot and started CarbonCloud. We cover a lot of ground in this conversation. It's a topic I've been following for, around a year and was really eager to learn more about.

 We talk about why product level climate footprinting and labeling has historically been so challenging and why new technology makes it a lot more achievable. We talk about why comparatively few retailers and brands calculate product level footprints and label their products with climate footprints today, but why that's likely to change in the years to come.

And we unpack the business case and who typically has a seat at the table when retailers and brands are deciding and deploying, this type of technology. I really learned a ton, and I think you will too. So let's meet David Bryngelsson, CEO and founder of CarbonCloud.

Hi, David. Thanks so much for joining me. Good to see you.

David Bryngelsson: Good to see you. Thank you for having me.

Keith Anderson: Well, I always love starting these discussions with a little bit of background on you and how you came to do what you're doing now. And, as I said to you a bit earlier, I find it super fascinating when somebody who comes from a, deeply technical or scientific background, sees opportunity to have an impact in industry.

So maybe we could start there. Why don't you tell us a bit about, who you are and how you came to start CarbonCloud?

David Bryngelsson: All right, let's do that. That goes actually a pretty long way back, but yeah, so now we are a source company. I've been running this for a bit over four years. And we're now going to a growth phase. And before that I was in academia for, roughly eight years doing climate change mitigation research.

 And that is maybe an unusual trajectory, but sort of how did this happen? So let's go back a little bit further. I decided when I was like 14 or something like that. So first half of the nineties that I wanted to dedicate my life to fighting climate change and doing it as effectively as possible. And then I thought about like, how do I make the best impact?

And, As I was doing studies at university, I was doing physics and I was like thinking about what to do. There was some, a division there that was doing some teaching where they had some professors that were very influential, both in sort of public outreach and to prime ministers, you know, IPCC lead authors, stuff like that.

And I thought, well, that, that is definitely a way of making an impact and some really cool people. So I joined that research division and I did research for a while before I realized that for most verticals, like energy, transport, the change was already happening, like the cutting edge research wasn't needed, but more like it was already in the commercialization phase.

Whereas at the same time we had the food industry, which at the time was responsible for about a quarter of the problem and there was really nothing happening. So, I focused increasingly on that from a research point of view. And there also it became very clear to me that we know enough from the point of view of research to solve the problem and like from the, to get the measurement going and get the engineers working on finding the solutions.

But the industry was entirely lacking. tools and methods for, for working with it, to be data driven and to, to act on the business opportunity that I saw was there. And the business opportunity being the food that, the world has decided to solve climate change. The policies are coming. We can be very certain that people will eat also in the future.

We want food. And then if you're as a food producer, figure out a way to produce good food that people want without emissions, people will want to buy it. Basically, same thing as Tesla did for transport. And no one was doing that. And I was thinking why? Well, fundamentally, it had to do with a measurement problem.

So if you're in a food producer, you normally don't know what their emissions are. So to be able to go after a business opportunity like that, you need to have a strategy for how to decarbonize your production and still deliver good products. But as the food system looks, which is a very large network of long supply chains where they don't know a lot about each other.

No, no one really knew how to go about it or very few companies knew how to go about it. But I figured that I think I know how to solve that. So, I switched careers, left academia to fund this company to solve that problem, to develop a platform, a tool to enable, to put really, really good quality data in an understandable way, in the hands of the people who need the data to make this transition happen. And these people are then from everywhere in the supply chain, from the grocer or wholesaler, to the producer, to the ingredient supplier, to the farmer. And everyone will need to collaborate to collect data, to make innovations, to do changes in the production system to solve the problem.

And, and that's what we are working hard on now. So I ended up as like the reason for me to becoming then the software founder and building this company is that I see this as a very, very good tool to build a scalable solution to make this impact, to sort of take the learnings and insights that I've gotten and refine it and really sort of put it in the hands of the people who need it. And also it's awesome fun.

Keith Anderson: I'm sure it is. So just briefly from your academic background, you mentioned when you got into this area, food represented around a quarter of the problem. Can you just expand on that for folks that may not understand, why food is such a big source of emissions?

David Bryngelsson: Yeah, sure. All right. So, looking at climate change in total, I mean, you have emissions from many different sources where fossil fuels have been and still is the major part of it. Where you burn fossil fuels, you can get emissions. And that is a part of the problem that needs solving. But it's really not the only part of the problem.

You have other sectors as well, where food is a very large one, where, you have emissions from biological processes in soils, biological processes in livestock, in animals when they're eating, and then you also have energy used, in farming, you have energy in tractors, and then you have in sort of logistic systems and refinery processes.

But for food, it's primarily the vast majority of the emissions happen at the agricultural stage. Where some of the processes on the agricultural states are very easy to understand, like deforestation. You cut down trees, trees are made out of carbohydrates. You burn them or they rot or whatever. The carbon in the trees ends up in the atmosphere.

That is one large driver of emissions in agriculture, but then you have these nitrification processes in soil where bacteria, and stuff like have this, like, I don't know, biological processes where there are chemicals produced and you have nitrous oxide and methane and other very potent greenhouse gases getting emitted. And, yeah, globally, that is a big part of, big part of the problem. And also this goes back to when I talked about earlier about the measurement part of the food system, one that's tricky, like the, how to keep track of the emissions of food is much more difficult than other verticals. Because if you take a power plant to make electricity, you burn coal.

or natural gas, you get electricity out, and you get emissions. And the amount of emission is always proportional to the amount of coal you burn. So you burn a pound of coal, you know how much carbon dioxide you'd get. Same if you drive a car and you burn a liter of petrol, or a gallon of petrol or whatever, you always know how much carbon dioxide you get.

Whereas in food, you have the emissions happening somewhere else in the supply chain and also most of the emissions, as I mentioned, happen in the agricultural phase, so for most food producers and definitely for retailers, very far away and also very difficult to measure. So these microbiological processes are very, very tricky to measure because the flux, the amount of gas released from the field is low, but in aggregate, it's very large.

Keith Anderson: Well, and, and you've sort of anticipated and started to answer one of my big questions, which is, there's been a ton of venture capital invested in, I think, industry agnostic, sort of broad based carbon accounting and management platforms. Why does the food industry require something tailor made?

 It sounds like part of the, the question is, or part of the challenge is the complexity of measuring it. Are there other drivers?

David Bryngelsson: Yeah, yeah, I would say definitely are, and, and this goes back to which problem are you trying to solve? So if the problem you're trying to solve is figuring out roughly where are we at? So you have an operations, you want to figure out, so how much of the emissions come from our spend on food? How much come up on our spend on sort of housing properties, vehicles, whatever, the personnel then doing this industry agnostic where you have spend based data, rough estimate, it's, it's good enough. And, and for a lot of the reporting needs, it's, it's good enough, you're fine. But if you want to get to a solution of the problem, you go from, all right, so you figure out that, say you're a grocer, and you realize that 95 percent of our emissions come from the food that we sell.

And then like, all right, so what are we going to do about it? When you get to that, what are we going to do about it? You need to dig into the detail, because the details matter. And then suddenly knowing that a dollar spent on food causes roughly this amount of emission is not enough and also knowing that if it's spent on meat it's roughly this.

It's also not enough. You need to be able to differentiate between all your different options and this goes down to so as a grocer, if you're going to procure something to keep in, like, in your store, you need to know what's the difference between different suppliers and different options. Because if you were to say, stop selling meat, your business will probably not go very well.

So you need to figure out, you need to maintain sort of selling what people want. And this goes back to the business opportunity. People still want food, they want good food, but they will increasingly be prepared to do something to get the missions done, maybe pay a little bit of premium or whatever. And then you need to identify where that is.

And then you need to go down to the details.

What's the difference in getting an orange from Mexico, Florida, or Brazil? What's the difference, right? First on roughly level, and then eventually get down to, so you're getting your oranges from Mexico, and then someone supplying those realize that you want to pay premium for lower emissions, then they need to figure out what's, what's the out of our thousand farmers, say, that we procure from, how do they fare? Which ones are better? Which ones are worse? And then eventually figuring out how can we get the poorly performing ones to perform better? And that is definitely in the detail on how the nitty gritty in agriculture happens. And so the solution needs to be able to capture the data for how the production systems look like in the detail, to be able to tell the story, to be able to track it, to be able to track it over time and differentiate, and then create the visibility of the better performance towards those who care.

Because even say that you are in a country very far away where there is no climate policy whatsoever, but your market is the U. S. or the market, your market is Europe, where there is climate policy and there will be more policy coming, then if you can prove that your emissions are lower, you get access to that market and you get paid premium.

So then it becomes relevant to perform. But then you need To be able to measure on a very large scale in a very consistent manner, all the different producers to be able to tell that story. And there it needs to be very specific.

Keith Anderson: So I've got a good sense now for why food is so, different and, and more challenging than broad-based. You know, let's use averages to estimate based on spend. Let's unpack a little bit, what exactly is the data that you're able to provide, you know, at what level of granularity, where does it come from?

 And, and we can move from there, I think, too. So who's using it and how are they using it?

David Bryngelsson: Back to the measurement problem, right? So we say, we have agreed, our governments have agreed that by mid century. We are going to get down to zero emissions. So, at least not every country, but in the U. S. and Europe and some other places, we've agreed to this. So this is 26 years back, away.

Sorry. So in 26 years, we're going to get down to zero. And, the amount of data, like if you take a fairly complex product like, like this one, a soft drink here, with a lot of ingredients in it and, and each and every ingredient, like first, there's a lot of parameters to calculate the footprint. You need to know what the ingredients are, how much there are, where they're from, how it's produced, and so on and so forth.

And then for each ingredient, there is a value chain with several steps. And there are many, so it branches out. So for a sort of complex product, there might be something like 10, 000 parameters to calculate the footprint. And there will eventually we will need to collect all that data and not the data we're talking about production data.

So like yield levels, solid type levels or vehicle types, load factor types for transport, fuel types and so on. So a lot of different parameters need to be collected and then we need to make investments and innovations to sort of change how we operate to get the emissions down. So the totality of data that we'll need to track will be very similar to the amount of data we have in the financial accounting system. That's the scale of this measurement thing that we'll need to do and we'll need to build this up quickly. And compared to financial data, we've had something like 700 years to build that up. Right?

Keith Anderson: We don't have that much time, do we?

David Bryngelsson: We don't because we need to act on the data. So we need to build it up and we need to act on it to get it down in 26 years.

That is tricky. Fortunately for us, now we have built a lot of very good software tools that enables us to scale things extremely rapidly. But also there needs to be a bit of a pragmatism because if you take a food brand like this one that I showed, Tenzing here, that, they realize this, they want to act as your business opportunity and profiling themselves as we are working on climate change. They need to be able to start making decisions and use this before every single producer in along the value chain, including every single farmer has collected all the thousands of watts of data, because that would take forever and there wouldn't be an incentive really for compliance for most of them.

So, what we have done to solve this is that we have flipped the calculation process around by look, instead of collecting all the data and then making the calculation, we look for, we're basically built a framework. What are the equations that govern emissions in the food value system, in agriculture and everything after?

And then look for, what do we know about it? What has someone measured and collected somewhere? And there's a lot. And then we built this benchmark data set for every single parameter. So if you know that like you get a tea from Kenya that goes into this one, we have a pretty good idea how tea is produced in Kenya and how it gets here and what types of vehicles and so on and so forth for the entirety.

So we know that without knowing the specifics, we can actually tell a lot, which means that we can enable someone like that to, by only letting us know what goes into the product. More or less and where it's from tell with extremely high precision the performance of the product so that they can use that in their go to market and also in their future sort of thinking about how to develop the product. So long winded answer, but, but like you can start with very little data and through this pretty cool tech, we can enable you to say a lot. And then go from there, incentivize by sort of telling the supplier, hey, we're now quantifying our climate performance. We'd like buying from you. If you're going to go forward, we'd like you to collaborate.

We've already calculated your product. Could you verify it? And they just have to answer some very, very easy to answer questions and they're on board. And then they get access to the market and so on. And eventually, they collect a lot of data. But by the time they do that, they will see the value in it, because it's to prove performance that someone else values financially.

Keith Anderson: So there's sort of an assumption that over time, some of the sources and methods are going to evolve as more data is available and can be included in the model. But you're taking a really practical approach now, given the urgency to provide the best available data to make better decisions today.

David Bryngelsson: Exactly. So, I'd say, like, where will, Yes, it's improving. We are, like, our goal is to say At any given state of information that you have about your production processes or your assortment of products you're selling or whatever, we'll be able to give you the best possible quality of climate performance data for that. And that is typically good enough for you to not draw the wrong conclusions and to know how to navigate.

Keith Anderson: I know, I was digging into this general topic of, product level, climate footprinting and labeling. And, I didn't find a ton of examples of retailers that were doing it at scale. One of the interesting examples was Tesco, maybe 12 years ago had made an announcement that they were going to, label essentially the full range.

And, as I think we all know from walking their aisles, they didn't get there and it was largely due to the complexity and, cost of calculating product level emissions at that point in time, and even today, you know, Walmart was recently at the Goldman Sachs Global Sustainability Conference, and given the size of their assortment, was wringing their hands a little bit about this product level measurement challenge.

 So, I'd love to hear how the technology is really being used. Practically changing what's possible, and maybe we can help people understand, you know, what that cycle of input and output looks like in terms of, here's how much effort goes into, providing your current assortment, and here's the kind of questions you have to answer, and here's how long it takes to get out what you need to make better choices.

David Bryngelsson: Yeah. Yeah. So the Tesco example, I think is a good example of great ambition, but prematurely from a technology point of view attempt, right? So the years to be when you did product specific calculations, and for the most part, this is still how it's done. It's a very manual process where you have to redesign and figure out how to do it every time.

And there is a lot of back to the data problem, right? So you want to calculate the product, you have access to some data about the product, but most of the data you don't. And then if you're going to do the calculation, say you know you're getting tea from Kenya or you're getting oranges from Mexico or something like that into your product, and then you need to think about, all right, so how are they transported?

How do I calculate the transport? How do I, like a lot of different methodological things that need to be figured out. And then for all the stuff that you don't have data, where am I, where am I going to find that? Which makes it an excruciatingly sort of time consuming project to do for a product. And you can do like, and most of this has historically been done in Excel, basically, and it doesn't scale to, to the scale it needs to do, to do for a grocer or a retailer or whatever.

 And this is fundamentally one of the problems we have solved. So two of the problems we have solved. One is the automaticity of it. So that. Almost every step on this calculation is automatic and the data collection and the methodological choices have already been made. So there's nothing of that.

So we can do, and we are doing, full assortment for grocers. Like we did recently now we're doing with, Miniago, which is one of the biggest wholesalers here in the Nordics, a part of the Cisco group, where we've done 23, 000 SKUs, I believe it is. That soon will be made available to the customers on the website for every single one.

That's like where we can, by making this automatic, we can calculate this on a very large scale. And, we are about to do similar things for a lot of other large retailers, out there. And, and the second part, which is crucially important here, is the collaborative part of it. Where, as I mentioned, I think I mentioned the sort of network aspect of it.

Like the problem is a network problem. You need to collaborate with your supplier to know anything about your product. You can't tell the footprint of you, your product without knowing something about your supplier and they normally need to know something about their suppliers. So we built the platform like that so that we can model all these different steps.

And so that also we can get collaboration through the network. And that means that when we first, we pre calculate every product at the grocer or retailer wholesaler first. And then we can reach out to all the different suppliers and say, hey, so we did a life cycle assessment fundamentally of your product, the footprint calculation of your product.

Can you go in and take ownership of that, please? Verify the assumptions and then they can open up the box and they can look at what did the platform assume regarding ingredient contents, where it was produced, how it was shipped around and so on and so forth. So there are a lot of different parameters, but they need to first answer some very basic ones on the product like the bill of material, what goes in for making this? Where is it produced? Where do I get this stuff from? And that increases the level of quality tremendously. Then there are a lot of nitty gritty details you can also dive into over time if you want, but normally the predictive model gets those very close to the reality. And, and this process makes it possible to do, like, even if you are a producer, like on a scale, if you have a thousand products in your portfolio, that's easily done quickly.

So that you are then able to show whatever investments, whatever innovations, whatever good stuff you have been doing historically and are doing going forward becomes visible through your sales channel to your customer, which makes sort of one, the process is easy and quick and you can keep it up to date.

And secondly, it's visible to those who care. And yeah, this 12 years ago because we, of course, building this rely on a lot of tech that has been developed since, but now it is.

Keith Anderson: Yeah. And I keep coming back in this area to sort of two related, but distinct, rationales for doing it. You know, one is you're a retailer or a brand, I suppose, that's made a net zero commitment. Maybe you expanded from scopes one and two, and you're now doing scope three. And for all the reasons that you've articulated, that means you've got to understand all the inputs upstream.

You know, I see some retailers beginning to do these product level footprinting exercises, really for a couple, reasons, some of which are customer facing, but some of which are simply, hey, we need to understand and, both at a granular level and even, a category or department level, where are our emissions, coming from so that we can start to, score suppliers in the products they're offering us, through this lens when we're making buying decisions, full stop.

Then I think to your point, there's the, and so that alone may be influential to you. Regulators, investors, there's all kinds of stakeholders independent of the shopper that might care that you're engaging your supplier base and trying to reduce scope through emissions. Then there's the, again, related, value of communicating to your shopper.

How do you think about those, discreetly? Is, is one of those the clear winner in terms of where the demanded value is?

David Bryngelsson: Who's the clear winner? I don't know, but I mean, these things are very much connected in a really interesting way. Like, the policy makers will not introduce policies, effective policies, if they think that the industry will be fiercely opposed to them. That is impossible, because that, that politician will, like, their career will end.

So that doesn't work. But, and here, but here there's a nice cycle. I mean, eventually we can expect there to be policy, and the reason why I'm confident for that is that there is a business case to be made for the retailer, there's a business case to be made for the producer here. So there is, like, as long as the rules of the game are clear, there is like, you can play the game, you can win the games, you can earn more money, grow your business in an increasing policy environment.

And the problem, fundamentally, it's solvable. And here, the communication to the end customer is important because there is already a customer demand for doing more. There is a large cohort of people out there who are willing to pay premium for better performance; you see that. Why are people buying organic? Because they want to do something. Why are people buying the products that are labeled, like the one I showed here? They have Tenzing, they put climate labels or carbon labels on the pack as a way of differentiating, showing we are doing something. And that works. Like, the retailers like it, we have several customer examples where they have gotten climate labels and thus gotten shelf space at retailers, helped them get enlisted, getting shelf space, which is great.

Why? Because the retailers realize that we need to start doing something, like there is both the reporting requirements that are coming, where they need to report emissions, both scope 3, and the scope 3 is tricky for them. But then, even more importantly, like Back to then, again, the climate targets, so by 2050 we need to get to zero, which means that the retailers need to sell stuff without emissions, if they want to stay in business.

And then they need to figure out how to solve that. And the retailers are interested because it's not really their problem to solve, because they don't have the emissions that will make the production, but they can incentivize efforts. So by saying, hey, if you're transparent, we will sort of give you something.

We will highlight your product one way or another. And then there is a game that can start by, all right, yeah, sure. We're part of the transparency game. We show our emissions and we get the shelves space. When you're a competitor also, you need to get lower, but then very, very important, like lower. And then presumably you'll sort of gain the customer by, by being lower.

But very importantly in that is. That climate performance is not everything, like taste is king, you never get around that. So if you have a product they haven't tried before, your emissions are lower than the competing one next to it, you get the shot. But if they don't like the product, they're not going to keep on buying it anyway, right?

So, so that, that is, that needs to be in there, but you can also factor in the climate performance. and then once more and more food brands or producers start doing that, then of course from the policy point of view, it's quite safe for a politician to say, now transparency becomes mandatory, or else they see that they're competing on performance, they can implement whichever quantitative sort of policy you want, if you want it to be tax, a cap and trade system, a mission standards, whatever. I mean, there's a handful of different policies that work and as long then, if you are a producer, as long as you're better than the next guy, that policy will only make you get more revenue or profits.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of Decarbonize.co, stay tuned for the rest of the episode. 

Keith Anderson: Thanks for listening. I'm Keith Anderson, the executive producer and host of Decarbonizing Commerce. Sonic Futures handles audio, music, and video production. If you enjoyed the show, we'd really appreciate it if you took a moment to subscribe and leave a review or share it with a colleague. For the full episode and more member exclusive insight and analysis, join the Decarbonizing Commerce community at Decarbonize.co. Thanks for listening and we'll see you on the next episode of Decarbonizing Commerce.
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In this episode Keith is joined by Tanvi Patel, Senior Data Analyst for Climate and Sustainability Data at SPINS. SPINS is a data technology company specializing in wellness, health, beauty, food, and beverage, at the heart of where innovation meets sustainability. In this episode, we delve into Tanvi's unique career journey, which beautifully intersects retail data, consumer packaged goods (CPG), and the pressing issue of climate change. We explore the remarkable framework developed by Tanvi and SPINS to enrich the SPINS product intelligence suite, unveiling the invaluable insights it offers to brands and retailers. Join us as we uncover the trends and transformative potential that lie at this powerful intersection. 
Learn more about Tanvi:

• SPINS Website
• Tanvi’s LinkedIn

To listen to the full episode join our plus and pro tier program at decarbonize.co:

• https://decarbonize.co/member-benefits/ 

Episode resources:

• Regenerative Organic Alliance
• The Non-GMO Project
• SPINS Product Intelligence Framework

If you enjoyed this episode then please:

• Follow, rate, and review on Apple Podcasts
• Follow and rate on Spotify
• Learn more about Decarbonizing Commerce at decarbonize.co

TRANSCRIPT BELOW:
Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Keith Anderson: Hi, and welcome to the Decarbonizing Commerce Podcast. I'm your host, Keith Anderson, and I'm really excited for today's guest, Tanvi Patel, who is Senior Data Analyst for Climate and Sustainability Data at SPINS, a data technology company helping brands and retailers in the wellness, health and beauty, food and beverage, and adjacent spaces.

When I found Tanvi, I had to meet her because her career sits at the intersection of three topics that are near and dear to my heart and my career. Retail data, CPG, and now climate and we talk about the framework that she and SPINS are using to develop attributes and append them to the SPINS product intelligence suite, who's using that data and how they're using it, and some of the trends that she sees on the horizon.

I really enjoyed meeting her and covering some of her work, and I think you will too. So here's Tanvi Patel.

Tanvi, it's great to see you. Thanks so much for joining us for the show.

Tanvi Patel: Thanks, Keith, thanks for having me.

Keith Anderson: Well, I think to kick us off, it would be great to learn more about your career trajectory and trajectory and especially the work you're doing now with SPINS.

Tanvi Patel: Yeah, absolutely. So to give you a quick background on myself. So I'm from Phoenix, Arizona. And I've always been interested in sustainability and the environmental space. I went to school at Arizona State University, which was really lucky. It's I believe it was one of the first undergraduate programs for sustainability in the country and it happened to be in my home state, so that was really cool.

Love the program and I decided I wanted to add more of a business context to what I was learning, more generally in sustainability. So, decided to add a supply chain management degree as well. And just fell in love with sustainability. I did some consulting work in undergrad. I interned for a company working on, circular packaging and recycled packaging for them, as well as shaping their sustainability strategy.

 And then, after college, I went to work. At Gatorade, so working with PepsiCo at the Gatorade production facility, which was more of a supply chain role, but definitely incorporated elements of sustainability into that. So, I was measuring greenhouse gas emissions for them for EPA reporting. I did a water conservation project, and also worked on their Zero Waste to Landfill goals.

 From there I went to work at a company called Chicken of the Sea, it's a seafood company. I actually did supply planning for them, so kind of shifted back to more of the supply chain management side of things, but still always had that really strong interest in, in sustainability, and was able to work on packaging and initiatives wherever I could.

 I did some consulting in there as well for Beauty for All Industries, now called IPSY, doing some life cycle analysis stuff for them. And that is what brought me to my current role. So, I've been with SPINS now for six months. I'm the Senior Data Analyst in Climate and Sustainability for them and, I think it just perfectly combines everything I love about this industry. I'm able to work with product data, and consumer brands. And really empower brands in the sustainability space to grow sales if they're doing innovative things, but also to empower them to work on more sustainability initiatives, we know that consumers care more than ever about sustainability and that's proven not to just be a trend even through inflationary times and through COVID, it's something that people are really, putting their dollars behind, so, yeah, I'm excited for what I'm able to do in this role and excited to get into it with you.

Keith Anderson: When I saw your background, your career sort of sits at the intersection of three topics that I have a deep interest in CPG, sustainability, and product data. So I thought, boy, I've got to meet Tanvi and learn more. For those that may not be familiar with SPINS, can you just describe a bit more about the company and unpack some of the data that you work with?

Tanvi Patel: Yeah, definitely. So, SPINS is a, basically a retail data company, so we provide product data, for a huge number of products, about 3 million products, 3 million UPCs and counting, we're always adding to that, mostly in the health and wellness space, and I'll get into that a little bit later, so, basically anything you'd buy at the grocery store, mostly food and bev, but also health and beauty, vitamins, supplements, things like that. We are taking in all that information, all those data points, so we're looking at ingredient statements, nutrition fact panel, data, certifications, claims, even like the romance copy, so the little advertising language that's on package, plus things like pack type or container material.

Basically aggregating all of that, and then overlaying our product intelligence on top of it. So, we have a very intelligent and educated team of product intelligence R& D people, that are subject matter experts in their area, from nutrition to areas like climate sustainability, which is what I do.

So, not only are we looking at things like claims and certifications, we're able to develop really complex attribution around that. And I can also talk to you about how we get some of that data. So, we get data from a couple of different areas. Either directly through partnerships that we have with retailers.

And a lot of our partnerships I'll also mention. So, we have tens of thousands of exclusive retailer partnerships. [Note: Tanvi later clarified that she misspoke here; SPINS has hundreds of retailer and brand clients.]

Mostly with brands that are, in the health and wellness space. So natural channels, regional channels, really because these brands are usually innovative and smaller. And so we're trying to, catch them where in that startup phase, where our data will be the most useful to them.

 And so going back to where we get that data from, so we get it directly from retailers and brands. We also have a partnership with Circana, formerly IRI, where we get sales data and volume data from them. And then, we also recently acquired a company called Pinto. And Pinto is really cool. So what we're able to do with Pinto is take images, high quality images of the product and just pull all the data off of that product.

 So all the information and data I mentioned before, ingredients, labels, etc. We're able to do it automatically and at scale. And so, directly from product images, from retailers and brands, through our partnerships and then finally, we also have partnerships with certifying bodies, so certifiers like Regenerative Organic Alliance, Non-GMO Project, we partner directly with them and are able to get UPC lists directly from them.

So another really key area of our framework that I'm pretty excited about is our circular packaging attributes. So circular packaging or sustainable packaging, basically packaging that's not, that's not designed to end up in a landfill. It's something that is very top of mind for consumers. I think the latest stat I read is that 55 percent of consumers are very, or extremely concerned with the environmental impact of packaging.

 So we know it's definitely something that they're looking for when they're searching for products and for sustainable products. And so within our framework, we also have a suite of circular packaging attributes. So that can be things like recycled packaging, packaging made from recycled materials or bio based materials, compostable, refillable, et cetera.

 So that is another aspect of sustainability that we're identifying as. Something that's important and something that we can track in our data as well. So we have a number of, attributes within that area. So consumers can, sorry, so brands can look at things like container type, container material.

And, with our data automation process, we can evaluate if the main component of a packaging is recyclable or compostable or something like that. So they're able to track against their own packaging goals. Benchmarking, bidentifying opportunities, all of those things that you can do with the rest of our attributes.

Keith Anderson: are you parsing some of those terms? And I'm no level of mine expert, but my growing sense is, like with organic before it and other claims, there's not exact standardization or consensus on what some of those terms mean.

So, what kind of complexity does that create for you?

Tanvi Patel: Yeah, that's a very good point. We are, so not only are we capturing what. It says on the package. We know that a lot of those claims can be false sometimes. Sometimes you see it says recyclable and it's not actually recyclable. In your municipality, or it requires you to take the package into a store drop off, or some sort of other recycling program, right?

So there's a lot of confusing messages in the recycling space. Our approach has been to go with kind of the industry accepted standards set by the sustainable packaging coalition, for example. So. Within, like, our recycled packaging attribute, we actually have curbside recyclable and store drop off recyclable, as well as TerraCycle.

TerraCycle is one of those, mail in programs that brands can sign up for, and those difficult to recycle types of packages can be mailed in. And so the way that I designed it was basically if. It is a plastic material and it's a rigid container that we know that can be recycled in over 60 percent of U.

S. households. We'll say that it's curbside recyclable. If it's an LDPE bag, for example, like a bread bag or something like that, one of those flexible plastic materials, we know that that can be generally recycled when you take it into the store at one of those store drop offs. And so the data that we're collecting, um.

It is in the process of being automated, but it's also being coded manually by actual people. So they're able to look at the product image and put in, what the container material is and the container type. So they can say, it's glass, it's a colored glass, or it is, it's a box or a bag or a rigid kind of container like that.

So using all those data points. We can make a fairly accurate assumption, based on that of how to actually recycle it or if it's compostable. So with compostable, we're going with certifications instead of claims. So BPI, for example, is one of the certifications that's verified by a third party and is going to ensure that it actually is compostable and tested.

Keith Anderson: Yeah, that's, that's super interesting. I, I've waded into, part of the reason that I started with refillable is it candidly seemed to be the most straightforward of all of the emerging, you know, alternatives to single use plastic, basically, you know, not a lot of debate or controversy over what refillable is, ton of debate and controversy over when it makes sense and what are the economics like and, but it, it's not sort of stuck in a discussion of who should be able to say package is refillable?. That said, it, it is pretty interesting to me that you've got more of a fact based approach to identifying packaging at that level. I'm not going to name names, but there's a large U. S. based mass retailer that has a packaging, and some other claim based, messaging that they're using both on their site and in some stores to help shoppers find, or in some cases to guide them to products that have many of those, packaging types that you just listed.

And because we've been doing all this work on refill, I was looking for examples for the report that we're working on, and I go to the section of their site where they let you search your filter and we picked refillable and suffice it to say, it's not a particularly accurate set of results that you get.

So the intent is there, but it's actually the second example of product level climate and sustainability related faceted search or other attribute or claim driven discoverability and findability that I've seen on e commerce sites for major retailers that is clearly, I would say, quarter baked, it's not even half baked.

 And, you know, I have to admire the intent, but I think it's going to take more data like this that is scalable and largely automated. I can totally appreciate the need for human review for near perfect accuracy. But I just think it's going to be really a key enabler to get that level of granular data at scale, because I think the retailers are showing signs.

They want to help shoppers find products that meet these criteria, but having data that's up to date and accurate when the suppliers themselves may not yet be reporting it themselves, is challenging.

And in particular with Pinto, are you going beyond what's observable on the physical package with the attribution that you're layering in?

Tanvi Patel: Yeah, absolutely, so we are really trying to create multi layered and dimensional complex attributes. So, some examples of what this means. We have an attribute that is an ancient grains ingredient attribute. So, not only are we looking at the individual ingredients that make up ancient grains, amaranth, buckwheat, etc.

We're able to say, okay, how do these ingredients appear on the label? Which ingredients actually qualify in the mind of the consumer, in the minds of brands as ancient grains and all the benefits that come with that? So we're layering on that, that product intelligence.

We can even get more complex. So we have positioning attributes. For example, plant based positioning is a really popular one of ours. So with this attribute, right, the really just straight data approach would be, okay, look at the ingredients in this product. Does it have any animal derived ingredients? No, it's plant based.

Obviously, that's going to pull in everything like water or popcorn. Things that just aren't really valuable as a data point. So our plant based positioning attribute is actually where we're taking a look at the product, but also the brand and the category that it's in and understanding beyond the package, looking at their website, looking at their marketing and really all the positioning information to see if it's a product that's positioning itself as a plant based alternative to a traditional meat based product, for example.

 So there is a lot of that complexity and dimensionality that we're adding on top of just the straight data.

Keith Anderson: So the, the point of sale data that you get from cooperating retailers and the Circana partnership really is the starting point to give you a sense of the size of a given market and. Share and how quickly it's growing and, the, the attribute data really helps you understand that a fairly granular level, what's driving some of the demand in terms of product characteristics.

Tanvi Patel: Definitely. Yep. And then. What you can do too with, like, the product data is compared against our other attributes. So demographics of the consumer, geographies, sales channels, things like that. Slice it and dice it in every, any way that you want to.

Keith Anderson: Can you tell us more about who is using the data and how they're using it? Ideally on the retailer and the brand side, I think a lot of data. Like this is often sourced by a consumer and marketplace insights team or similar, so I'm sure they have a seat at the table, but commercially, who else finds this data interesting and what kind of decisions is it informing?

Tanvi Patel: Yeah, absolutely. And I can speak a little more generally or kind of drill down to more of the sustainability and climate attributes,

Keith Anderson: I I think both would be of interest. We can definitely start at a, at a broader level just to contextualize things and then definitely want to get into the climate and sustainability angle.

Tanvi Patel: Cool. Yeah. Yeah. So. The majority of people using our data are people like category managers at retailers, brand managers, there's also, you know, space for marketing people, sustainability analysts, analysts, when we get more into the sustainability attribution, but there's a ton of, ton of use cases here, right?

So things like competitive benchmarking, looking at your competitors in your product category. And looking at all that data for your competitors, looking at their sales volume, but also looking at things like what certifications are they using, what label claims, how are they positioning or marketing their products?

 To really identify what's driving sales and growth and how does your product or brand stack up? From a retailer perspective, looking at category management, identifying opportunities, identifying the white space. So, what are the certifications or different product data points that are up and coming and really driving consumer interest?

 It's also a way to inform brands and, different companies on how to innovate. So, what kind of new products can we bring to the market that consumers really care about? Proven by the data. Proven by what is driving sales.

Keith Anderson: And do you have a sense of what cadence people are analyzing this data on, is this data that you look at monthly, quarterly, every day, depending on the use case?

Tanvi Patel: Yeah, absolutely. Our data goes back for years. So, within, like, our dashboard, Satori is, Satori is the, the main software that the users will interact with the data with. And so, they can look at the previous day, the previous week, they can go back several years. It's really any timeline that they want to.

Keith Anderson: And are they accessing it through a portal, or how, how is the data typically accessed and engaged with?

Tanvi Patel: Yeah, so, I mentioned Satori, that's pretty much our main, software offering. In which, you can go in, you can look at your product data, you can add in all the attributes and just build, like, customized reports depending on what you want to look at. There's also more of a backend offering. So within our API, you can go in and just directly download whatever data you need, and you can get

 more access to more data points that way.

Keith Anderson: Got it. You mentioned some of the certifications. Are there examples you can share about, effectiveness or how brands are using data like yours to prioritize among the many certifications they have available?

Tanvi Patel: Yeah, absolutely. So, I kind of mentioned before an example of identifying the white space. Another problem that I see, or

another question that I see a lot is brands aren't really aware of which certifications they should be pursuing. In sustainability, there's an overwhelming amount of messaging out there, claims, certifications, it's consuming, it's confusing for consumers, it can be very confusing for brands as well to understand what they should be prioritizing, and what certifications or what they should be investing in, to gain market share.

 And so an example of some cool statistics that we put together with our partnership. So, Regenerative Organic Alliance, is a certifying body that we partner with. They're doing really great work in setting really stringent criteria for regenerative agriculture. So, for those that don't know that, know what that means, basically, it goes beyond organic and actually aims to regenerate the soil, so adding nutrients back in, having less emissions.

It's already organic, so no pesticides. It's a very holistic and sustainable method of agriculture. And so some statistics around that that we've put together for them are, over the past year, there's been an 821 percent growth in sales for products in the refrigerated yogurt section that have this certification versus ones that don't, right. So there's all these examples of how we can see, sales increasing over time. And you can also compare it to different categories. So, milk, for example, regenerative organic in the milk section drives or drove 114 percent growth in the last year. And so the answer to that question of what certification should I go after?

What kind of claim should I go after? is very specific to your product or your product category, so the answer can get very nuanced, but using our data, it's very easy to see and customize that to exactly what you want to understand and what's relevant to your brand and your category.

Keith Anderson: I can see how category level and, possibly even custom data ends up being pretty important. Are there syndicated views, that is sort of standard views across categories that you're producing or publishing for clients or the industry also?

Tanvi Patel: Yeah, yeah, so, we definitely have a number of reports, a number of customized reports that we provide, at every level, so, you can go in and build your own reports, but we're also, releasing white papers, we're releasing, webinars around the state of plant based dairy, for example, or just these different areas of rising consumer trends, because we're in this data all the time and we're constantly understanding what the new trends are and what's relevant. We're really well positioned to kind of track these trends and see where the numbers are headed, where the growth is headed.

 Yeah,

Keith Anderson: Yeah, I see just an immense volume of survey data, sort of self reported, here's what people say, they think, feel, and do, but in my experience, the behavioral data that you can get via point of sales in particular, because it's really post transaction Did you buy or didn't you buy? It's a pretty accurate reflection of what's really performing in the market.

And so I think for that reason, it's really fascinating to me what kind of climate related attributes are starting to be appended to traditional point of sale data that every brand in retail works with. And I think it's also sort of entering a vacuum of data that is, performance based and helps the industry.

Make sense of just what, what I think continues to be the Wild West in a sense of labels and certifications. And, I'm curious to get your perspective on, you know, in almost every topic I'm working on. I look at it through two lenses, primarily commercial and climate or sustainability. And so commercially.

It's clear you've got a great lens into what's performing from a sales and market share and growth perspective. And it sounds like from a climate and sustainability perspective, through some of the underlying ingredient data, you're able to better understand the relationship between the claims or the certifications and what the product actually is.

Are there other ways that you're working on or exploring layering in data that links, for example, life cycle analyses or other disclosures or reporting that a company, is obligated or encouraged by their retailers to provide?

Tanvi Patel: Yeah, yeah. Great question. So I'll kind of start with talking more about our framework around sustainability and what really cool attributes we're developing right now. And to your earlier point, too, I think that's a, it's very true that consumers can say one thing, that they care about shopping one way.

 But how they actually behave when they're in the grocery store can be quite different. So, having this real data behind it to inform business decisions is, is really crucial. And so, talking about the different areas of sustainability and How it's just this very confusing kind of area since there's so many different areas and concepts rolled up into it.

 We're developing a framework to really kind of cut through that noise and cut through greenwashing, but also provide more of a standardized approach to segment out the different areas that consumers care about, and the different areas that brands are making sustainability happen in their products.

And so we can attach this in the show notes, I believe so. Just a visual of what our framework looks like. We've segmented it into kind of three main pillars and I'll just walk you through what those look like. And keep in mind that this is both how we're organizing the different areas of sustainability, but each of these areas is also an advanced attribute as well.

So, you can use it as a brand to understand more generally, do consumers care more about good for the animals, for example, sustainable animal welfare certifications, or do they care more about people centric sort of certifications? And so our three main pillars are animals, people, and planet. And then we have levels of granularity under that.

 And these are all driven by label claims and certifications. So, kind of understanding, you know, what I know, what my team knows about all these certifications, which ones actually hold a lot of weight when it comes to sustainability, which ones are more subject to greenwashing, for example. We're able to organize all of these into these areas.

So, good for animals, we have areas of animal welfare and marine animal welfare, separating seafood versus land based animals. So, certifications that would live under that. would be things like Certified Humane or A Greener World, all those animal welfare certifications rolled up into one animal welfare attribute.

 And then things like, Fair Trade or B Corp that would live under the people attribute. So you can get as granular as you want. You can also look at these groupings because these are ways of thinking are different areas of sustainability that consumers care about. Some more examples under the planet bucket, we have, good for environmental.

 I guess we have good for production practices. So, like sustainability around production practices, things like zero waste or upcycled foods. We have reduced carbon footprint, so looking at certifications around climate neutrality, carbon zero, and all those different areas, like organic and how that relates to soil conservation or habitat biodiversity.

 So that's kind of our, an overview of our main framework and how we're approaching it. And then to your point about incorporating some of that deeper data beyond the pack, looking at life cycle analysis, for example, that's definitely in our roadmap. I think, as time continues on, I think emissions level data will start to surface more for consumers.

And I'm excited to see that happen, at scale. But incorporating things like, what is the water use of this type of product or the carbon emissions of this type of product, understanding that, conventional dairy versus a plant based dairy, there's going to be an inherent sustainability differences there and how can we create attribution around that, is definitely something that's, that we're thinking about.

Keith Anderson: And do you anticipate some of that more granular attribution is going to be used primarily behind the scenes by retailers or brands as they're making decisions about ingredients or formulation or assortment, or do you think it's going to eventually show up in shelf communication? You know, you mentioned consumer interest in labeling.

One of the first reports that we worked on at Decarbonizing Commerce is on product level footprinting and carbon labeling and It's a pretty interesting subject to me simply because it is one of the most obvious ways some of this could show up and in, in a limited number of cases is showing up at the shelf to consumers.

But again, it's, it's really the Wild West. There's different approaches. There's no standard. It's not clear if retailers or brands or regulators are going to play the driving role in pushing the industry towards a standard and widespread adoption. So I'm curious to get your view.

Tanvi Patel: Yeah, absolutely. I think. To answer your question, all of that is a use case for these. I think on the brand and retailer side, as mentioned before, right, identifying opportunities, comparing. What are your competitors doing in this space? Also like internal performance analysis, so looking at, your different categories, looking at your products, and measuring it against internal sustainability benchmarks.

Maybe you want all of your products in a specific meat category to meet the certification or have a certain level of sustainability work being put into it. So I think definitely all those use cases. But I'm also excited to see how this kind of manifests more, but I think there's a ton of potential on the consumer side as well.

So, building things like a sustainability score into an e commerce platform. So, making it really easy for consumers to immediately see and compare the sustainability of different products, whether that is through a set of certifications, maybe it's the marine animal welfare attribute, a way for them to filter and quickly understand the different environmental impacts of different products.

So yeah, I would love to see that on e commerce. I know that's starting to slowly roll out, as well as in shelf tags, so having things like the carbon emissions of a product to be listed. So I think there's a ton of potential there, on the consumer side as well.

Keith Anderson: Yeah, it makes sense. Jumping back to some of the commercial use cases, what, one of the assumptions that I am really encountering across the industry, almost any time I mention that I'm working on sustainability related topics in CPG with, people that know me for traditional CPG and retail strategy.

Sort of say, yeah, yeah. Sustainability. The question is sort of who's going to pay for it? You know, it's, it's a basically baked in assumption that the sustainable choice is inherently and almost always more expensive and therefore has to be sold at a price premium. So with some of the data you have, have you looked at, or have your teams looked at the relationship between these attributes and consumer prices and how that affects performance?

Are there examples where, that assumption isn't true? It's just, I found examples in different categories, some of which I think Spence would cover, but it seems to be this conventional wisdom that I'm not convinced is to your earlier point about category specific detail. I'm not convinced it's as true universally as it seems to be believed to be.

Tanvi Patel: Yeah, absolutely. I think we have a lot of data that supports this and kind of debunks that, where, you know, it was, first of all, the understanding that, or the thought that sustainability is a price premium. We're seeing like over time and at scale different products are price competitive and eventually will also be, can potentially be, even less expensive.

So I think there's a couple of aspects and ways to think about this. I think as consumers start to demand it more and awareness starts to build, but also governmental regulation starts to roll through, things like the SEC requiring ESG reporting, all of that, as that increases, there'll be more of this awareness.

And need for more of a true cost accounting when it comes to the price of things. And so looking at, well, so I guess I'll, I'll back up a bit. So with our data we have found and, I don't have specific numbers with me at the moment, but I kind of mentioned this earlier too. So through COVID, through inflation, people kind of thought that sustainability would take a dip along with all these other things.

 What we actually found is that people are willing to pay more still for sustainability and that held true through inflation and through COVID when people had less money to spend. So I think that's a super telling point, right? It's not really this trend that's going to go away. That people are, it's not like a passing fad that people are interested in.

 But it's something that people are understanding is very important and companies and brands are being required to treated as something is as important as well. So it's definitely something that will continue to grow and as that happens, prices will go down. An example, too, of something that I think is super interesting is this coming trend of, precision fermentation.

 So there's a couple of specifically dairy brands out there that are non animal dairy. So they're using cell cultured, microbes to basically create an identical product to dairy, so it's identical molecularly. It's still like tags as an allergen, as a milk allergen, but it can be made with no animals.

 And so that's a highly efficient form of creating the same quality product at the same taste. And all those properties, but, completely eliminating the need for animal agriculture, right? So these technologies, I mean, inherently it's so much more efficient. There's so much less cost of involved in the supply chain. And so when we start realizing the true costs of some of these things, that price will go down.

Keith Anderson: It's such an interesting, the whole alternative protein space is really interesting. And I'm just learning a bit about, fermentation and it's emergent along, I think, with sort of cultivated animal proteins as, alternatives to the alternative of plant based and potential successors to some of the really high growth and then tapering growth options that we've seen in the market over the last, call it five years. So I think it's really interesting and important that you call that category out and it hadn't occurred to me before you mentioned it, but, I mean, I'm, I'm looking at some of those emerging approaches from a capital investment point of view.

So, I mean, I've, I've bumped into companies like Tezza Foods and Nobell and others that I think fall into that fermented alternative protein space. But the only indicator I typically have at my fingertips is You know, how much capital have they raised? Secondly, sometimes what kind of retail traction are they getting in terms of distribution?

But I think to get a complete picture, you do need the sell through data in addition to the sell in data. And so I would imagine the data you sit on is a great leading indicator of consumer adoption and acceptance of some of these emerging potentially disruptive, ingredients and materials that are really aimed at producing a comparable product, experience, you know, similar taste profile, texture, you name it, but with a very different, resource and environmental footprint.

Tanvi Patel: The interesting challenge that I think brands in that space faces, just the education part. It's such an innovative space. It's such an innovative product of, it's dairy, but it's not from an animal, and it's vegan in some ways, but not technically, right, just that piece of educating consumers because, it is, there's so many benefits environmentally, but just trying to get people to understand that it's a clean product. It's highly sustainable and efficient. But yeah, it's different than anything else on the market today. So, bridging

Keith Anderson: Have you,

Tanvi Patel: gap will be key.

Keith Anderson: have you tried them?

Tanvi Patel: Oh, good question. I haven't tried them actually. There's a couple of brands that I've been meaning to. My sister is actually a vegan, and has been for a couple years, and I told her about, I think it was the, the no cow milk brand. And so she picked it up and tried it, and then she called me.

She's like, I just realized I haven't had milk in years. Like, this is probably going to hurt my stomach because I'm not used to it. But yeah, she liked it. It was, it was crazy. She hasn't tasted milk that real in years.

Keith Anderson: Well, I'm always interested to try any of these products, whether it's a food product or personal care, just because I continue to think so much of the competitive dynamic. While I totally acknowledge it's clear in the data, there is a strong interest in the, you know, better for the planet option, I think, in many cases, certainly not all, the effectiveness or experience isn't yet at parity with the conventional offering that it's intended to replace.

And so I think that's why there's so much investment and so much innovation, which I'm having a great time looking for and studying, to try to raise the bar on what is that consumer experience? Is it as convenient to find and buy it as the way that I used to do it? Is it economically at parity and the answer in many cases today is not necessarily, but it is in more and more cases, and I'm always eager to hear about those breakthrough experiences where somebody says, hey, I switched from the old razor I was using to this double edged safety razor, and it's actually saving me money, and it's a better shave, and it's a better shave and what do you know? The waste and footprint are really favorable versus the way I was doing it before. So, fermented proteins are one of those that I'm really intrigued by.

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Keith is joined by Emily Fultz, the Vice President of Marketing and Sustainability, North America for the Swedish company, the Humble Co. Emily has more than 25 years of experience in the U.S. consumer goods market, having worked at Starbucks, IRI (now Circana), Campbell Soup, Henkel, and most recently the Clorox Company. They discuss how Emily has transformed her roles with broad competence from working in both marketing (omni channel) and sales calling on grocery, drug and home hardware, but also overseeing sustainability in this innovative company.
Learn more about Emily:

• The Humble Co.’s Website
• Emily’s Linkedin
• Emily’s Email

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TRANSCRIPT BELOW:
Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e commerce, and consumer products through the lenses of low carbon and commercial viability.

Welcome to the Decarbonizing Commerce Podcast. I'm your host, Keith Anderson. And today's guest is Emily Fultz, Vice President, Marketing and Sustainability, North America for the Humble Company, an oral care brand that was the creator, one of the first, if not the first creator of bamboo toothbrushes, really trying to reinvent the oral care category in some interesting ways.

And before Emily was at the Humble Company, she has a career in all kinds of functional roles. In areas like omni channel and category management and shopper marketing and brand management at some of the biggest names in the CPG industry, Henkel, Campbell's, and most recently at Clorox. So I thought it was really interesting that Emily has built a career and followed a trajectory from big CPGs to an emerging brand and has evolved her career from conventional commercial functional roles to a leadership role at Humble that includes some traditional functions, but is also overseeing sustainability and was really eager to meet her and learn more about how she made that jump in her career and how she's approaching her work at the Humble Company.

So, let's meet Emily Fultz of the Humble Company.

Emily, it's great to be with you. Thanks so much for joining the show.

Emily Fultz: Thank you for including me, Keith. I've been looking forward to it.

Keith Anderson: So have I, and you are Vice President Marketing and Sustainability at the Humble Company. Can you tell us more about what you do and how you came to do that at The Humble Company?

 

Emily Fultz: Sure, sure. So I am the, really the leader of this function and it is a pretty small team in North America. We were founded in Sweden by a former dentist that saw the need for more environmental solutions to waste in oceans and a way that he could impact that was through the invention and launch of the bamboo toothbrush.

And so I had spent about 13 years working for Clorox in different roles and functions. And I found that this would be a kind of a neat next step for me to take a function and expand it into sustainability for another organization.

Keith Anderson: I think I, I mentioned this to you when we were first speaking, but as a former consultant, I can't resist four box frameworks. And when I, when I looked at your background, I sort of pictured, you know, on one axis, commercial experience leading up into sustainability and on the other axis, big CPG companies, you, you named Clorox, but you have experience at several other big CPG companies

Emily Fultz: Yes.

Keith Anderson: and then eventually joining an emerging brand.

And so to me, it's really interesting and I hope we get a chance to go into a little detail on some of the comparisons and the contrast between working in purely commercial roles and then taking on work that involves sustainability and what's similar and different about working inside of a big incumbent CPG versus a newer emerging player.

Emily Fultz: Yes, I think, it boils down to kind of where you start your career is often where you end up. I started out my career, coming out of undergraduate from Santa Clara University and I moved overseas and I worked as an English teacher in Italy. And I've just fell in love with Western Europe, and I knew I wanted to have an opportunity to work for a European company someday as well.

So, I came back from that experience and I went back and I got my master's in business at Thunderbird, which is an international business school in Arizona and came out of that experience and coming out, you know, young with an MBA, very ambitious. I went for an Italian company that imported Italian foods into the U. S. marketplace, and I built that small brand. And what I realized in that experience was I had a lot of curiosity and love for marketing, but I didn't have a lot of the traditional training that I felt I needed to be a successor in my career with. So that's when I went to work for Starbucks Ice Cream, and that was based in Oakland, California, and it was in the Dreyer's headquarters.

And I had the opportunity to build a brand from scratch. And I worked with some great marketers there where I did everything from package design to portfolio development, to copywriting, to national sampling. And I was making a lot of reporting really to our joint venture at the time, which was with Starbucks and Dreyers.

And I realized that when I was doing this reporting, I really wanted to have more of an analytics understanding. So, I decided my next career step would go to work for IRI, and I worked for them, now Circana. But IRI at the time, and I was a vendor services manager at the Safeway headquarters, where I partnered with large CPG brands on their analytics and positioning for sale at Safeway.

And from there, I had a great exposure to all different types of analytical suites. And category management, and then Campbell Soup tapped me on the shoulder, and they said we'd like to have you come work for us. And so Campbell Soup, I spent about five years there, and mainly in the category management function.

I worked on the Prego business and then the Soup business. And then because of my brand background, they tapped me on the shoulder when it was time to start shopper marketing. They had not been in this function yet. And so I had the chance, along with three other people, to create that function at Campbell Soup.

And I fell in love with it. I loved the opportunity to bring a brand to life with retailers. And to kind of put some of that creative focus at shelf and in store. So I worked for them for a long time. I loved it. And then my family and I, we moved to Charlotte, North Carolina, where I reside. And I decided that I really wanted to continue in shopper marketing.

And so a couple, a little while after I moved to Charlotte, I went to work for Clorox and at Clorox, I was able to really get a touch on multiple channels of trade. I worked with home hardware. I worked with The Dollar Channel. I worked with Target. Really across all the brands at Clorox, and I had a chance to really work with teams of people.

And so I really feel that this industry is this opportunity to partner across functions to really build a brand. And so I had a chance to do that with my peers and with those retailers. And one of my accounts, was Lowe's Home Hardware. And at the time, they were really getting into e commerce in a big way.

And I had a chance to really push the organization and myself to learn in this burgeoning space. And so really learning about the digital shelf and new technologies and influencing the retailer to also evolve, you know, even further in this space. And so, with that, after really being, I think we had great success with that account.

 I was asked to join a part of the Clorox organization, which was the Omni Channel, category leadership program. And so I worked with an industry leader, Anne Zabowski. And our team was small, but, but mighty, and we were able to coach our existing retailer sales organization across the field on how to win with e commerce and Omni Channel.

So that was a fantastic field. I absolutely loved it. The exposure, the learning and the application. And so it felt at that point. There was an opportunity for me to go and kind of bring those learnings and experiences and make it a little bit broader than one function. And so I've had that opportunity at the Humble Co. I lead both the marketing function as well as our, obviously, our sustainability area for North America. And I also guide our e commerce and insights. It's again, it's a lean team, so I couldn't do it alone. I have a fantastic team of people with small levels of experience, to my CEO, Rich Hewton, who has had a grand tenure, really, within consumer packaged goods that I learn from every day.

Keith Anderson: It's so interesting to me, listening to some of the different functions and disciplines that you've worked within

Emily Fultz: Mm hmm.

Keith Anderson: and I recall in the early days of shopper marketing when it was, you know, the first moment of truth was introduced to the industry as a concept and many CPG brands got a much deeper appreciation for what it meant to influence and win at the physical shelf.

Emily Fultz: hmm.

Keith Anderson: I sort of watched and I guess our paths actually intersected during this next phase when digital and omni channel became such a big part of where growth in the industry was being sourced.

Emily Fultz: Mm hmm.

Keith Anderson: And to your point about cross functional, it changed. So much of the work that I think in many companies for many reasons is siloed, but it's, it's hard as time goes on to succeed at building a brand or winning at the digital shelf or any of these important disciplines if you're working in a vacu and, and I think it's So interesting and important to have people who have not only worked with the different teams, but, have worn those hats and can empathize and relate to what somebody who's working on packaging or working on what's our portfolio strategy for the next three years, any of those considerations, while they're also trying to keep up with whatever the fastest moving New trend is, and that sort of leads us to sustainability because candidly, I don't think it has quite hit the way that these other, disciplines did in, in their moments of peak interest, but I think the next three years are going to move very quickly and yeah.

And so I, I think, you know, it's, it's going to be very useful in your work and to your company, I'm sure, to have been through similar. Transitions when a new discipline with new considerations about consumers and customers is suddenly changing the work in all these conventional areas.

Emily Fultz: Yeah, and I think sustainability is one of these terms that is thrown out pretty loosely within organizations. And I feel like it's always, there's, you know, there's definitions of sustainability, and then there's ways to enact sustainable action within your organization. And so I think traditionally we have, you know, consumer packaged goods companies are Short term profit motive and sometimes that is not aligned with sustainability.

And so creating a platform to get reaction from your organization in a meaningful way. I think that the B Cert, that is, you know, becoming more prevalent across a lot of the natural channel. In oral care, I see that, you know, several companies are now certified B corporations and so that is that's my goal, is that we are in that space over the next three to five years.

Maybe sooner. But I do feel that that understanding of there's not just one way to be sustainable. It's our actions every day. It's how we treat our employees, how we pay our employees. It's also how we, address Our packaging and our product and how we get that from distribution all the way back to the manufacturing cycle.

And so I think what we're going to see in the next 3 to 5 years is a hyper focus there. I think from everything we're hearing about the UN, right, like the UN climate meetings where Us and China were not invited to the table 'cause we haven't made enough action in that space. So I seek that. I see that as kind of a challenge for all of us in consumer packaged goods to have a seat at that table moving forward.

I think that we have, a lot of passion in this space. And a lot of creativity. I think the United States, we are full of the most creative people on earth. So I feel like we have the talent and the capability to get there. You know, how can we, you know, put pressure on our own internal systems to shop, go local, right?

Local is the best. So trying to keep product off the seas when we can. How can we use less virgin plastic in our products? I think PCR, Post Consumable Recycled Goods of plastic in goods is a step in the right direction, not always all the way to bright. I see a lot of opportunity in protein based packaging.

That's going to come our way. And this is a All in the best interest of Mother Nature. So I think that the more we can evolve our companies and the people that work for them to be aware in this space is really important too. It can't just be one sustainable champion in your organization. It needs to be a part of your fabric.

So one area that we've made action on as a company, really globally is I've just led with my, my partners at the Humble Co, a new, mission and core vision statement work that's really grounded in people and planet first, humbly, is where we're leaning towards. We haven't final, we haven't finalized the mission statement, but I think that as long as our core values are aligned to get there, it's taking steps in that direction.

But it needs to be the fabric of the, I think the area of the organization that you work in.

Keith Anderson: Well, you've touched on a couple of, I think, common challenges, one of which is the incentive models aren't always aligned between essentially a company's sort of core purpose, which is often to make a profit.

Emily Fultz: Yes.

Keith Anderson: And I think secondly the importance of linking some of the vision and the mission to everyday action and I know you're in the midst of this work. It's not, it's not done. It's probably never done, but can you tell us more about what is so appealing about the B Corp designation, what kind of commitments and changes you think that's going to bring to an organization like yours and how do you think as you refine and ratify this new vision and mission. How are you going to link that to some of these everyday decisions and functions across the company?

Emily Fultz: Well, I think to motivate change, we do need to address, you know, sales and profit. And so

 I think one of the areas that I see evolving too is that, you know, Gen Z is coming right on the heels of really addressing a lot more of the wallet of the American shopper. And they are voting towards the environment.

So I think, you know, as we think about short term versus long term viability for brands, I think it only makes sense to make steps in the right direction. I think, you know, B Corp is kind of the most broadly understood certification, globally. And so what I'm excited about, as I enter into this work with my team, is it's not just about knowing what your carbon footprint is.

 There's a lot more to it than that. So it's again, how we treat our employees, 360 reviews, making sure that there is not such a large wage disparity across an organization. So these are all elements of getting the certification.

And again, I haven't initiated the work yet within, my Humble Co. yet. I'm still in the evaluation framework. So maybe next year when I come back and speak, Keith, I can talk a little bit more about our experience.

Keith Anderson:

Fair enough. , and, and I think it's important to emphasize, How holistic some of those considerations are and I think part of the reason it's appealing to so many companies is it does force you to think about the relationship between. These different elements of building a company and operating a company through these lenses of so many important factors about how are we going to operate fairly and equitably and, you know, play the long game.

And I'm reminded again, as you mentioned, Gen Z. In the early days of the growth of e commerce and online grocery, it was a very similar conversation about millenials.

Emily Fultz: Hmm.

Keith Anderson: That is, you know, I helped produce analyses that when you charted the data would show, okay, here's the breakdown of income and consumption by cohort today.

And here's the projection of when they're going to reach their peak consumption years, that is, they're going to get married, they're going to form households, they're going to buy pets, they're going to have kids, and those are among the bigger drivers of expanded consumption, and in those days, we were emphasizing that the way they were shopping and buying differently was mediated by technology. They, they were digitally native, they were buying through a screen, and the whole transformation discussion was about to your earlier point about thinking beyond the next quarter, how do we walk that tightrope between the way that we've always done things while acknowledging things are going to be different in 3, 5, 10 years? And it may seem slow for a long time, and then it's going to seem sudden as that rotation happens, and now I see the same sort of thing happening both with Gen Z, and others. I mean, not unlike what happened with digital as time went on. There certainly are the early adopters who care the most and change their behavior more dramatically and earlier, but over time you sort of see the flywheel effect of, well, as their desires are met with more selection and more choices in the marketplace, suddenly more people are exposed and start making similar choices.

And before you know it, things look really different. you've worked for Some of the largest brands in the industry, you're working for, an emerging brand now. What are some of the really key distinctions, both in a general sense and then in a sustainability sense?

Emily Fultz: Well, my ability to impact on a mega scale is diminished, so but I do feel that on a smaller scale to start building a brand really in the North America market is very rewarding. So I think, you know, beyond budget, differences. There is this opportunity to engage in a different way than I've ever experienced before.

Again, Keith, you know, I came from very functional background, so category management, brand, omni channel, e commerce, and this role that I'm in now is really more broad scoped, where I have the chance to guide multiple functions at once. And so I think what I've realized through this experience is that it's really rewarding owning multiple functions and especially I think in sustainability to make sure that we're being true across the different elements of our business and talking more synchronously on our mission. So I think that's very rewarding. Also, I'm at a stage in my career where I have a lot of knowledge, a lot of experience.

I don't say that to be. overly confident. I say that because I work with this team of young people that truly want to learn and they are asking for my information and working with it and I see their growth and there's a certain amount of reward in that. Just to see that evolve and see their skill sets grow. So I think that that's a real tangible. Also, you know, I've seen tremendous growth on our brand. So it's not just doing good work with good people and having fun. It's also I'm seeing the numbers. And so when I came in to the organization we didn't yet have a consumer data. And so I've done a small purchase, with spins, which is really focused on the natural channel.

And the natural channel is where we've really focused in most of our retail brick and mortar focus, because that's where our shoppers are. They're the ones that are looking for a bamboo toothbrush or for, you know, a floss pick that is plant based. And so post consumer recycled product. So that's been a wonderfully rewarding thing to see and start to track our progress. And so, you know, we have also now kind of, now that we've have this solid foundation in the natural channel, we are starting to see a really great traction within the NPL, which is the natural products. Area of food as well as MULO, which means that those shoppers aren't just going to the natural food stores. They're also buying groceries and they're seeing our brand, and it resonates with them from a value based, place. And so that's been really fun is also. It's freeing in the way of, I think, traditional large CPG brands. They have a very defined brand communication platform, and where we have brand guidelines, we also have this ability to flex our creative and identify more with, you know, raw content with our, within our social media channels. And that's been super fun too, where we are able to lay out our annual plan and really focus in on, you know, key events that make sense for us. You know, we are a natural Swedish oral care company. And so we, you know, we can celebrate different holidays, that are meaningful for our shoppers.

And we can participate in different ways.

Keith Anderson: Are there any favorite holidays that we should all be celebrating?

Emily Fultz: You should all be celebrating summer solstice, for sure. That is a super fun time of year, very festive and rewarding. And I also think there is this kind of clean, simplistic, Swedish vibe that our brand has that I think resonates with, you know, the whole kind of cleaning out your house, cleaning out your mind, being more mindful in your approach to life, which I'm really excited to play with more, you know, moving forward.

Keith Anderson: I can tell you My neighborhood throws many block parties, but one of my favorites is the summer solstice

Emily Fultz: Oh yeah?

Keith Anderson: block party. So, I wasn't sure where you were going to take the, you know, different holiday celebrations, but I'm happy that that's one that I have been celebrating for the last few years.

Emily Fultz: Good job.

Keith Anderson: You mentioned your background comes from highly functional roles, and I think it's super interesting to hear you talk about now at this stage of your career in the company and the role that you're in with oversight of several different functions at once. One of which is sustainability. I think when I tell people what I'm doing and, you know, sustainability or climate comes up, the natural first thought is it's all about switching your sources of energy or changing how you heat and cool the production facilities.

And truthfully, those are all immense parts of it and they're a big deal, but where I see so much potential and I think, you know, whether it's from regulations, as you mentioned, or, competition among the retailers and brands, I think there's going to be a lot of business model transformation, too. And so, in some of these areas that you are focused, you've mentioned packaging, where do you see synergy between marketing and omni channel or e commerce and sustainability? Are there other areas that, through your perspective as a functional expert you're already finding promising opportunities to change how you go to market, that also have benefits in other areas?

Emily Fultz: Yeah, so I think that there's always different, challenges with different channels in which you sell your goods. So, you know, with Amazon we have, we found a lot of success and so we can pull some of that success in the way of keywords and product. And also how we package our goods so that we can help lessen our certain fees that are associated with doing business on Amazon, like our FBA fees, where we are able to really navigate what the weight and dimensions are of our items so that we can lower that cost, and then focus it really towards different ways to market our product from DSP, which we are, you know, recently engaging with, as well as, different programs.

And so I think that we take a lot of learnings from there and we're able to apply it to our digital shelf and to our packaging. So I think it's this, it's a constant continuum really, of learnings that we're finding, that are working in one channel and applying it to another. So I would say that, as well as how to inspire some change.

So, often retailers really respond, I think, to seeing what's working at other retailers and when they're leaning in to sustainability and how it's being proactive in growth. And so, again, I lean on the analytics side of the house where, comparing the natural products compared to the total collection of products that are being sold and to show that the natural products really are outperforming, outperforming by and large, both in MULO and in food to say, and to share with retailers that it's okay to kind of lean into some of these, nascent brands that are providing something different for their shoppers. So, but I also, you know, I think I've changed my shopping behavior as well, as I've been involved in this space. And so I think that we can all take little changes. So maybe when you're reaching for a plastic bottle of water, you kind of shift and, you know, grab something out of your faucet or, you know, when you're thinking about heating and cooling your home. Maybe you think about if you're going to stay in your home for more than 10 years to invest in some home solar. There's just little steps that we can take as humans that if enough of us take steps there, I think it's going to step us in the right direction.

Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of decarbonize. co. Stay tuned for the rest of the episode.
Have a question or feedback about Decarbonizing Commerce. Record an audio message https://s.castplus.fm/decarbonizing-commerce?episode=68rmq6rn