123 Benjamin Ware on how Nestlé, doing 93 billion a year in sales, is getting serious about regeneration

This conversation with Benjamin Ware, manager of Responsible Sourcing for Nestlé, explores the role of large corporations in regenerative agriculture.
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As it is a transition, it is a slow process so don't expect Nestlé to buy 100% regenerative products in 10 years and there might be a role for some chemical inputs in the transition.

More about this episode on https://investinginregenerativeagriculture.com/benjamin-ware.

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Transcript

SPEAKER_00: 0:00

What is the role of a food company doing 93 billion, yes, that's a B, a year in sales in the regenerative transition? If we like it or not, large food companies, actually large food conglomerates, play a very important role in our current food system. Go to any supermarkets, and most of it comes from a few brands. And increasingly, they're making claims and are setting goals around regenerative agriculture. Do they have a role to play here? And if yes, what is their role? And what are their challenges moving an intransparent Welcome to a special mini-series where we explore the role of corporates in the regenerative transition. This series is supported by the Earthworm Foundation. Find out more in an interview we did with Bastien Sachet, the CEO of Earthworm, in the show notes below. And more information on Earthworm at earthworm.org. Welcome to another episode of In March last year, we launched our membership community to make it easy for fans to support our work, and so many of you have joined as a member. We've launched different types of benefits, exclusive content, Q&A webinars with former guests, Ask Me Anything sessions, plus so much more to come in the future. For more information on the different tiers, benefits, and how to become a member, check gumroad.com slash investingbridge an egg or find the link below thank you Welcome to another episode today with Benjamin Ware, the global head of climate delivery and sustainable sourcing of one of the biggest food companies in the world, Nestle. Welcome, Benjamin. Thank you. And to start with a personal question, what brings you to agriculture and soil, regenerative agriculture and obviously climate? But what was your path towards that?

SPEAKER_01: 2:19

Well, I mean, overall, of course, Nestle is linked with this because of the DNA of what we do, which is food, health, nutrition for the world. Me, more personally, I'm an agronomist by background and I've grown up in one of these countryside in Switzerland and France. So it's naturally that I've evolved to this kind of studies and reach out to Nestlé as a Swiss citizen to make my career into that.

SPEAKER_00: 2:48

I mean, naturally you say, but it could also be, I mean, I know many people that grew up in the countryside and definitely didn't want to work in anything to do with the countryside. So do you remember if there was a trigger or a moment or something that really made you study agronomy, which is quite a specific study. I mean, after that, you can do many different things, but you're not going to work in banking probably.

SPEAKER_01: 3:08

Yeah, no, I would say it's just like nearby my village, there was a potato factory from a French company that was not Nestle. And I was just surrounded by, you know, agri, agro food businesses. And it was obvious that this was linked with nature. I'm very much someone that enjoy nature, sports outdoors. good food and somehow good life at Nestlé. So I haven't really even thought about that. It was a natural path for me because of the positive vibes I was getting from my surroundings.

SPEAKER_00: 3:42

And within Nestlé, did you immediately start, let's say, on the sustainable side of things? Is it something you grew into? What was your career path or your path within such a large company? I mean, it's bigger than some countries, so you can do many different things in there, but you ended up definitely on the sustainable side. things and the climate side. What was your path there?

SPEAKER_01: 4:01

Yeah, so I was actually put in touch with some Nestlé individuals while I was working in the US and immediately when I started at Nestlé they sent me to India, to China to be exposed to the sourcing of fresh milk and the new challenges of the agri and agro industry over there and for the last year, 17 years at Nestlé I've been always into sourcing related position always linked with farmers, more at the beginning related to really agronomical practices, yield optimization, understanding of the risk attached to the growing of certain crops in certain locations for the given farmers. And through this basically risk mitigation approach that I was taking on sourcing, I slowly derived on the SESMT agenda. More on the animal welfare at the beginning, And do

SPEAKER_00: 5:07

you remember, because I think many food companies have been working on sustainable sourcing for a long time, but it was never, or at least not that I saw it, connected to climate and connected to not even soil in general and the regeneration of soil. Is that something that has been growing for a while? Honestly, do you remember when that came or became a thing or where we suddenly started connecting? climate and food and ag, not just let's use renewable energy for the factories, let's et cetera, et cetera, but actually let's change the farming practices and approaches. Seems to me something relatively new or recent in large food companies. Would you say so? Or what has happened there?

SPEAKER_01: 5:45

Definitely. It's definitely something new and kind of a great upgrade and shift of how we look at sourcing practices. I think for many decades, farming, farmers and practices applied, you know, on land and territories have been looked at from the practices angle to reach an overall ambition of saying practices are okay they are in line with ethical standards and expectation some of them can even reach a certification status and claim a third party you know organization logo but it was really looked at from a practices standpoint less from an output standpoint less as how many farmers are benefiting from their practices to improve their livelihoods, how many animals are being treated in the right way so that they better produce or they do X, Y, Z, and definitely what's the carbon output of these given practices. So I think this is one of the very positive consequences of the 1.5 degree pledge that we have signed 18 months ago. which has really put a different spin to the sustainable sourcing practices in basically calling for the measurements of the outputs rather than just the practices. And that brings, you know, a challenge because we don't have yet all the methodology to really measure adequately the outputs of the given practices that we all like at farm level.

SPEAKER_00: 7:22

That brings us to a very, very good question. What is for a company your size or any company, let's say a large food company, company. It doesn't have to be the behemoth that Nestle is. What's the biggest challenge after you take a pledge like that at 1.5 degrees? I will definitely link it below in the show notes. What's the biggest challenge to then, because that then comes to you to implement it. It's all nice and funny when people sign, but then what's the biggest challenge for a large company to implement things like that?

SPEAKER_01: 7:47

I mean, the biggest challenge is the scope and basically the baseline. So what is behind these words is the type of raw materials that we are sourcing, the location on where we are sourcing them from, and then the practices in this location.

SPEAKER_00: 8:03

Because you don't own any farms. It's not that you are the farmer and you can tomorrow switch if you would want to. No, you are working through a long chain and sometimes a short chain, but yeah, it's not your land.

SPEAKER_01: 8:15

Yeah, so let's tackle that as a second step. But I think the first step is definitely really, again, the ecosystem, the locations, and the farming model that we are talking about. And if it would be about just I mean, just tackling the agricultural practices of Nebraska, where I did my master's degree. Then, you know, you work on one country on two or three specific crops under certain climatic and weather conditions. Everybody is more or less trained the same way. And here we go. But we basically source 29 million tons of agricultural raw metals per year. How big is it? It's three times the agricultural output. of the entire Swiss agriculture. And we sourced this from 86 different countries. And of course, each of these ton of agricultural raw material is linked with a different crop and is linked with a pool of different countries and origins. And the farming practices are very different from Peru to Mexico to US to France. So where do we start? We start with no really big surprise on the quick win So where we believe we can demonstrate progress and we can practice what we preach with a certain supply chain player. So how do we do that? We basically, of course, trace all our commodities. We identify the biggest volumes from where are they coming from. And then basically when we realize that, okay, let's say 20% of our volume of derivatives are coming from three countries We will embark with the supply chain partners of these three countries to implement, to understand the practices at farm level and to implement the new one that we would love to have being practiced in the years to come, which now touch what you were talking about a few minutes ago, which is the nature of the supply chain, as you have said. We basically don't own any of the farms that are supplying this 28, 29 million tons of agricultural raw material to Nestlé per year. For, I would say, 10 to 15% of it, we do source directly from farms, where, of course, it's kind of a very simple and easy situation where it's a Nestlé factory sourcing directly fresh milk from a cooperative and a group of farmers behind, the same for Kofi and Cocoa. But for the bulk of this 29 million tons of raw materials, it's through what I call the trade channels, so through the procurement channels, sourcing from the agricultural commodities of this world, the Cargill, the ADM, Louis Dreyfus, Ecom, Volcafe, sourcing themselves through aggregators, mills, elevators, cooperatives, sourcing themselves from farmers. And basically, we shouldn't look at that as an issue, but rather as an opportunity for everybody to basically team up is there is no intent at Nestle, you know, to source more directly at farmer level.

SPEAKER_00: 11:34

Yeah, I was going to ask that. Do you see that change from like 15 or 20 percent to 30 or 50? So you have more control also from a risk perspective? Or what do you see? Like, is it a natural limit for a company your size to be at the 15, 20 percent?

SPEAKER_01: 11:48

Yeah, I think you're touching the reality check is trying to control 29 million tons of raw materials from 86 countries by ourselves and sourcing everything from farmers ourselves is just unrealistic and that's why you know the agricultural industry is set up like this to have aggregators to have organizations that consolidate these volumes to provide contracts to farmers that are long term because they are aggregated consolidated and sold to the market on an ongoing basis so the idea is not really to vertically integrate the supply chain and to own more. The idea and the strategy is definitely, yes, to stabilize the supply chain. And when I say stabilize, it doesn't, you know, everybody start to talk about then decommoditize the industry.

SPEAKER_00: 12:42

That was going to be my next question. Yeah.

SPEAKER_01: 12:45

Which is in a way, yes, the right terminology to use in the sense that we are going to move away from buying just an asset, which is a ton of raw material, to buying an asset together with soft attributes, which is, you know, for example, a carbon weight or a carbon footprint.

SPEAKER_00: 13:06

Yeah, because many would say that the anonymization and this ton of grain or this ton of dry milk or powder milk, it's all the same. It doesn't matter where I get it from as long as it shows up on my factory door. That's sort of the extreme example, obviously, but it does lead to a very long distance between consumer and farmer or land steward. And obviously it leads to a very unhealthy situation for many farmers because they basically always sell to the lowest bidder or the other way around. So that I think with decommoditization, it's an interesting term. It's a bit of a buzzword now, but as you're saying it, it's without owning the full supply chain, we're already moving away from just buying everything on the spot market or just not caring where it comes from and any soft attributes are irrelevant.

SPEAKER_01: 13:49

Exactly. And actually it's, I mean, what we are passing is the message and the call for action from the consumers. The consumers, they don't want this anymore. They want to know what is the origins.

SPEAKER_00: 13:58

How do you see that? Do you see that in buying specific brands with a story? Do you see that as surveys?

SPEAKER_01: 14:05

We see that in market share and marketing and sales. When we run all of this consumer study in, you know, fast moving economies, China, India, but also develop markets in sense checking what the consumers expect from the food that they buy. And all of them, they expect the food and the ingredients that they are buying to disclose on back the main origins of the ingredients and how they have been produced and what are the soft attributes behind the food that they eat.

SPEAKER_00: 14:36

Has that

SPEAKER_01: 14:37

changed? It has changed, yes.

SPEAKER_00: 14:39

Have you seen that? Because you've been doing these studies forever, I think. How has that changed?

SPEAKER_01: 14:43

So I think, as you have said, these studies are being done since a good 10 years. But in the last two, three years, we've seen really a spike, a true change of answers to this consumer study, especially in the way consumers talk about their willingness to reward for food that are able to disclose origins and to disclose practices. In the past, they were saying, we are interested and we want, but we are not super ready to give it a preference in the purchasing act or in premiums kind of thing. So in the last two, three years, definitely there is a big drastic change on that piece that maybe comes from the generation but more you know from the broader vibes that climates but also governments and regulations are making on the need to preserve our ecosystem for the long term and for the new generation to come

SPEAKER_00: 15:43

super super interesting i mean that's that's what everyone i think is hoping for as soon as a consumer or a good percentage of the consumer we don't need everyone we need enough to a stubborn minority enough to move move the sector but it means I'm imagining I'm assuming that's one of the main reasons apart from the climate pressure biodiversity pressure that you're all part of those discussions but that the consumer is moving which means that if you are able to disclose if you're able to source differently etc etc you will find a group of people at least willing to buy and make a different purchasing decision or come back to you or change over another brand or change within the brands of Nestle obviously which makes the case a lot stronger I think throughout the organization and so So the biggest barrier, I mean, it seems to be the size, the quantity you're sourcing, and then the complexity, because it's not that you're sourcing one ingredient that is always done everywhere the same. And that's sort of counterintuitive to the regenerative movement. So what do you see as the biggest opportunity? What do you see as the role of corporates? What can you, with the size you have and your colleagues that have a similar size, what can you do in this regenerative transition? At the moment we are now, you've made pledges, you're buying a lot of materials. A lot of them are not with regenerative practices yet, but you're doing a lot of work there. What do you see as your role as such a large player in the space?

SPEAKER_01: 17:00

I mean, we could talk about our role in regards to content and into encouraging the implementation of the practices or more the operational side. But look, I think what matters for Nestlé and companies like ours is to send the right commercial signals. And that's the way we will basically transform or help to transform from the industry. And when I say send the right commercial signals, I would divide that into three things. Point one, to send signals that we are not interested, let's turn that into a positive angle, that we are interested to buy multi-crop and not anymore single crop.

SPEAKER_00: 17:45

That's a massive

SPEAKER_01: 17:46

one. And so to give you an example, today we have cocoa buyer. They are in one office, in one desk. And then we have wheat buyer in another office, in another desk. Coconut buyer the same way. We don't basically send signals to the industry that we are interested to buy multiple crops together coming from the same land. So what is behind and what is in the corridor is we want regenerative agricultural practices at farm level. But of course, if you ask a farmer to start to crop coconut on top of cocoa trees, he will say, I don't have a market for this coconut. And I get you that this will capture more carbon and that these two crops will feed each other, but who is going to buy this coconut? So I think a company like Nestle, we basically barely buy any type of raw metals out of the earth. So one of the signals is definitely to make a bit of an adaptation of our way of buying.

SPEAKER_00: 18:49

And to put those two buyers in the same office at a different desk.

SPEAKER_01: 18:53

Exactly. To buy crops together so that when a buyer makes a request for proposal or request for information, he basically calls for coconut together with cocoa and he negotiated volumes of both and price of both together so that it basically triggered this commercial pull for this change and this transformation at farm level so that's one the second one which is a bit more political we want farmers to get federated and to unionize and to get together I still see this as an opportunity for doing things better. There are too many cases where we reach the farm communities and yes, the farmers, they know each other, but they don't really work together. So one of our role is really to engage the farming community in an inclusive manner and that we try to engage these farmers with the meals that are sourcing from them or the cooperatives that are sourcing from them so that this community has the opportunity to better know each other and then do what? Do things together in regards to regenerative agriculture. So again, if you look at what is in the corridor, basically what we would love the farmers to do is to upgrade and update the machines that they are using. For example, for reduced tillage, no tillage, but all the farmers will tell you for this type of practices, like, you know, my coconut and cocoa example, it relates to assets and infrastructures. And very difficult for a single farmer to do that on its own. So why not to take the opportunity of this boost on regenerative agriculture to try to put these farming assets into a collective pot and say, okay, now I know my different farmers, my different neighbors. I know that I'd like to implement this. This is what my client wants. I need to buy this type of machines. Let's buy together as a group of farmers and that's where Nestlé will help as well with co-financing. So the second thing is where we can help to transform and upgrade the industry is by taking all our action in a way that it's federating this farming community and it helps all the farmers to work together in the way they implement.

SPEAKER_00: 21:25

It could be also a risk for you, right? They could get together and start negotiating much more interesting prices for them and you as a buyer that have committed to long-term relationships and cannot, I mean, you are decommodifying your value chain, meaning you're not going to the neighbors or to another country to buy. Is that something that could backfire as well? Or because it is such a different approach, like it used to be, we play everybody a bit differently. We just keep them anonymized and in the dark. And this is really a step change away from that. But I'm also imagining that there might be some risks involved from you as a corporate perspective, obviously.

SPEAKER_01: 22:01

Yeah. I think it's definitely fair to say, I think we need to look The way to not get too much worried about that is really to look at the entire life cycle of this transformative change that needs to happen in regards to the implementation of regenerative agriculture. And if you try to not take a full, inclusive, end-to-end approach of everything that you need to do to make the things happen, then you may not federate these farmers. But then what you have to do is to embark each of them one by one. This will cost a bomb in onboarding farmers one by one and embarking mills one by one. So you need to look, yes, at the entire end-to-end things that you need to do and choose the best return on investment on having all of this being implemented. And yes, there are some cons, which can be characterized as cons from a commercial standpoint, but really from an end-to-end cost management standpoint, it's much more cost effective to help to trigger a feeling of agricultural community, federate all the farmers together, aggregate the assets at this farming community level, co-finance the asset at this level, train everybody at this level. And it also helps as well in the decommoditization side because What we need to keep in mind is it's impossible for a company like us to actually say we are going to source only from these farmers in the next 20 years to come because they have implemented this set of practices that we want in regards to climate. It's irrealistic.

SPEAKER_00: 23:47

Because simply of the size, of the amount of tons you can buy?

SPEAKER_01: 23:51

No, because, you know, of things that you cannot control. So a drought, climatic weather conditions, breakdown, something... Even, you know, the family, personally, something happened, the political situation, things like this. So you need to look at the implementation of the regenerative agricultural practices at the landscape and community level. And basically try to implement and sponsor, co-finance the practices within this pool of farms, within this state, in a given country, within this landscape. And at the end, what matters is that you stay in this state, you stay in this landscape. And basically, that's the rule of carbon accounting. You need to make sure that basically you're connected with this value chain. It's great that this is linked with these precise farmers, but over a long term, we need the practices to be implemented in this state so that if we switch from this given farmer to this given other farmer still in the same state, it's still OK from a carbon landscape accounting standpoint. So the third aspect of how we can really help the industry to embrace the challenge is to move away from this thinking that everything needs to be one to one. It has to be multiple to multiple. So multiple buyer, multiple end user like Nestle, Danone, Pepsi, Coca, etc. Coming to one And what do

SPEAKER_00: 25:46

you see as not the role of corporates? Like what is clearly outside? I mean, there's a lot outside your scope because there's limited things you can do. But what do you see as the role of, let's say, the public or politics or, you know, Mainly those two.

SPEAKER_01: 26:01

So a bit of a call of action here. Where I don't see our role is to set the scientific methodology and tools to measure the benefits, the outputs of the practices that we have to implement.

SPEAKER_00: 26:18

Like the ecosystem services, the outcomes, the water quality, things like that.

SPEAKER_01: 26:22

Yeah. So we are basically expecting the academia or the governmental organization to come with the methodology to measure soil carbon capture, organic matter, soil organic matter, and the way, you know, to give it a carbon tag. So I think our role is really to give technical assistance, dialogue with the farmers, co-finance rewards for environmental services, really practices-based, and basically make a call for actions to measure the return on investment with outputs. with, for example, carbon sequestration or number of hectares or tons of agricultural metals tagged as regenerative agriculture. Our role is not to set the methodology to measure soil organic matter or soil coverage or the output of these practices. I guess we could, but the challenge is that if we would do it, then it would be the Nestle approach, then we need to make sure that we're that with all our peers and competitors. We need to come to a common understanding and agreement on how to measure and it will take decades. We don't have time for this and that's basically what we kindly ask regulations, governments, NGOs and academia to set for us out of all the PhD and the theses that are triggered in the world in regards to these topics.

SPEAKER_00: 27:58

And there's the food as medicine discussion and you have a big piece of Nestle is actually health focused already since years and what do you see there because obviously there isn't an issue or a potential challenge with a long value chain with a lot of processing around health do you see there that interest as well in terms of the audience or the potential consumers as they are looking for let's say clearer or more transparent labels are they also looking for different things from the food or is that staying the same and what are your ideas and thoughts on but whole food as medicine and the quality of the ingredient piece.

SPEAKER_01: 28:33

So definitely there is a pool for that. And I think basically sustainability in general related to the raw materials or packaging is an entire part of the expectation of our consumers in regards to quality. So when they talk about, I expect a good quality product somehow in their mind and that's what comes out of the consumer study. They also mean, sustainable raw and packaging materials so and most probably you know one day or another we'll have a color coding or grading on pack as we have today in regards to the recipe and the health status of the given product that you purchase

SPEAKER_00: 29:18

it's already there in France right in Europe and I know it's in the Netherlands it's coming and the color coded the traffic light system is starting to and in Australia as well

SPEAKER_01: 29:27

exactly ABCD So I think one day or another, the accessibility angle will be embedded either into that or with its own dedicated visuals. But as an example, you know, in Europe, you have this already color coding that exists and it takes into consideration if the raw materials has an organic certification. And I think you get some points if it's there. So I think the door is already half open and basically accessibility will get embedded into that. I think this will also pull for simplification of the value chain in general, and probably pull for simplification as well of the recipe, of the number of the ingredients that are being used, and the kind of industrial transformation which is applied to get the food that we get as packaged food. But I'm far from being an expert from this, but to your question, yes, I think it's going to pull for this.

SPEAKER_00: 30:22

Yeah, and I think there's an interesting challenge there from uniformity as well. We expect packaged food to potentially always take tastes the same except when we buy wine etc then we know okay different years are different things but then if we go into the chocolates and go to the coffees and like we probably have we as consumers I'm saying have to go through a transformation as well like things taste different in different years and things taste different in different seasons and butter is not always the same and milk is not always the same and we sort of know that but as we are in the supermarket choosing certain things we sort of expect the flavor to be constant and as you are probably embarking on a journey to make the ingredients simpler and more flavor will come through, more different flavors will come through. And it will be interesting to see how, I mean, consumers say a lot of things, but if we at the end, we wanted always to taste the same or similar, then it could be a challenge for these ingredients to shine, basically. And to ask a few questions I always like to ask, and I'm very curious about your view on them. What do you believe to be true about regenerative agriculture that others don't? And this is definitely inspired by John Kempf, who always asks in his podcast on agriculture in general. But where are you contrarian in this regenerative movement? What do you believe to be true that others don't?

SPEAKER_01: 31:36

Yeah, that's a tough question. I think everybody has the tendency to argue, and I started our monologue, our dialogue on this, to say that regenerative agriculture differs from one crop to another, from one location to another, and there is almost no common foundation about regenerative agriculture. I slightly disagree with this. I think regenerative agriculture has two main foundations. The first one, it's the main concept of not harming nature by using things that are not supposed to be used over nature. And it's the fundamental principle of regenerative agriculture that You're here basically to have a positive impact and of course, not to harm. I think this is a common foundation of regenerative agriculture, regardless the crop, regardless the location, regardless the farming production methods and way of doing things that apply to everybody.

SPEAKER_00: 32:39

And what do you do with criticism then of people pointing out or saying big food companies, everything is evil. They just, I wouldn't say greenwash. I mean, there was a word we used before, sustainable wash or not. for sure we're going to call it regenerative washing they come out with big claims and at the end of the day of course you're going to find something in the value chain that doesn't work and there will be articles also about Nestle but all the others with big claims what do you say to that criticism like not harming nature yeah but you're actually doing xyz in this in this field what is your response to that at a birthday party when somebody brings up an article or brings up something that they read somewhere

SPEAKER_01: 33:16

yeah so I would say I mean first of all fair there is no perfection anywhere and we are not claiming that everything will be perfect on every places where we are sourcing these raw metals and there will be always pockets of improvements needed I would say we really try our best to be as transparent and as granular as possible in regards to this topic so I think we are really one of the few companies that already today disclose on our Nestle website all the origins, all the locations for all our ingredients. And when I say that, it's not only the tier one suppliers, you know, from whom we have the commercial contract, but it's also the upstream supply chain partners with the volumes and the status of practices. So I think the best way to have this discussion in a birthday party is to say fact-based and also to be a bit humble and to say there is no way you can reach perfection on a topic like this. embarking into a transformative journey. Whereas I was taught when I was in school that chemics and chemicals is the feed for agriculture. This is what I was taught 20 years ago. I was taught to run agriculture by basically using synthetic inputs. And I think we cannot expect the world to change this in just one decade. So to your question on that, I think it's about you know, making sign of being humble and being as transparent as we can in regards to facts and figures.

SPEAKER_00: 34:59

And come and help. I mean, if you have, there's a lot of work to be done in order value change and it's easy, not easy, but it's sort of easy to point it out, but it's definitely not easy to change.

SPEAKER_01: 35:09

Yeah. So the second point in regards to what people don't believe is true and I believe is true and it's really controversial is Somehow regenerative agriculture doesn't mean that you phase out entirely the use of synthetic fertilizer. And a lot of the community believes that basically if you cruise for regenerative agriculture, you are basically cruising for organic agriculture. And one day or another, the farmers will just switch to organic to achieve the additional premiums and to gain. even more return on what they have done. I don't believe this is true. I believe that to be really regenerative, there will be from time to time a little need of a boost just in a sporadic manner. And this boost will still come from the chemical industry and the agrochemical industry. I've been visiting a lot of different farmers showing me the structure of the soil. And a few of them were saying If I really, and I'm going to touch a very touchy point and name, if I really phase out glyphosate, really entirely, I have a big problem. And I cannot control this problem with natural solution. If I do so, then I truly have a yield issue. And then business-wise, it doesn't make any sense.

SPEAKER_00: 36:46

What crops are we talking about? What kind of farmers? I mean, we're not talking about the cocoa.

SPEAKER_01: 36:49

Perennials. So annual crops. Wheat, etc. Exactly. So they were saying, you know, in the past I was using probably glyphosate twice a year. Now I have switched to these practices and I'm using glyphosate sporadically every three years. But I have two.

SPEAKER_00: 37:07

Which is a 6x drop.

SPEAKER_01: 37:09

Yeah. And it's very controversial because, again, there is this movement of saying regenerative agriculture means that, again, you replace every single thing by practices or by natural solution, which I think is right in 95% of the case. But I don't believe we'll be able at least 2020 to 2030 to achieve such status. And it basically, you know, open a day paid for hours. But I think that's the second thing.

SPEAKER_00: 37:38

No, I think it's interesting. I think it's the context that is always very specific. I mean, we had Zach Bush on the podcast about Roundup and Glycophate. And yeah, it's interesting the argument on if you have a very healthy soil you don't need these chemical inputs but if you are on a journey to the healthy soil and you don't have the space to replace it with organic inputs or not or your soils are not ready or your context doesn't make sense you cannot have the yield drop etc etc etc is there a place for and I think that makes the movement interesting that it's not binary it's not you are or you are not regenerative like organic everywhere is because it is a certification and it is a standard and in many cases it's not regenerative like it's It definitely was in the beginning when it was about chemical inputs, but not necessarily about soil. But we've, I think, all visited organic farms that are far from building soil and many that are. I mean, just to give credit to where credit is due, but I think the direction of how do you build soil to a moment where you maybe need it once every 10 year or never need it, depending on where you are, what rotations you are doing. But it doesn't mean that in year six, potentially you cannot use it, lose everything just because you want to stay within a system or stay within the boundary. I think it's a very challenging concept for many. I'm happy you bring it up. We can probably spend another few hours. We'll for sure get reactions on it, which is great. But it's the direction I think that counts. And it's a continuum. You're somewhere on the journey. Every farmer, every land steward, every land owner is on a journey, either down to extract more from their soils or either to rebuild them. And we have to help them. We have to meet them wherever they are. You cannot expect people to change overnight, buy all new machines, have a yield drop of 20, 30, 40% in in five years. And then after that, you will recover. But yeah, that's not fair for us to ask from anybody.

SPEAKER_01: 39:27

And I think what is important and what you've just summarized is the transition phase. I think we need to keep that in mind. We are in a transition. Things will be different in the future once this transition is implemented. But we need to find and to choose the right solutions to make the best chance that these transactions succeed. And as you have said, maybe it's about, you know, using still few practices to help the new one to get implemented and answer the new one are really paying off and are scale up at the land level. Then you can stop and decrease and phase out completely.

SPEAKER_00: 40:08

Yeah. And I want to ask two final questions before we have to sign off. I want to be conscious of your time. If there's one thing you could change overnight, so you have a magic wand, you have magic power to change one thing in the food and agriculture sector or in general. What would that be? What would be your one wish?

SPEAKER_01: 40:23

To have all of the farmers virtually connected to us. So having a single identifier for all farmers and having all farmers having an app where they make themselves connected to a cloud and then everybody sees and is connected to each other. So I think the really big foundation of everything that we do, let's spell it like this, it's the identity preservation, which will resonates with a lot of agri-colleagues. It's traceability. It's knowing who is there. So it is this wish today, this industry, because of us, you know, because of everybody in the value chain. It's a very opaque one. It's very cumbersome, extremely difficult for the farmers to know who are their clients and for the clients to know who are their farmers. So if I could have one of these magic things that suddenly gives a single identifier to everybody and connect everybody in the cloud and then traceability is not anymore a challenge, that will help.

SPEAKER_00: 41:27

I think it's a very good answer. We never had that like that. And to end, this could be another rabbit hole where we can keep it for another discussion as well, but we took your magic wand away. So you no longer have that power, but you do have, in this case, maybe you do actually, but a billion dollar investment fund. So you are putting your investment hat on. This is a podcast about investing in regenerative agriculture. What would you focus on with that fund? So you could have a long-term view, very short. You could choose whatever you want, but it is an investment fund, so it cannot do grants. What would you focus on? Is it technology? Is it food companies? Is it transition finance? What would be your focus as a fund manager from tomorrow?

SPEAKER_01: 42:06

Yeah, so I would say one thing which is for sure is that climate change is going to impact everybody, all industries together. And that's a big threat and opportunity at the same time for our economy so point one if I would have a billion funds to invest I will look at investing that to something connected to climate because that's the way to help the earth and that's the way to basically probably definitely make money and help the way to forward

SPEAKER_00: 42:40

when you say connected to climate is that solar panels electric cars

SPEAKER_01: 42:44

yeah let me go to that so then when you think about climate there is one thing that I would do as well is to make sure that I invest into organization, companies, technologies that generate carbon reductions and removals. So what I think is very dangerous today is the race for sponsoring and financing the decarbonization not linked with the value chain of the industries. And what I see coming is basically a competition between carbon reductions and removals of organization and then the offsetting market. So I would try to give a boost to technologies and organization that create solutions to decarbonize the company within the value chain of the different industry. And I would make sure that the money is not used to basically boost the carbon credit. And it's not, you know, that I'm trying to pull that on the side of Nestle, but if I would invest this money, I would think like okay I would invest into a company that create a new type of fuel for the airlines or a new type of engine or a new type of infrastructure instead of boosting things that create carbon credits for the airline companies then to come and compensate so I think we need to be extra careful in this race for carbon that we invest our time energy and money into an insetting decarbonization and that we make really extra care that we don't boost things that will boost the compensation market. And definitely today, governments and regulations, they are trying to do the same because they have identified that if we do things the wrong way, we are going to end up into a competition. It's going to basically trigger business as usual. It's going to trigger and boost the compensation market and not really make the proper upgrade. So that would be the extra care that I would make.

SPEAKER_00: 44:50

Thank you so much, Benjamin, for your time, for your openness. And I'm very excited to follow this. I mean, there's an enormous role for companies like Nestle. And I'm happy you're taking the challenge. Being humble, there are going to be barriers and roadblocks and it's a rocky ride, but for everyone. So I'm happy to have you here.

SPEAKER_01: 45:09

So let's take an appointment and meet again in one year. And I tell you where we are in our journey and our KPIs and performance on carbon and regenerative agriculture.

SPEAKER_00: 45:19

Let's look at that. the outcome and the outputs. Exactly. Thank you so much. Thank you. if you found the investing in regenerative agriculture and food podcast valuable there are a few simple ways you can use to support it number one rate and review the podcast on your podcast app that's the best way for other listeners to find the podcast and it only takes a few seconds number two share this podcast on social media or email it to your friends and colleagues number three if this podcast has been of value to you and if you have the means please join my membership community to help grow this platform and allow me to take it further you can find all the details on gum Thank you so much and see you at the next podcast.