Pet Food Podcast: How can those in the pet food industry properly navigate their sustainability business plans?

Lindsay Beaton (LB): Hello and welcome to trending pet food–the industry podcast, where we cover all the latest hot topics and Trends in pet food. I’m your host and editor of Pet Food Industry Magazine, Lindsay Beaton, and I'm here today with Project Hive Pet Company Co-Founder and CFO/CSO Melissa Rappaport Schifman. Hi Melissa, and welcome!

Melissa Rappaport Schifman (MRS): Hi Lindsay, thanks for having me.

LB: We actually covered Project Hive Pet Company as Pet Food Industry Magazine’s April 2022 cover profile, but in case you haven't had a chance to read the issue, here is a little bit of information on the company.

That overarching sustainability expertise is why I asked Melissa here to help me answer today's question: how can those in the pet food industry properly navigate their sustainability business plans? So, Melissa, you obviously have a ton of experience, and I'm really looking forward to this conversation. I want to talk a little bit about how sustainability has made its way through business over the last several years. In your experience, how have priorities shifted in the business world when it comes to sustainability, and where do you think the pet food industry in particular is at right now?

What is sustainability, and how have priorities shifted?

MRS: I think we should back up and say what sustainability is, because it's really a massive topic, and people can kind of go cross-eyed with it. It's generally defined as “meeting our own needs without compromising the ability of future generations to meet their own needs.” But that's pretty hard to get your head around in terms of making it into a practical strategy. We're talking about natural resources, agriculture, human capital, social equity…sustainability can be applied to every part of our lives.

So today, we’re talking about the business world and sustainability. Businesses have been slowly getting on board with sustainability, and we’ve seen a major growth over the past decade. Companies that used to just put out annual reports are now also putting out CSRs (Corporate Social Responsibility Reports), and companies are aligning their short, medium, and long-term strategic plans with broader sustainable development goals. Thankfully, there is a framework for that. The United Nations adopted 17 goals in 2015 around sustainable development, and they talk about it as a “shared blueprint for peace and prosperity for people and the planet.” So again, very broadly, businesses are starting to look at their energy uses and their impact on climate change; how much they contribute to pollution of our land, water or air; how they affect the depletion of natural resources, as well as human rights and issues like hunger, poverty and diversity.

As an industry, pet trends typically follow human trends, so the pet industry is also gaining a lot of traction in becoming more sustainable. I want to give a quick shout-out to the Pet Sustainability Coalition, which was founded in 2013. They're based in Colorado and they're really helping drive that change; they're a great resource. They like to say “we're working in an industry of caring; caring for things that don’t have a voice” [our pets don't really have a voice]. We take care of our animals, and we need to take better care of our planet's natural resources that really support all life.

LB: Clearly there are a lot of elements that go into sustainability in business and different avenues to cover, and as we get more involved in sustainability, it becomes more complex. I know one of the things that companies are going to come across, pretty early on in their sustainability journey, are various kinds of certifications that you can get, depending on where you are in the process.

What are some of the top company-level certifications that companies are going to come across as they're exploring sustainability?

MRS: Certifications have grown a lot in the past decade as well, and there are overall third-party certifications that basically say yes, we've validated your operations (or whatever it is that they do). But it can be pretty confusing for businesses. I think a lot of businesses are asking: are they worth it? Does the consumer care; do they understand it? Some of the top ones that we've come across that I really love, and one of the most holistic brand level certifications is B Corp. It’s a bit of a misnomer because you don't have to be a corporation; you can be any type of business. It's a third-party verification performed by the nonprofit be BLab, and it looks at your impact on all stakeholders. So, not just shareholders, but it looks at your impact on your employees, your community, and the environment. Over 4,000 companies have been certified globally so far, and it's a really great organization that I talk about as the savior of capitalism because it makes businesses more kind and thoughtful towards everybody that they impact.

Another great organization is 1% for the Planet. That was founded by one of my heroes, Yvon Chouinard, who's the founder of Patagonia. You basically commit to donate 1% of your revenue–not your profits, but revenues–which is more significant They have a whole host of environmental organizations as part of their network. If the organization that you want to contribute to isn't part of their network, you can tell them I want this to be part of your network; they'll do a quick audit [and add them to their database]. For companies, they conduct an annual review to make sure that the business is actually do donate 1%, so they look at your tax records look at your total revenue, and you have to have a receipt that shows that you are giving 1% of your revenue. I think over 1,200 businesses have signed up for this.

There's a component of it that isn't really certifiable: being mission-driven. For Project Hive Pet Company, our mission is to help save the bees. So we donate 1% of our Revenue to our nonprofit partner the Bee Butterfly habitat fund. But it goes beyond just the certification partnership with 1% for the planet: we also advocate for bees and sustainability through our blog and newsletters and social media. And there aren't really many pet companies out there with a sustainability mission like ours. There are a lot of great pet companies that have either a mission or a give back or something, but we're seeing more of consumer demand for “what is your company doing to help save the planet?”

LB: We did talk a little bit about this in the company profile that we did for the April issue of the magazine. But when companies are really trying to figure this out (and we're going to talk about product certifications in a minute but we're going to stick at the business level for now), what do people need to be focusing on; how do they decide if a certification is a way to go, or is it more important right now to focus on being mission-driven and really flush that out?

How broadly should a company cast its net when it's trying to figure out where to go in terms of sustainability business plan?

MRS:  I think it really depends on what the business’ core values are and aligning those core values, because you do have to really prioritize. It's not that easy to get all these certifications, and it can be costly. One example: we are working towards B Corp certification and we do have our agreement with 1% for the planet. We have a goal of being climate-neutral as well. We just went through climate-neutral certification for small brands, and it actually came back as being too costly for us at this level, as a startup company watching our financials and cash constraints. So, we're working towards becoming climate-neutral on our own but not going for the certification. It's kind of a difficult prioritization; not all companies can do all things.

What consumers want is transparency. Because of the internet and social media, you can find out so much more about what a company is doing and what their values are and what their priority is. So, as long as there is communication about “our main goal is to do X” (like ours is to save the bees and we’re planting wildflower habitat to help). That's our main focus. Then the next level of certifications can be nice to have, and I don't know that any of them are a “have to have” right now, because consumers are still trying to navigate it. But if you're transparent and honest and communicate your goals, that goes a long way. Starbucks has a great corporate sustainability report where they say: our water use has gone up because our product uses water. But being honest with the consumer and the marketing claims that everybody's putting on their packaging and websites—they just they need to be real.

LB: I think that's an important thing to talk about, because after all is said and done, yes it is easy for consumers to look at product packaging or go on the website and if you have that seal, if you have the certification, that tells consumers a lot of things in one go. So that could be an “easy” way to do things, except for the fact that it's not it takes money, it takes time, and some companies are just going to be priced out of some of these certifications depending on their resources and their manpower and just the size of the company–how much money they are bringing in and if you are start-up company, then you might feel a little bit of despair with all of this, because how can you possibly keep up? But one of the things consumers are looking for and we’ve talked about it another episode of this podcast, and it's coming up in a lot of stuff for writing for the magazine, is that people just want to know what you're doing. And you have to be able to back it up, because they’re going to find out if you're not telling the truth. But there is an avenue there to put together a solid sustainability business plan as long as you're transparent and say, “we aim to be carbon neutral by this date” and yes if you Google search there are the certifications out there you can get it. But if you're transparent about your journey, I think that can hold just as much weight as consumers as that little label on your packaging at the end–without all of the costs that could be prohibitive in getting those kinds of certifications.

So, I do want to talk about product-level certifications just so people know what kind of things are out there. But I do think it's really important to make that part of the conversation about certifications and things you can do as part of your sustainability plan and maybe ways to work around it. Maybe you can't go for the certification right now, but you can still do things and tell your consumers about your actions without completely torpedoing your strategy from the start.

MRS: Exactly. It does take manpower and specific knowledge to even understand what your impact is from a sustainability standpoint. One of the things I love about B-Corp is that it requires annual impact reporting. And maybe a company doesn't get B Corp certified, but they still have an impact report. That is the first step–it’s really to start measuring your impact. It depends on the business you’re in, but in terms of pollution, energy consumption, water usage, carbon emissions, things like that—you have to start somewhere with measuring what your impact is. So that's a great starting point and then you can say, “we didn't realize our downstream impact is X.” So for example if you're shipping something from overseas, that's going to be a much bigger impact on fossil fuel emissions, so maybe that's where you start trying to reduce, and then you just go from there. And you can set goals and say, “this is what we're working toward.”

LB: So We’ve covered a lot of the business certifications, and before we zoom out a little bit and talk about the bigger picture, let’s zoom in and talk about product certification.

What are some of the top product level certifications out there right now related to sustainability?

MRS: If we start with food-related certifications, most people know the USDA certified organic label. That's got some controversy with it because for small farmers, it can be difficult to go through that process. Actually, Project Hive Pet Company wanted go organic when we were originally looking at treats. We were going for chicken treats, but  going for the organic certification was going to just be too difficult and expensive. We decided to offer vegetarian treats instead, for a variety of reasons. Our dog treats are made of ground peanuts, good flavor that dogs love, and they have pea protein. We insisted on getting our treats Non-GMO Project Verified. It did take manpower and it is a cost, but it aligns so closely to our mission to save the bees. In this process, I learned a lot more about GMO (genetically modified organisms). Our agricultural system is pretty dominated by GMOs. Studies have shown that most people don't want to have GMOs in their food supply. Many of the agricultural practices out there, like GMOs, are what put bees in danger. It's our mission to save the bees, so we're really focused on having Non-GMO Project Verified. So that's a great certification. I think we're going to see more and more of that as the genetically modified food industry gets more and more scrutiny. Keeping on the food side, less well known certifications are around sustainable fisheries and those around animal welfare.

Then there’s product level certification similar to climate-neutral at the brand level. You can have CarbonFund.org certify your products as climate-neutral. Most of these climate level certifications require you to purchase carbon offset for your carbon emissions. Those have been a bit controversial. Greenpeace wrote blog that carbon offsets are a scam. I don't totally agree with that, but they do need to be incremental and additive; you can't just say we didn't take down the forest that wouldn't have been taken down anyway. But I think people are a little bit skeptical about some of the carbon offsets. That market is still in its infancy in and it's growing really rapidly, but I think people are still trying to understand it.

Packaging is a major waste problem, so there are more and more certifications around that, if you’re looking at compostable materials and material that can be recycled and responsibly- sourced materials. FSC-certified is Forest Stewardship Council, so that shows that if your products or any type of packaging is made out of paper, it comes from responsibly, sustainably managed forests. I think we're going to be seeing more reused and refillable packaging (there's not really a certification around that one).

One of the certifications I really like—it's very small not many people have heard of it—is Cradle-to-Cradle Certification. Cradle-to-Cradle is a book written by William McDonough. He's an architect, and he takes you back to a concept: there's no real waste in nature. So instead of making products cradle-to-grave, let's think about the entire life cycle of a product. Because you don't really ever throw anything “away,” right? When you throw something away, where does it go? it doesn't just disappear. So, if we want to go into more detail of it, he kind of takes all materials and says there's a biological nutrient cycle that can be endlessly composted and it regenerates itself…Then there's technical nutrients: things like metals and glass that can be recycled and reused. But the important thing is to keep those two types of materials separate. The biological nutrients stay in that cycle, and the technical nutrients stay in that cycle. When you mix them, he calls it a “monstrous hybrid.” It can't be composted; can’t be recycled. Getting a cradle-to-cradle certification– it's a great way to think about product and what's going to happen to it at the end of its lifecycle. Particularly with food, it's around packaging, because the food gets digested—but what's left is the packaging. Whether they’re compostable or recyclable are kind of the main issues there.

LB: The conversation around sustainability has really really grown to encompass every single part of the pet food industry, everything from ingredients, all the way through packaging to transportation to the final product on the store shelves. As we said at the beginning, it could be really confusing and really complex. We’ve talked about a whole bunch of certifications—maybe you should, then maybe you should hold off on them. With all of your experience with sustainability in business and in your opinion, what certifications do you think companies should prioritize if they want to make something like that part of their sustainability plan? And then what things should they be doing that don't necessarily have to do a certification? If you're building a sustainability plan, are there one or two certifications you should really look into, and then what are the things within your company that you should really focus on as your building this plan?

What certifications do you think companies should prioritize if they want to make something like that part of their sustainability plan?

MRS: I think B Corp certification is one of the top ones. and I think 1% for the planet is one of the best ones. But it really has to tie into your overall mission and strategy. So, 1% for the planet is great because a percent of your revenues is going towards helping to save the planet. But really thinking about your own product, and if it's animal-based products, finding an organization that aligns closely with your own products so that it makes sense from the standpoint of a company's mission. It kind of goes back to the company's mission and values in terms of picking a certification that makes sense. So for 1% for the Planet, if they're just giving away part of their revenue to a variety of different places that changes every year depending on who the person is that decides where it goes, that doesn't really fit well with an overall message to the consumer. I would just go back to incorporating a mission to save the planet as part of it. Patagonia is a shining example. They have said they are in business to save our home planet. I love that. They're just saying: everything we do is going to be not just to stainable, but they're going towards regenerative. They're working on regenerative agriculture because we do have some healing to do with our natural ecosystems.

B Corp and 1% for the planet I think are the two most impactful certifications to go for at the Brand level. If you are in food, I think Non-GMO Project Verified is really important. Sometimes people can't get the organic label. That’s what we’ve prioritized at Project Hive Pet Company, based on a lot of expertise in sustainability, so I guess I’m a little bit biased. 

LB: What is the top question a company needs to ask itself when it's trying to figure out what its sustainability mission should look like? You’ve talked about focusing on your products and finding something that aligns with that, and your business strategy, there are a lot of different elements and companies are starting to take a look at themselves right now because they're shifting the way they're interacting with consumers and it's really turning into a more transparent, more conversation-type of relationship with consumers. What would really help give a company a springboard to jump off to really flush out a sustainability plan?

What is the top question a company needs to ask itself when it's trying to figure out what its sustainability mission should look like?

MRS: I think, as a sustainability consultant, we always start with, “where is your biggest impact in your operations?” Larger companies can afford to do a materiality assessment. That sounds very scientific, but materiality means what is most important to your business as you look at your supply chain and your operations—and then going all the way to the consumer through waste. In that whole circle, or line, where is your biggest impact? The three major areas that are typically looked at are energy, water, and waste. Those are the main areas to start focusing on to see where is your company is. It is very energy-intensive; do you produce a lot of waste? Do you utilize a lot of water? And it should be not just in your own operations, but throughout the supply chain. So it's looking at the whole picture, the life cycle of the product: where is the most impact? It can be a little daunting to try and figure that out, but I think most businesses can guess where that is going to be. But backing that up, I’d ask: why are you in business? What is your main purpose? If it’s “I'm in business to make money,” I would encourage business owners to back that up a little bit more. What are your values, what do you hope to do and make a difference for your consumer or for the pet that you're serving? is there a bigger picture, do you want to make life better for a certain group of animals or a certain group of people? Is that geographically constrained or is it holistic? So, there may be soul-searching questions to ask that will help drive a sustainability strategy. It's a really big umbrella to plan out.

LB: I think you’ve given people some places to jump off of which is always good because you can't come up with a plan unless you know where to start. And with the conversation around sustainability these days, it can be difficult to know where to start and where to look first.

What do you see as the future of sustainability the pet food world? Where we going?

MRS: I think we're in the middle of a major transformation in what we're doing and what were expected to be doing when it comes to being more responsible for our impact. Specifically, I think we'll see more alternative proteins in the pet food industry as people try to reduce their consumption of animal products. Pet food trends tend to follow human trends, as I mentioned, and with the global demand for more vegetarian and vegan food, as it increases, pet parents will start looking for that for their pets. Alternative proteins can be plant-based, cell-based (which is lab-grown), or insect-based. I think we'll also see growth in the Non-GMO Project Verified pet food and treats, because consumers are asking for that in order to help transform our agricultural system. We’re also seeing a growth in the wellness categories for pets: treats that are good for their teeth; treats and toys or other things that are good for their mental health– whether it's an interactive game or whether it's a scent or something that is calming; things that relieve anxiety. I think we're in kind of an overanxious stressed-out world right now and I think we're seeing more need and demand for help in that area—for people and pets.

LB: I would definitely agree with that. Thank you very much for your insights. Sustainability is such a hot topic right now that I know many companies are hip deep in trying to figure out where they stand. So I hope and think that this will provide a lot of touch points for companies to start with. Before we go, let's do a little plug: where can people find you, and where can people find Project Hive Pet Company?

MRS: People can find me on LinkedIn: Melissa Rappaport Schifman. Project Hive Pet Company can be found on our website: ProjectHivePetCompany.com where you can find our products and savings on bundles. Since the Global Pet Expo in Florida in March, we introduced our company and products to the world. We just launched a year ago, and I don't think many people have been together at a pet show for a couple years because of Covid. We are growing our retail presence and we really love local retailers. They know more about our products, and pet specialty retailers are great as well. We are trying to make it convenient for people, so we are also on Amazon—because the more that we sell, the more bees we can save!

LB: Excellent! That's it for this episode of Trending Pet Food. You can find us on PetFoodIndustry.com, SoundCloud or your favorite podcast platform. You can also follow us on Instagram at TrendingPetFoodPodcast. Once again, I'm Lindsay Beaton your host and Editor of Pet Food Industry Magazine, and we’ll talk to you next time. Thanks for tuning in!