Investing in Regenerative Agriculture and Food

273 Eric Smith - Commoditization is the root cause of all ecological destruction and human health impacts

January 02, 2024 Koen van Seijen Episode 273
Investing in Regenerative Agriculture and Food
273 Eric Smith - Commoditization is the root cause of all ecological destruction and human health impacts
Show Notes Transcript Chapter Markers

A conversation with Eric Smith, CEO and co-founder of Edacious, who is building a technology platform for differentiating quality of food. Eric and Koen talk about measuring quality and how to turn around objectively one of the most complex systems ever, from one driven by chemicals to one driven by biology, with abundance as an outcome. The solution, according to Eric, is radical transparency.

Get ready for a deep dive into the world of nutrient density with one of the few people building a company in the space. Why did they choose to focus mainly on cows and grains? Hint: the climate impact there is just enormous. Shockingly non of the retailers or food companies is measuring anything when it comes to quality! Everything is about quantity and availability. 
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Speaker 1:

Get ready for a deep dive into the world of nutrient density with one of the few people building a company in the space. Why did they choose to focus mainly on cows and grains, hint? The climate impact there is just enormous and, shockingly, none of the retailers or food companies is measuring anything when it comes to quality. Everything is about quantity and availability. How do we turn around, objectively, one of the most complex systems ever, the food and agriculture system, from driven by chemicals to biology driven, focused on abundance? As an outcome, the solution, according to our guest today, is radical transparency. Discover why he left a comfortable job at the Granton Foundation focusing on investing in neglected climate opportunities mostly regeneration and decided to co-found his own company. What are the connections between healthy farming practices and the healthy soil, healthy produce, healthy gut and healthy people? Welcome to a special series where we go deep into the relationship between regenerative agriculture practices that build soil, health and the nutritional quality of the food we end up eating. We unpack the current state of science, the role of investments, businesses, nonprofits, entrepreneurs and more. We are very happy with the support of the Granton Foundation for the protection of the environment for this series. The Granton Foundation is a private foundation with a mission to protect and conserve the natural environment. Find out more on grantonfoundationorg or in the links below.

Speaker 1:

Welcome to another episode. Today with the CEO and co-founder of Adatius, we are building a technology platform for differentiating food quality. Welcome, eric. Thanks, it's so great to be back. Yeah, I was going to say welcome back, eric.

Speaker 1:

Actually, you've been on the show. A while ago when you were at the Granton Foundation and you were focusing on neglected climate opportunities, you identified one, I think, a biggie or a very big one. We've actually been making a whole series about that, a two series now on nutrient density and what it could mean for regenerative agriculture. I've been supporting that and it's been on my list. Obviously, to check in with you what Adatius is, what Adatius is doing, there's not a lot. I mean there's a bit on the website. There's nothing on LinkedIn. I'm very much looking forward to unpack your journey there, or the part of your journey we didn't cover last time, because obviously that still has to happen, and why you went into, let's say, the deep end of the pool of this neglected opportunity, because that's definitely what you did. You went deep. What happened since the last time we talked with Eric?

Speaker 2:

Yeah, well, it's just so great that all the work that you've been doing to really bring these stories forward and really connecting the dots between our agriculture systems and the nutritional quality of the food that we're producing I've really loved some of the content that you've selected and the people that you've selected. It's been very educational for me and that's why it's been exciting to be a part of this journey in a lot of ways. I think. To take a step back, my background is actually in forestry. I really started with the knowledge that I knew ecosystem services were going to play a vital role in global ecological restoration. Fundamentally, we depend on nature. A lot of my early career was spent around forests, forest management and forest ecosystem services. I worked for an organization called Fono Fifo, the National Fund for Financing Forestry of Costa Rica. They really commercialized what today we know as ecosystem services. They're experiencing rampant deforestation. In the 90s they codified into law that we value and protect the wealth that comes from our forest ecosystems. That was foundational for me and my journey.

Speaker 2:

I went into auditing, funny enough, really understanding the pros and cons of certification when you send auditors out to forests and agriculture systems to say are you doing this the best way possible within conformance of a standard. That standard was the Forest Stewardship Council. I had early seated the table for what became many standards and certifications, which today many consumers know as labels. Then I went to go on and do my MBA and my Master of Forestry and really wanted to understand the trade-offs between managing for ecological outcomes and traditional harvesting and how to balance the duality of those systems. Everything I've done has really had a climate angle and forestry, because it's so apparent, is quite obvious in terms of its impact.

Speaker 2:

From there, from grad school, I was really exploring a number of different areas. I went into public markets for a stint. I was working for BlackRock on green bonds and climate education for portfolio managers. I worked for SJF Ventures and OG in the impact space and really began understanding what I would call the art and science of impact measurement and management and how we track and communicate outcomes. But foundationally, where many of your listeners know me from, is from the Grantham Foundation.

Speaker 1:

We have that one history and forestry right, that is yeah, that's been there for a long time, forestry.

Speaker 2:

The family has been big investors in forestry and the sons both work in forestry, land management and the land ethos has been a part of that organization for a long time, but over the course of time they've moved from in trying to stay true and catalytic. They have moved from being very forestry focused to more land focused to being more climate and technology focused. That was a large part of that ride and so I've been with the organization over the past six years, still very connected to the organization. But, yeah, you mentioned so neglected climate opportunities. Nco, as we refer to it, was a catalytic investment portfolio for climate technology, so I helped to build this vehicle and deploy it. It's now more than I think, 60 portfolio companies, a few hundred million invested.

Speaker 2:

But the way we split it up was biology and abiotic solutions, and so I was really responsible for everything that was biological driven. So how do we activate all the potential biological solutions to climate change? And this was everything from oceans to forestry to agriculture. But fundamentally, biology really is about understanding how we use an interface with the land and the products and services that the land produces, and so this quickly, from an interest standpoint, moved me from forestry to agriculture, because the land is the primary, agriculture is the primary interface that we have with the land, and if we can move the needle on agriculture, we can move the needle on climate, so to speak.

Speaker 1:

And do you remember when the nutrient piece or even a word, nutrient density popped up? Because spending so much time in forestry, I don't think I mean quality. Wood quality probably is a thing, but nutrient density for sure not Like that's not a word you use regularly, I'm imagining in the forestry space. So do you remember when you stumbled upon this neglected opportunity?

Speaker 2:

Yeah, Well, so in grad school I very clearly remember a story from one of my professors, which is two groups of foresters walk into a forest together, one American, one Japanese. And the American foresters walk in and they look up. They look up at the canopy to measure and understand the productivity. And the Japanese foresters, the first thing that they did is they walk in and they look down and they look at the soils and they start probing and seeing what's going on in the soils.

Speaker 2:

And so so much of forestry has to do with site prep, site selection and preparing that ground for planting. And so the basis of productive forestry, especially in plantation-based systems, is nutrient prep, is preparing that ground for productivity. And so that's where it was really introduced to the concepts of nutrition. And no, it is not. In forestry, just like in food, we look at volume of output. So we look at how much the system produces, not the quality of that wood that's coming off the system. But we do know we can change and manipulate the genetics of those forests to get straighter wood or bigger wood or bigger trees. But at the end of the day, that idea is really just beginning to make itself to agriculture, which we really hope to be a part of.

Speaker 2:

But, the core principle that I really took away from forestry is sustainability. So the FSC and the basis of forest management and sustainable forest management has to do with productivity. So the forest has to produce more than we take from it, more than we harvest. This is foundational principle, and I still think that the word sustainability applies just as much as regenerative, because you need to ensure that the principle, the total abundance of wealth in the soil is actually increasing beyond what you're taking from it. And so we'll continue to use regenerative, because I think it's all a mode, but what I'm really excited about is the true potential of regenerative. Is positive, mass balance agriculture. So positive, what? Well, it's the positive abundance of resources. In this case, resources are nutrients. The nutrients that we extract from our soils are the basis of our health and wealth and productivity as a society. So, fundamentally, what we put into the land has to be less than we take from it, and the beauty of that is that it's possible because of biology. Well, because, there.

Speaker 1:

I think we I'm not going to say we lose people, but there's a very strong narrative in.

Speaker 1:

I'm going to call them the techno optimist or the let's say in other circles that that is not possible and we can only produce enough by a lot of inputs non biological mostly but to be able to harvest enough, and so we should what we should focus on is limiting the damage and limiting the damage control.

Speaker 1:

That's what we should instead of and you're painting a very different picture in terms of abundance and a very different picture. As long as we harvest less than the system can produce, it actually can increase over time, which is a very optimistic view of the future and a very biology view of the future. What do you tell people when you're the like you've traveled a lot now, so you're in a flight somewhere, or you're at a dinner table or something and somebody's going to go, yeah, we just grow everything in a lab with some solar energy and just to limit the damage. And we, that's the only way to escape that future where we have 10 and a half billion people and not enough calories, not enough food, like, what is your go to answer there to? Not de-armor or something? That narrative, because it's a very strong one.

Speaker 2:

Yes, yeah, I mean, it's the foundational basis of the economic potential of regenerative right. So it's like inputs are less than outputs and the evidence base that exists to show that this is possible is still coming, but the evidence that I have seen from traveling and talking to everyone is there are farmers and ranchers that are succeeding on this basis throughout the agriculture system, and they tend to be have been on the soil health journey for a long time, but they are experiencing low to no input systems and they are seeing the abundance and diversity of nutrients within their soil is beyond what they thought is possible that's repeated for the people in the back Low or?

Speaker 1:

no, no, it's because I'm just realizing this is such a fundamental mindset shift. Actually, we're recording a mindset shift series probably out quite a few actually, when you can listen to this or whenever you're listening to this long into the future. But that's a fundamental mindset shift. Like you're, we're looking for systems that are able to produce over time, more over time, while you're harvesting within the system, within the limits, within the boundaries, a lot of very healthy and we get to the, the nutrients, the quality nutrients, out of that system. That sounds like magic and but at the same time, that's how nature biology works until we start messing with it. So there's, there's a strong foundational basis for it, but it's it's also.

Speaker 1:

I want to emphasize how big of a mindset shift, how big of a narrative change that that is for most people. Not only the bubble where like, oh, it's perfect, we all know, but just to double click on that. But you've seen it, you've thought you've seen the it's still very minority piece, maybe partly because it does take such a long time on that soil health piece, which we're now speeding up and we're finding out. I mean, you've invested in many solutions there in a toolbox that can help. But after you've been through that partly transition journey. Things are starting to pick up quite quickly and there is an abundance which is fascinating to to think about or to even contemplate, because that's not what we've been told the last 50 years, let's say in school.

Speaker 2:

Yes, yes, and I'll say that one of the best places I've seen it is is with nitrogen right. So many farmers who have been on this journey for a long time are not adding any nitrogen to their soils. That is a big deal. So that is climate.

Speaker 2:

Thank you, nitrogen is something like 2 to 3% of global greenhouse gas emissions. So when you have farmers that have proven that they have zero input, nitrogen systems and, oh further, the nitrogen that is in the soil is more bioavailable, I mean that's game changing. And so you know, nitrogen is one of the macro nutrients that are available in the soil for plant health, in addition to potassium and phosphorus. But all the preponderance of micro nutrients that are in the soil. They become bioavailable to the plant through nutrient cycling, and that nutrient cycling happens through an abundance and diversity of microorganisms that unlock that nutrition for the plant, and we're seeing this time and time again. So the foundational principle on which we're operating is that positive mass balance agriculture is possible.

Speaker 1:

We're able to increase the abundance so that we can sustain which loss? What do you mean by mass balance?

Speaker 2:

Yeah. So think of this stock change right. So at time zero you have a baseline measurement of the amount of nutrients that are available in that soil. You can then do three things. You can send that soil off to a lab, or stick a probe in it from my good friend Chris Holms over at Yardstick or use a biogeochemical model from my friends at Regro. The most accurate is going to be sending that sample off to a lab and seeing what's actually in that soil that's going to give you, you know, your stock level. Regenerative practices over time, through biology and through the suite of practices, will actually increase the nutrient availability, so increase the mass balance of nutrition that is actually available in that soil, and what that means is that nutrition becomes more available to those plants and those animals and then to us as humans. And so, yeah, it's incredibly exciting, and I think this is part of the mindset shift that we all need to bring about in thinking where the system can go.

Speaker 1:

And then what led you to leave Grandham, and for sure a comfortable job. You put another few hundred million to work, probably in neglected, super exciting opportunities, partly in your density, but also in the nitrogen space my biology is a very, very wide space and you've made some super interesting investments, but that doesn't mean you were down there. In a sense there were many other investments to make, there were many other catalytic places to go and somehow it was itching and you wanted to first of all become an entrepreneur again.

Speaker 1:

I think you have done before, or at least become an entrepreneur and go into very unknown space of okay how do we create radical transparency in the food chain, which is all known for, not radical transparency around quality, which is even more like? What do we actually mean by that? Like? What was the itch there? What was the jump?

Speaker 2:

Yeah, yeah, being an investor gives you incredibly interesting seat at the table. It allows you to see a whole range of ideas and solutions, but also fundamental principles of management and organization and growth. And you know, after five years, I just really felt like, okay, I've seen a lot, I've seen what's working and what doesn't work, and I was able to develop my own theses as to how things were going to play out, so to speak. And my background in forestry and seeing how ecosystem services had played out in that space made me really nervous about transposing a lot of that those tools and mechanisms into an agriculture based system, which is even more complicated than forestry. Right Trees are a lot easier to measure than agriculture systems.

Speaker 1:

What made you so nervous, or what was the most nerve-wracking?

Speaker 2:

piece on that. Yeah, I mean to get to the core of it. I came of an age during the California cap and trade system and a lot many of the companies that were being regulated in that system were allowed to buy offsets for something like 78% of their total portfolio of emissions that they had to account for. And then I saw billions of dollars in forestry credits being transacted in California cap and trade and, having been in grad school in the time and working with many organizations that were transacting those forest carbon credits, I saw the true nature of those credits and what they meant, and it was not pretty. And so what we're experiencing right now with Red and South Pole and many of those credit systems. I kind of saw that six years ago and I said, ooh, this is going to come to bite us in the butt. I think we need to try something else.

Speaker 1:

But that's like what else? Because people jump on the CO2 band, the carbon, the soil, carbon credit ones, or now biodiversity and water. So what led you then to the biggest lever, or lever potentially quality, like what was the? Yeah okay.

Speaker 2:

So think of our mandate is to get the producer the producer as the operator of the land to change the way that they practice and interact with that land. If we want systemic climate impact, we have to change their behavior. And again, this is like I'm not talking from a producer, I'm talking to them like I'm not the 30,000 foot view, looking down at the system and trying to understand how we move the needle in the system. So you have to influence behavior. Now, what are all the activities that actually influence that producer's decisions? So you have regulatory, you have financial, you have technological, you have social values, you have policy and then you have the market. So I had looked at all of those influences and all of them, by and large, push themselves onto the producer. Okay, so we tell you what rates we're going to give you and what you can borrow. We tell you how you can farm and what you can't farm with. From a regulatory standpoint, we have Act Tech, pushing all these ideas onto these producers and say please use this, please use this, please do this.

Speaker 2:

But the fundamental root of a producer's decision is how do I make money? And there's two ways to think about making money. In terms of profitability. You need to either sell more or you need to have less cost. And when you look at how their decisions are driven, they are reacting to the market. And, yes, there's all kinds of behavioral economic theories that show that we're not totally rational human beings. But fundamentally they look at price signals year to year, they look at crops that are available and they decide what to produce and what they can sell based on short term, medium term and long term relationships of what they believe they can produce. So when you think about the market and what it's asking for, it's asking for volume. That's how the market's structured.

Speaker 2:

So the three ways that we get paid based on food today are the quantity how stable that supply is and the quality. Now, the quality is this big fuzzy concept and there's many different ways of thinking about quality. It's safety, it's provenance, it's traceability, it's price, it's accessibility. Food quality means many things. If you ask someone, everyone's going to have a different answer every time, but the cohesive thing to that is taste, price and how good it is, and it turns out that both of those things are really related with one another.

Speaker 2:

So the core theory of how we activate change is to get the producer to think differently about the quality of the food that they're producing so that they can get compensated in a different way outside of our commodity based system.

Speaker 2:

When you take them out of that commodity based system, you can give them different incentives based on the quality of the food that they're producing. Now the quality aspect that we have chosen to focus on is nutritional quality. Nutritional quality is the and we can get into this whole definition on nutrient density and regen and how these two things are connected, but the underlying thesis is that consumers are acting in their own self-interest. They care about what the food is doing to their health and wellness, and that is a priority over sustainability largely, and so their purchasing decisions are largely to go towards is this food better for me? If we can prove that this food is better for them, farmers are more likely to produce food that is better for them and thereby pull better soil health practices through the system and therefore linking our agriculture management system to human health through that lens which assumes the big connection or the connection between practices and quality and flavor.

Speaker 1:

So what have you seen there? How do you start then when this, this, say, this theory of change, I think, has been laid out before and somehow we all get excited about it and then not too much happens, like there's this sort of wall that we're all hitting with this and, partly honestly, also with this series. Like finding the science piece is, I wouldn't say, easy, but we have Fred Provenza, we have David Montgomery and Vickley, of course, like explaining science, but then who's going to build the companies around it and going to deliver quality piece is just tricky, tricky to find, tricky to dive deeper into and I think it feels we're very, very early. There's a lot of fundamental pieces that are or we're still missing. So where do you start?

Speaker 1:

When you come to that theory of change conclusion and say, okay, we're going to build a company, first of all you team up with Joe Clapperton, who we had on the show. But then where do you go then? Because it seems such an enormous white potential, there are 10,000 routes to take. How do you figure out how to build a company around that? Like, what are your customers going to look like, and who's going to pay for this? I mean, we know we all need it, but where do you start?

Speaker 2:

Yeah well, there's a few components to this answer that I want to walk through. But let's talk about the complexity of the system and why it's challenging to make simplified extrapolations based on the system. And then let's talk about nutrient density and what that means, and then I'll explain basically what a day she's just doing to really solve these problems. So agriculture, fundamentally, is one of the most complex systems in which we work. There's lots of complex systems the human brain, the power grid, living cells but when you stack up is what is represented in agriculture, you end up with one of the most complex systems possible. So it starts with seeds and all of the inputs that go into that soil, including fertilizers. The genetics in that seed are acted upon by some total of attributes that exist in the environment in which the seed is working. This includes minerals, organic matter, water, everything outside the soil temperature, humidity, precipitation, weather conditions, etc. And then that environment is acted upon by us as humans through the totality of management practices that we apply to the soil. So the way I explain to people is you could say that the environment is being epigenetically changed by us as humans, whereas the seed is being epigenetically changed by the environment which is growing right. So all of this results in two outcomes One which we measure constantly, which is volume and preunitive output, and the other that we measure rarely, which is the nutritional composition of that food, because it is very difficult and expensive to measure, and I'll talk about why that is in a second. But fundamentally, we have a very complex system with a whole range of permutations and potential outcomes, and so generalizations like regenerative agriculture equals nutrient density, I think can be destructive to the space in a lot of ways, because it's simplifying the system in such a way. That's just not possible. There's a few folks out there that are really yelling this, and I'd really urge a bit more caution because I think there's going to be a lot of disappointment. There are instances where this will be completely true and there are other instances where it won't. So when it comes to, you know, does Regen-Ag equal nutrient density? There's a lot of potential for the answer to be yes, and let's first understand what that is right. So Regen-Ag has to equal a measurement, and we talked about what that measurement is. It's the totality of nutrients, or I should say organic and non-organic matter within the soil. Now, when you have higher levels of biology in the soil, you have better nutrient cycling capacity, which means things become more bioavailable.

Speaker 2:

Okay, so now, what is nutrient density? Well, nutrient density has many definitions and people talk about it different ways. But FDA, the Food and Drug Administration of the United States, defines nutrient density as food. Whole foods are nutrient dense, right? So, according to our government, anything that is unprocessed is a nutrient dense food, and that is true. It is dense with nutrients. Traditionally, scientists have defined it as the quantity of nutrients per unit of energy or per calorie. So watercress is more nutrient dense than a steak. Okay, well, that seems counterintuitive, but, yes, all right.

Speaker 2:

What we're doing at Adatius is we're saying there needs to be a new way of thinking about nutrient density. We have to talk about apples to apples comparison, right? So it's really the abundance and richness of beneficial nutrients between foods of the same type. What I can say definitively are two things. One, in animal agriculture, you see more beneficial nutrition within that food when those animals are in their native habitat, right. When that animal is on grass, when it is in a woodland system for its life cycle, you end up with more, a better diversity and abundance of beneficial nutrients.

Speaker 1:

Compared to a closed system. I'm fed with, yeah, and like significantly more or a bit more or that really depends, but like what's the difference?

Speaker 2:

So you're still getting the same. If you compare two glasses of milk with one another, they both have lots of nutrients in it, but they're fundamentally different because of the composition of fatty acids, the composition of amino acids, the abundance of minerals, the types of vitamins and, to generalize even more or to generalize less, the fatty acid profiles are extremely important and very diverse based on the production system. I'll talk about aminos and protein in a second, on the row crops. They're just fundamentally different. The amino acid profiles look different as a result of different production systems and we are seeing instances where there are greater abundance of vitamins and minerals within the food due to certain measurement practices, and that is proving again and again true. If you take the same cow and you stick it in two different systems, right same genetics, and you feed that animal very differently, the milk looks very differently. That seems intuitive. That is obvious.

Speaker 2:

Now, when it comes to row crop agriculture, that is a much more complicated and complex system. You're dealing with lots of variables, lots of different inputs and a greater diversity of potential outcomes. As a result, what I can say is that with higher levels of organic matter, the better the ability of the cycle nutrients, the better the ability for that nutrition to be available to the plant and the likelihood that that plant holds a greater abundance and diversity of nutrition within it. And we are seeing that in our lab, in testing when from some of our customers when they have been on the regen journey for a long time, we are optimistically seeing, especially when it comes to row crops, specifically grains, we're seeing a greater abundance and diversity of nutrition within that food. And that's what the evidence says.

Speaker 2:

Depending on the G, the genetics, the environment in which those genetics are placed and the management practices that are acted on that environment, you are going to see a lot of variability in the nutritional outcomes of that food and, fundamentally for me, variability is good for our business. That's what we're trying to unlock. But I'm just urging a little bit more caution, because you're going to end up with these organic producers who are finding that their food has less nutrition in it, or you're going to end up with people who are on the regen journey for a season or two and they're like well, why isn't my crop changing? Well, your crop isn't changing because those genetics have been optimized for chemical practices that have nothing to do with the system in which you're looking to deploy. So anyways, I just would.

Speaker 1:

And then are those the two main. You said two things I can definitively say on the animal side and the crop side Is there? What's the reasoning to pick I wouldn't say animals first, but animal agriculture as one of the big ones. Is that because of customer interest? Is it easier? Is it also more controversial, like the role of animals in this space? Can you then also do lab-grown meat? Why is the focus on animal protein as a big one? I mean, we've seen that with the beef study of a bio-nutrient food association with Stefan van Vliet. Here. It's here, like virtually here, of course, not here in the studio. It's a hot topic and a lot of people are shouting about it. A lot of people are very angry about it. What made you decide to focus at least partially on that?

Speaker 2:

Yeah, thank you for asking this question. I mean, it's people. They're like Eric, you're so focused on climate. What are you doing on this nutrition stuff? Why get away from it? And it's like, well, the crops that we're working on. If we can fix those crops, they're the biggest climate lever we have available to us. So that is rumen-based animals and that is grains. So we are working on, basically, cows and grains. That's what we're interested in impacting. So what you're getting to is my ultimate gripe on where we're at with measuring the impact of the food system. So the climate space is operating on data that's uniquely extracted from a limited set of academic research that then is extrapolated to the whole food system.

Speaker 1:

Are you talking about that famous thing that I see constantly? What is it? One my world and data. One world data? I don't remember. I think on LinkedIn, I think, and Instagram as well, eurof is going to be shouting out his laptop Like the beef line and then everything else is better than that. Like that kind of simplistic.

Speaker 2:

That simplistic mindset is the problem, exactly. So basically, what you have now is a bunch of scientists pointing finger at the whole ag system and guess what? Everyone in the ag system is pissed off because they're making huge generalizations about a whole system. So what we're trying to do is boil it down to productivity. What we're interested in is energy in and energy out, so the system has defaulted to greenhouse gas per unit of volume or per caloric output, and this is because we can measure it CO2.

Speaker 1:

And guess what, co2.

Speaker 2:

Yeah, so well, fundamentally, we know this is flawed because not all calories are created equally. You know, this is the basis of our food system and commoditization is the root cause of all ecological destruction and human health impacts. So what we want to do is move to what we believe. The ultimate measure is greenhouse gas per unit of nutrition produced. This changes everything. It changes how we think about the productivity of the land and what it can produce and how it can sustain both the land and us. So we have to stop comparing beef to soy. We have to compare beef to beef, we have to compare soy to soy, and this is the evolution it's about again, apples to apples, because two, you know.

Speaker 2:

And I think like just to take a dig at the plant-based movement, right, and I'm very pro plant-based movement, I think you know I have. I eat a lot of tofu. Like I love tofu, I love soy. I think it's an important part of my diet. But just because you have something in the shape of a burger, it doesn't make it functionally equivalent, right?

Speaker 2:

Chemically produced GMO soy covered in pesticides is a different product from a grass-fed, organic burger, and the substitute has to be a one-to-one exchange. And so these are two funnily different products when you even when you have price parity, but when you have a truly grass-fed, regeneratively-grace burger that also has a completely different greenhouse gas and nutritional composition from a burger that comes out of a feedlot and from an animal that spent most of its life in confinement. So, yes, we have to do apples to apples. We also have to do apples to oranges and we need to understand the greenhouse gas or the energy into the system required to extrapolate a unit of output, and for us that unit of output is nutrition. And this really begins the new systems thinking about, like where we need to produce food, what types of nutrition we're actually delivering, and begins to really connect the dots to the human side of the story and bring about that radical transparency that you asked about.

Speaker 1:

And oh, there's so many rabbit holes.

Speaker 2:

Let's take one. Let's take one.

Speaker 1:

The customer side. Let's start Like who do you like so early in this journey, as we're asking a lot of questions? You're asking a lot of questions that not many people have been asking, or at least not enough people have been asking, especially in food and egg. Like to switch a system I don't know what lever level it is of Donnella Meadows I should not have of systems change, but it's pretty high up there. Like the goals of the systems change. Like the goal going from yield to nutrition is almost as high as you can get in system change to change the really the goals of system. I think it's the second level, almost the highest one.

Speaker 1:

Who do you find them to work with? Like in terms of customers, because you're gonna have this. Like you need some kind of volume and size from within the current system to be able to run a company, because otherwise you can't and it's just never going to get out of a tiny lab or even out of an apartment. Like, how do you approach that? Of course you have the backing from Grant. It opens some doors, but at the same time, at some point that's not enough. Like you need customers. Like what are the type of customers? If you can name them. Great if you can also find but who's working with you and who's interested in the stuff now, even though it will disrupt them relatively quite fundamentally?

Speaker 2:

Yeah, yeah. So let's let me take just one side step to explain what we do and how we do it, and then how that's delivering.

Speaker 1:

That's a good point yeah.

Speaker 2:

Yeah, so adatious. What we do is we help our customers to measure, understand, report and verify the nutritional quality of the foods that they produce and consume. So there's three problems that we're really trying to solve. The first is a data story. So we need to understand the variability of nutritional composition of foods better than anyone else. So we're building one of the most comprehensive databases that understand the highs and lows of nutrients that are within our, within whole foods on a global basis. So that's part one.

Speaker 2:

Part two is the measurement story. So how do we drive down the cost of measurement to make measuring the nutritional composition of food more affordable and accessible? And this is if you it's. It's funny because, with Chris tolls at yardstick, we have a lot of parallels in our business, right? So if you think about lab based testing, what chemistry? You send a sample off to a lab, you wait for a result and then you get information and decide whether or not that information is helpful to you as a decision maker. So today, on a piece of a glass of milk or a piece of beef, if you send that off to a lab for analysis, like, and you wanted to go beyond the nutritional facts panel, so to speak.

Speaker 1:

it would cost you 2,500 to 3,500 US dollars which is what every one day does, of course, oh yeah, exactly.

Speaker 2:

And then you get a whole range of information that you have no idea what it tells you and how to make sense of it and how to make decisions based off of it. Right? So that's one. That's the measurement story. So we're focused on driving down the cost of measurement and we use a combination of wet chemistry and spectroscopy and we own our own lab and our own instrumentation.

Speaker 2:

But the third bucket is arguably the most challenging. It is the communication story. It's how do we help people understand and differentiate the nutritional quality of the food that they are producing and consuming? So how do you take this complex set of nutrients and how do you distill it down to easy visualizations and educational tools so that people say, oh well, you know, this has more omega three and this has more magnesium and, wow, look at the vitamin B profiles in this food. Well, that's really easy for a core set of like people who are into the food nutrition scene, but making that accessible to my mom not so easy, right?

Speaker 2:

So the challenge is communicating this information in a way that allows people to make actionable decisions, be it in the grocery store or be it in kind of B2B tools for trading on certain yeah, quality attributes. So our customers right now are within beef, milk and grains and we are helping them to understand the range of nutritional outcomes that they are seeing based on their management practices, and it's been very easy for us to find. I would call the people who are on the trending edge of regenerative and say, hey, let's, let's prove your food is different and guess what it is. And so it's very. We have a range of customers where the evidence is clear and now we're beginning to have conversations with that second set of customers were saying we might be not that clear.

Speaker 1:

Yeah, let's find out together.

Speaker 2:

And exactly, and I'll tell you, the most shocking thing about this journey so far is nobody does any testing. It's like nobody sending food out for labs. Nobody is looking at it.

Speaker 1:

It's a bit mind blowing Bingo.

Speaker 2:

Yeah, until there's. Yeah, and it's really, it's either lead or heavy metals or, you know, pesticides is really when, when people start looking and then what have you changed in your own diet since starting auditions, have you?

Speaker 1:

And if so, what?

Speaker 2:

I actually, during the pandemic, went vegan for for a few years to really just see what that did for me. And despite I mean, after an incredible what I call vegan honeymoon and just like really just losing some weight and kind of thin it out, I was, I just was starving all the time and I just couldn't get the abundance of nutrition that that that might probably needed. And so now I really just I only eat food from, from animal. I only eat animal food from systems that I know where it's producing. I most of my animal products come from a company called Walden local. Charlie's been on the show and so I get that delivered to my door and that's just. That's the only animal protein that I really consume.

Speaker 1:

And apart from that, have you made any other shifts in your diet?

Speaker 2:

You know, to me it's it's all about diversity. It really is eating the greatest range of foods possible, because you're going to get a little bit of everything. And now I'm personally really beginning to explore this question and almost tracking everything I eat, because if you look on, if you look online and you say, okay, what's in this food? I know that what they tell me is wrong and I know that what they tell me is incomplete. So it's both wrong and there's not enough information. And then I'm comparing that to what are recommended daily allowances or daily values and trying to understand Okay, based on what the FDA and the National Health Institute say I need to have in my body to optimize my health, am I actually hitting that? And what I'm realizing is all of the ways that they've come up with that daily value information are completely inactive, completely inadequate and mostly based on what you would I forgot the technical term is but like the minimum amount needed to actually survive as a human being.

Speaker 1:

Nothing has to do with optimization.

Speaker 2:

Yeah, and so I'm now beginning to go down this health journey and really understand, because, at the end of the day, the nutrients are the base input for all reactions in our body.

Speaker 2:

It's nutrition is the sum total of human physiology, right? So human physiology is based on the quality and quantity of nutrients that we put in, and we have such a low understanding, because of how we practice nutrition in today's world, of what that actually means. So and this is equally as important it's not just what goes in, but it's the quality of the system to which it is put in. Right, and this is where we get into microbiome and the function of the microbiome. So you could put a bunch of really healthy nutrition in someone, but if their microbiome has been nuked by chemicals and pesticides and not functioning properly, that nutrition is not doing anything for that person. However, when you have that diversity and abundance of beneficial microorganisms that are present in either the soil or the gut, nutrition becomes more accessible for the host, right? And so I am constantly thinking about both these things, about the system in which we put that nutrition and the nutrition itself, and I've yeah, I've been been making a lot of decisions differently as a result.

Speaker 1:

That gets us into the human health piece. Are you working on that side as well? Or because it almost feels like they're two sides of the same coin, of course, with the gut microbiome and the soil microbiome, but connecting it all the way through from soil to your gut and dust to your health seems a very long one, let's say. So what are you, apart personally, obviously, going down the health? Journey are you working on that human, the human interface, the human interaction, let's say, with the food piece?

Speaker 2:

Yes, we are, and I will explain how we are basically building knowledge tools that show you the preponderance and evidence that exists that says a nutrient is beneficial or neutral or anti-beneficial and anti-quality nutrient. So our platform includes the ability to learn about what those nutrients do for you as a human, and so it's more of an educational tool to say, ok, this is magnesium, this is what magnesium does for your body and this is why you're likely not getting enough.

Speaker 2:

And this is where you can get this food has this much magnesium in it. And where you can click, go to magnesium, see all the foods that have magnesium and then see, begin to see the variability of that magnesium within food. So we're building you know it's coming down the pipe, but consumer facing tools to our platform that will help those producers communicate the nutritional quality of their foods to a diverse audience. And we're not just trying to say and this brings to an important point on the whole nutrient density side, right, we're taking a very objective view right now. Right, we're not like trying to go out and carve a space and says this is the adacious definition for nutrient density. We're trying to be supportive of the industry so that everyone can learn together objectively about what's the quality of nutrient that's in their food.

Speaker 2:

As soon as you move into this, like you know, this is better for you because of X, it becomes a little bit more subjective because of how we practice nutrition in today's world, which is there's. There's just two distinct paths, right, there's randomized, controlled trials, which tend to be short term, very expensive, or there's epidemiology, and epidemiology, for all its flaws, looks at lots of information and says well, you know, based on this population eating these foods, it likely has this outcome. And I have, you know, two nutritional biochemists and a nutritional bio epidemiologist on my team and we debate this stuff constantly about. Is this the right way to educate someone and share whether or not these nutrients are good for them? And so our philosophy internally is to be very objective and be very truthful. Part of that radical transparency to help people understand the nutritional quality of the foods that they're consuming. And so we're, and we're trying to stay out of, you know, diet landia, because it's just loaded with complexity and it's the wrong framing for a lot of what we're doing.

Speaker 1:

And when somebody throws the board, you're like why is this so fundamental? Isn't it just good enough if we stay off mostly, let's say, ultra processed food and eat your veggies, preferably non sprayed, and because otherwise you don't have any gut microbiome left. But let's say most, most, get your veggies and, and extremely diverse and low on sugar and salt, you'll be fine, like what's for most people, not hitting that anyway. Like what, what is?

Speaker 1:

Adding a piece of a piece of flavor is always good, but adding a piece of quality on top of that or underneath that and saying, actually it really depends how your broccoli was grown, or it really depends its glass of milk or it really depends the fat piece. I mean we've seen the huge shift in fat research and coming around that all fat is bad, etc. But like what, what helps? Or does it just make it more complex adding this, this level of quality to it? Or is it fundamental because otherwise we advise people to eat a lot more kale and broccoli and actually some of that kale and broccoli can make them sicker, like Zach Bush found. Yeah, like why? Why go the extra mile for that if it's already difficult enough to get people to eat broccoli in the first place, or diverse stuff?

Speaker 2:

Yeah, you know, I love, I love this question and let's come at it from a few different angles. The first is you know, remember how we started this conversation, my backgrounds in climate, I'm, I'm, I see nutrient quality yeah, okay. Yeah, and so we're. We're here for, for ecological and environmental impact much as animal protein and grains.

Speaker 1:

Large surfaces, huge emissions. However you measure it, yeah.

Speaker 2:

Yeah, the the first caveat that I'll say. I mean, I fundamentally agree it's. It's like the problem that most people have is not that their food isn't of a high enough quality, it's that they're not getting the right food to begin with, right? So we have three problems when it comes to human health it's culture, it's exercised and it's the type of foods that we put in our body. Well, I'd say there's a fourth right environmental toxicity as well, and you'll notice that nutritional quality is not in any of those four things, right.

Speaker 2:

And so culture we need to get back to surrounding our culture around food. We need to, we need to exercise and be outside a lot more, we need to get the right food in our systems and we need to remove toxicity from that system. Where I think the nutrient quality piece really comes into impacting human health is two concepts. One, it's about the quality of calories that go into your system, right, so when you get more nutritious food, you eat less crap, and so that's that's they're proving this again and again that when you satiate yourself on on high quality plant, you know home, home foods, you are less interested in crap, and that is empty calories that come largely from processed foods based on fat, salt, sugar and all the things that are detrimental to our body. The other side is that it's it's it's really about optimizing our human potential and it's about, as my friend Dan Kishij likes to say, the vibrational potential and the vibrational frequencies of our body. When you have better nutrition, your body is able, better able to resonate and better able to function as a human, and I fundamentally believe that, and I know it from experimentation, I know it from my family and friends when they eat better, they're happier, and so I think it is part of the story, and I think that we can do a much better job of showing that when, when we eat higher quality food, we have better health outcomes, and we're and I'll let's go back to use this very specific example right.

Speaker 2:

So animal agriculture has shifted its fat profiles completely from very natural, wild based fat profiles to confined animal feeding that profiles.

Speaker 2:

What that means is we're changing the level of saturation within that fat from one that is highly poly and monolens saturated to just pure saturation, and this saturation is happening as a result of many of the omega six fatty acids that come from grains, and those grains come in the form of corn and soy and and things that are very good at storing long term energy within the body, and so what we're doing is we're taking long term dense energy, feeding those into those animals, ending up with completely saturated fat profiles and then putting us that fat into our own bodies and that fat is causing inflammation and that inflammation is slowing us all down.

Speaker 2:

So there's more evidence, and Stefan is doing the some of these human health trials as part of the beef study and other research that he's doing to show that the blood shows less inflammatory markers when you change the quality of the fat that you're consuming. So I think there are those lines that we can connect that show that higher nutritional quality has immediate and direct human health outcomes. But I'm also not ignorant to the fact that, like if you just have a very low quality food diet of whole foods, you're going to be way better off than someone who doesn't have those you know, those whole foods in their diet.

Speaker 1:

And let's imagine you for a day. You're, you're in the grand them seed again and you're looking at this space as an investor Again. I mean, what Compared to a few years ago? Like what should? I usually ask this question? Like, let's say, we're in a theater where we have an audience. I mean, you know this question, we have an audience of people. We're doing this life, which would be amazing. It's going to happen at some point People, it will happen, but at the moment we're doing this online, but let's say we.

Speaker 1:

There's this audience of investors who do this in the city of London, or Wall Street or Beijing or Shanghai, like somewhere where there's the financial what, what you've seen now in the last couple of years. What does this mean for the investment world that is interested in food and also doesn't hasn't gone down a rabbit hole completely yet to talk about omega three and omega six ratios, which everybody should but still like. What does it mean for them? Is the one thing you would like them to to remember. They walk out. They had a great evening, very inspiring, but also thought that they were walking. But if we want them to remember one thing that they actually start doing with their professional life, with their financial hat, let's say, the next day, what would that, that one thought or that one action be?

Speaker 2:

You know it's fine, it's. Every time I listen to this podcast I think I have a different answer. And it's funny because now that you have me under the gun, I think I think I'm gonna choose a different one. But the?

Speaker 2:

The core of my investment philosophy at Grantham was the. The economics have to make sense, right. The underlying business has to have a fundamental value proposition that causes someone to do something differently. If someone's problem is being solved, something is getting paid for. We live in a capitalist society.

Speaker 2:

The mistake that I think a lot of people have made, especially in the impact world as they become of values driven investor and that those values and there's nothing wrong with that I just think it's a different investment strategy with a very different return profile.

Speaker 2:

So I think you have to decide if you're coming at this from a values perspective or if you're coming at this from a commercial perspective.

Speaker 2:

And they're not mutually exclusive, but they tend to be, and what?

Speaker 2:

What I would recommend I'll not giving investment advice, but is is to look at the underlying fundamentals of these businesses and what's driving them and how you allocate resources, ie capital, and so If I took my impact and my climate lens off, I would make very different decisions than with it on and the evolution of mechanisms that underlie pricing, ie Environmental values or carbon or biodiversity or water, is Not being transacted at a volume and and quantum enough to move the lever on systems change. And Many of these things cannot function in the absence of policy, and and that is one of the biggest pieces of advice I'd give is really to understand the Venn diagram between Policy, regulatory, Social and environmental values, and then just core economics and and business and and when you, I think when you line those Venn diagrams up and you've, you're gonna find there's very few companies that exist in that sweet spot in the middle that are, they're gonna generate outsize returns, especially in the food and egg space and that's really looking at, let's say, the current system.

Speaker 1:

Let's say you're successful with adatius and others as well, and the lever of quality and the Quality piece becomes much more important in five, let alone ten, years. How do you sort of pre-shift already now as an investor Like, how do you, let's say, the world of quality, like in the world of food and egg quality, is gonna be a Significant piece in five years and fundamental in ten? Okay, started journey, maybe on as many farms as possible in terms of soil health. So you're ready for that? Like what would be a Glasses like without giving investment advice, like you said, but what would be a framework or a narrative to look, a framework to look at the world and say, okay, if I believe that that's gonna happen and I don't know the exact date, I don't know exact technology, I don't know exact platform, yeah, but it will happen, what should I do now?

Speaker 2:

Yeah, yeah, yeah. So, adatius, is the internet, right? So the first innovation is web pages, right? So web pages are the ability to share information. So, or that's where we're starting. Today, we're trying to solve one specific problem the ability to live, you know, measure and report nutritional quality. So, with that assumption that then everything changes, which I believe is the right assumption, what do we do? So, one, we look at the, the genetics and the research that's underlying our production systems, right? So we're gonna have to have more Independence and research and understanding how different genetics act in different soil types and what. That's gonna be an edge. And, if you know, it's incredible, because I don't think a lot of the singentas and Monsanto's of the world are actually thinking about this and I've spoken to them, but that's gonna change.

Speaker 1:

Like what's the app? I mean, the beginning is so, but like what? What do you put in? Like that is optimized, as you said, for a chemical system. Until now, we switched to biology. Even most biology seats are optimized for a chemical system. That's why we sometimes have the yield gaps like there's. So if we switch to a biology driven or organic, as a biology driven System, where quality is is important, we need a completely new set of of seeds and seed companies and seed researchers and seed seed, seed seed genetics. Like that's not existing today at all and it takes a year.

Speaker 2:

So please go and start now yeah, yes, they start, start that process now and look at these outcomes, and that's that's exactly the type of partnerships adatius is ready to help unlock. It's like if you're doing that genetic selection and doing that genetic experimentation, we're here to help you understand how those genetics express differently and what the range of nutritional outcomes that come with that are right when you get to the producer side, right? So you producers it's kind of obvious, it's you're gonna be marketing and communicating based on the quality of your food. It's gonna change how you manage the lands and it's gonna change what the outcomes are and how you get paid at the end of the day. And so, you know, by farmland and starting investing in soil health, right?

Speaker 2:

Part two, you know, or the third part is, is what I would call the brokerage distribution, trading, the ABCDs of the world, right? So ADM, bungee cargill, louis Dreyfus olong, all of a sudden, they're not transacting based on volume and quantity and calories, they're transacting based on nutritional quality. So they're transacting on the range of fatty acids, are transacting based on the amino acid profiles, they're train transacting based on mineral composition, and I think that's one that I'm really excited about. You know, I've joked around with a few people that you know, in 12 years It'll be a BCD e, if we're a day shows, because we will be the back end for a lot of that transaction, which is radical because transparency and commoditization not to pick on any of those hasn't been like.

Speaker 1:

Commoditization by definition means non transparency, because otherwise it's not a commodity and otherwise I cannot shop around and Get the lowest price point and quantity and availability, the highest availability possible. But quality hasn't been a core concept there For better. I mean because it wasn't, and what? That's gonna be a fundamental disruption and some will take that very well and some others won't. Just like any disruption we see. But how to get it from? Yet the distribution with the widest range possible as a definition is how to get it from farm to Plate, including processing and all of that processing, another one probably. That's all different podcasts, but anyway. So okay that that's a big piece as well, but it's not right.

Speaker 2:

So that's the next part of the value chain, which is Processing and consumer package goods companies.

Speaker 1:

What does it mean when you?

Speaker 2:

process for quality. That's, that's just it. So we can use you know, well, let's use Karen spring versus King Arthur flower, right? So these are two fundamentally different flower companies that take wheat, mill it and turn it into a flower product that becomes the basis for many processed foods, and the quality of that wheat is both affected by the Original product and both the processing process. So, depending on how that that milling process happens, you end up with a completely different nutritional profile. So now we have, and we were experimenting with this in milk too, right? So milk is produced at one level, it's raw, and then it goes through various transportation systems.

Speaker 2:

It goes through a Processing process which involves in today in the US, ultra high temp, which then just basically nukes the milk for any any biology that was present or left, or there's Techniques like that pasteurization, which have a much more softer impact on the milk. But that vast pasteurization means higher quality, but you can't ship it across the country and it's not going to be on a store shelf for for eight to twelve weeks at a time. So it then, you know, beckons all these questions about regionality and the importance of eating nutrition closer to place, and we talked about the nutrition of place.

Speaker 1:

Freshness. I remember story was it Greg Schumacher? On strawberries. They found massive differences on farm between organic and unorganic and that difference had disappeared completely when they measured again on shelf and Somewhere something happened. Was time expression is like they didn't really know, but like something happened because that difference just disappeared. And so there is, I think, for freshness.

Speaker 2:

Yeah and and so we'll come to that. And from the retail, well, so anyway. So I think all the, the all of the CPG companies are gonna think about the nutritional quality of their portfolio portfolios. They're already beginning to do a lot of self audits, the unilevers in the nestlies of the world to really understand how shitty is our food and and what are we looking at.

Speaker 1:

I think with that, a big chunk of their portfolio was not couldn't be qualified as healthy. That's their own research.

Speaker 2:

Exactly. Yeah, yeah, yeah. But then from there you have what I think are the biggest levers in the food system. It's, it's not consumers, it's retailers, and retailers have the biggest lever to pull on to ask for these products and hit their shelves or to ask that they start measuring this information in, in in those ways, and many of our customers are, you know, on the shelf of Whole Foods, but we are, you know, and in conversations with that. But so I'm pretty excited about the lever.

Speaker 1:

It's funny, we did it as always. Say like yeah, but it's the consumer that's asking for it. Well, they first of all build the shelf and second of all guide us to or whatever they want us to buy, like there's, there's. Of course, we choose ourselves, but at the same time, it's a much more interactive relationship, I think. Is it the diplomatic way of saying so? They hold an important piece of this puzzle.

Speaker 2:

Yeah, yeah.

Speaker 1:

And none of them are measuring at the moment. I can imagine none of them are measuring it.

Speaker 2:

I mean it again, it goes. All of the nutritional facts panel information, all of the regulatory structure really exists for processed foods and the FDA, the food drug administration, just such little auditing. I mean practically zero auditing of any type of whole food that's coming through our system. So no, you could, you can get away with a lot of stuff and a lot of claims, but they're gonna start paying attention to this stuff because you know they're looking at regen, they're looking at practice stuff and they're saying how, you know, is this, do we have to regulate this, like organic in some type of way? And then consumers, you know, I think I think what there is is just gonna be more Retail consumer slash, d to C, consumers focused on nutrient quality, and and there's gonna be direct Channels to the consumers to access people who are interested in eating the most nutritious food at the end of the day. So do you see that like? Do you see?

Speaker 1:

that that pool because we started with the pool, um more. I mean Ethan sort of if keeps saying region Is hitting more nerve than than organic ever has, if you communicate it well, in the soil health affair Does that but like is the consumer? Because we all assuming that everybody in the Cares more about their own health and their family's health compared to environmental outcomes. Have we seen any experiments there? Have you seen any like consumer responding strongly to to this piece?

Speaker 2:

Um, I don't think we have good a B testing that says it flower, flower yeah.

Speaker 1:

Yeah right.

Speaker 2:

So the example I always use if I, if I put two carrots in front of you, irrespective of practice, and I said this, this carrot has eight times more nutrients in it. And and again, depending on price, which carrot are you likely to buy? You're likely to buy the carrot with eight times more nutrition it because you would have to eat eight of the other carrots to get the same level of nutrition. That's in the one care.

Speaker 1:

So, whatever price you'd be better.

Speaker 2:

Yeah, that's so I mean I am Personally and and information that we're, I am beginning to explore these pricing dynamics and I'll use an example. I buy Hemp seed and I and I love hemp seed and I put it in my my oats in the morning and I put it in my smoothies. I've been buying these man's toba I forget the name of the brand, but it's I think it's from Canada and it's organic and they recently just came out with an ROC version regenerative, organic certified. Same product line, different colors on the package. But I was in the store and holding these two things up to to to look at and I flipped over. Look at the nutritional content. No difference reported in the nutritional content to the two foods. The price premium was 100x, 100%, wow. So the ROC hemp seed was $20 per bag and the the other hemp seed was $10 per the just, they're organic.

Speaker 1:

Yeah, they're talking, they're organic, okay, wow.

Speaker 2:

I'm not. I'm not paying 10 extra, you know, 10 extra dollars just because it's regeneratively grown Like I'm sorry, and this is what we're seeing time to time again is the consumers.

Speaker 1:

And put it no, what did you do? Come on.

Speaker 2:

We I mean when we're a little bit bigger, I'll be able to do fun stuff like that, but I, I just, I just know. Oh so consumers, they all say they care about sustainability and and when they do surveys they really say this is important to me, but their mouth doesn't match their wallet and they're not spending. Once you have those types of price premiums that are on the store shelf, this and to them is the same product. So this gets back to our fundamental theory of changes. If you can say definitively that this regenerative product has more nutrition in it and the price is close enough, I'm likely to choose the price, the regenerative one, because I'm getting more nutrition per dollar and that's, that's what we're trying to unlock no fascinating.

Speaker 1:

I want to be conscious of time as well and and ask a few. I mean, we've asked a few of these already and but now, a few years in, let's say, in the deep end of the pool of Nutrient, a quality and quality and flavor in general, what would you do with the magic wand If you had to change? If you could change one thing overnight, what would you do?

Speaker 2:

Yeah, I mean I would introduce competition back into the food system, right? So that's the whole. Our whole theory of change is decommodanization. I would remove subsidization from the food system in all shapes and forms, and that includes energy subsidization, which is the basis of how our chemical system exists. I would remove, you know, a lot of the yeah, the nitrogen subsidies, the you name it crop insurance. But if you want to see innovation happen, if you want to see what's really possible from the food and ag perspective, stop stop propping up a bad system.

Speaker 1:

So yeah remove the subsidies, fair enough. And when you go to I mean, you've been to quite a few conferences over the last month and when you go to, I don't know, a region food investment summit, when you go to the region once, let's say when do you think different, where are you Contrarian, apart from let's be a bit more cautious what we claim on regen and quality? I think that's a clear, a clear one. But are there other pieces where you clearly Thinking differently compared to your peers?

Speaker 2:

Yeah, yeah, I mean I, Regenerative is just an is a buzzword. It's gonna be here. You know, for the time being, sustainability had a 10 year, 11 year run to it. I Be surprised if it even lasts that long. And, and like I said earlier in the pot, it's like sustainability is the same thing as regenerative. If you are increasing the abundance, you you're sustaining withdrawals over time. So it's the same thing, is regenerative, it's replenishment, and so I think there's just gonna be another buzzword and another concept, the other, the other place that I am Contrarian and and again I mean a lot of investments based on ecosystem service and ecosystem credits.

Speaker 2:

I the asterisk I like to put on this is like, in the absence of policy, these markets are never gonna be as big or impactful as we need them to be for systems change.

Speaker 2:

Voluntary is great for transition finance, for like jump-starting practices, for getting producers to think differently, to put a little extra dollars in their pocket, but we're never gonna have systems change until the regulators come in and say, hey Cargill, hey, general Mills, hey, you know, food system people, we're gonna regulate you for your scope three emissions and you're gonna have to account from them beginning to end, and show that that you're having measurable impact throughout your your supply chain, and so, because of the culture and the sensitivity around food, I really don't expect the regulators to take a stick-based approach. And that's what we saw with with the climate smart commodities in the US. It's very carrot-based, it's very. We're gonna sprinkle this money all over the food system and really see what happens and see if we get positive impact, but I'm not holding my breath that you know Uncle Sam or the US federal government is gonna be regulating Greenhouse gases from the food system within the next 10 years.

Speaker 1:

Yeah, nor I think the EU is moving. Electric deforestation there are a number of, but they also shut down very recently a Strickler one gonna call it strict pesticide law, after intense lobbying, and of the agrochemical industry. And so, yeah, there's, there's just limited space in in regulation and so, let's, let's not hold to your breath because that's not gonna take 10 years. We're saying that's gonna make you to to get to 10 years. I want to thank you so much for for your time today coming back on on the podcast, for listening, obviously, and for Doing the work you're doing and coming here to share about such an important, such an early but an exciting topic as well. So thank you so much for being part of the series and, of course, for showing up here and sharing about the journey.

Speaker 2:

It's a pleasure to be here. Thank you so much for having me and thanks for all the great work you do and bringing this community together. I mean, I can't. I can tell you so many people who have come to me, who have heard myself or have learned from you over the years, and it's just like Such a cool thing, and so I'm wishing you many more episodes and continue growth in your journey with this community.

Speaker 1:

Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investing in regender agriculture. Comm forward slash posts. If you like this episode, why not share it with a friend? Or give us a rating on Apple podcasts? That really helps. Thanks again and see you next time.

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