This episode features an interview with Corey Blumenthal, Sustainability Specialist at Shake Shake and Lauren Brown, Senior Program Manager, Carbon Reduction Data & Analytics at Neutral Foods.
Today, we sat down with Corey Blumenthal, Sustainability Specialist at Shake Shake and Lauren Brown, Senior Program Manager, Carbon Reduction Data & Analytics at Neutral Foods.
Shake Shack partnered with Neutral to source carbon-free milk, initially available in Washington and Oregon, and later expanded to their East Coast locations. Corey's role at Shake Shack involves overseeing sustainability initiatives, while Lauren focuses on carbon reduction strategies at Neutral.
Corey and Lauren highlight the importance of sustainable practices in food production, particularly in addressing emissions from dairy farming. They discuss initiatives such as regenerative agriculture and feed supplements aimed at reducing methane emissions from cows. Lauren explains how technology and innovation play a crucial role in measuring and mitigating methane emissions on farms, emphasizing the need for upfront financial support to incentivize farmers to adopt sustainable practices.
The conversation delves into the intersection of sustainability and productivity, emphasizing the potential for practices like regenerative agriculture to improve both environmental outcomes and farm efficiency. Corey and Lauren also discuss the challenge of balancing sustainability with affordability for consumers, emphasizing the importance of collaborative efforts across sectors to drive meaningful change in the food industry. Overall, the episode provides insights into the practical strategies and collaborations driving sustainability efforts in food production.
Guest Quotes:
“ You know, we've seen it over and over again in surveys, consumers saying, yes, they care about sustainability, but they're not willing to pay extra for a product that's produced sustainably if it costs more. So at Shake Shack, as part of my role as a sustainability specialist, I've been trying really hard to find avenues for us to incorporate sustainability without having to pass that cost onto consumers. ” - Corey Blumenthal
“I think from Neutral's perspective, I mean, we know that 93 percent of households in the United States have some sort of dairy product in their fridges at home. And we also know that dairy has a very significant climate impact. And so we're trying to address that issue. We know that consumer behavior is notoriously difficult to change. So we're meeting them where they're at with a more sustainable option. And so we're doing a lot of that work to really invest in farms, invest in these systems, to set consumers up with a better choice that they can make.” - Lauren Brown
Time Stamps:
Today's episode is brought to you by Ancera, the company that gives poultry companies a birds eye view into their operations. Find out how Ancera is replacing opinions with objectivity at www.ancera.com.
Links:
Arjun: [00:00:00] On today's episode, we sit down with Corey Blumenthal and Lauren Brown. Corey is a sustainability specialist at Shake Shack, the fast casual restaurant that serves elevated versions of the classics. And Lauren is the senior program manager for carbon reduction data and analytics at Neutral. Neutral is the first carbon neutral foods company in the United States.
Arjun: Thanks In 2023, Shake Shack partnered with Neutral to source carbon free milk, which is now available at all Washington and Oregon locations. Uh, I am very excited to have both Corey and Lauren on the show in this, uh, new group format. We've not done this before. Uh, to really tell us more about their experience and how these alliances can be made to achieve, uh, these moonshots, really, in the food industry.
Arjun: Uh, Corey, Lauren, welcome. It's great to, uh, have both of you on the podcast.
Corey: Thank you. I'm excited to be here. And I actually have just one clarification. We actually [00:01:00] have all of our east coast, so New York, Massachusetts, Rhode Island, that's now where we're getting neutral milk, which is really exciting because we expanded from just having the northwest locations to now being in over 90 locations.
Arjun: Wow, that's fantastic. That's great news. Congratulations to both Shake Shack and to Lauren and team. Uh, that's
Lauren: to be here. Thank you.
Corey and Laurens Background in Food Sustainability
Arjun: Um, for, uh, our audiences, um, Corey, if you can kick it off a little bit, uh, just talking about, uh, yourself, um, and very specifically what your role entails at Shake Shack, please.
Corey: Of course. So ultimately, as you said, I'm the Sustainability Specialist at Shake Shack. Prior to this, I completed my Master's in Energy and Sustainability at Northwestern with a focus on sustainable food systems. So at Shake Shack, my role is pretty cross functional, anything sustainability related at the [00:02:00] company I touch.
Corey: So I work with our marketing team to figure out how best to tell the amazing stories that, you know, we're doing. I work with our, um, development team to look at how can we continue to expand our footprint of restaurants while minimizing our environmental footprints. You know, anything sustainability related at Shake Shack, I kind of have a hand in, and Neutral was one of the projects that I was able to get started at Shake Shack, um, and it's amazing to see it just kind of flourish.
Arjun: That's fantastic. Uh, thank you, Corey. Uh, Lauren, can you talk a little bit about yourself and Neutral and a little bit more about, um, about how this whole, uh, this whole, um, partnership with Shake Shack really came by?
Lauren: Yeah, so I, I work on the carbon reduction team at, at neutral. We're the first carbon neutral food company in the US like you mentioned. Um, and we're really focusing on our big, uh, areas of impact first. So [00:03:00] think about like dairy and beef, things that we know have large source of emissions where we can really drive impact There.
Lauren: Um, I work on the carbon reduction team, mostly supporting the data and analytics components of what we do. So that includes our life cycle assessment and our footprint, um, on an annual basis to really know where our impact is coming from. Um, and then a lot of the modeling and measurement and reporting required for our on farm projects, which is really the heart of what we're doing, um, working directly with farmers to reduce emissions on farm.
Lauren: And then maintaining all of those certifications, um, and verification of those projects to make sure that we're, uh, holding them to the highest standard that we can do. Um, my background's really in sustainable agriculture and climate science as well. Um, my master's program's also in, uh, earth systems from Stanford, so very similar, um, vein as Corey as well. I think the origin of the partnership, Corey, you might have met someone and reached out. Um, we originally started in the Pacific Northwest, mostly focusing on retail channels. Um, and we've really been expanding into food [00:04:00] service and found great partners like Corey and Shake Shack, um, that are really interested in driving sustainability through their, their operations as well.
Corey: Yeah, I think that is actually how the partnership came to be. You know, in the sustainability worlds, I feel like we're always joining panels and reading books and articles because things are just ever evolving, so to keep up with trends, it's really important to be plugged in, and I actually came across.
Corey: A member of the neutral team on a panel and thought, you know, wow, Shake Shack sells a lot of milkshakes. Shake is in our title. So if we could really figure out a way to minimize the impact of our fluid dairy supply chain, we'd be able to make a big impact across restaurants. And that's when neutral popped in.
Corey: And I said, wow. We should start the conversation and we began conversations with Lauren's team and to date, you know, as she said, we had started in our Northwest locations, but had been able to expand to our East Coast locations, which is really [00:05:00] great because, you know, we have a really high concentration of restaurants on the East Coast.
Corey: So, like I said, over 90 locations and always looking to find ways to expand the partnership.
Arjun: that's fantastic. Um, just looking out in the near term horizon, right? So, sustainability, Almost over the last two decades, and more specifically, the last decade has had its own highs and lows. This is obviously an important success story. So as you look to build off of this success, I'd love to hear both of your take on it. What do you think, just outside of your corporations, right? Just in terms of achievable things that are possible in America within the next 12 to 24 months, what are some things that are That you guys are seeing that those of us that are not as deeply intertwined in sustainability are saying, where do you go?
Arjun: Oh my God, that is incredibly exciting. And this would be such a great sneak preview about where the industry is growing. So I'd love to get both of your perspectives on [00:06:00] that topic. Corey, if you don't mind going first, please.
What's new on the Sustanability Front?
Corey: Of course, yes. So, um, I think that's a great question and something we should be thinking about. I personally am super passionate, and I know Lauren is too, because we have had sidebar conversations about this, about regenerative agriculture. So just looking at our food system now, It's really fragile. We saw that first hand during, you know, the COVID 19 pandemic.
Corey: Supply chains were completely disrupted. Our soil health is diminishing. And regenerative agriculture, I'm not saying it's a catch all for all of these problems, but it definitely helps reduce some of these problems. So, improved soil health, improves farmers livelihood. Um, and, um, And I think that that is, you'll see it everywhere.
Corey: Marketing wise, all these big brands are, you know, investing in regenerative agriculture. Here at Shake Shack, we are investing, we purchase meat from regenerative farmers, our french fries come from regenerative farmers, our dairy milk comes from [00:07:00] farmers who are using regenerative practices, and I think that that's going to become even bigger and more important in the sustainability space in the coming months.
Lauren: Yeah, Likewise, I agree there's a, there's a big push to demonstrate that we have tools and mechanisms of really making an impact in sustainable agriculture right now. Um, that's everything from feed supplements to reducing enteric methane in cows to how we plant crops that feed animals or go directly to, to our food supply chain now.
Lauren: Um, how we manage manure. There's a lot of avenues of addressing emissions now and making a more robust system that, you know, improves biodiversity, improves water quality, all sorts of co benefits associated there. Uh, and we're really at the kind of height of showing that we can, we can do these, these practices and we can implement them.
Lauren: Um, and producers are open to it. So I think it's, we're kind of at this inflection point. Um, of really making an impact, uh, in this area.
Corey: And I think that [00:08:00] what's really interesting, sorry, just to add on to what Lauren said, but I think that in sustainability, we need to find ways to continue to give the consumer what they already have. Changing consumer behavior is, it's nearly impossible. It's so complex, it's so hard. So if we're able to find ways where we can still give consumers dairy milk, where we can still give consumers beef, where we can still give consumers fries.
Corey: in a way that's more sustainable, that's kind of the avenue that we need to explore because we can't ask consumers to stop eating meat or stop eating dairy because that's going to take years to actually see the impact of that, um, versus, you know, trying to get down to the source of how is this being produced and can we make it more sustainable.
Arjun: No, that's really helpful. I want to key in on one small point that you brought up, Corey, and then I want to go back to what Lauren said, especially about feed additives and some of these [00:09:00] newer things that are being put in place. That are of dual purpose, but I want to key in on fragility, uh, in the supply chain, right?
Arjun: So, um, uh, it, it talked to me a little bit about fragility. I understand regenerative ag is one part of the solution, but if you can help me bridge that, Both of those, uh, both those, those two comments around fragility and regen, that'd be incredibly helpful.
Fragility, and Regenerative Agriculture
Corey: Yeah, so I think that when you think about fragile supply chains, I'm thinking through here at Shake Shack, we put lettuce on some of our burgers. With extreme and volatile weather conditions, the supply of lettuce gets disrupted. It becomes harder to get quality lettuce consistently, it becomes more expensive to get quality lettuce.
Corey: Lettuce consistently. And regenerative agriculture can kind of play a role in that. So ultimately, some of the practices of regenerative agriculture help improve soil health, one of which is You know, if there's a big storm, [00:10:00] water can come and if there are cover crops, water can come and just sweep soil and completely ruin the crop field.
Corey: But with regenerative practices, you would have crops that can help hold the water in the soil. And so I think that that's, there's just some practices of regenerative agriculture that do help soil health and in turn help us consistently get the produce that we need. Um, I think that's a really important thing looking ahead, especially, you know, in California, we consistently see droughts.
Corey: Um, we're seeing extreme weather patterns all across the East Coast right now. Yesterday in New York City, it was like a monsoon. It was raining so hard. And I think it's important to, to think about, you know, it doesn't just have impacts like the weather, um, you know, your day to day activity, but it does impact the crops that we grow and the availability and.
Corey: how restaurants and grocery stores are sourcing, because you know, you go to the grocery store and you assume they will have lettuce, they will have [00:11:00] apples, but if we aren't able to consistently grow those crops, you may be going to the grocery store and you're not seeing it. So I, I think that that, that's kind of where the connection is drawn and, and Lauren, feel free to pop in.
Corey: I know you have tons of experience in RegenAg as well, so.
Lauren: Well, I like the idea, too, of a lot of these interventions addressing both the mitigation and the adaptation to climate change. So, not only are we, like, reducing emissions from some of these practices, but like Corey said, we're also building resiliency into these systems that allow us to Respond more dynamically to volatile weather or, um, unexpected, you know, patterns that we're, that we might not be ready for yet.
Lauren: Um, and so being able to address both of those at the same time is not only good for us as a consumer, it's healthy for the producer, it's healthy for the land. These are all avenues of which I think, you know, we need to be addressing.
Arjun: No, I, uh, that's very helpful, right? Because we have a wide spectrum of [00:12:00] people coming in, uh, to the show where we speak about fragility, right? Uh, and, and so each person has a different perspective depending on the complexity of their supply chain. Uh, your point is incredibly well received, especially when you're doing, you know, A lot of local, uh, sourcing, right?
Arjun: And, uh, and, and so that, that resonates well for that specific call out, uh, Lauren, one of the things, um, that, uh, we see is, uh, with sustainability, um, it doesn't have to be different from productivity, right? In a way, it needs to almost be a virtuous cycle where if you're doing something sustainably, It means that the yield rates are better, and if your yield, uh, if your yield rates are better, it means that there's more sustainability.
Arjun: Can you, uh, can you give us a little bit of your perspective on the topic? Maybe with an illustrative example or two, please?
Sustainibility leads to Productivity
Lauren: Yeah. We think a lot about efficiency in some of the projects that we work on. Um, I know we brought up feed supplements earlier. One of the ones that we've been working most closely with producers on is a, a product called [00:13:00] Lin. Um, it's an essential oil blend that the main purpose for us is that it reduces the enteric methane emissions, so the burps from cows.
Lauren: Um, that's a huge source of emissions for dairy products. Um, but in addition to that, we see improvements in feed efficiency, which means. Um, the producers are set, uh, feeding their cows less, uh, food, but they're still getting the same milk yields. So we're seeing improvements there that obviously has a, um, impact on how much feed they need to produce or purchase.
Lauren: Um, so that's one really great example where we're seeing some efficiency improvements as well that goes beyond just the, the basic calculations that we're doing for methane. Um, and other areas that we're thinking this about is in pasture refurb, um, refurbishment. So we're working with producers on introducing.
Lauren: Species that have more tannins, that again have a benefit towards reducing methane emissions. Um, but at the same time, we see higher productivity in some of these fields, a little bit more resiliency, um, during the summer where, uh, you know, hotter weather and less water can lead to [00:14:00] kind of the summer slump.
Lauren: Um, so there's a lot of areas that have those kinds of benefits for us that go beyond the one that we're, the only one that we're taking credit for, which is that methane emissions.
Arjun: Got it. Um, just so curious, um, how do you measure methane emissions in a cow? I've seen some really interesting equipment, I've seen microbiological methods, I've seen models. I'm so curious, uh, what is, what is actually possible at scale?
Measuring Methane Emmissions
Lauren: yeah, so there's a couple different avenues here. So when we're talking about our Agilent project, for example, it's a relatively well studied heat supplement, um, and for following protocols that exist for realizing that reduction in a similar way as you would realize a carbon offset. Um, we use meta analysis of studies that show here's the reduction and we, um, calculate the baseline emissions based on how much you're feeding the cow, um, the types of cows that you're using, that sort of thing.
Lauren: So that's a little bit more just kind of plug and play on the model, um, but we have done some really exciting work, uh, specifically with seaweed, um, to [00:15:00] feed to beef cattle, um, to feed sand foying, which is an alfalfa alternative. Um, that you can use to feed that also has tannins, and we used a green feed machine, um, with, uh, Dr.
Lauren: Logan Thompson out of Kansas State, um, and it's, uh, it's a large machine on the back of a trailer that we pull out to a field, um, and it gives little alfalfa pellets as a treat to the cows for about two to three minutes. Um, and a little RFID tag on their ear lets us know which cow is there, and while they're eating for that two or three minutes, the machine is registering the gas exchange.
Lauren: So we can measure the methane emissions directly, um, when we're trying different feed supplements, when we're trying different feed stuff, um, and that's really exciting to get some primary data, um, and really understand what, what sort of options are available to producers.
Arjun: Super. That's, that's really exciting. Corey, when you guys think about sustainability, uh, you know, one of the big, uh, this is, uh, what I've had friends of mine that are more in the forestry industry that I've heard, uh, speak about this is really this [00:16:00] difference between do you pay for practice or do you pay for performance?
Arjun: But then that comes down to very specifically the question about incentives, right? So there's a two part question over here. Uh, the first question is to both of you guys, which is, um, how do you actually pay someone for practice in saying, will you feed these cows the specific, uh, you know, feed additive, if you will, right?
Arjun: And then there's a question of, did you feed these cows, um, where there is past performance? I think that that has been a heavily debated topic anytime people are talking about sustainability. So if you can opine on that, Uh, just in terms of how you think about it, that'd be super helpful. Second thing, Corey, uh, love to hear just in terms of incentive structures, right?
Arjun: It's, um, at the end of the day, capital markets are what the capital markets are. Um, so, uh, how do you think about creating the right incentives where you can actually move Uh, towards these newer sustainable practices, but keep it affordable for customers. So I'd love to hear first on this whole, [00:17:00] um, you know, the, the payment mechanism and what performance versus action.
Arjun: That'd be super to hear both of your perspectives.
Keeping it Affordable for Customers
Corey: Totally, and I think those are loaded questions. I think the first one, it's really, there's a learning curve, and I think we're also trying to figure out how can we incentivize farmers to do these new techniques Because, you know, they, The status quo, I feel like, and I'm speaking, I'm not a farmer, so this is me coming at it just from experience working with farmers, but I do think farmers are hesitant to changing from the status quo because what they've been doing has worked, and so why should they switch?
Corey: And I think We need to figure out ways to incentivize that switch. I don't know whether, I think it comes cross sector. I think the government needs to play a role. I think private businesses need to play a role, non profits. I think consumers need to play a role. You know, shift consumption patterns so that farmers see, oh, it is in demand, and I will make a profit [00:18:00] by switching methods.
Corey: So I think, I think that one is definitely something I'm still learning, and it's like the million dollar question everybody's trying to get is how can we incentivize these behaviors? I don't know, Lauren, if you, if you agree with me, because I feel like you are working more closely with farmers, so you might have more insight there.
Corey: Mm
Lauren: Yeah, one of the things I appreciate so much about my team here at Neutral is how farmer friendly and farmer forward a lot of our thinking is, so, um, for some of our carbon reduction managers, um, who work most closely with farmers, you know, they've been in the dairy industry for decades and have been building with us.
Lauren: Relationships with these, um, producers to really, you know, work with them as a partner to gain their trust, to be able to collaborate on these ideas with them. Um, and one of the things that we come in as is we are technology agnostic. So, you know, we know the main sources of emissions on a farm. We're thinking about, you know, a third's coming from that enteric methane, a third's coming from manure management.
Lauren: A third is coming from feed [00:19:00] production. You know, there's a little bit of energy in there as well. Um, there's always the opportunity for removals, either below or above ground and soil and trees. Um, but we want to come to a producer and say, hey, how is your operation functioning now? Where are avenues that you want to improve?
Lauren: What are your goals for your farm? Um, and where are the opportunities for carbon reduction that tie into those other goals? So for a lot of producers, um, they're really interested in the, the opportunity for co benefits, um, that come with a lot of these, these projects that we're doing, um, and between those co benefits, and then obviously the price for the carbon that we're willing to pay, usually we can find opportunity in which they're willing to do, to adopt new things, or to try new things, and maybe that's a short term project initially, and they kind of understand a little bit about that.
Lauren: You know, what kind of data is going to be collected and what the ask is going to really look like in practice. Um, and then we can really dive into other projects too as they get more comfortable with the idea of, of this process. But I think [00:20:00] there's, there's probably a price that most producers are willing to accept to change their practice.
Lauren: And I think, um, as we're seeing a lot of, you know, companies willing to put money into this and seeing, you know, the purchasing changes around that, especially from companies like Shake Shack. Yeah. Um, I think it's a really exciting opportunity to, to put more money behind some of these changes that we're wanting to see.
Arjun: No, that's really helpful. And can you touch a little bit, Lauren? I think one thing is you almost need to pay for practice first and then eventually maybe gravitate to a pay for performance as more people are willing. Is that, is that a reasonable characterization of, uh, not just about here, but just in general, is that where the market needs to be today?
Arjun: Because the market is not yet at a place where people are saying, assess my performance. Is that the carrot that needs to come? at first.
Lauren: that's a really good question. So for a lot of the offset projects that have been typically available for, to larger producers in the United States, Um, a lot of that upfront money is coming from the producer themselves. And then, like you said, [00:21:00] they're getting paid for performance over time. Um, one of the things that we're doing that's really different is we're paying up front for a lot of these projects so that if we're talking about installing a new piece of equipment to manage manure differently, the producer isn't You know, taking out a loan or financing that upfront, um, neutral helps contribute to that.
Lauren: We often try and collaborate with, um, grant money and NRCS funding where possible. Um, but we really try and lower that burden or lower that, you know, threshold in which a producer is like unable to get past to start these projects. Um, and then a lot of cases we do continue to pay over time, kind of depending on the nature of the project itself.
Lauren: But I think that aspect is so key to getting farmers to actually changing their behavior to changing these practices. Um, because asking them to upfront, you know, these large payments, especially when there's not always a ton of extra money going around on a farm, um, it, it really helps actually make a difference.
Arjun: No, that makes a lot of sense. Thank you. I think, um, uh, it's, it's, it's really interesting to think about, [00:22:00] um, that, that whole dynamic there. Uh, one thing that you, uh, brought up very early is this whole idea of methanogens, right? Uh, I may be saying this wrong, but these are the specific microbes, uh, that, that, at least because we're talking about, uh, about dairy and we're speaking about microbes very specifically that lead to methane.
Arjun: Can you talk about that specific action, Lauren? Cause I think. Uh, that is such a cool concept, and I'm sure our listeners would love to understand the first principles of how biology meets this chemistry of, uh, of how that whole reaction happens.
Lauren: Yeah, so cattle have four stomachs. In the ruminant, there is methanogens that produce methane from, they're also feeding off of the food that the cow is consuming. And so a lot of these, these strategies for changing how the cattle processes food is adjusting those methanogens. And so one of the things, back to kind of the feed efficiency piece that we're seeing is when you're [00:23:00] changing the dynamic of how much food is going towards.
Lauren: You know, the cow and making the milk versus how much is being used up by the methanogens, we're starting to see those efficiency gains, um, for the cow themselves. So that's where we see they're actually eating less food because less of it's being sent to those methanogens, more of it's being sent to the cow into milk production.
Lauren: Um, so there's some really interesting shifts there that, you know, can be really exciting. There's a lot of different strategies out there. Um, I think one of the ones that people are hearing a lot about right now is red seaweed or asparagopsis taxiformis. Um, they're showing results of, you know, 85, 90 percent enteric methane reductions, um, from cows.
Lauren: And so there's, you know, a big spectrum of, of what's available for producers right now. Uh, but it's really exciting that we're seeing some of those really big changes. So I think that's going to have a major impact on the footprint of dairy.
Arjun: Got it. Corey, uh, as you think about, um, food, as you think about, uh, I'm not talking about food safety, very, to be able to call this out very clearly, I'm thinking very [00:24:00] specifically about microbes, um, like methanogens. Um, As you look at broader sustainability, as you look at broader opportunities, when you think about shelf life, um, as you think about, um, other things that may be impacted by microbes to sustainability, that's not typically a topic that's, uh, that's, you know, really in the airwaves.
Many Many Microbes
Arjun: And we think that that's, that's an interesting angle, right? Because it's measurable to Lauren's point, um, the output of total number of microbes. It's just, you know, there's only so many microbes. There's only so much that they can digest. That's measurable, but looking at it past just the methanogens, Corey, are there other points that, uh, would be worthwhile pondering on just to think about the role of, uh, microbes?
Arjun: And their impact on sustainability.
Corey: Honestly, that's a great question, and I'm not sure that I know the answer to it. I think that it's definitely, like Lauren said, something we need to continue to explore, because I think [00:25:00] it's, it's such a new technology, and it's something new that all these producers are using, so it's definitely something that we need to kind of learn more about, and I think that's probably why a lot of companies haven't talked about it yet, um, including Shake Shack.
Corey: And I'm hoping to go back as you had asked me as part two to my question earlier, and I want to make sure I hit on that because I think listeners might be interested to hear about this. But, you know, kind of what Lauren was saying, farmers are on the front line and we need to give them the tools to fight climate change.
Corey: And I think that that's exactly what Neutral is doing by helping farmers invest in these, um, techniques to be able to mitigate carbon. Um, that's amazing. Here at Shake Shack, we don't want to pass off any cost to consumers because unfortunately, consumers are likely not to purchase something That's more expensive.
Corey: You know, we've seen it over and over again in surveys, [00:26:00] consumers saying, yes, they care about sustainability, but they're not willing to pay extra for a product that's produced sustainably if it costs more. So at Shake Shack, as part of my role as a sustainability specialist, I've been trying really hard to find avenues for us to incorporate sustainability without having to pass that cost onto consumers.
Corey: We're not going to charge more for our milkshake. We want consumers just to continue to buy milkshakes and know that they're purchasing from Shake Shack a milkshake is This milk is sustainable. Same with some of our beef supply.
Corey: We're trying to incorporate regeneratively raised Beef into our overall supply chain, so it's not us trying to convince consumers, hey, purchase this regeneratively raised burger. It's more so, hey, X percent of our supply chain is from farmers who utilize regenerative practices. And I think once we're able to really educate consumers on what, what does sustainable mean?
Corey: What does regenerative agriculture mean? Why should you pay more for this higher [00:27:00] quality product? Then I think we'll be able to maybe start You know, including a cost, but until the consumer is educated, which I think is far out in the future, we'll be working really hard to find ways on the back end so that we don't have to charge consumers more for making the smarter decision.
Corey: It's more now come to Shake Shack, like the decision that consumers need to make is coming to Shake Shack versus another restaurant because they know that we are using. Suppliers who are practicing regenerative practices or suppliers who are using sustainable sourcing techniques.
Arjun: No, uh, thank you, uh, for calling that out. I think that this, that, that as a running theme, I think also goes back to that point about the virtuous cycle, right? Which is yield goes hand in hand with sustainability. And, you know, key part over here, uh, congratulations to, uh, Lauren and the neutral team, right?
Arjun: Uh, it is to compete in a capitalistic market. Where you are able through technology, [00:28:00] pull something together that is cost competitive to fit into the supply chain, right? It wasn't that you said without this premium, you could operate. It was that you were cost competitive and you were able to do that.
Arjun: And my guess is a reasonable amount of technology went into it. Uh, and I think that that's, that's just, uh, you know, that that's, I think technology needs to operate that way, right? It's not about favors. And Corey, I also think that you brought up something really, really important, which is, um, People vote with their time, and people vote with their dollars, right?
Arjun: So the fact that Shake Shack continues to grow, um, and people are voting with their time to go to Shake Shack, uh, while you guys can view this message at the pricing that you guys do, I think that that's a testament to the fact that those customers are there, both for the food, And with the culture of what it is that you guys have, uh, uh, you just endorsed right now, which is, it needs to be cost competitive, but you're making this choice to saying, Hey, suppliers, we would like for you to compete, [00:29:00] uh, and be successful.
Arjun: So, uh, that's a great call out. That's a great
Corey: percent. And I think that that is going to come more into focus in the future with suppliers who can, you know, like neutral come forth with a sustainable product at a competitive price. Like that's how we're going to be able to increase market share for these sustainable products.
Arjun: Uh, that's go ahead and
Sharing Sustainability Data
Lauren: And kind of to go back to one of your, I think one of your first questions was about what are we excited about. I think one of the things that I'm excited about is this data sharing between multiple supply chain partners, and I think that has the capacity to really help drive sustainable decisions. So if we're talking about, you know, data collection on farm, to data collection at the supplier level, to data collection at, You know, food service partner, like those are all ways that we can share what we're doing, have a positive impact, um, you know, both our work is recognized as neutral, Corey and Shake Shack are able to recognize that work, um, [00:30:00] I know there's a lot of concerns and questions and about, you know, new regulation and new disclosures and all of that, but I think it really does have the capacity to move forward.
Lauren: unlock a lot of this great work that we can do together rather than individually?
Corey: I 100 percent agree. I mean, we're all working toward the same goal, which is to mitigate climate change and have a positive impact on the environment. So I think open source information is incredibly helpful, especially cross, like, Restaurants, like even like learning what other restaurants are doing and, Oh, is that something we can implement?
Corey: Or we're all using this, you know, partner. Can we work with this partner to better distribution? Like, it's just like, it's all like dominoes effect, like really small changes end up making a big difference. And I think, Progress over perfection. Something I've been saying about sustainability since the beginning, we just need to continue to like make these small [00:31:00] tweaks and, and eventually, you know, zooming out, you see that it actually had a bigger impact.
Arjun: Well, that's really helpful. Uh, the one thing that you brought up, uh, Lauren and Corey, especially this idea of looking deeper into the supply chain for, uh, companies like Shake Shack and with a company like Neutral, uh, you know, I'm very curious, uh, to learn similar things that can be carried over. Can you, can you give us just a quick, uh, couple of examples, right?
Arjun: Because setting specs for products. is as old as manufacturing, right? So that's, that's one part of it, but verifying those specs through sharing of the data is such an interesting new paradigm. Um, and, and, and some of this almost, there's this, it's not a, it's not a stick where you're saying you must give this to me.
Arjun: It is almost a part of this sale process that's going on. Can you give me just very high level An illustrative example of how this happens [00:32:00] today.
Lauren: Yeah. So when we're talking about on the farm level, um, when we start with projects, we are very clear about what types of data we need to collect. And, um, there are a lot of approaches out there that I think are collecting, not just the need to have, but that would be nice to have data, which can, can reduce the, the interest in the farmer, because it increases the burden of data requirements.
Lauren: So I think that we're trying to find this fine line of What do we need to really collect from the data to be sure about the reductions that are happening on farm? That's really tied into our life cycle assessment and our footprint, which shows us, you know, here's how much emissions are coming from each of these sources.
Lauren: And that's all information that we use to really drive where we, we, uh, we invest on the farm. So that's the big piece of the data for us as well. Um, and then a lot of that data is able to be shared with Cori. So we go through a carbon neutral certification process. We essentially say, here's our footprint on an annual basis.
Lauren: Here's what we were [00:33:00] able to reduce through our on farm projects. What we weren't able to reduce, we still purchase high quality offsets for, which I think have a major role to play in really meeting some of these, um, near and long term, uh, climate, uh, targets. Um, and so that's all information that we can share with our retailers, with Shake Shack, um, that they can use in their, They're communications as well.
Lauren: Um, so I think that's one really important aspect of data sharing. And then the other thing is, is kind of, uh, you know, understanding what kind of, Operations are happening beyond the farm. So if we're talking about, you know, 72 percent or so of emissions occurring on farm, that's still a chunk that's occurring through our transportation, manufacturing, food waste.
Lauren: Um, so we try and take into account the most realistic, um, expectations of what's going to happen to that product once it leaves the farm. So when we're talking about selling into retail, into home consumers, we know that there's higher waste there, for example, than in food service like Shake Shack. And so those are all [00:34:00] things that we account for to help make sure that our impact is as close, our data is as closely tied to the impact that we're actually having and that best reflects the practices of Shake Shack and others.
Arjun: No, that makes a lot of sense. Uh, Corey, can you add any color as you think about, you have a slightly higher vantage, right? So you gave us one example of neutral, but just zooming out, Corey, as you think about that sharing of data past neutral, as you look at the rest of your supply chain, right, there's obviously a lot of beef, obviously a lot of chicken, uh, there's obviously a lot of cheese, so can you give us a little bit more Of a broader scope of what should we, well, you know, what is coming?
Arjun: What's, uh, you know, what else is possible?
What else is possible through partnerships?
Corey: Totally. And I think this is, you know, a really good first step for any company hoping to, you know, really beef up, no pun intended, their sustainability program is looking at. Where do they have the most impact? So what's most material to their business? And a [00:35:00] lot of companies conduct materiality assessments, which is looking at, you know, what impacts their business and impacts their stakeholders the most.
Corey: And then they focus in on those key metrics. So it could be, you know, um, packaging for instance, or it could be be regenerative agriculture or sustainable farming. So we have internally done a materiality assessment and have identified areas that are really, you know, central to our business. So like I said earlier, regenerative farming, investing in sustainable agriculture, packaging is also a huge aspect for us.
Corey: We are a fast casual restaurant, meaning a large majority of our orders are to go, meaning customers come in, They get their food and they leave. So how can we continue to assess our packaging so that it is more sustainable, so that we are minimizing waste, um, and how can we play a [00:36:00] role in helping ensure that the waste that we do create is properly disposed of?
Corey: So, um, How
Corey: can we enhance, you know, signage at restaurants for recycling? How can we, you know, look at composting? We are doing a really cool partnership right now with Mill, which is a really smart compost bin at our West Village Shake Shack location. So looking at how can we continue to minimize food waste in the prep area?
Corey: Because, you know, as a restaurant, we do a really great job of ordering exactly what we are going to cook, and we only cook what has been ordered. So our food waste is Relatively small for a business of our size. So I think another important area for us as employee engagement, it's really looking at what's going to have the most impact to the business and what's going to have the most impact on our stakeholders and identifying initiatives that we can do that hit both of those.
Corey: And I think that that would be really smart advice for any business [00:37:00] that's looking at how can we continue our sustainability efforts, it's finding where you can, you know. What's the least effort with the biggest results?
Arjun: That makes a lot of sense. Um, Lauren, I want to go back to one of the points that you brought up, which is about carbon credits, right? So in terms of actual purchasing these credits, um, I'm guessing you compete against a number of others as well, right? So in terms of how do you actually, there's this, there's a specific amount of demand for offsets.
Arjun: And then there's a certain amount of supply for certain offsets, right? So for some of the practices that you're generating, how, Looking past today where you are purchasing offsets to a future where you may be generating offsets, how should companies like Neutral be thinking about, um, positioning themselves, right?
Arjun: Because, you know, it's a marketplace, right? At the end of the day, these carbon offsets, people have the choice of doing seven different things, maybe 70 different things. How can [00:38:00] companies or people that want to purchase these offsets actually choose to prioritize a, a offset from a Neutral, uh, versus.
Arjun: Option B.
Neutral Food's Carbon Credits Process
Lauren: That's a good question. Um, so we typically purchase all of our credits through Climate Action Reserve. Um, we typically, uh, support projects that are happening on farms. So that's things like dairy digesters that are, you know, not the right fit for our smaller farms, but are a great option for reducing emissions on larger farms.
Lauren: Um, we haven't been thus far in the business of developing offsets for others because we're so hardworking to just address our own emissions right now. So maybe that's a one day, um, ambition for us. Um, but I think one of the things that I find really exciting right now. Is that, uh, you know, we haven't really talked about the scopes of emissions when we're talking about greenhouse gas accounting.
Lauren: This is kind of data wonky, but, you know, someone's scope 1 emissions so that their direct, um, operations are, you know, your downstream [00:39:00] supplier's scope 3 emissions. So, you know, the supply chain type emissions, um, that means that, you know, the missions that are happening on our farm are part of our scope 3, are part of Shake Shack's scope 3.
Lauren: Uh, and I think the thing that's really exciting is the companies that are starting to invest in these types of supply chain projects can share it because those emissions show up on multiple places along that supply chain. So when we're seeing a reduction in one place, That same reduction is happening on multiple scope 3 reductions for other folks.
Lauren: Um, and so I think with a lot of the, you know, major companies out there that are starting to invest in these projects are starting to disclose on their scope 1, emissions. Um, there's really potential to collaboratively address these emissions together because it really is showing up for everybody. Um, and so, you know, I think when, when we do get to a place where everyone is overproducing emissions credits, which would be.
Lauren: The best place to be. Um, yeah, we can, we can start to think about, you know, how do [00:40:00] we, these, these, these supply chains are so interconnected. How do we share them with others? How do we, you know, sell them to others, um, who need them? Um, but for right now, I think we're trying to set up the systems to allow us to do all of that, which I think is, um, really necessary for us to really go beyond what we're doing now.
Arjun: Yeah, it's so interesting. Actually, uh, it's a completely different industry, but one of the things as I was preparing for this meeting, um, for this podcast, um, Was really looking at what do we know? We know a lot about poultry, right? Um, and, um, there's a really, really interesting use case where chicken litter, um, right, um, there's now actual studies that companies are starting to do to actually see how they have an impact on scope one, scope two, and scope three.
Arjun: Um, and so some of it is almost sitting in plain sight, uh, which was pretty interesting, but the other part, um, that, that we have as a conversation Um, and, you know, some of this may be, uh, known information already, but, uh, I, I tried to pull [00:41:00] up, uh, something that's lying in plain sight that probably sustainability can be gained is probably not, uh, getting the right voice
Food Waste vs. Food Productivity
Arjun: but very quickly, let me just show you guys something, which I thought was super interesting.
Arjun: One thing that we, uh, went out and we, uh, were looking at is saying, uh, again, we're chicken people. So we were looking at what is basically one ounce of underweight birds, uh, how much can that actually cost people, right? So, and some of this is obvious profits, right?
Arjun: It, uh, companies, farmers are all hit. But the last one, I found that to be a pretty shocking metric, right, which is basically the average bird in the United States is about six and a half pounds. You're talking about about a half a percentage of its weight. You would need 10 times the size of the island of Manhattan, more in corn, just to catch those birds up in weight, right?
Arjun: And [00:42:00] I can throw up the citation here on the specific data, but some of that brings back to Lauren, your conversation about these cows. I'm guessing have lower mortality. I'm guessing they have higher yield. I'm guessing they have, um, they have, um, you know, just good productivity. Um, I'd love to get both of your take on it, right?
Arjun: So one is tying this thing about both production, animal health, as well as in yield. What is a good way to think about what is the current sustainability in the system? And there are these regenerative practices and a lot of these things that are being done, but some of these other practices, we don't look at measuring, is it sustainable?
Arjun: How much more sustainable can we actually have by, Taking things that farmers are already used to doing, but is there a way to measure it? So I'd love to just get both of your reactions to that, uh, please.
Lauren: Yeah, I can jump in first. So, um, I, [00:43:00] again, we, we think about efficiency in a lot of places. Um, I'm not the cow expert on my team, but from, from those that are, I know that that, that animal health and animal productivity is so key to every decision that, that farmers are making on farm. Um, so, you know, we've talked about aglan and improving feed efficiency.
Lauren: Um, some of the other areas that we've, we've talked about is. How do you manage silage so that the feed that they're storing, um, to feed over the winter when maybe they're grazing less or they have less feed available, um, how do you store it so that less of it is going bad? And, you know, you have more from what you've already grown.
Lauren: Um, and I think these places in which we're able to make pretty small changes in The amount of waste that's happening at multiple points, that really adds up by the end of a cow's life or the, you know, the end of the milk getting into the carton. Um, and so I think that the areas where we can improve efficiency, I mean, they're so good for productivity for a producer, but they [00:44:00] often have benefits for animal health as well, um, for, you know, animal productivity.
Lauren: And so these are all areas in which we can, you know, address pretty small changes that, that, that multiply by, by the end of the cycle.
Arjun: Uh, we see it the same way and a big part of what I'm hoping this podcast leads to is for people to actually recognize that sustainability is not this distant dream. That they can actually look back at what they're already doing and, uh, and really say how much of this, uh, Can benefit the larger mission at hand.
Arjun: Corey, do you have anything to add around that specific topic?
Corey: Yeah, I think it's just important for businesses and even consumers to know that Sustainability is just good business. To be more, to be energy efficient saves you money. To be efficient with the amount of feed a cow has is to save money. So it's, it's, they're, the two go hands in hands. And I think oftentimes people think that they're butting heads.
Corey: You can only [00:45:00] be sustainable or you can be profitable, but you can be both at the same time. And I think that, that, that's, that was my goal for this conversation is to get that across that. You can do both by choosing neutral milk. We are able to do both. So it's, I think, and Lauren kind of even said it, but like farmers, when they choose sustainable practices can save money.
Corey: So it's good business. So I think we need to just continue to encourage businesses, farmers, governments to, to make sustainable choices, knowing that in the end, it It does oftentimes save money as well, and it's just makes business sense.
Lauren: And I think one of the things that I think about a lot is, is regarding waste. I know that. You know, waste is often a financial cost, but even as a consumer, the data that's built in about how much food we waste and the impact that can have on sustainability is really significant. And I think, um, that's an area that [00:46:00] as a consumer, we have a pretty good control over of how much waste that, that we make.
Lauren: And so, um, You know, you don't want to spend 20 more, 20 percent greater on your groceries because you're wasting it and that's a 20 percent increase in sustainability too. So, I think there's really potential, um, to make a difference there.
Arjun: No, I think that, that I think as a core theme, uh, just needs to be obvious and maybe we can actually have that as one of our titles, right? To your point about sustainability being good business, that is a narrative that is quite often not heard. And I think that that's such a powerful part of how this actually moves forward.
Arjun: Hey, uh, we're down to the last few minutes. So I'd like to, uh, try and, uh, ask one question, then we'll wrap up with our last session. To the consumer, right? So we're talking about a time when inflation is high. We're talking about, it's very hard where none of us like to be told things. How can, how do we help consumers think versus the traditional message of consume lesser, [00:47:00] the, the traditional message of buy X, which is, you know, is there a different narrative that we can actually encourage consumers to buy into these practices a little bit more?
Arjun: Can you guys comment on both of those, please?
Corey: Yeah, I can, I can go first, but I kind of think I touched on this earlier, but you know, my goal at Shake Shack is to make it so that consumers aren't choosing One product over the other. Our end goal is to just have our product be sustainable so that consumers can come and say, okay, I'm buying this milkshake.
Corey: I don't have to sacrifice and get a non dairy milkshake. I can get this dairy milkshake because I know that the fluid dairy in the milkshake comes from neutral and is carbon neutral. And I think that that is almost revolutionary. I feel like. A lot of companies use sustainability as a marketing play, which is totally, I get it, you don't get credit unless you market what you're doing, totally fair, but I do think it's important to [00:48:00] not put pressure on the consumer.
Corey: Why do they have to pay more? You know, that's like kind of the consumer thinking is mentality is why do I have to pay more for something that's sustainable? Like, shouldn't we just have sustainable products to begin with? So I think that that's one avenue to go for. Um, I think there is a bit of a gap between what consumers understand and the messaging that a lot of companies put forth.
Corey: So I think that we need to narrow that gap in order to better. You know, educate consumers on what they're purchasing as well.
Arjun: Oh, super. Thank you, Corey. Lauren, anything to add there?
Lauren: I think from Neutral's perspective, I mean, we know that 93 percent of households in the United States have some sort of dairy product in their fridges at home. Um, and we also know that dairy has A very significant climate impact. Um, and so we're trying to address that issue. We know that consumer behavior is notoriously difficult to change.
Lauren: Um, so we're meeting them where they're at with a more sustainable [00:49:00] option. And so we're doing a lot of that work to really, um, invest in farms, invest in these systems. Um, to set consumers up with a better choice that they can make
Wingin' It
Arjun: That's great. Um, hey, this is the last section. We have quick fire questions. Really looking for single sentence answers from both of you guys, right? Some of them silly, some of them a little bit more serious. Um, what do you think came first? Chicken or egg? Corey?
Corey: The egg.
Arjun: Lauren?
Lauren: the chicken.
Arjun: All right.
Corey: I scratched that. Scratch that. I say chicken. Now that, now that Lauren said chicken, I'm like
Lauren: I'm guessing I had to, you know, play up the opposite.
Corey: Yeah.
Arjun: who do you think has served the most important influence on how you think? Corey,
Corey: Wow. That's, that one is, that's a thought provoking one. I'd have to say my [00:50:00] mom. She has always emphasized sustainability since I was young and I think that's why I've found this as my career path.
Arjun: Nice. Lauren. That's
Lauren: Um, this is probably a cheesy answer for most people in food sustainability, but, uh, I remember reading the Omnivore's Dilemma and being blown away by the idea of, um, regenerative agriculture generally, and a new way of thinking about food. And I think that really kind of set off my interest in addressing this.
Corey: Michael Pollan.
Arjun: what has dramatically changed in the industry over the course of your career so far? What have you seen change in the time that you guys have been in, in these roles?
Lauren: I think that the massive uptick in, uh, insetting and scope three reductions has skyrocketed in the last couple of years. And I think we're thinking less [00:51:00] about offsets as the main, uh, lever to pull in addressing climate change and really thinking about our own supply chains. As the main lover. Are
Corey: I think the emphasis on scope three emissions has really risen since I started my career in sustainability and will continue to be a focus as we see guidelines and policies put forth that require companies to, um, measure their scope 3 emissions.
Arjun: What is the most frustrating food related misinformation that you've come across?
Corey: Okay.
Arjun: wants to go first. I
Lauren: you going
Corey: first. Yeah, sure. I mean, I'm, I'm, I'm worried I'm going to have haters after this comment,
Lauren: I do have two.
Corey: yeah, I know. So ultimately growing up, I had been under, I thought meat was bad for the environment. I think that yes, we [00:52:00] should probably reduce the amount of meat we consume. But if grown responsibly, it can help the ecosystem and the environment.
Corey: And I think people don't think that and ignore that and only stick to the scary, fear mongering headlines about beef and dairy, and I think we need to have a shift in perspective.
Arjun: appreciate you bringing that contrarian opinion. Thank you.
Lauren: I think that technology generally gets demonized a little bit in the food system, and I think that there is technology that's allowed us to be more productive, more sustainable. Um, more disease resistant, uh, you know, when you get an ear of corn or an apple that doesn't have four kernels or is really small and doesn't have a ton of seeds, like that's technology.
Lauren: And so I think, um, there's a lot of really good that can come from the way that we've evolved our food system.
Arjun: Awesome. [00:53:00] Last question, guys. What is the one thing you can eat for the rest of your lives? Corey.
Corey: Sushi.
Arjun: Nice. Lauren?
Lauren: Bread.
Arjun: Nice,
Corey: Bread. Oh, that's a good one.
Arjun: All right. Well, guys, thank you. I really appreciate the both of you being here. Uh, as we wrap up, how can our listeners find, uh, both of you online?
Corey: Yeah, you can follow me on LinkedIn. I love to share educational articles and keep everybody updated on what Shake Shack's doing.
Arjun: I said, Lauren.
Lauren: I'm also on LinkedIn. Neutral has a pretty big presence on, on Instagram as well, so you can follow along. We have lots of great videos of cows and frolicking.
Arjun: Wonderful. Well, thank you both, uh, for coming. And thanks to our listeners for listening. Today's episode was made possible by Ansera, the company that gives poultry companies a bird's eye view into their operations. Find out how Ansera is replacing [00:54:00] opinions with objectivity at www. ansera. com Uh, thank you guys.
Corey: Thank you!