0:03

Now with science-based

0:03

targets for carbon and for nature,

0:06

now with, regulations and investors

0:06

coming in and saying, you've gotta

0:10

be lowering your footprint, more and

0:10

more this is landing on supply chain

0:16

professionals to solve things to make

0:16

a difference, to reduce the carbon

0:21

footprint, to reduce the labor risk. And these women and men who are

0:23

in that role have not had a lot

0:28

of data to make decisions on.

0:30

Good morning, good

0:30

afternoon, or good evening,

0:33

wherever you are in the world. This is the Sustainable Supply Chain

0:34

Podcast, the number one podcast

0:38

focusing on sustainability and supply

0:38

chains, and I'm your host, Tom Raftery.

0:43

Hi everyone. And welcome to episode eight of the

0:44

sustainable supply chain podcast.

0:48

My name is Tom Raftery, and I'm

0:48

excited to be here with you today.

0:51

Sharing the latest insights and

0:51

trends in supply chain sustainability.

0:56

Today, I'm talking to Ethan

0:56

Soloviev From HowGood.

1:00

And we're talking about

1:00

the food supply chain.

1:04

On next week's episode, episode nine,

1:04

I'll be talking to Alex Scott from

1:08

the university of Tennessee Knoxville. And we'll be talking about

1:10

sustainable logistics and

1:13

truck emissions, for example. And the week after that on episode

1:15

10, I'll be talking to Hans Thalauer,

1:19

an ex-colleague of mine from SAP now

1:19

with UI path, and we'll be talking

1:23

about artificial intelligence. So some excellent episodes

1:25

to look forward to.

1:28

In the meantime, before

1:28

we kick off today's show.

1:31

I want to take a moment to express

1:31

my sincere gratitude to all of

1:34

this podcasts amazing supporters.

1:37

Your support has been instrumental

1:37

in keeping this podcast going.

1:40

And I'm really grateful for

1:40

each and every one of you.

1:44

If you're not already a supporter,

1:44

I'd like to encourage you to consider

1:47

joining our community of like-minded

1:47

individuals who are passionate about

1:50

sustainability and supply chains. Supporting the podcast is easy and

1:52

affordable with option starting as low

1:56

as just three euros or dollars a month. That's less than the cost of a

1:58

cup of coffee and your support

2:00

who will make a huge difference

2:00

in keeping the show going strong.

2:05

To become a supporter. Simply click on the support link in

2:06

the show notes of this or any episode.

2:11

Or visit tiny url.com/s S C pod.

2:16

Now, without further ado. I'd like to introduce

2:18

my special guest today.

2:20

Ethan. Ethan welcome to the podcast.

2:23

Would you like to introduce yourself?

2:25

Great to be here. I'm Ethan Soloviev, Chief

2:26

Innovation Officer at HowGood.

2:30

I'm also a small scale

2:30

farmer in upstate New York.

2:32

In the USA. I have about a 30 acre apple

2:33

orchard, grass fed sheep and lamb

2:37

and shiitake mushroom operation.

2:39

But at HowGood I manage the world's

2:39

largest sustainability database for food

2:45

and agriculture products and run our

2:45

innovation partnerships with both the

2:50

biggest food companies in the world and

2:50

the coolest, smallest ones and many of

2:53

the larger coalitions that are pushing

2:53

forward regenerative agriculture.

2:58

And data and metrics as a path

2:58

for transformation in the world.

3:03

Nice. Nice. And why?

3:08

As in you, you said you've got

3:08

the biggest database of, of,

3:13

I guess, food related data. So what, I mean, what, what do

3:15

people do with that and why?

3:20

There are probably

3:20

four primary use cases for our data.

3:27

And it's usually used by food companies,

3:27

but it's used across the supply system.

3:32

So we have food manufacturers like

3:32

Danone is a, a great partner of ours.

3:37

But also we have retailers like

3:37

Ahold Delhaize in the USA, which has

3:42

2000 super supermarkets in the USA.

3:45

And we have partners that are. Upstream producers of ingredients like

3:46

Ingredion who make some of the, the

3:51

ingredients that go into the products

3:51

that the companies make, that go

3:54

into the stores that the retailers

3:54

manage and get to, and consumers.

3:59

And so we have users across the

3:59

supply system, and it's basically

4:03

anyone who wants to move towards

4:03

sustainability, move towards regeneration.

4:09

Needs good information to make decisions.

4:11

If you're a business owner and you

4:11

didn't have good financial data on

4:15

what was happening in your business,

4:15

you, you couldn't make decisions

4:18

that would keep the business going. We're on a planet where if you

4:20

don't have good sustainability

4:23

data, you can't make decisions that

4:23

will keep the whole planet going.

4:26

That will keep all businesses in business.

4:29

And so, different people at different

4:29

companies use our data in different

4:33

ways, but primarily it's around

4:33

looking at individual food products.

4:37

What is their impact? What is their carbon footprint?

4:39

What is their water footprint? What is their biodiversity impact?

4:42

What is their labor risk? And then how do we improve our products.

4:47

How do we reduce the carbon? How do we uplift human rights?

4:50

How do we enhance biodiversity? And then tell that story

4:51

into the marketplace.

4:54

Maybe I need to change sourcing upstream,

4:54

or maybe I need to reformulate my product.

4:58

Then I want to be able to

4:58

say, here's a certification.

5:00

Here's a a label. Here's how I can tell the

5:01

average eater in the world

5:04

what's so great about my product. Maybe it's water smart.

5:07

Maybe it's climate friendly. If those individual eaters have

5:09

information that they get on

5:12

the supermarket shelves, then

5:12

they can make better decisions

5:15

and the whole thing gets better.

5:18

Okay, nice. In theory.

5:22

Where does the data come from?

5:25

How can I trust the data

5:25

that's in your database?

5:28

How do I know that it's not, you know,

5:28

six years old or that someone didn't

5:33

just, you know, stick their finger in

5:33

the air and pick a number or, you know,

5:37

talk, talk to me about how, how accurate,

5:37

how verified, et cetera the data is.

5:46

That's a great question. HowGood has spent the last 17

5:47

years building this database from

5:52

a huge number of different sources.

5:54

Hundreds of individual experts and

5:54

PhDs who have contributed data from

5:59

the best databases in the world on the

5:59

impacts of food products, on greenhouse

6:04

gas emissions on water, peer reviewed

6:04

scientific journal articles in all

6:08

of the leading journals that are

6:08

out there that are getting a really

6:11

very rigorous peer review and coming

6:11

out on a monthly and quarterly basis

6:15

with new data; data from governments,

6:15

from the US Department of Labor, from

6:20

the EU, from, you know, the UN FAO.

6:23

So these are the most

6:23

vetted sources in the world.

6:26

Everything HowGood does is a, according

6:26

to internationally recognized standards.

6:31

So the ISO standards for looking at

6:31

the impact of products the greenhouse

6:37

gas protocol for understanding the

6:37

impact on greenhouse gas emissions.

6:41

So it's a large set of data

6:41

and it is variable, right?

6:47

Sometimes it's from a database

6:47

that's a really excellent database.

6:50

But the original study did

6:50

go in there six years ago.

6:54

So more and more what we're doing now is

6:54

gathering specific primary data all the

7:03

way back up to individual farm level.

7:06

So we have this massive secondary

7:06

database, but then we also have the

7:09

ability to talk to an ingredient

7:09

supplier who works with a cooperative,

7:13

who works with, you know, a hundred

7:13

farmers and gather data from their farm

7:18

about their sustainability impacts,

7:18

and then represent that in the platform

7:22

as specific primary verified data.

7:25

And then we can get the whole thing

7:25

assured by one of our assurance

7:28

partners if you need it for auditing.

7:30

So the data is massive. It is variable, but it is a very

7:32

high degree of precision and

7:37

assurance associated with it.

7:39

Okay. And what kind of data is it?

7:43

Is it, you know, where the

7:43

crop was grown if it's a crop?

7:47

Is it what food the animal

7:47

was fed if it's animal based?

7:51

Is it location? Is it soil pH?

7:55

Is it, you know, et cetera, et cetera, et cetera. What, what, what data are you gathering?

8:00

So yeah, those, and

8:00

about 16 million more data points

8:04

is exactly the sort of information

8:04

that we have in the system.

8:08

I mean, it's, it's, it goes down

8:08

to, yeah, the individual feeds

8:12

that were used to feed a cow.

8:15

It goes down to the level of exactly

8:15

how many hectares of land and how much

8:19

water was used to produce an individual

8:19

crop in an individual location.

8:24

It's holistic in terms of

8:24

sustainability, so it focuses

8:27

certainly on environmental factors. There's a, a large number of those

8:29

data points, but then we also have

8:33

social and economic data points.

8:36

is there labor risk in the location

8:36

where this crop, where this cacao

8:40

is being produced, where this

8:40

banana is being produced, where

8:43

this beef is being produced? What sort of labor risk is it?

8:46

Is there child enslaved

8:46

labor possibilities?

8:48

Or is it, you know, a risk

8:48

of discrimination and, and,

8:52

pushing against unions? We track all of that.

8:55

We also look at animal welfare. How are animals being treated?

8:59

You know, what physical

8:59

alterations are they experiencing?

9:02

What's their feed like,

9:02

what's their housing like?

9:04

And we do biodiversity as well.

9:07

So a lot of these are ones that are not

9:07

treated by traditional lifecycle analyses.

9:12

We love lifecycle assessment. We think it's a really great

9:14

science, but it's not fast enough.

9:18

It's not scalable enough for

9:18

what the world is facing today.

9:22

And so we have built with machine

9:22

learning and increasingly artificial

9:26

intelligence, a platform that can

9:26

work at scale to understand the exact

9:31

impacts of any individual ingredient.

9:34

From wheat to an invasive cactus

9:34

harvested from the wild in Africa.

9:39

And then roll those up to products, to

9:39

any product that you would find on a

9:43

grocery store shelf or that you might have

9:43

in your refrigerator or in your pantry.

9:47

We can aggregate the data in

9:47

an automated way and tell you

9:51

exactly what the impact is.

9:55

Fantastic. Why do I not see that information on the

9:57

goods that I'm buying in the stores today?

10:40

Well, you,

10:40

you will more and more.

10:43

If you lived in the DC metro area, you'd

10:43

see it in Ahold Delhaize in their giant

10:47

stores in the, in the US If you were

10:47

at COP 28 in Dubai, you would've seen

10:52

our carbon footprint labels directly

10:52

on products in Carrefour, the Majid Al

10:58

Futtaim, which is the leading retailer

10:58

in the Middle East, they have put

11:02

exactly this sort of sustainability

11:02

outta carbon footprints, sustainability

11:06

ratings right on the shelf edge.

11:09

It, it's only gonna be spotty

11:09

if companies put it on.

11:12

So some companies might put a

11:12

carbon footprint on their packaging,

11:15

but then, you know, the six

11:15

other milks or yogurts or peanut

11:19

butters might not have done that. So it doesn't really help you.

11:21

The real key is what, HowGood's been

11:21

able to figure out is the partnerships

11:25

with the retailers where we assess every

11:25

single product in store, hundreds of

11:30

thousands of products in a store, and

11:30

then provide a unified simple, easy

11:35

to understand labeling that helps me

11:35

as a dad when I'm shopping with my two

11:40

daughters, it helps me make a decision

11:40

quickly so that I can choose the more

11:44

sustainable product for my family, for

11:44

my health, and really for the whole world

11:49

Okay. But it needs to be in the whole

11:49

world, you know, because it, it,

11:58

it's great that it's in Washington. It's great that it's in Carrefour in the

11:59

Middle East, but I have a Carrefour store

12:04

about 500 meters away from me here, and

12:04

I can go in there and it's not there.

12:08

So, you know, how do we make

12:08

it, how do we make it global?

12:12

I guess I, I mean,

12:12

the one thing I would say is any

12:16

super, so this, we're talking right

12:16

now about the supermarket link in the,

12:20

in the system, in the supply system,

12:20

the sort of grocery, the retailer.

12:23

We can also talk about that same kind of

12:23

decision moment for the food formulator

12:28

or for the, you know, the farmers. But while we're here on the, the retailing

12:30

node what I would say is that any

12:34

retailer who wants to make more money

12:34

by selling more sustainable products

12:41

would do well to move in this direction.

12:44

Because what we've proven over and over

12:44

again when we do these rollouts in store

12:49

is that the more sustainable products,

12:49

which are not always more expensive, I

12:53

think it's important to note many times

12:53

the own brand or the private label of

12:57

a retailer are quite reasonably priced,

12:57

but will score well in terms of carbon,

13:03

water, biodiversity, sustainability, and

13:03

the products that achieve a good or a

13:09

great or a best rating from HowGood that

13:09

sort of environmental holistic summary,

13:13

those products jump in sales anywhere

13:13

from 25% to 45% in some trials, up to 235%

13:20

in some of the trials that we've done. So more sustainable products when

13:22

there's information for consumers,

13:26

for citizen eaters, shoppers. When they can see it and make a

13:28

decision based on it, they buy

13:31

the more sustainable stuff across

13:31

economic classes, across geographies.

13:35

We just did a trial in the uk. There's one ongoing, I don't have data

13:37

from it quite yet in the Middle East.

13:41

It's the first of its kind there. So everywhere we do it, sustainability

13:42

sells and the retailers generally

13:49

make back their investment in

13:49

the program in like three to

13:54

four days after implementation.

13:58

They're starting to see a return. So it's, it's really good business

13:59

and I think it's that, you know,

14:03

you might not see it because

14:03

the world is now ready for it.

14:06

Five or six years ago, this was too early. Now, with the awareness of climate

14:09

change, with the awareness of

14:12

the global instability situation,

14:12

people want transparency.

14:18

They want data, they want

14:18

information, they want to make a

14:20

decision that's good for the world. So the time is ripe.

14:23

It's part of why we're growing so quickly.

14:25

Yeah, great. So an example I've used on this

14:26

podcast a couple of times at least,

14:32

is I make my coffee with Oatley milk.

14:36

I. And the Oatley milk container tells me,

14:36

you know, to your point, it tells me it's

14:40

45 grams CO2 per liter of Oatley milk.

14:44

And I have no idea whether that's

14:44

fantastic or whether it's horrific

14:49

because I have cow milk beside it, which

14:49

doesn't tell me it's CO2 footprint.

14:54

So I don't know, would the cow milk,

14:54

I do know the cow milk would be

14:58

significantly more, but you know, were

14:58

I a a regular consumer who has not

15:04

looked into this, I, I wouldn't know

15:04

whether one was better than the other.

15:08

And the flip side of it is I can turn

15:08

the containers around 180 degrees and

15:13

look at the nutritional information. And that's standard right there.

15:17

It tells you carbohydrate, it tells you

15:17

protein, it tells you sodium, it tells

15:22

you, et cetera, et cetera, et cetera. And you can do complete

15:24

side-by-side comparison.

15:27

And that's because it's mandated. That's down to regulations here in the eu.

15:31

I assume it's similar in the

15:31

US and other regions as well.

15:36

Mm-Hmm.

15:37

before we get similar type

15:37

cross comparable labeling in the EU,

15:43

globally, whatever, because it, the only

15:43

way it will be cross comparable, I reckon,

15:48

is if a) Someone like yourself does it,

15:48

and you manage to sign up everybody across

15:53

the world as a customer of yours, which is,

15:55

on it. We're working

15:56

which would be great for

15:56

you, but I think more likely to get it

16:01

pushed out would be global regulations

16:01

or at least regional regulations like

16:06

we have for nutritional information.

16:08

Yeah. Okay. Couple great points here.

16:10

Yeah. We have nutrition, facts panels. We need sustainability facts panels that

16:12

will only happen through a regulation.

16:17

But there is significant

16:17

motion in this direction.

16:20

There is just like in a number of

16:20

different realms, there are retailers.

16:25

A huge portion of retailers are

16:25

experimenting with some form of ecological

16:29

or sustainability rating system.

16:32

Sometimes it's online, if you're

16:32

on Amazon right now, if you shop on

16:35

Amazon, they have a new sustainability

16:35

attribute system that they've just

16:38

rolled out, you know, across the millions

16:38

and millions of products they sell.

16:42

So that immediately does make

16:42

it a little more worldwide.

16:46

But we also have a number of laws that

16:46

are getting onto the books in Europe in

16:49

particular that will push this forward. One in particular is the EU Green Claims

16:51

legislation, which will structure the way

16:56

that you can make claims but at the same

16:56

time, there's a number of projects pushing

17:02

forward that are to create a harmonized

17:02

EU wide eco labeling scheme that would,

17:09

that basically everyone would sign onto. Now, France is a little bit ahead on this.

17:13

France has a scheme by their Aden,

17:13

their government organization

17:17

that has been working on this. They've been in the lead for a while.

17:20

They are, this year they're starting

17:20

to ask for a unified eco label

17:25

for any product sold in France. And it's a pretty good one.

17:28

It takes into account ecological

17:28

you know, a holistic set, water

17:32

biodiversity carbon, pollution.

17:34

There's a number of different factors in there. So that'll go into an

17:36

effect in France this year.

17:38

And then it becomes a requirement in 2025.

17:41

Not an ask, but a requirement. Anyone who's selling in France, and

17:43

that will, even before the rest of

17:47

the EU gets to agreement, that will

17:47

push quite a lot forward in terms

17:51

of the sort of unification of it. Now, I do think back to your

17:53

initial point about Oatley.

17:57

I do think that carbon is the new calorie.

18:01

And that there will come a time when

18:01

you don't need it to be on any pack.

18:06

You will know, or my, my 7-year-old

18:06

daughter, she's gonna know that

18:09

0.45 is a little less than 50% lower

18:09

than what your average milk is at

18:15

around, you know, 1.1, 1.2 kilograms.

18:17

So, I think people will understand that,

18:17

but it's not what I would lead with.

18:23

Like a geeky decimal

18:23

pointed ki abbreviation.

18:27

What is that unit? That's not what I generally start with.

18:31

We recommend something simpler, clearer

18:31

to understand something that says climate

18:37

friendly or water smart, or our rating

18:37

system says, Good, Great, Best, right?

18:45

It's very simple. It's focused on the positives.

18:48

And in that way it ends up being more

18:48

effective than what you have, for

18:52

example, with Nutri Score, which is a

18:52

nutrition labeling system in the EU,

18:55

which is also excellent and there's

18:55

a lot of good things about it, but it

18:59

has a, A, B, C, D, E, and then we're

18:59

getting into the orange and the red here.

19:04

And unfortunately rating things as bad,

19:04

it, it doesn't necessarily shift the

19:11

behavior of people who are shopping. People say, well, I, I like those

19:13

Oreos, or I like those crisps anyway and

19:18

I'm, I'm just going to get 'em anyway. So what we found is that accentuating

19:20

the positive and saying, you know,

19:24

good is only the top 25% of the system.

19:27

There's a 75% that doesn't

19:27

meet our standards.

19:30

But we don't say, this is

19:30

terrible, don't eat this.

19:32

We just say, here's the good stuff,

19:32

here's the great stuff, here's

19:35

the best, this is the top 5%. And we find that very lovingly nudges

19:37

behavior in a more sustainable direction.

19:44

Okay. And just to clarify, the Good are

19:44

maybe the top, as you said, 25%,

19:52

and then the, what was the next one?

19:55

Great and

19:56

Great is

19:56

top 15% and best is top 5%.

19:59

Okay. And does that mean there's still a

20:01

whole bunch under there who didn't

20:05

qualify to meet the good qualification?

20:07

It's not that everyone who turns

20:07

up gets a participation Good and

20:11

it's only the ones above that? No. Okay.

20:13

No, it's just there's nothing on it. And so you learn to mean or

20:15

you learn that that means.

20:19

Well, okay. I won't, you know, I

20:21

won't go for that one. It's not, it's not, we're

20:22

not looking to be activists.

20:25

We're not looking to call

20:25

anyone out for that is not

20:29

effective for wide scale change.

20:31

In our experience, we partner equally

20:31

with farmers and large international

20:36

companies and activist organizations

20:36

to push the whole thing forward.

20:40

And we find that a, a collaborative

20:40

approach is generally more

20:44

effective than an antagonistic one.

20:46

Interesting. Interesting. Okay. And what kind of sustainability

20:48

factors are taken into account in this?

20:57

Great. So now we start to move from the retailer.

21:00

We're starting to look back into in the

21:00

supply system, to the manufacturer, to the

21:05

place where I can give you an exact carbon

21:05

footprint and kilogram CO2 equivalent

21:09

per kilogram, or I can show you the blue

21:09

water usage in a you know, cubic meters

21:12

of water used per metric ton or the land

21:12

occupation in a hectares per metric ton.

21:16

So, there are eight core metrics that go

21:16

into our system and those are greenhouse

21:22

gas emissions, level of processing,

21:22

water usage, land usage, soil health,

21:30

biodiversity, including deforestation

21:30

risk and other land use change, animal

21:35

welfare, and human rights and labor risks.

21:39

Those are our eight core metrics.

21:42

Many of them align with the European

21:42

Product Environmental Footprint

21:46

legislation but they go beyond it because

21:46

we have the social and the animal and

21:50

the and things beyond that as well. We like a, a holistic picture

21:52

of sustainability and we

21:55

think people care about it. We think people care that the people

21:57

who made the food and grew the food

22:00

were treated well and have a reasonable

22:00

economic livelihood, and it doesn't

22:04

make sense to us to sort of strip out

22:04

social and put it somewhere else while

22:08

only focusing on the environmental.

22:10

Okay. And how do you measure those things?

22:12

How do you determine, you

22:12

know, biodiversity levels,

22:17

whether they're good or bad? What's a good or bad

22:19

biodiversity level, for example?

22:22

Yep. Yep. So we have a concept that's called the

22:23

impact spectrum or the continuum of

22:30

agricultural impacts and I've got a,

22:30

a article I wrote a number of years

22:35

ago, I've been working on this concept

22:35

since 2005 or something like that.

22:39

And I have an article that sort of

22:39

charts the development over over time.

22:43

But we look at a spectrum

22:43

for any individual metric.

22:47

Let's just choose let's choose carbon

22:47

for now and greenhouse gas emissions.

22:51

So on that, we see a spectrum.

22:53

And on one end of the spectrum is the worst. The most damaging, the most, you

22:55

know, polluting the most degenerative

23:00

side of the spectrum, which

23:00

would be a high carbon footprint.

23:03

You know, a hundred kilograms

23:03

of CO2 equivalents emitted

23:06

per kilogram of material. Or even for things like gold that

23:08

can get up into the hundred or

23:11

thousands of kilograms emitted. But for food products, the highest

23:13

you ever really see is you know, a

23:15

hundred's, pretty much the high end. And then you look at the full spectrum and

23:17

you say, okay, well what's less than that?

23:20

50 is actually still pretty bad. 10, still pretty high.

23:24

But then you get in down to,

23:24

you know, four kilograms, two

23:27

kilograms, one kilogram of CO2. Now we're getting close to zero.

23:30

That's a net zero point. That's the middle of the spectrum.

23:34

At the middle of the spectrum, we

23:34

have sustainable, we have zero.

23:37

And that's like, that's

23:37

zero impact, zero emissions.

23:40

But then HowGood tracks beyond that? And we say, well wait, can't

23:43

we go beyond sustainability?

23:45

Can we go to regeneration? Can we go to what's net positive?

23:49

Can't you capture carbon

23:49

through agriculture?

23:52

Can't you sink it into the living

23:52

biomass of the farm ecosystem and

23:56

actually be net positive in that way? So HowGood tracks beyond zero.

24:00

We go minus one, minus two, all the way

24:00

up to, you know, minus 10 or minus 40

24:04

kilogram, CO2 equivalent per kilogram. That's when you have a

24:06

regenerative agriculture that is

24:09

sequestering carbon in the soil.

24:11

Now you could do a different

24:11

spectrum, same idea of a spectrum,

24:14

but you can do it on biodiversity. On one end, you have deforestation in

24:16

the Amazon polluting with terrible,

24:20

you know, forever chemicals. On the other hand you have

24:21

basically adding more rainforest,

24:26

not just no deforestation. That's the midpoint, that's the zero.

24:29

We have adding rainforest, enhancing

24:29

biodiversity, creating an agroecological

24:35

and agroforestry farm that produces a

24:35

lot of food, but also, you know, adds

24:39

new biodiversity to the landscape. So we track that exact threshold, that

24:41

metric for each of our core metrics.

24:48

And then depending on the crop.

24:50

So whether it's cacao, a perennial

24:50

shade grown tree crop, or whether it's

24:54

wheat and annual tillage agriculture

24:54

crop, or if it's chicken right, a, a,

24:59

a grain, usually grain or sometimes

24:59

grass heavy meat product, we track

25:03

the impacts of the production of that

25:03

individual crop across those spectrums

25:09

in each location where it could be grown.

25:11

It's gonna use a lot more water

25:11

in Spain where you are than it

25:14

is in New York to grow a tomato.

25:18

It's gonna have a lot larger impact

25:18

in terms of land use in Brazil and

25:22

the Amazon than it is in Switzerland.

25:25

And so each crop in every location,

25:25

we have the data to show exactly

25:30

where it sits on those metrics.

25:33

Interesting. Interesting. I'm, I'm curious as well, because there's

25:34

been a movement in the last few years

25:39

towards large scale indoor vertical farms.

25:43

Are you working with them at all

25:43

and and what do you think of them?

25:49

Sure. I mean, there's been a movement

25:49

towards them and there's been

25:52

a crashing of them recently,

25:52

especially the more high tech ones.

25:56

Look, indoor vertical growing

25:56

can be really great on

25:59

water and pesticide impact.

26:02

It can have a lower footprint though

26:02

if you fully take into account the

26:06

embedded energy of building all those

26:06

greenhouses, high tech structures, then,

26:11

you know, something to check there. I'm, I'm in support of it, especially if

26:13

it could be diversified and localized,

26:18

but it doesn't really grow much calories.

26:21

This is one of the challenges with it. It's great for micronutrients and

26:23

greens and really fresh, clean

26:26

produce and even strawberries. It's great, but you're not

26:27

getting a lot of protein.

26:30

You're not getting a lot of good carbs.

26:33

Like it's the, the bulk of the

26:33

mass of what human beings eat is

26:37

not generally produced in them. Overall I'm in support.

26:41

I think they're excellent. They generally score

26:42

quite well in our systems.

26:44

The localization as opposed

26:44

to the globalization of them

26:47

can be really excellent. But are they a panacea to what's

26:49

what we're facing in the world?

26:53

Unfortunately not.

26:54

Hmm. Interesting. Okay, cool. And we're on the Sustainable

26:57

Supply Chain podcast.

27:01

So talk to me a little bit

27:01

about, you know, the importance

27:04

of this for supply chains. If I'm a supply chain manager,

27:06

you know, how does this impact me?

27:11

Okay, so this is, this

27:11

is where it gets really interesting.

27:13

Supply chains have been opaque. They've been hard to see.

27:18

Everybody's got their

27:18

cards close to their chest.

27:20

They don't want to digitize it. They like their pen and

27:21

paper and their handshake.

27:23

Like it's a, it is in some

27:23

ways a beautifully conservative

27:28

part of the food industry.

27:30

I think one useful thing to note

27:30

from our perspective is that actually

27:34

the word supply chain is not the

27:34

most useful way to think about

27:38

it, because they aren't chains.

27:41

Chains don't actually

27:41

exist in natural systems.

27:45

And they're kind of just one-way, link to link to link. It's more like a supply web or a supply

27:47

network or a supply system because it's

27:52

much more complex and interconnected

27:52

than anybody, you know, thought it was

27:56

when they were calling it a supply chain. Also, there's a, a history of supply chain

27:57

in that we actually sadly used to chain

28:03

people up to produce the goods that we,

28:03

you know, move through the supply chain.

28:09

And there even today, I mean there are

28:09

millions still in, in modern slavery.

28:15

So, we don't use the word supply

28:15

chain because we think it creates the

28:18

mind that thinks about it wrong to

28:18

solve for what we're actually facing,

28:22

which is a complex network or web.

28:25

And so part of HowGood's work

28:25

is to be the social network for

28:29

sustainability data so that you can pass.

28:33

You don't give up all your ip. This isn't about sharing all your

28:35

data openly everywhere, but you can

28:38

pass the appropriate information for

28:38

somebody to make a decision upstream or

28:42

downstream from you through the system

28:42

in a more comprehensive and trusted way.

28:48

So if you're a supply chain.

28:50

If you're a supply system manager at a

28:50

major food company or at any food company

28:55

and you're looking upstream and you have

28:55

very low visibility into where things

28:59

are coming from and what the impacts

28:59

are, it's hard then for you to make a

29:02

decision to lower your carbon footprint.

29:05

And now with science-based targets

29:05

for carbon and for nature, now with

29:09

regulations and investors coming

29:09

in and saying, you've gotta be

29:11

lowering your footprint more and

29:11

more, this is landing on supply chain

29:18

professionals to solve things to make

29:18

a difference, to reduce the carbon

29:22

footprint, to reduce the labor risk. And these women and men who are

29:25

in that role have not had a lot

29:29

of data to make decisions on. Sure they get price.

29:33

And they know quality and they get terms

29:33

and they can negotiate the logistics, but

29:37

they need sustainability intelligence at

29:37

their hands, at their fingertips, just

29:42

like they need business intelligence

29:42

in order to say, I've got 16 suppliers,

29:47

which of them has the lowest carbon

29:47

footprint for this sugar or this beef?

29:52

Because then I could make a decision

29:52

where I don't even have to change

29:54

my products, but just switching a

29:54

supplier or not switch a supplier.

29:59

Why don't you engage with your supplier

29:59

and say, look here for your crop.

30:03

Here's the six top recommendations

30:03

for abatement strategies you could use

30:07

to lower the impact of your product. Would you like to pick out two or

30:09

three of them and we'll go at it

30:12

together and see what we can reduce? Most companies we work with would

30:14

rather engage their suppliers than

30:18

change to a different supplier. And so for all of that, you need

30:19

unbiased data that can be assured,

30:25

so you can understand the current

30:25

impacts, make decisions in the right

30:28

direction, and then gather more detailed

30:28

primary data in collaboration with

30:35

your upstream suppliers over time.

30:38

It's interesting that

30:38

you use, the word can be assured with

30:41

respect to the data because increasingly

30:41

regulations are going to require

30:50

reporting and assurance and auditing

30:50

of data the same way financial reports

30:56

are required to be reported today, no?

31:00

I mean it's

31:00

like, it's so close to here.

31:03

You basically have to be acting

31:03

like it's here, specifically the EU

31:07

deforestation regulation which singles

31:07

out six high impact commodities beef,

31:14

palm oil cocoa, coffee, rubber and soy.

31:18

So it singles those out to start, but the

31:18

onus that it puts on companies working

31:23

with, or even in some cases making

31:23

products with those ingredients, you

31:28

have to be able to trace the individual,

31:28

lots of material back through the

31:33

supply system with chain of custody

31:33

to the farm where they were produced.

31:38

You need to have a polygon, you know,

31:38

an outline of the map of that farm.

31:42

And once you have that, you then have

31:42

to be able to say, no deforestation

31:47

happened on this plot of land post 2020.

31:51

Is what the law says. And if you get caught out not

31:52

having that in the EU, the

31:56

fine is 4% of your revenues.

32:00

Yeah.

32:00

that's a big stick, right? That's significant.

32:03

Nobody wants to get to the end of

32:03

the year feeling like they had a,

32:06

a good year of growth at 3%, get

32:06

hit by a fine and realize that

32:10

they're, they're down a point. That's like that nobody wants that.

32:13

And so this is a really significant

32:13

legislation that's coming into force

32:17

in 2025 and is going to require the

32:17

rapid digitization, the rapid upskilling

32:24

in terms of technologies and software

32:24

that companies are using to be able

32:29

to track to this level of detail. I, you know, there's a lot of, there's

32:31

gonna be a lot of challenges with it.

32:34

Both from the, you know, companies

32:34

that will be hit the hardest, the, the

32:38

processors, the ingredient traders, but

32:38

then also up to individual small holder

32:42

farmers in the supply systems you know,

32:42

who might be producing coffee, and this

32:47

is seen as an undue burden on them.

32:50

So, either way, because of that

32:50

financial penalty, that's sort of

32:55

staring, staring at everybody in

32:55

the coming years, there's gonna be a

32:59

massive movement in this direction.

33:02

In fact, if, if your company

33:02

isn't moving this direction.

33:07

Mm.

33:07

You kinda get on it

33:07

'cause it's gonna take a while to get

33:10

the system set up to do the tracking. My hunch is once the six high impact

33:11

commodities, once we've been going for

33:17

a little bit there, I think then people

33:17

will say, oh okay, this is doable.

33:24

There is software out there that

33:24

can help me do this traceability.

33:28

There is software out there that I

33:28

can see the value of being able to

33:31

say EUDR compliant, deforestation

33:31

free product there will be a

33:37

marketing benefit to that, right? So I, I think people will see the value,

33:39

see that the software tech tools are

33:42

there, and this is leading me towards

33:42

AI and artificial intelligence a bit,

33:46

but maybe we'll save that and I think

33:46

there will be more ingredients that it's

33:50

required of, and in the not too distant

33:50

future, it'll just become the norm to

33:55

have that level of data visualization,

33:55

transparency, traceability in, in

34:00

global supply systems and certainly

34:00

the companies that do it first will get

34:03

the, the benefits of being the leaders.

34:06

Nice, nice. And you know, having mentioned

34:06

AI, et cetera and all, all the new

34:10

technologies that are out there and

34:10

as the Innovation Officer for HowGood.

34:15

What's next? What's coming down the line that,

34:16

you know, is exciting and interesting

34:20

and supply chain people should

34:20

be, you know, all excited about?

34:24

Ah, there's, there's so much. I mean, I saw a Nobel Prize winning

34:26

economist speak recently about

34:31

artificial intelligence along with

34:31

scientists from Google, and they

34:35

described that artificial intelligence

34:35

is a general purpose technology.

34:39

Especially the, the generative

34:39

intelligence, Gen AI a general

34:43

purpose technology on the order

34:43

of electricity and computers.

34:49

Right.

34:50

That the massive

34:50

shifts that we saw in the world

34:52

with the introduction of electricity

34:52

and computers, we're in the early

34:57

stages of it here with Generative AI.

35:00

So HowGood is leading this work,

35:00

especially this particular intersection

35:05

of food, artificial intelligence,

35:05

and impact food, artificial

35:09

intelligence and sustainability. We're right at that nexus.

35:12

You know, we've convened conversations

35:12

at Climate Week at COP, the

35:16

Climate Conference at Davos, and

35:16

a number of events this year.

35:19

We'll be focusing on

35:19

this exact intersection.

35:23

There's three levels of work that

35:23

I see supply chain professionals

35:29

and the broader food and

35:29

agriculture industry can work with.

35:31

But actually this is across any industry. You could see these three levels.

35:35

The first one is efficiency, where you

35:35

can just do things that you currently

35:39

do a lot faster and easier, querying

35:39

large data sets with natural language as

35:44

opposed to running through spreadsheets. You can just asset AI for it.

35:48

Writing and sifting through and

35:48

figuring out what the best RFP is.

35:52

AI will get so good

35:52

and fast at doing that.

35:55

There'll be AI's writing the RFPs,

35:55

there'll be AI's responding to them.

35:58

Right? So all of this is in efficiency.

36:01

Then there's a level which is innovation.

36:04

And this is where I

36:04

spend a, a bunch of time.

36:07

It's great to do the things that

36:07

we already do more quickly, and

36:09

Gen AI helps with that immensely. All the data coming up shows

36:11

productivity increases from it.

36:15

Innovation is about

36:15

really doing new things.

36:18

And so, you know, we're looking

36:18

at it for things like, here's a

36:21

product or here's a portfolio,

36:21

here's a supply chain portfolio.

36:24

You're buying 200 materials

36:24

from 50 countries and you

36:28

know, a thousand suppliers. If I wanted to decarbonize by

36:30

15% and reduce my land usage and

36:38

water impact while maintaining

36:38

my current price prices overall.

36:45

What's the best way to do that? In our platform, you'll be able to click

36:47

a button and click optimize, and the AI

36:51

will run through all of the options, all

36:51

the different suppliers, all the different

36:54

sourcing locations all the, you know,

36:54

ingredient swaps you could consider.

36:58

Everything that you've got and then come

36:58

up with a quick set of recommendations.

37:02

Try this, try this, try this,

37:02

and you'll interact with it.

37:05

You'll be able to say, oh. That's a thumb that up,

37:06

that's a good recommendation.

37:09

Or no, that doesn't make sense. My company can't do that.

37:11

And then the AI will start. This is machine learning now.

37:14

It will start to learn you and what your

37:14

company can do and then make better and

37:18

better recommendations going forward. So this is gonna, I just talked

37:20

about it from a supply chain level.

37:23

Imagine that same thing happening at

37:23

an individual product reformulation

37:27

level or at a portfolio of products

37:27

level or at, for a retailer who wants

37:30

to decarbonize and needs to change

37:30

their category mix, or for an ingredient

37:34

supplier who's looking at what new

37:34

crops they want to be making into

37:37

ingredients and selling into the market. Innovation's gonna be

37:39

incredibly useful there. And then just one last little bit on it.

37:44

You know, the third level that I've

37:44

identified is the level of transformation,

37:49

which is where you see actual, like

37:49

transformational, really big phase shifts

37:56

in the industry come from Generative AI.

37:59

And I'll be honest and say we ha

37:59

we haven't seen any of them yet.

38:03

It's like, it's a little nascent. I'm looking for it every day.

38:07

I'm thinking about, I'm saying, where

38:07

is that transformational impact?

38:10

They're really totally changes the game.

38:12

So if you see one if you hear about

38:12

it, I'd love to hear about it.

38:16

And I think we, I think there's a, a lot

38:16

of potential in what we can do with AI for

38:22

yeah, this profession and realm of work.

38:23

Yeah. Great, great. Superb. We are coming towards the

38:26

end of the podcast now.

38:28

Ethan, is there any question I didn't

38:28

ask that you wish I had or any aspect of

38:33

this we haven't touched on that you think

38:33

it's important for people to think about?

38:38

There's two realms I'd like to touch. One is about the granularity of data.

38:43

And we've explained that we go from

38:43

secondary data towards primary data,

38:49

and then companies are looking upstream

38:49

in their supply system getting more and

38:53

more detail what's actually happening. What's the, you know, agricultural

38:55

practices on the ground, what kind

38:58

of abatement strategies are you

38:58

trying out and what's happening in

39:02

carbon, in water, and biodiversity. One thing that's great is that we have

39:04

a now globally unified set of metrics

39:09

to track the impacts of agriculture.

39:12

The sustainable markets initiative that

39:12

HowGood is part of authored two reports,

39:16

but one recently that has the five top

39:16

metrics for regenerative agriculture and

39:21

they're very straightforward metrics. And they align with the One Planet

39:23

Business for Biodiversity, with

39:27

the SAI platform, the Sustainable

39:27

Agriculture Initiative platform, they

39:31

align with the global farm metrics. So we're getting at a, at a high level,

39:32

a small, tight set of metrics that

39:37

every company should be measuring, every

39:37

ingredient we should be measuring it for.

39:41

But when it comes to granularity,

39:41

what some of our partners are finding,

39:45

especially the ingredient suppliers

39:45

who have traditionally been a little,

39:49

I dunno, reticent to share some of

39:49

their data from their farm systems.

39:53

What they're finding is because

39:53

there's demand from the CPGs and

39:56

from the retailers for this level of

39:56

information, the ingredient suppliers

40:01

that come forward first and say,

40:01

here's our carbon footprint, here's

40:05

our water footprint, here's our

40:05

biodiversity impact, that's seen as a

40:10

benefit because they're differentiating

40:10

themselves on sustainability.

40:13

And then the companies that aren't

40:13

disclosing that sort of information.

40:16

They're just getting slapped with the

40:16

industry average worst case scenario

40:21

for beef or for coffee or for whatever.

40:24

And so by disclosing more, you

40:24

just, you get a more intimate

40:28

connection with your customer.

40:30

And what we're seeing is that whole

40:30

thing is speeding up because we have

40:33

six of the 10 largest food companies

40:33

in the world using our platform.

40:38

Now they're asking data from

40:38

the ingredient suppliers.

40:41

Instead of ingredient suppliers having

40:41

to answer six different surveys or 17

40:45

different surveys about that data from

40:45

every single manufacturer out there.

40:48

They can now come to one place,

40:48

enter their data once, and it gets

40:52

distributed to all the users in the

40:52

format with the metrics they wanted

40:55

So again, this is that social network

40:55

of sustainability that's speeding

40:59

up and helping everybody valorize.

41:02

And get the value out of the good

41:02

sustainability initiatives and

41:06

work and transparency that they

41:06

have done on their ingredients.

41:10

Now, mostly that's on carbon, but

41:10

the last sort of leg and point

41:14

I wanted to make is that this is

41:14

all coming for biodiversity to o.

41:19

We have science-based targets for nature

41:19

releasing their biodiversity guidance.

41:23

The GRI more on the investor side

41:23

just released their nature on

41:26

biodiversity reporting requirements. We have a COP 16, the conference

41:29

of the party 16, for biodiversity

41:34

in Colombia at the end of this

41:34

year, right before the climate COP.

41:37

So biodiversity is, is rising.

41:39

So if you're feeling like you're

41:39

just barely getting your arms around

41:43

carbon and greenhouse gas emissions. Well, hopefully you learned a

41:45

lot there because it's gonna

41:48

be required, I think, soon. And, and there's an upside if

41:50

you're leading it on the, on

41:54

the biodiversity side as well. And of course, biodiversity and carbon,

41:56

are deeply interwoven and we shouldn't

42:00

really look at them separately. So I think this is a net benefit and

42:01

hopefully what the industry has learned

42:05

on carbon, we'll be able to transfer

42:05

and speed up on biodiversity soon.

42:10

And if you need help I happen to

42:10

know of a place that has a lot

42:13

of data that could be supportive.

42:15

Which leads me

42:15

nicely to my last question, Ethan.

42:19

If people would like to know more

42:19

about yourself or any of the things

42:22

we discussed in the podcast today,

42:22

where would you have me direct them?

42:27

HowGood website's a great start. There's a huge amount of information

42:29

in our help centers and in our, our

42:34

video, our own podcast that we do. So there's a lot there

42:36

on the HowGood website. And then you can find me haunting on

42:38

LinkedIn around various water coolers

42:43

there and, and putting out everything I

42:43

find on the leading edge of innovation,

42:48

artificial intelligence, food and impact.

42:50

So, connect with me

42:50

there and send me a note.

42:54

Perfect. Great. Ethan, that's been fantastic.

42:56

Thanks a million for coming on the podcast today.

43:00

Thank you, Tom. It's been a blast.

43:02

Okay. Thank you all for tuning into this

43:03

episode of the Sustainable Supply

43:06

Chain Podcast with me, Tom Raftery.

43:09

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43:09

professionals listen to this show.

43:14

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43:14

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43:18

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43:21

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43:38

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43:41

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43:42

of sustainable supply chains.

43:47

Thanks. Catch you all next time.