Ethan Soloviev: 0:03

Now with science-based targets for carbon and for nature, now with, regulations and investors coming in and saying, you've gotta be lowering your footprint, more and more this is landing on supply chain professionals to solve things to make a difference, to reduce the carbon footprint, to reduce the labor risk. And these women and men who are in that role have not had a lot of data to make decisions on.

Tom Raftery: 0:30

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Sustainable Supply Chain Podcast, the number one podcast focusing on sustainability and supply chains, and I'm your host, Tom Raftery. Hi everyone. And welcome to episode eight of the sustainable supply chain podcast. My name is Tom Raftery, and I'm excited to be here with you today. Sharing the latest insights and trends in supply chain sustainability. Today, I'm talking to Ethan Soloviev From HowGood. And we're talking about the food supply chain. On next week's episode, episode nine, I'll be talking to Alex Scott from the university of Tennessee Knoxville. And we'll be talking about sustainable logistics and truck emissions, for example. And the week after that on episode 10, I'll be talking to Hans Thalauer, an ex-colleague of mine from SAP now with UI path, and we'll be talking about artificial intelligence. So some excellent episodes to look forward to. In the meantime, before we kick off today's show. I want to take a moment to express my sincere gratitude to all of this podcasts amazing supporters. Your support has been instrumental in keeping this podcast going. And I'm really grateful for each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like-minded individuals who are passionate about sustainability and supply chains. Supporting the podcast is easy and affordable with option starting as low as just three euros or dollars a month. That's less than the cost of a cup of coffee and your support who will make a huge difference in keeping the show going strong. To become a supporter. Simply click on the support link in the show notes of this or any episode. Or visit tiny url.com/s S C pod. Now, without further ado. I'd like to introduce my special guest today. Ethan. Ethan welcome to the podcast. Would you like to introduce yourself?

Ethan Soloviev: 2:25

Great to be here. I'm Ethan Soloviev, Chief Innovation Officer at HowGood. I'm also a small scale farmer in upstate New York. In the USA. I have about a 30 acre apple orchard, grass fed sheep and lamb and shiitake mushroom operation. But at HowGood I manage the world's largest sustainability database for food and agriculture products and run our innovation partnerships with both the biggest food companies in the world and the coolest, smallest ones and many of the larger coalitions that are pushing forward regenerative agriculture. And data and metrics as a path for transformation in the world.

Tom Raftery: 3:03

Nice. Nice. And why? As in you, you said you've got the biggest database of, of, I guess, food related data. So what, I mean, what, what do people do with that and why?

Ethan Soloviev: 3:20

There are probably four primary use cases for our data. And it's usually used by food companies, but it's used across the supply system. So we have food manufacturers like Danone is a, a great partner of ours. But also we have retailers like Ahold Delhaize in the USA, which has 2000 super supermarkets in the USA. And we have partners that are. Upstream producers of ingredients like Ingredion who make some of the, the ingredients that go into the products that the companies make, that go into the stores that the retailers manage and get to, and consumers. And so we have users across the supply system, and it's basically anyone who wants to move towards sustainability, move towards regeneration. Needs good information to make decisions. If you're a business owner and you didn't have good financial data on what was happening in your business, you, you couldn't make decisions that would keep the business going. We're on a planet where if you don't have good sustainability data, you can't make decisions that will keep the whole planet going. That will keep all businesses in business. And so, different people at different companies use our data in different ways, but primarily it's around looking at individual food products. What is their impact? What is their carbon footprint? What is their water footprint? What is their biodiversity impact? What is their labor risk? And then how do we improve our products. How do we reduce the carbon? How do we uplift human rights? How do we enhance biodiversity? And then tell that story into the marketplace. Maybe I need to change sourcing upstream, or maybe I need to reformulate my product. Then I want to be able to say, here's a certification. Here's a a label. Here's how I can tell the average eater in the world what's so great about my product. Maybe it's water smart. Maybe it's climate friendly. If those individual eaters have information that they get on the supermarket shelves, then they can make better decisions and the whole thing gets better.

Tom Raftery: 5:18

Okay, nice. In theory. Where does the data come from? How can I trust the data that's in your database? How do I know that it's not, you know, six years old or that someone didn't just, you know, stick their finger in the air and pick a number or, you know, talk, talk to me about how, how accurate, how verified, et cetera the data is.

Ethan Soloviev: 5:46

That's a great question. HowGood has spent the last 17 years building this database from a huge number of different sources. Hundreds of individual experts and PhDs who have contributed data from the best databases in the world on the impacts of food products, on greenhouse gas emissions on water, peer reviewed scientific journal articles in all of the leading journals that are out there that are getting a really very rigorous peer review and coming out on a monthly and quarterly basis with new data; data from governments, from the US Department of Labor, from the EU, from, you know, the UN FAO. So these are the most vetted sources in the world. Everything HowGood does is a, according to internationally recognized standards. So the ISO standards for looking at the impact of products the greenhouse gas protocol for understanding the impact on greenhouse gas emissions. So it's a large set of data and it is variable, right? Sometimes it's from a database that's a really excellent database. But the original study did go in there six years ago. So more and more what we're doing now is gathering specific primary data all the way back up to individual farm level. So we have this massive secondary database, but then we also have the ability to talk to an ingredient supplier who works with a cooperative, who works with, you know, a hundred farmers and gather data from their farm about their sustainability impacts, and then represent that in the platform as specific primary verified data. And then we can get the whole thing assured by one of our assurance partners if you need it for auditing. So the data is massive. It is variable, but it is a very high degree of precision and assurance associated with it.

Tom Raftery: 7:39

Okay. And what kind of data is it? Is it, you know, where the crop was grown if it's a crop? Is it what food the animal was fed if it's animal based? Is it location? Is it soil pH? Is it, you know, et cetera, et cetera, et cetera. What, what, what data are you gathering?

Ethan Soloviev: 8:00

So yeah, those, and about 16 million more data points is exactly the sort of information that we have in the system. I mean, it's, it's, it goes down to, yeah, the individual feeds that were used to feed a cow. It goes down to the level of exactly how many hectares of land and how much water was used to produce an individual crop in an individual location. It's holistic in terms of sustainability, so it focuses certainly on environmental factors. There's a, a large number of those data points, but then we also have social and economic data points. is there labor risk in the location where this crop, where this cacao is being produced, where this banana is being produced, where this beef is being produced? What sort of labor risk is it? Is there child enslaved labor possibilities? Or is it, you know, a risk of discrimination and, and, pushing against unions? We track all of that. We also look at animal welfare. How are animals being treated? You know, what physical alterations are they experiencing? What's their feed like, what's their housing like? And we do biodiversity as well. So a lot of these are ones that are not treated by traditional lifecycle analyses. We love lifecycle assessment. We think it's a really great science, but it's not fast enough. It's not scalable enough for what the world is facing today. And so we have built with machine learning and increasingly artificial intelligence, a platform that can work at scale to understand the exact impacts of any individual ingredient. From wheat to an invasive cactus harvested from the wild in Africa. And then roll those up to products, to any product that you would find on a grocery store shelf or that you might have in your refrigerator or in your pantry. We can aggregate the data in an automated way and tell you exactly what the impact is.

Tom Raftery: 9:55

Fantastic. Why do I not see that information on the goods that I'm buying in the stores today?

Ethan Soloviev: 10:40

Well, you, you will more and more. If you lived in the DC metro area, you'd see it in Ahold Delhaize in their giant stores in the, in the US If you were at COP 28 in Dubai, you would've seen our carbon footprint labels directly on products in Carrefour, the Majid Al Futtaim, which is the leading retailer in the Middle East, they have put exactly this sort of sustainability outta carbon footprints, sustainability ratings right on the shelf edge. It, it's only gonna be spotty if companies put it on. So some companies might put a carbon footprint on their packaging, but then, you know, the six other milks or yogurts or peanut butters might not have done that. So it doesn't really help you. The real key is what, HowGood's been able to figure out is the partnerships with the retailers where we assess every single product in store, hundreds of thousands of products in a store, and then provide a unified simple, easy to understand labeling that helps me as a dad when I'm shopping with my two daughters, it helps me make a decision quickly so that I can choose the more sustainable product for my family, for my health, and really for the whole world

Tom Raftery: 11:49

Okay. But it needs to be in the whole world, you know, because it, it, it's great that it's in Washington. It's great that it's in Carrefour in the Middle East, but I have a Carrefour store about 500 meters away from me here, and I can go in there and it's not there. So, you know, how do we make it, how do we make it global?

Ethan Soloviev: 12:12

I guess I, I mean, the one thing I would say is any super, so this, we're talking right now about the supermarket link in the, in the system, in the supply system, the sort of grocery, the retailer. We can also talk about that same kind of decision moment for the food formulator or for the, you know, the farmers. But while we're here on the, the retailing node what I would say is that any retailer who wants to make more money by selling more sustainable products would do well to move in this direction. Because what we've proven over and over again when we do these rollouts in store is that the more sustainable products, which are not always more expensive, I think it's important to note many times the own brand or the private label of a retailer are quite reasonably priced, but will score well in terms of carbon, water, biodiversity, sustainability, and the products that achieve a good or a great or a best rating from HowGood that sort of environmental holistic summary, those products jump in sales anywhere from 25% to 45% in some trials, up to 235% in some of the trials that we've done. So more sustainable products when there's information for consumers, for citizen eaters, shoppers. When they can see it and make a decision based on it, they buy the more sustainable stuff across economic classes, across geographies. We just did a trial in the uk. There's one ongoing, I don't have data from it quite yet in the Middle East. It's the first of its kind there. So everywhere we do it, sustainability sells and the retailers generally make back their investment in the program in like three to four days after implementation. They're starting to see a return. So it's, it's really good business and I think it's that, you know, you might not see it because the world is now ready for it. Five or six years ago, this was too early. Now, with the awareness of climate change, with the awareness of the global instability situation, people want transparency. They want data, they want information, they want to make a decision that's good for the world. So the time is ripe. It's part of why we're growing so quickly.

Tom Raftery: 14:25

Yeah, great. So an example I've used on this podcast a couple of times at least, is I make my coffee with Oatley milk. I. And the Oatley milk container tells me, you know, to your point, it tells me it's 45 grams CO2 per liter of Oatley milk. And I have no idea whether that's fantastic or whether it's horrific because I have cow milk beside it, which doesn't tell me it's CO2 footprint. So I don't know, would the cow milk, I do know the cow milk would be significantly more, but you know, were I a a regular consumer who has not looked into this, I, I wouldn't know whether one was better than the other. And the flip side of it is I can turn the containers around 180 degrees and look at the nutritional information. And that's standard right there. It tells you carbohydrate, it tells you protein, it tells you sodium, it tells you, et cetera, et cetera, et cetera. And you can do complete side-by-side comparison. And that's because it's mandated. That's down to regulations here in the eu. I assume it's similar in the US and other regions as well.

Ethan Soloviev: 15:36

Mm-Hmm.

Tom Raftery: 15:37

before we get similar type cross comparable labeling in the EU, globally, whatever, because it, the only way it will be cross comparable, I reckon, is if a) Someone like yourself does it, and you manage to sign up everybody across the world as a customer of yours, which is,

Ethan Soloviev: 15:55

on it. We're working

Tom Raftery: 15:56

which would be great for you, but I think more likely to get it pushed out would be global regulations or at least regional regulations like we have for nutritional information.

Ethan Soloviev: 16:08

Yeah. Okay. Couple great points here. Yeah. We have nutrition, facts panels. We need sustainability facts panels that will only happen through a regulation. But there is significant motion in this direction. There is just like in a number of different realms, there are retailers. A huge portion of retailers are experimenting with some form of ecological or sustainability rating system. Sometimes it's online, if you're on Amazon right now, if you shop on Amazon, they have a new sustainability attribute system that they've just rolled out, you know, across the millions and millions of products they sell. So that immediately does make it a little more worldwide. But we also have a number of laws that are getting onto the books in Europe in particular that will push this forward. One in particular is the EU Green Claims legislation, which will structure the way that you can make claims but at the same time, there's a number of projects pushing forward that are to create a harmonized EU wide eco labeling scheme that would, that basically everyone would sign onto. Now, France is a little bit ahead on this. France has a scheme by their Aden, their government organization that has been working on this. They've been in the lead for a while. They are, this year they're starting to ask for a unified eco label for any product sold in France. And it's a pretty good one. It takes into account ecological you know, a holistic set, water biodiversity carbon, pollution. There's a number of different factors in there. So that'll go into an effect in France this year. And then it becomes a requirement in 2025. Not an ask, but a requirement. Anyone who's selling in France, and that will, even before the rest of the EU gets to agreement, that will push quite a lot forward in terms of the sort of unification of it. Now, I do think back to your initial point about Oatley. I do think that carbon is the new calorie. And that there will come a time when you don't need it to be on any pack. You will know, or my, my 7-year-old daughter, she's gonna know that 0.45 is a little less than 50% lower than what your average milk is at around, you know, 1.1, 1.2 kilograms. So, I think people will understand that, but it's not what I would lead with. Like a geeky decimal pointed ki abbreviation. What is that unit? That's not what I generally start with. We recommend something simpler, clearer to understand something that says climate friendly or water smart, or our rating system says, Good, Great, Best, right? It's very simple. It's focused on the positives. And in that way it ends up being more effective than what you have, for example, with Nutri Score, which is a nutrition labeling system in the EU, which is also excellent and there's a lot of good things about it, but it has a, A, B, C, D, E, and then we're getting into the orange and the red here. And unfortunately rating things as bad, it, it doesn't necessarily shift the behavior of people who are shopping. People say, well, I, I like those Oreos, or I like those crisps anyway and I'm, I'm just going to get 'em anyway. So what we found is that accentuating the positive and saying, you know, good is only the top 25% of the system. There's a 75% that doesn't meet our standards. But we don't say, this is terrible, don't eat this. We just say, here's the good stuff, here's the great stuff, here's the best, this is the top 5%. And we find that very lovingly nudges behavior in a more sustainable direction.

Tom Raftery: 19:44

Okay. And just to clarify, the Good are maybe the top, as you said, 25%, and then the, what was the next one? Great and

Ethan Soloviev: 19:56

Great is top 15% and best is top 5%.

Tom Raftery: 19:59

Okay. And does that mean there's still a whole bunch under there who didn't qualify to meet the good qualification? It's not that everyone who turns up gets a participation Good and it's only the ones above that? No. Okay.

Ethan Soloviev: 20:13

No, it's just there's nothing on it. And so you learn to mean or you learn that that means. Well, okay. I won't, you know, I won't go for that one. It's not, it's not, we're not looking to be activists. We're not looking to call anyone out for that is not effective for wide scale change. In our experience, we partner equally with farmers and large international companies and activist organizations to push the whole thing forward. And we find that a, a collaborative approach is generally more effective than an antagonistic one.

Tom Raftery: 20:46

Interesting. Interesting. Okay. And what kind of sustainability factors are taken into account in this?

Ethan Soloviev: 20:57

Great. So now we start to move from the retailer. We're starting to look back into in the supply system, to the manufacturer, to the place where I can give you an exact carbon footprint and kilogram CO2 equivalent per kilogram, or I can show you the blue water usage in a you know, cubic meters of water used per metric ton or the land occupation in a hectares per metric ton. So, there are eight core metrics that go into our system and those are greenhouse gas emissions, level of processing, water usage, land usage, soil health, biodiversity, including deforestation risk and other land use change, animal welfare, and human rights and labor risks. Those are our eight core metrics. Many of them align with the European Product Environmental Footprint legislation but they go beyond it because we have the social and the animal and the and things beyond that as well. We like a, a holistic picture of sustainability and we think people care about it. We think people care that the people who made the food and grew the food were treated well and have a reasonable economic livelihood, and it doesn't make sense to us to sort of strip out social and put it somewhere else while only focusing on the environmental.

Tom Raftery: 22:10

Okay. And how do you measure those things? How do you determine, you know, biodiversity levels, whether they're good or bad? What's a good or bad biodiversity level, for example?

Ethan Soloviev: 22:22

Yep. Yep. So we have a concept that's called the impact spectrum or the continuum of agricultural impacts and I've got a, a article I wrote a number of years ago, I've been working on this concept since 2005 or something like that. And I have an article that sort of charts the development over over time. But we look at a spectrum for any individual metric. Let's just choose let's choose carbon for now and greenhouse gas emissions. So on that, we see a spectrum. And on one end of the spectrum is the worst. The most damaging, the most, you know, polluting the most degenerative side of the spectrum, which would be a high carbon footprint. You know, a hundred kilograms of CO2 equivalents emitted per kilogram of material. Or even for things like gold that can get up into the hundred or thousands of kilograms emitted. But for food products, the highest you ever really see is you know, a hundred's, pretty much the high end. And then you look at the full spectrum and you say, okay, well what's less than that? 50 is actually still pretty bad. 10, still pretty high. But then you get in down to, you know, four kilograms, two kilograms, one kilogram of CO2. Now we're getting close to zero. That's a net zero point. That's the middle of the spectrum. At the middle of the spectrum, we have sustainable, we have zero. And that's like, that's zero impact, zero emissions. But then HowGood tracks beyond that? And we say, well wait, can't we go beyond sustainability? Can we go to regeneration? Can we go to what's net positive? Can't you capture carbon through agriculture? Can't you sink it into the living biomass of the farm ecosystem and actually be net positive in that way? So HowGood tracks beyond zero. We go minus one, minus two, all the way up to, you know, minus 10 or minus 40 kilogram, CO2 equivalent per kilogram. That's when you have a regenerative agriculture that is sequestering carbon in the soil. Now you could do a different spectrum, same idea of a spectrum, but you can do it on biodiversity. On one end, you have deforestation in the Amazon polluting with terrible, you know, forever chemicals. On the other hand you have basically adding more rainforest, not just no deforestation. That's the midpoint, that's the zero. We have adding rainforest, enhancing biodiversity, creating an agroecological and agroforestry farm that produces a lot of food, but also, you know, adds new biodiversity to the landscape. So we track that exact threshold, that metric for each of our core metrics. And then depending on the crop. So whether it's cacao, a perennial shade grown tree crop, or whether it's wheat and annual tillage agriculture crop, or if it's chicken right, a, a, a grain, usually grain or sometimes grass heavy meat product, we track the impacts of the production of that individual crop across those spectrums in each location where it could be grown. It's gonna use a lot more water in Spain where you are than it is in New York to grow a tomato. It's gonna have a lot larger impact in terms of land use in Brazil and the Amazon than it is in Switzerland. And so each crop in every location, we have the data to show exactly where it sits on those metrics.

Tom Raftery: 26:06

Interesting. Interesting. I'm, I'm curious as well, because there's been a movement in the last few years towards large scale indoor vertical farms. Are you working with them at all and and what do you think of them?

Ethan Soloviev: 26:22

Sure. I mean, there's been a movement towards them and there's been a crashing of them recently, especially the more high tech ones. Look, indoor vertical growing can be really great on water and pesticide impact. It can have a lower footprint though if you fully take into account the embedded energy of building all those greenhouses, high tech structures, then, you know, something to check there. I'm, I'm in support of it, especially if it could be diversified and localized, but it doesn't really grow much calories. This is one of the challenges with it. It's great for micronutrients and greens and really fresh, clean produce and even strawberries. It's great, but you're not getting a lot of protein. You're not getting a lot of good carbs. Like it's the, the bulk of the mass of what human beings eat is not generally produced in them. Overall I'm in support. I think they're excellent. They generally score quite well in our systems. The localization as opposed to the globalization of them can be really excellent. But are they a panacea to what's what we're facing in the world? Unfortunately not.

Tom Raftery: 27:28

Hmm. Interesting. Okay, cool. And we're on the Sustainable Supply Chain podcast. So talk to me a little bit about, you know, the importance of this for supply chains. If I'm a supply chain manager, you know, how does this impact me?

Ethan Soloviev: 27:45

Okay, so this is, this is where it gets really interesting. Supply chains have been opaque. They've been hard to see. Everybody's got their cards close to their chest. They don't want to digitize it. They like their pen and paper and their handshake. Like it's a, it is in some ways a beautifully conservative part of the food industry. I think one useful thing to note from our perspective is that actually the word supply chain is not the most useful way to think about it, because they aren't chains. Chains don't actually exist in natural systems. And they're kind of just one-way, link to link to link. It's more like a supply web or a supply network or a supply system because it's much more complex and interconnected than anybody, you know, thought it was when they were calling it a supply chain. Also, there's a, a history of supply chain in that we actually sadly used to chain people up to produce the goods that we, you know, move through the supply chain. And there even today, I mean there are millions still in, in modern slavery. So, we don't use the word supply chain because we think it creates the mind that thinks about it wrong to solve for what we're actually facing, which is a complex network or web. And so part of HowGood's work is to be the social network for sustainability data so that you can pass. You don't give up all your ip. This isn't about sharing all your data openly everywhere, but you can pass the appropriate information for somebody to make a decision upstream or downstream from you through the system in a more comprehensive and trusted way. So if you're a supply chain. If you're a supply system manager at a major food company or at any food company and you're looking upstream and you have very low visibility into where things are coming from and what the impacts are, it's hard then for you to make a decision to lower your carbon footprint. And now with science-based targets for carbon and for nature, now with regulations and investors coming in and saying, you've gotta be lowering your footprint more and more, this is landing on supply chain professionals to solve things to make a difference, to reduce the carbon footprint, to reduce the labor risk. And these women and men who are in that role have not had a lot of data to make decisions on. Sure they get price. And they know quality and they get terms and they can negotiate the logistics, but they need sustainability intelligence at their hands, at their fingertips, just like they need business intelligence in order to say, I've got 16 suppliers, which of them has the lowest carbon footprint for this sugar or this beef? Because then I could make a decision where I don't even have to change my products, but just switching a supplier or not switch a supplier. Why don't you engage with your supplier and say, look here for your crop. Here's the six top recommendations for abatement strategies you could use to lower the impact of your product. Would you like to pick out two or three of them and we'll go at it together and see what we can reduce? Most companies we work with would rather engage their suppliers than change to a different supplier. And so for all of that, you need unbiased data that can be assured, so you can understand the current impacts, make decisions in the right direction, and then gather more detailed primary data in collaboration with your upstream suppliers over time.

Tom Raftery: 31:11

It's interesting that you use, the word can be assured with respect to the data because increasingly regulations are going to require reporting and assurance and auditing of data the same way financial reports are required to be reported today, no?

Ethan Soloviev: 31:33

I mean it's like, it's so close to here. You basically have to be acting like it's here, specifically the EU deforestation regulation which singles out six high impact commodities beef, palm oil cocoa, coffee, rubber and soy. So it singles those out to start, but the onus that it puts on companies working with, or even in some cases making products with those ingredients, you have to be able to trace the individual, lots of material back through the supply system with chain of custody to the farm where they were produced. You need to have a polygon, you know, an outline of the map of that farm. And once you have that, you then have to be able to say, no deforestation happened on this plot of land post 2020. Is what the law says. And if you get caught out not having that in the EU, the fine is 4% of your revenues.

Tom Raftery: 32:33

Yeah.

Ethan Soloviev: 32:34

that's a big stick, right? That's significant. Nobody wants to get to the end of the year feeling like they had a, a good year of growth at 3%, get hit by a fine and realize that they're, they're down a point. That's like that nobody wants that. And so this is a really significant legislation that's coming into force in 2025 and is going to require the rapid digitization, the rapid upskilling in terms of technologies and software that companies are using to be able to track to this level of detail. I, you know, there's a lot of, there's gonna be a lot of challenges with it. Both from the, you know, companies that will be hit the hardest, the, the processors, the ingredient traders, but then also up to individual small holder farmers in the supply systems you know, who might be producing coffee, and this is seen as an undue burden on them. So, either way, because of that financial penalty, that's sort of staring, staring at everybody in the coming years, there's gonna be a massive movement in this direction. In fact, if, if your company isn't moving this direction.

Tom Raftery: 33:40

Mm.

Ethan Soloviev: 33:41

You kinda get on it'cause it's gonna take a while to get the system set up to do the tracking. My hunch is once the six high impact commodities, once we've been going for a little bit there, I think then people will say, oh okay, this is doable. There is software out there that can help me do this traceability. There is software out there that I can see the value of being able to say EUDR compliant, deforestation free product there will be a marketing benefit to that, right? So I, I think people will see the value, see that the software tech tools are there, and this is leading me towards AI and artificial intelligence a bit, but maybe we'll save that and I think there will be more ingredients that it's required of, and in the not too distant future, it'll just become the norm to have that level of data visualization, transparency, traceability in, in global supply systems and certainly the companies that do it first will get the, the benefits of being the leaders.

Tom Raftery: 34:39

Nice, nice. And you know, having mentioned AI, et cetera and all, all the new technologies that are out there and as the Innovation Officer for HowGood. What's next? What's coming down the line that, you know, is exciting and interesting and supply chain people should be, you know, all excited about?

Ethan Soloviev: 34:58

Ah, there's, there's so much. I mean, I saw a Nobel Prize winning economist speak recently about artificial intelligence along with scientists from Google, and they described that artificial intelligence is a general purpose technology. Especially the, the generative intelligence, Gen AI a general purpose technology on the order of electricity and computers.

Tom Raftery: 35:23

Right.

Ethan Soloviev: 35:23

That the massive shifts that we saw in the world with the introduction of electricity and computers, we're in the early stages of it here with Generative AI. So HowGood is leading this work, especially this particular intersection of food, artificial intelligence, and impact food, artificial intelligence and sustainability. We're right at that nexus. You know, we've convened conversations at Climate Week at COP, the Climate Conference at Davos, and a number of events this year. We'll be focusing on this exact intersection. There's three levels of work that I see supply chain professionals and the broader food and agriculture industry can work with. But actually this is across any industry. You could see these three levels. The first one is efficiency, where you can just do things that you currently do a lot faster and easier, querying large data sets with natural language as opposed to running through spreadsheets. You can just asset AI for it. Writing and sifting through and figuring out what the best RFP is. AI will get so good and fast at doing that. There'll be AI's writing the RFPs, there'll be AI's responding to them. Right? So all of this is in efficiency. Then there's a level which is innovation. And this is where I spend a, a bunch of time. It's great to do the things that we already do more quickly, and Gen AI helps with that immensely. All the data coming up shows productivity increases from it. Innovation is about really doing new things. And so, you know, we're looking at it for things like, here's a product or here's a portfolio, here's a supply chain portfolio. You're buying 200 materials from 50 countries and you know, a thousand suppliers. If I wanted to decarbonize by 15% and reduce my land usage and water impact while maintaining my current price prices overall. What's the best way to do that? In our platform, you'll be able to click a button and click optimize, and the AI will run through all of the options, all the different suppliers, all the different sourcing locations all the, you know, ingredient swaps you could consider. Everything that you've got and then come up with a quick set of recommendations. Try this, try this, try this, and you'll interact with it. You'll be able to say, oh. That's a thumb that up, that's a good recommendation. Or no, that doesn't make sense. My company can't do that. And then the AI will start. This is machine learning now. It will start to learn you and what your company can do and then make better and better recommendations going forward. So this is gonna, I just talked about it from a supply chain level. Imagine that same thing happening at an individual product reformulation level or at a portfolio of products level or at, for a retailer who wants to decarbonize and needs to change their category mix, or for an ingredient supplier who's looking at what new crops they want to be making into ingredients and selling into the market. Innovation's gonna be incredibly useful there. And then just one last little bit on it. You know, the third level that I've identified is the level of transformation, which is where you see actual, like transformational, really big phase shifts in the industry come from Generative AI. And I'll be honest and say we ha we haven't seen any of them yet. It's like, it's a little nascent. I'm looking for it every day. I'm thinking about, I'm saying, where is that transformational impact? They're really totally changes the game. So if you see one if you hear about it, I'd love to hear about it. And I think we, I think there's a, a lot of potential in what we can do with AI for yeah, this profession and realm of work.

Tom Raftery: 38:57

Yeah. Great, great. Superb. We are coming towards the end of the podcast now. Ethan, is there any question I didn't ask that you wish I had or any aspect of this we haven't touched on that you think it's important for people to think about?

Ethan Soloviev: 39:11

There's two realms I'd like to touch. One is about the granularity of data. And we've explained that we go from secondary data towards primary data, and then companies are looking upstream in their supply system getting more and more detail what's actually happening. What's the, you know, agricultural practices on the ground, what kind of abatement strategies are you trying out and what's happening in carbon, in water, and biodiversity. One thing that's great is that we have a now globally unified set of metrics to track the impacts of agriculture. The sustainable markets initiative that HowGood is part of authored two reports, but one recently that has the five top metrics for regenerative agriculture and they're very straightforward metrics. And they align with the One Planet Business for Biodiversity, with the SAI platform, the Sustainable Agriculture Initiative platform, they align with the global farm metrics. So we're getting at a, at a high level, a small, tight set of metrics that every company should be measuring, every ingredient we should be measuring it for. But when it comes to granularity, what some of our partners are finding, especially the ingredient suppliers who have traditionally been a little, I dunno, reticent to share some of their data from their farm systems. What they're finding is because there's demand from the CPGs and from the retailers for this level of information, the ingredient suppliers that come forward first and say, here's our carbon footprint, here's our water footprint, here's our biodiversity impact, that's seen as a benefit because they're differentiating themselves on sustainability. And then the companies that aren't disclosing that sort of information. They're just getting slapped with the industry average worst case scenario for beef or for coffee or for whatever. And so by disclosing more, you just, you get a more intimate connection with your customer. And what we're seeing is that whole thing is speeding up because we have six of the 10 largest food companies in the world using our platform. Now they're asking data from the ingredient suppliers. Instead of ingredient suppliers having to answer six different surveys or 17 different surveys about that data from every single manufacturer out there. They can now come to one place, enter their data once, and it gets distributed to all the users in the format with the metrics they wanted So again, this is that social network of sustainability that's speeding up and helping everybody valorize. And get the value out of the good sustainability initiatives and work and transparency that they have done on their ingredients. Now, mostly that's on carbon, but the last sort of leg and point I wanted to make is that this is all coming for biodiversity to o. We have science-based targets for nature releasing their biodiversity guidance. The GRI more on the investor side just released their nature on biodiversity reporting requirements. We have a COP 16, the conference of the party 16, for biodiversity in Colombia at the end of this year, right before the climate COP. So biodiversity is, is rising. So if you're feeling like you're just barely getting your arms around carbon and greenhouse gas emissions. Well, hopefully you learned a lot there because it's gonna be required, I think, soon. And, and there's an upside if you're leading it on the, on the biodiversity side as well. And of course, biodiversity and carbon, are deeply interwoven and we shouldn't really look at them separately. So I think this is a net benefit and hopefully what the industry has learned on carbon, we'll be able to transfer and speed up on biodiversity soon. And if you need help I happen to know of a place that has a lot of data that could be supportive.

Tom Raftery: 42:49

Which leads me nicely to my last question, Ethan. If people would like to know more about yourself or any of the things we discussed in the podcast today, where would you have me direct them?

Ethan Soloviev: 43:01

HowGood website's a great start. There's a huge amount of information in our help centers and in our, our video, our own podcast that we do. So there's a lot there on the HowGood website. And then you can find me haunting on LinkedIn around various water coolers there and, and putting out everything I find on the leading edge of innovation, artificial intelligence, food and impact. So, connect with me there and send me a note.

Tom Raftery: 43:27

Perfect. Great. Ethan, that's been fantastic. Thanks a million for coming on the podcast today.

Ethan Soloviev: 43:33

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

Tom Raftery: 43:36

Okay. Thank you all for tuning into this episode of the Sustainable Supply Chain Podcast with me, Tom Raftery. Each week, thousands of supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose the guests or a personalized 30 second ad roll. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn, or drop me an email to tomraftery at outlook. com. Together, let's shape the future of sustainable supply chains. Thanks. Catch you all next time.