In this episode, host Jonathan Havens, co-chair of Saul Ewing Arnstein & Lehr’s Food, Beverage and Agribusiness (FBA) Practice, speaks with Paul Schiefer, senior director of sustainability at Amy’s Kitchen, which started in a home kitchen in Santa Rosa, California and now serves millions of consumers globally with organic ready-made canned and frozen meals. Paul discusses with Jonathan how Amy’s Kitchen last year became a Certified B Corporation®, a designation which means that the company has met the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. Paul outlines for listeners the B Corporation® certification process that took several months to complete and analyzes the company’s operations and performance across several areas, such as governance, supply chain, adjacent and internal communities, and environment. Finally, Jonathan and Paul talk about how the B Corporation® principles mirror the company’s ethos and align with its sustainability goals, including scaling organic agriculture, investing in research to make it more productive, and decreasing the cost of organic food so it is affordable and accessible to everybody.
Jonathan Havens: Hello, everyone. Thank you for joining us for another episode of our food, beverage and agribusiness podcast series, “Don't Miss a Beet.” My name is Jonathan Havens and I'm the co-chair of both the firm's Food, Beverage and Agribusiness Practice, as well as the firm's Cannabis Law Practice. I'm based in our Baltimore and Washington, D.C. offices. Today, I'm thrilled to be joined by Paul Schiefer. Paul is the senior director of sustainability at Amy's Kitchen. Amy's, which some of you might know, began as a home-kitchen startup in Santa Rosa, California and now serves millions of global customers with organic ready-made frozen meals. I'm happy to say I'm one of those consumers. Paul has spent close to 15 years of his career with Amy's and thus has a fantastic set of institutional knowledge of this impressive company. Paul, it's great to have you on the podcast today.
Paul Schiefer: Great. Thank you, Jonathan. It's a pleasure to be here.
Jonathan Havens: Well, there are so many different things we could get into today, mindful of our time. One thing I wanted to talk about is that Amy's became, as of I think December of last year, a certified B corporation. I looked into what this is. I know about it from some of our work with other clients, but I'm curious, especially for the members of our audience that might not be familiar with what a certified B corporation means. Could you talk a little bit about what it is and why it's important to Amy's?
Paul Schiefer: Sure, absolutely. I'd be happy to do so. So let me start with a little background of the certification and the process, and then I'll get into kind of the relationship Amy's has with it and how we did it. So B Corp, it stands for benefit corporation and there's really two parts to it. Part A is really a legal change to articles of incorporation or association to become a benefit corporation. And the second piece is really embarking on a process to use a third-party standard and certification process to make sure that we're really doing the things we say we are when it comes to our public benefit. B lab is pretty much the only certifier we're aware of that's doing that work, but in theory other companies could come in and provide a similar service. But most people when they talk about B Corp associate it with the B lab standard and process behind it, so that's really what I'll speak about today. As far as the legal change, I'm
actually not an attorney so I'm going to leave that to people who know that space better to talk about what's required from state to state and different business types because I know it can be different depending on context and situation, but I will speak really to the certification process within the B labs. At its core, it's really a certification that's awarded to business that use profits and growth as a means to a greater end. So what does that mean? That means creating a positive impact for their employees, for their communities, for their environment. And ultimately it also is being part of a community of companies that do believe that we can use our businesses as a force for good and take on issues like inequality, lowering levels of poverty, creating a healthier environment, strengthening our communities and really creating great opportunities of work within our businesses. So, we got pretty excited about it because in many ways it's sort of connected to the history and purpose of Amy's. And just, I guess, to go a little deeper into the standard, and then we'll talk about how Amy's did against it is, there are three parts to the sort of standard. The first is a review of environmental and social risks, so we looked at things like, have we had any legal cases against our business. It looked at issues like food recalls, safety, human safety. And it was really trying to say, is there any egregious environmental or social risk, or is our business type something that just by its very nature will do harm to the environment. Fortunately, we cleared that hurdle and then you can kind of enter into the other parts of it. So there's the legal changes, which we did, and then the performance standard, and that's really the meat of it, and that's where all the, probably since we're a vegetarian food company, you know, the veggies, the good stuff, but it's broken into five areas. It looks at governance, so kind of how you operate your business and stay true to that north star. It looks at workers, so health and safety of those workers, engagement, satisfaction, benefits, pay — topics like that. It looks at the communities that operate around us, so those could be supply chain communities, like how you treat your sourcing partners or those that work for your sourcing partners. It could also look at your local adjacent communities and the type of economic development benefits you have to your neighbors, donations. And really importantly, it also looks at internal communities, through sort of a justice, equity, diversity inclusion lens. There was a section on environment, which is the area I'm the closest to, looking at what kind of carbon footprint, water, waste, packaging impact, end-of-life impact. And the last area is customers. Really understanding that we need to serve the social good of our customer's needs. So, are we making food that's safe, that's healthy, that's having positive outcomes? And are we treating customers with the dignity and respect that we should be?
So broadly, there are a lot of areas. It's a process that took us six-to-nine months or so to go through all of it from kind of the beginning to the end. We learned a whole lot about our business. And I think really where I would start with is that it helped us reflect on what really made us a unique business to start with. We didn't become a B Corp because of the certification. In many ways it helped us see what we have done well over the years, kind of in a new light. So we were really fortunate, we scored 102.7 points out of, it's sort of an open-ended top but I think you can get theoretically up to 200, or I've never heard of a company getting that high in it, but you do have to clear a threshold of 85 to be audited. And the
average company that goes through the assessment scores about 50 points. And again, I think it just speaks to the organic and plant-based foods that we make and the fact that we've really spent a lot of time to understand our environmental impact, workers, pay, benefits, making sure that we have really great healthcare programs, and ultimately also being a great partner in the community. So a lot of those came through in terms of how we understood ourselves through the certification. And I guess I'll just end with saying it's a journey. It's not really a destination while it's awesome to become certified. We're thrilled about it. It's a way to, again, reflect on what we've done well. It's only the beginning of a long journey of continuous improvement and I think through this process, we've also learned a lot of new areas where we can have an even more impactful environmental and social benefits for the communities and the people that we work with.
Jonathan Havens: That's great. It's really helpful to hear that perspective, hear about the process. You know, when you consider how many factors went into this certification, the fact that it only took six-to-nine months, it seems like you jam quite a bit into that short amount of time. I know that it was a very heavy lift, so that's quite impressive and I really appreciate the background that you've given on that.
So last I read, the company reports annual revenue of about $600 million and has 2,900 employees give or take. Despite the company size and notoriety, there are certain things that you've addressed here, that is evidence for what I'm about to talk about, but it's clear how important social/environmental performance are to the company. Could you give listeners a sense of how those factors figure into Amy's ethos? Obviously you talked about the B Corp. certification, but drill down maybe a little bit on social/environmental, if you could.
Paul Schiefer: I think it's best to really tell it through the story of Amy's. I appreciate you introduced my professional career at Amy's, which has been about 15 years, but my personal life story with Amy's began when I was eight years old. Amy is my cousin and it was my uncle and aunt who founded the business, so a lot of my early life was witness to this beautiful story that became Amy's. And while I was probably too little and too young to know often what I was looking at, certainly as I got into high school and college years and worked in internships in the business, I was able to see it for what it was. I think from that perspective, let me tell it as my own personal experience, because I think that's the most relevant. My Uncle Andy and Aunt Rachel, they love food. They loved having people sit at their dining table and enjoy a meal with them. Rachel grew up with her own organic garden in her backyard and Andy has always been deeply moved by the people he surrounds himself with and making sure that they're really treated like family and treated with respect. And it was on the basis of those values that they made this kind of quirky decision to start a food business, literally out of their barn in the back of their property with a handful of people making these little funny pot pies that not one looked the same, it was actually my grandmother's recipe. But when they looked inward, they're like, okay, we're going to make food, what does that mean to us? Well, it means that it has to just taste delicious. We're used to hosting people. We want to serve our products on our dinner table to the people that surround us, so it has to taste good enough, be delicious enough and meet that bar. When they started looking at the type of ingredients, Andy really got close to the food system and started going out and meeting farmers and growers. And he really saw, while organic was not even known at that time, there was no national standard, there was no real market around it. Certainly what we have today is significantly different than it was in 1987. He still saw these pockets of excellence in farming, where there really was kind of recognition of the full ecosystem, recognition of some of the inputs and chemicals and pesticides and what those might be doing to the people working on the farms. And he just felt, look, if I have a choice, I want this company to be the way I would eat food and the way I would eat food would be organically, grown in this really respectful way to people and planet. And that became his founding values. It wasn't on a wall. It wasn't in a business plan. It wasn't frankly even really talked about as anything different to the world for many years. But I think, you know today we reflect back and think wow, what a powerful vision and aspiration to start a business with such an ideal front and center. And we've really benefited that we've built our whole business model around those values. It wasn't something we had to like pivot a big organization that was operating one way to this way of work. We had scaled these practices, this mindset, this philosophy from really day one. And I think that's why it's some way something like B Corp – I don't want to say it was easy for us – but it wasn't like we had to reinvent the business. That's probably why we could do it in six-to-nine months. It was more of a reflection of what was rather than a redesign of something that wasn't that way. So, I think that's really the long story short of it. In the last maybe 10 years, we've really tried to professionalize sustainability, and even the last handful of years, we've really gone much deeper into things like our carbon footprint, really understanding waste streams, getting deeper into some of the areas that we can go beyond. And in some ways we're sort of in, as a family business, we go through these generational changes. And so Amy, who was born at the same time the company was founded, is now coming into what is her legacy within Amy's and where does she want to see this business go for the next 30, 50 years. And she sort of coined this term that we want to be on this journey to heal the planet through our business. So, while we've always been very intentional about reducing impact, now we want to go beyond that. And that's a large part of what the planet strategy and my team is trying to do – is live up to something that frankly is a bit scary. We know we're not there yet, but it gives us an amazing north star to kind of continue to grow towards, and ultimately, that's where we're at.
Jonathan Havens: Very cool. So, you know, you hit on, I was going to ask about this organic notion. I say “notion” because Amy's was into organic far before the U.S. Department of Agriculture had an organic standard. This was talked about in the 80s, organic wasn't really a thing. I think I understand why Amy’s got into organic in the first place, but it must be kind of gratifying, I would imagine, for the company to see, okay, we were kind of adhering to the organic standard or lack thereof previously and now there's this recognized standard. I would assume it's like, okay, the company has been doing this for a while. Now, everyone around you is doing it, which is great. But it's something that the company has kind of lived and breathed far before there was a standard. So, not really a question as much as a comment or observation to say – wow, it's pretty interesting that the company was ahead of its time in that respect. And to your point about it feeding into the B Corp certification and how you got that so quickly. I mean, this is something you've been doing for a while, so I don't know if you have any comments to add.
Paul Schiefer: Sure. No, I I'd love to. I spoke somewhat to the sort of founding principles, but I think what's also really exciting about organic is kind of where it can go. For those that haven't deeply studied the standard, I mean, of course there's some hard requirements around the avoidance of synthetic pesticides and herbicides, but there are also other practices that really you need to use to be successful in organic, things like crop rotation, selecting resistant varieties, using nutrient water management – trying to really provide almost an ecosystem or almost a habitat for natural enemies of pests. Look at it as a full ecosystem, not strictly as just producing one thing out of the soil. And I think what to me excites me the most is we're just trying to unlock what that really means in terms of the benefits it's having on the planet. Obviously the word “regenerative” is very much invoked today. We hear it all the time and we're paying attention to it, but we also reflect on what we're doing organic and seeing that it's already a regenerative system, most of the attributes that make regenerative interesting. We're really invested in understanding that more.
So, we've seen a lot of recent science showing, you know, 26% more carbon being sequestered in organic soils, lower global warming potential, more biodiversity, and starting to see also the economic side of it. While we understand that, of course, it has a premium today and that premium is super helpful. We believe that it can also create an environment where we have better farm worker livelihoods, sort of sustain those multi-generational family farms. So I think we're seeing this sort of social economic benefit as well as environmental benefit and that's frankly because scale is allowing it to get to a level where these things can be understood. They can be studied and they can be taught to each other. We're definitely somebody who's not afraid of scale when it comes to organic. We see we're still, yes, we're a long ways from 1987 when there was no standard and it was just a bunch of kind of crazy contrarians out there doing it. Though you could argue, you go back 100 years when everyone was an organic farmer, so it wasn't necessarily that we reinvented something. We just brought something forward, but it's on that basis. What I guess, maybe this is kind of rambling a little bit here, but what excites me about organic is not that it's just this historical system, but it's also a modern system. And I think the more we understand about this relationship between microbes and soil and soil health and carbon sequestration and how biodiversity creates plant health, like it's in that form, it's a whole new form of innovation from my perspective. Maybe it's not as technologically driven as other forms of agriculture, but by no means, is it not a highly complex, sophisticated system that we're really trying to emulate nature and use nature's gifts to be productive. And I think on that basis is where we really see so much more to come. So yeah, we're excited about our place. We're very passionate about organic, as you can probably tell, and what we really want to do is see it as, in many ways, as somewhat of a pre-competitive space, like let's help each other out as an organic industry. Let's grow this altogether and not feel like we have to own it as a singular group. It's something that is to be shared and celebrated in that way. And I think that’s a bit unique in this world of capitalism that as an industry, we really want to support each other and grow with each other. And often our competitors in the marketplace are still our allies when it comes to a lot of the research work we're doing or evolving farm practices, and that part also, it's just really enjoyable. And it's just been an honor that Amy's can be part of it.
Jonathan Havens: I think that's a great point and it's something I was trying to allude to earlier, but you've made much better sense of it than I did, which is that you were early to the organic space, but now that you see a lot of people and competitors included doing this around you, it seems like Amy's is interested in everyone doing this because the best benefit can come from everyone going organic in this space. I like that approach and I like the philosophy. So hard to believe, but we're kind of wrapping up our time where it always goes quicker than people think. But I guess one last question – you've talked a lot about the history and the ethos of the company. Give me a sense of what's next for Amy's in the area of sustainability. You've talked a little bit about it, but what's on the horizon? What are you looking towards down the road?
Paul Schiefer: Sure. I mean, I think first of all, just in terms of the broad company, there's still so much room to grow for us, and we're really excited as more and more consumers come into the brand and experience a product they like. We see becoming a bigger place in the food system and we're excited for that, specifically regarding sustainability. I think the big area is, a little bit as I was alluding to, what is the future of organic agriculture? How do we scale it? How do we invest in research so it's more productive? How do we bring down cost of organic so it's not something that's just there for the elite few, but affordable and accessible to everybody.
Within our business, I think probably similar goals and objectives to most food companies – working towards the elimination of wasted food, looking at other areas of waste to landfill, really excited about where packaging can go to more closed-loop solutions where we can ultimately grow our packaging and return it to the soil or recycle that packaging so it goes into a closed-loop process. Another big area that we're really, I think opening our eyes to as many people are, is just to the kind of impacts of social injustice and really committing to more of a holistic justice, equity, diversity, and inclusion approach. And looking at within, which we're really focused on right now, and how we show up in different communities and groups within our organization, but also how we show up externally, both in our supply chain and in our customer base. So that's a big area. I will be totally honest, we're early in that journey. I think we recognize how much we don't know and where we want to go, but we still are trying to find the right answers and really listen to the right people to make sure that we're building something fair and just and effective in that way.
And as I mentioned, I think we see this all as a journey. There's not like a place you get to where all of a sudden you nailed it and you're done. We're learning new things every day. The challenges of the planet are different every day. We don't know what climate change will ultimately bring in terms of the resiliency of our business and where we need to adapt to it. So we need to stay nimble and agile and honest with what we do well and, and where we've got room to grow. And I think that's what it's going to be about is a lot of continuous improvement
for many years and holding an aspiration that's just a little too hard to get, but it will always keep us motivated to take a step forward.
Jonathan Havens: Absolutely. Well, I can't think of a better place to wrap it up. I know I've learned a tremendous amount and I know our audience members have as well. Paul, really wanted to sincerely thank you for taking the time today, for educating all of us, for giving us some insight into a company that many of us knew something about before this, but certainly learned a lot about by listening today, so thank you so much. Be sure to check out our future episodes, and have a great day, Paul.
Paul Schiefer: Thank you.