The Secret to Supplier-Driven Sustainability

It starts with asking the right questions and being prepared to listen.

When Chief Supply Chain Officer Ricky Silver of Daily Harvest joins the C to C podcast, he shares insights on the secrets of supplier-driven sustainability. In a lively discussion with TraceGains CEO Gary Nowacki, he dives into the company’s commitment to creating a better food system, the inherent dangers of greenwashing, and what he’s learned simply by listening.

In case you missed the rise of Daily Harvest’s meal kits during the pandemic, they make it easier for consumers to incorporate fruits and vegetables in their everyday diets. From smoothies to bowls, bakes, and more, the team behind this subscription service never stops innovating. Download or stream the full episode to explore more of the R&D process that’s earned this CPG startup $120 million in funding.

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Ricky Silver: On the flip side, right, I go back to this idea of being able to listen to the growers on the other hand, right? And really hearing from a lot of the growers around a need to support an agrobiodiversity approach as it relates to the commodities that they grow—Why?

Because if you want to invest in organic and regenerative agriculture –right?—you can’t be a monocrop operation. You can’t grow one thing over and over and over again because the only way to do that is through the nonorganic approach of chemical pesticides and inputs. And so a lot of our growers are looking for these new biodiverse raw materials that they can grow, that help their soil, but they need the market.

Gary Nowacki: This is CtoC, where we cover innovation in the food and CPG business from conception to consumption.

Welcome to the podcast, everyone. Today, I’m very excited to have, as my guest, Ricky Silver from Daily Harvest. Ricky works for a fantastic company with a lot of great products and is currently chief supply chain officer at Daily Harvest, as we all know, a very critical role in these trying times. So welcome to the program, Ricky.

Ricky Silver: Thanks so much for having me.

Gary Nowacki: So Ricky, we focus so much on innovation here and on all the different challenges of food and beverage and CPG. So what are you seeing as some of the biggest challenges in food and beverage today? And if you have a crystal ball, what do you think the challenges might be in 10 years?

Ricky Silver: Yeah, that’s a great question. And if you don’t mind, I’ll just take a quick step back to make sure the listeners tuning in, they know all about Daily Harvest. We’re delivering chef-crafted food built on sustainably sourced fruits and vegetables. And our recipes are delicious, easy to prep, and as good for you as they are for the planet. 

We’d like to say from seed to plate, we’re committed to building a better food system. So a lot of that is what drives our approach to innovation.

Continue reading the transcript:

Ricky Silver: And getting back to that question around what’s the biggest challenge, I think if you think about the way the industry has focused and prioritized innovation, it certainly hasn’t been at the prioritization of human and planetary health. So in the short term, I think a lot of the industry is trying to keep up and trying to course-correct because of the systems that they’ve been so reliant on.

I mean, case in point, food is responsible for one-third of the global emissions. And we know the current challenges as it relates to human health and health care as it relates to people’s food choices and what’s available to them. So, if we want to address climate crisis and nourish humanity, we really have to rethink how we both grow food and how we eat it.

And so, I think to answer it more specifically, a real challenge for this industry is to pivot as quickly as possible and to really anchor the needs of consumers, the true needs of consumers, as it relates to health tastes and convenience, because if we change the way we eat, we can also the change the way we grow food. And that’s really core to Daily Harvest mission.

Gary Nowacki: And so you see it as priority one today, priority one in 10 years?

Ricky Silver: Yeah, I think, look, we have to look at it as a horizon, right? You can’t course-correct an industry this size overnight. But if in 10 years from now, we think about getting closer to that new system, right, not just trying to tweak and adjust the one we have today, but really a new vision for the food system.

You look out ahead to what’s coming 10 years now, right, things on the climate side, for example, are only going to accelerate. Even if we make the progress we know we can as a global industrial system, right, there’s no question, 10 years from now, the impacts that climate will have on the world and on supply chains will only create more chaos and more complexity. So, well, I wouldn’t say it’s a new issue 10 years from now. I just think it’s an evolution of the challenges we’re facing.

Gary Nowacki: And Ricky, is there anything in particular that you could recommend that every company in the food and beverage industry should either stop or start doing.

Ricky Silver: I love that question. I think one of the things we’ve really been focusing on because of this idea that we really want to ground our food innovation in the consumer who eats it, right, and develop the food with their input in mind.

But more uniquely, I think, to what we’ve been doing is also take the input of those that are growing the food themselves. And so, I think if you think about the really traditional model of R&D and procurement that the industrial food system has relied on, the procurement side really ends up going out there to the supplier world, right, whether that be a processor or a grower even and sort of tells them what they need, right?

And so it’s a purchase what we define as the need model. And I think what we’ve been really excited to see is when you go out there and you actually talk to the agricultural community and ask them what they want to grow or even what they need to grow, right? They know what’s going to work most importantly for their soil health, for example, or making sure that they can add that extra crop rotation into their organic cycle.

It’s unbelievable what happens, right? You start to ask questions and you start to open up possibilities. And so a lot of the way we think about our innovation model is how do we create a culinary operation and a supply chain organization that can take those inputs, both from the agricultural side and the consumer side, and be nimble enough to support it.

Create the market for those interesting and important potential growth areas. So, I would say just to answer it more directly, I think we need, as brands and as businesses, to stop being so much order makers and be better listeners.

Gary Nowacki: More partnership, less adversarial traditional relationships.

Ricky Silver: Yeah, exactly.

Gary Nowacki: And that’s a great segue to our next topic, which is when it comes to innovation, so much innovation today, as you know, Ricky, is tied to collaboration. What do you see as your key collaboration partners when you develop a new product?

And I know Daily Harvest is constantly launching new products, so who are the key stakeholders that you collaborate with? Is it your customers? Is it your suppliers? Is it your co-mans? All of the above? Talk to our listeners about that.

Ricky Silver: Yeah. And I can use just one of our recent launches. Just this last week, we launched our Daily Harvest Crumbles, which is our entry point into the alternative meat category. Very exciting, and I think what that category stands apart for us is exactly to your point. Who are we listening to and who are we helping, who are we driving information from to guide our development process?

So first, on the consumer side, we do a ton of listening. We work very closely with our in-house data science and research teams to generate ideas and to generate areas of opportunity directly from our customers. And what we heard from them in that case, right, was a desire and a look for something more in that higher protein, more on the staple side, right? How do we take something that can be used in a multitude of ways? So we heard that loud and clear from our consumers.

And on the flip side, right, I go back to this idea of being able to listen to the growers on the other hand, right, and really hearing from a lot of the growers around a need to support an agrobiodiversity approach as it relates to the commodities that they grow—why? 

Because if you want to invest in organic and regenerative agriculture—right? —you can’t be a monocrop operation. You can’t grow one thing over and over and over again because the only way to do that is through the nonorganic approach of chemical pesticides and inputs. And so a lot of our growers are looking for these new biodiverse raw materials that they can grow, that help their soil, but they need the market.

And so we were able to put those two things together. Right? This deep consumer need for a healthy truly plant-based, not lab-grown meat alternative with a ability to support a range of biodiverse ingredients. And there you go. Now you’ve got Crumbles. And so when we think about, “Who are we developing with?” those primary points of contact or developing food with those that eat it and those that grow it.

Gary Nowacki: I love it. I love Crumbles? because, as you know, some of the plant-based alternative protein providers have had a lot of flak in the press about having a lot of overly processed or not necessarily, quote, “natural” ingredients. It looks like you got some really good things in Crumbles there.

Ricky Silver: Yeah. And look, we like to say—we really are challenging ourselves as much as we feel like we’re challenging the industry. And so we really hold ourselves to a standard where we want to make sure we’re delivering on our mission with each and every product launch. But it’s true. Right?

A lot of these other alternatives that have been developed are relying on pretty heavily processed operations. And also, just a handful of, unfortunately, those same crops that are most likely to be monocropped out in the industry. Right? So if you think about soy and corn and wheat even. Right? These are crops that are not contributing to a regenerative approach. And so, again, competition is good. And so there’s lots of alternatives out there in the world. But we really feel like Crumbles? is a unique proposition. And we’re excited about the early traction we’re building with the consumers on it.

Gary Nowacki: And you’re saying you had a different kind of relationship with your suppliers and that that you pulled them, maybe, forward more into the innovation process, whether it was—I’m looking at your ingredients here—lentils, walnuts, mushrooms? Is that how it worked?

Ricky Silver: Yeah. And I’ll actually give you another example that I love to bring up. We were visiting some lentil farmers, actually, in Montana not too long ago. And some of the conversation really specifically, it was around the challenges that they’re having.

These are organic growers keeping that land in organic production. Why are they struggling? Well, there’s an invasive pest that they’re struggling to manage with the organic solutions that are in the market. And so what we heard from them loud and clear was two things. One, they desperately needed companies and government to step in and help fund and invest in solutions to those types of problems. They were tremendously organizing themselves to work together to find solutions. But this is a great area where corporations and government should be stepping up more.

But, two, they also acknowledged that they were some tried and true solutions to these problems, like adding additional rotations into their crop planning. And there were some unique varietals of ingredients, like chickpeas, for example, that they were finding. If they could plant those into those rotations, they were seeing incredible results for their soil health and the management of the organic process.

And so, one of those was this unique black chickpea varietal that we saw and we loved and they sort of lamented, “If only there was a market.” Right? I have not seen a black chickpea before personally. And we said, “Well, good news, our culinary team will find an application for that.” And so there we go. They were able to make that commitment to grow and we were able to make that commitment to purchase knowing that we had built the culinary and innovation mindset to find a home and find a solution for that. 

So, it really goes back to that change in mindset around what procurement or what sourcing means. Because we’re able to create opportunities for those farmers that is not reliant on existing recipes, right? We’re able to develop around it. And I just love that example because it doesn’t always work that seamlessly, right? But it’s really a great example of how when you approach the process differently you end up with really special outcomes.

Gary Nowacki: So you actually became a partner in their crop rotation?

Ricky Silver: Yes. And soon to be, right? The team’s working on those recipes now. So when those black chickpeas become available, right, they actually grow and are handled and available for use we’ll be ready.

Gary Nowacki: Well, if they ever make Kiss the Ground part two you guys need to be in it.

Ricky Silver: Well, we’re definitely excited about some of the partnerships we’ve got out there both on the actual farming side but also some of our new partners as it relates to different bodies like American Farmland Trust and CCOF which we could definitely get into.

Because our belief is we’re both trying to change the way the industry is working but also humble enough to know that it won’t be just on us. So yeah, partnership is going to be key.

Gary Nowacki: And that kind of segues into our next topic which is you recently partnered with some other CPG companies—not suppliers—other CPG companies like Simple Mills on something called The Almond Project. Tell us about that.

Ricky Silver: This is such a great example of what’s possible when brands and suppliers and government and technical experts come together and really think about how to change the world.

The Almond Project is a multi-year investment in researching the impacts of regenerative practices on almond growers and almond growing I should say. And what we were able to come together—Simple Mills, Capello’s, Treehouse Almonds, a few others as well in that mix—in terms of bringing this to life was coming up with a strategy that lays out four different plots of lands, applies different practices to each and actually studies over five years the impact that those practices have over soil health and a multitude of different specific attributes like how much water is being maintained in the soil.

And almond gets that rap as a high-water utilization crop, but the truth is some of these practices may totally transform the ability for almonds to be a sustainable commodity not just for people eating it but for those that are growing it, right? We often forget, when we talk about agriculture, that the farmer livelihood component of sustainability is really, really critical. 

And so, this is working and this is happening because of that partnership and that commitment to the long term. Because I would say that’s the biggest trade-off right now in the system. It takes time and energy and money to validate changes in agriculture and the brands and the businesses have to be the ones helping lead that transition.

Because if we find results in these next three to five years that are meaningful, yeah, it will only have been on a relatively small plot of land, all things considered. But now you can actually go to other growers and convince them it’s worth it, right?

Because I think that’s one of the big challenges we have. Agriculture is already a pretty low-margin business. It’s high risk. These farmers are investing their livelihoods and asking them to do more without that proof point is just too much to ask. And so, this is a great example of both partnership and a commitment to the long-term that I’m just so thrilled we’re a part of.

Gary Nowacki: So I know The Almond Project, at this point, it’s an experiment and you guys are going to let this play out over multiple years, so you got to see what you find. But do you have any preliminary theories on where this is headed or how you may improve almond growing?

Ricky Silver: Well, I think the nice thing is while it is an experiment, I would say it’s more a validation experiment than it is a start-from-scratch, right? We’re definitely not starting from zero as it relates to the types of practices that should have an impact, right?

Things like cover cropping and animal integration are proven methodologies on the aggregate, but now it’s a question of really digging into the specifics. What is the real, tangible impact on soil health that we can measure? Because I think we’re maybe—we hope, right?—that’s where the industry is headed.

We hope business is headed as a world in which those investments in new practices, which often come at a cost, can be validated sufficiently so those costs are covered, not by the farmer, right? But by the industry and government as a whole to accelerate the change we need so that we can deal with the climate crisis, right?

So, this is where government and corporations are going to need to step up. We think an experiment like this helps create some of the data to really justify some of that additional spending. But you think about where the government, for example, is subsidizing agriculture today, that simply can’t be where we subsidize agriculture long-term if we want agriculture to be a solution to the climate problem. And so, again, while relatively small in the grand scheme of things, we really see this as a model that helps scale change in the system.

Gary Nowacki: Yeah. Yeah. And so, Ricky, with so many companies scrambling to do something about sustainability or perhaps to even slap sort of sustainability elements onto their labels, what advice do you give to these companies?

Ricky Silver: I’d say it helps to be a business that has it ingrained in your DNA. So, I’m grateful that I work for a company that can honestly say from the get-go, right, the mission was tied to the bigger we get, the greater we can do and really had a keen eye towards this idea that our core mission of changing the way people eat was connected to the way food is grown and being able to make a meaningful dent in that.

Look, but not all companies, I think, have that starting point. And so, I would say, on a more, you know, general level, making sure that you really are focused on long-term impact as opposed to short-term attention is a real key. Resist greenwashing. 

It is an incredibly easy thing to start touting potential changes in the system to draw attention to yourselves. But rather, I’d love to see more brands just simply acknowledge the complexity acknowledge the realities and the tradeoffs that exist in the system.

I started my career at Pepsi Co. and just spent a lot of time working on some long-term packaging technologies and really saw firsthand that there’s this tension between new technology and the infrastructure to deal with it, right. So, you think about composting maybe more relevant to the Daily Harvest business today, right? Composting in and of itself is an incredible solution to a massive problem. And yet there isn’t sufficient composting infrastructure and technology in the country. So, these are tradeoffs that I think if brands were just a little bit more honest and a little bit more humble about the difficultiness—difficulties I should say, I think, one, consumers would engage in the problem more. And two, there would be these more obvious examples of partnerships.

I’ve told this story before, and I feel like I probably have to retry it at some point. But early days of my career, I remember getting sort of almost laughed out of the room when I suggested Pepsi Co and Coca-Cola work together on changing the way we looked at plant-based plastic as the future, right? Why were we competing on a problem that the data has proven out? Consumers aren’t going to choose in the long run based off of who got there first, right. But the reality is what if those companies had worked together to solve that problem? Maybe both would have solved it faster.

Gary Nowacki: Do you worry that with the word greenwashing showing up more and more in the media, do you worry that consumers are just going to get jaded and burned out on this whole topic?

Ricky Silver: I don’t know. I think there’s a real consumer reality when you think about what impacts them. The truth is most consumers don’t have the time to invest all of their energy into solving the climate crisis.

It’s not fair to put it on the end-consumer, in my mind, right? It’s where I think we’ve spent a lot of the last number of decades is trying to convince people to use less water or change the way that they shop. And, look, that’s a part of it. But I really think it’s more incumbent upon business and government, as I said, to really drive the changes that need to occur at a greater scale.

And so, I think there will always be a consumer enthusiasm for companies and brands that do it the right way, and, again, engage with them in a really open and transparent way. I think transparency is the key here. It’s possible that consumers will start to feel like no matter what they’re hearing, they can’t totally trust it. But that’s where I think being open and honest is the key. And it’s hard. It’s not going to be easy to solve these problems. But if brands are truly focused on it, I think we can get there.

Gary Nowacki: Ricky, anything else? Any other words of advice you’d like to share with our listeners before we go on to wrap up?

Ricky Silver: No. I guess I would just say I think one thing that’s been most humbling for me working at Daily Harvest is really seeing the reactions we get from our customers when they really feel the difference in the food that they eat that you don’t need to eat Daily Harvest for every meal, for example, to feel the difference.

But when you have that relationship with your customer and you lean on them to share with you real feedback, it’s amazing how much that will guide you. And I think that consumer-centricity is something a lot of businesses talk about. 

It’s not necessarily hard at this point in the way the world is built to collect data or ingest data. It’s are you set up to do something about it?

And I’m so grateful that Rachel in the early days of Daily Harvest really challenged us to build a physical product organization that was capable of reacting to that data. And so that’s my sort of biggest piece of advice is as you’re thinking about setting up your business, collecting data is table sticks these days. But are you building an organization that knows what to do with it is where I think the difference-makers will ultimately prove out.

Gary Nowacki: I want to thank my guest today, Ricky Silver, who is chief supply chain officer at Daily Harvest. If you have not checked out their products, really cool products, go check them out, Daily Harvest. And another great product recently launched Crumbles, sounds terrific. Ricky, thanks so much for being on the podcast.

Ricky Silver: Thank you so much.

This podcast is produced for informational purposes and does not constitute any scientific, legal, or medical advice.

The views and opinions expressed by guests of this podcast are those of the guest alone and do not necessarily reflect the opinions and positions of the host or any other entity or organization. Listeners are encouraged to listen with an open mind and form opinions of their own.

This podcast originally aired on May 13, 2022.

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