Saif Hameed [00:00:07]:
This is the state of sustainability podcast brought to you by altruistic today. We're super excited to be joined by Audrey Leduc. Audrey is the north american director for Planet Friendly practices at McCain Foods. McCain's is the world's largest manufacturer of frozen potato products. We're going to discuss best practice for scaling regenerative agriculture practices across the value chain. Audrey, we're super excited to have you. I know that McCain's will be new to some of our listeners, probably actually not new to everyone, but we're excited for a few reasons. One is obviously, McCain's is huge in the space.
Saif Hameed [00:00:41]:
One in four chips, I think, or one in four french fries, I believe, around the world, or maybe that's a North America european stat, passes through the hands of McCain's. And then also, I have a slight affinity with the potato sector, as I think I mentioned just before we got started, Audrey, I was, for a brief period, a potato trader when I was trying to make ends meet and more on that. More on that later. Audrey, super excited to have you. Could you maybe tell us, in your own words, a little bit about McCain's and a little bit about your role there?
Audrey Leduc [00:01:10]:
Absolutely. Thank you for having me. Yes, that is our claim to fame. So one in four potatoes globally is a McCain french fry. So if you're hitting a shake shack or a Burger king or a McDonald's, you will think of us for sure. So very happy to be here. My expertise is in supply chain optimization, sustainability, but also, also, I'm going to say, storytelling, which comes in very handy to really amplify the great work that McCain has been doing on our journey towards planet friendly practices. So my team oversees our four pillars of sustainability.
Audrey Leduc [00:01:42]:
So that is smart and sustainable farming, good food, resource efficient operations, and thriving communities. So everything from packaging to volunteering to CO2 emissions, which I feel like a lot of the sustainability teams out there need to be jacks of all trade. So very, very similar at McKay. And I will say that we've been very much in the limelight recently for our efforts around regenerative agriculture. So I'm excited to speak a little bit more about that today.
Saif Hameed [00:02:10]:
Fantastic, Audrey. And I know firsthand that you guys are amazing at making the potato the unsung hero of a new story. And, you know, I was actually, I was at a conference last year, I think, or maybe the year before, and there was a regenerative french fries standard from McCain's where french fries were being made live from potatoes grown in a regenerative way. And the line was queuing out of the conference building. Audrey, I'm only slightly exaggerating, but for those of our listeners who aren't super familiar with regenerative agriculture, and I think that all of them probably will have heard the term, but as you know, there are many different interpretations of what regenerative agriculture actually means. Could you maybe start us off with just a bit of an idea of, like, how you see it, how you define it, what you think about?
Audrey Leduc [00:02:59]:
Absolutely. So in a few words, regenerative agriculture is an ecosystem based approach to farming. And what it does is that increases farmer resilience by enhancing the soil health. It protects biodiversity, and that improves yield, but it's also about reducing synthetic inputs, such as pesticides, for example. And the reason why this has been so, I'm going to say at the forefront of everyone's list is because planet friendly food is especially important today, as the natural resources that are required for the food system to thrive are under so much pressure. So, of course, the case for making food systems more sustainable and resilient has never been more compelling and giving that, in our line of business, it's our primary ingredient, the potato. We really need to be tackling these challenges head on just to make sure that we're able, able to assure supply for the long term. And what I love about McCain is that our leadership really sees this as an opportunity and as a responsibility.
Audrey Leduc [00:04:01]:
Sustainability is really at the heart of our purpose, to celebrate real connections through planet friendly food.
Saif Hameed [00:04:08]:
Audrey, that makes perfect sense and also resonates with what we hear from others in the industry. And I particularly like the way that you describe the sort of assuring the resilience of the supply chain and ensuring that the supply chain is there for you in years to come. I know from conversations with Mars, for example, that thats also how they see cocoa and their value chain, where its not just about solving for your little part and what youre buying, its actually about solving for the supply chain as a whole. Because if you only solve for your little part, youre increasingly buying from a smaller and smaller slice that will meet future needs. If you solve for the whole of the supply chain in your key ingredient, you make that supply chain resilient, and you increase the pool of suppliers you can buy from. I know that McCain's also thinks in terms of the whole farm, so to speak. And I've spoken with some of your european colleagues as well. And I know that your team is good at kind of leaning in to help the farmer be successful, even sometimes beyond just growing potatoes like growing their sort of countercyclical crops as well.
Saif Hameed [00:05:11]:
Could you tell us a little bit about how that dialogue works and how you're finding farmer engagement and, and so on? That would be great to dive into.
Audrey Leduc [00:05:19]:
Yeah. So regenerative agriculture has been a huge value driver for McCain from a production perspective, and it's been an incredible differentiation point for our customers. But really, our growers have been doing elements of regenerative agriculture for a long time, so they are very aware of the benefits as they see the benefits firsthand. So what are these results that they're seeing? They're seeing an increase in the farm resilience, in the improvement of the yield. And this is really about, currently 100% of our North America production uses north american potatoes. So it's about local sourcing, really. And we want to make sure that this continues. And in order to do that, regenerative agriculture is really key.
Audrey Leduc [00:06:03]:
So in terms of how do we prioritize, how do we incentivize our growers, how do we work with them? Well, it's very simple. You can't improve what you can't measure. So one of our commitments is to implement regenerative agriculture across 100% of McCain potato acres by 2030. And this is globally. So, of course, this is no small task. And how did we tackle this? Well, first we created the McCain Regenerative agricultural framework, and this is really a guide for our farmers to support their progression towards a more regenerative model. So this was developed in consultation with a lot of stakeholders. We had academia, scientific organization, of course, growers, but also customers and NGO's.
Audrey Leduc [00:06:47]:
And it's really meant to meet growers where they are. So there are four categories. So you have onboarding engaged all the way to experts and six indicators, for example, like minimizing soil disturbances or enhancing crop diversity. And so the methodology is really about seeing, you know, what are the indicators? How much of them can you actually tackle? And then encouraging you to kind of grow through the framework. But of course, grower and are businessmen and women. And it's really about seeing, is believing. And so what we've done, again, to really kind of walk the walk is we've created a first farm of the future in New Brunswick, Canada, or McCain's place of birth. This is a farm that is owned and operated by McCain, where we test regenerative agriculture to validate efficiency and scalability.
Audrey Leduc [00:07:39]:
Since then, we've launched a second farm of the future in South Africa, because, again, we're working with growers all around the world. But the problem that I was facing is that when I was meeting with growers in Alberta or in Wisconsin, and I was telling them about some of the key pieces of information that we found at farm of the future, they were like, well, that's great, Audrey, but, you know, obviously, Alberta and Wisconsin, we have different challenges. We have different weather situation, different climate issues. And so what we've committed to do is innovation hubs across North America. So these hubs are different in the sense that they are where we trial regenerative agriculture, but they are in partnership with our growers. They're not owned and operated by McCain. And at these innovation hubs, they're tackling challenges that are really unique to their region. And we have a field day throughout the summer where all of the neighboring growers are invited to come and see, I'm going to say, warts and all, what has worked, what has not worked, how much has it cost? And we're really open in sharing those books because the idea is really to encourage an uptake in these practices that have worked, but also be able to get ahead of the things that we trial that didn't work and share that proactively with the growers.
Saif Hameed [00:08:56]:
Audrey, thank you so much. I love the idea of having growers teach growers and cascading those learnings peer to peer. And as you remember from the event we were at in Chicago a few weeks ago, we also talked about how the best learnings are the ones that farmers can share with each other over a beer at the back of the truck, kind of when theyre just having a casual conversation. A lot of what youve described, if you think of regenerative agriculture as a framework of practices and youre doing them or you arent, and youre on a spectrum moving from one end to the other, this sounds very qualitative. And so it sounds like something that is quite tactile. You need people to go and visit the farm, have a conversation, see if it's happening. There's probably some involvement of agronomists as well. Do you see this transitioning to a world where in steady state, it could be managed by a procurement team or someone in the supply chain team at a McCain's, where they're actually able to, let's say, look at some quantitative indicators or something else that doesn't involve lots of on farm activity from the purchasing department? Or do you think it's always going to involve some form of physicality, physical inspection, physical understanding of where the practices are being deployed?
Audrey Leduc [00:10:07]:
It's very much going to be always a hands on, on farm activity. It's interesting because, of course, as we're talking about how great this is for assuring supply for the long term, a lot of our customers are turning around and saying, well, can we have all regen this year? And I'm trying to explain, it's not an on and off switch. This is something that takes careful planning. In the northern hemisphere, we get one harvest per year for potatoes, and on top of that, we do cover crops and we do a crop rotation. And so there's other things that need to be considered. It's not something that we can immediately go from zero to 100. And that upfront work that happens at the farm, I don't see it going away. That being said, we're using more and more technology on the farm, especially when it comes to, for example, reducing synthetic inputs.
Audrey Leduc [00:10:56]:
So we have a new technology called c and spray, which are really using cameras to make sure that they're targeting certain pieces of the plants and really just spraying where it needs to be, versus, you know, back in the day, where you would see airplanes just dropping on fields and really impacting the air quality. So while the way that we're growing is changing, I think that it's definitely going to be heavily reliant on boots on the ground, like we call them. And so our field team has been growing in North America. We have more and more experts. We have a great agriculture intern program where we're really trying to get younger people to be interested in agriculture and become experts so that they can really be the support to the growers that we need.
Saif Hameed [00:11:42]:
Audrey, I have a bunch of questions off the back of this. I love the focus also on technology and bringing this to bear on the farm side. And I know that we've seen from the last 20 years of technology transition in agriculture, which has been slow but impactful, that often you find a dual impact of sustainability and cost coming together. One example that I think about is drip irrigation, which is still new for farms in most of the emerging markets, for example. But drip irrigation kind of helps with cost. It helps with fertilizer and pesticide efficiency, helps with yield, and really good for both the environment and the bottom line. Do you see a lot of potential for that sort of thing in the region, agriculture shift where actually this makes money for farms as well?
Audrey Leduc [00:12:27]:
Yeah, so, I mean, of course, if you're reducing your pesticides, you're reducing your cost. The same thing for fertilizer, you're reducing the cost of your fertilizer. I think that there is a huge barrier to adopting regenerative agriculture, though, and it's financial. So this is something that, you know, I was really keen on sharing with your audience today, is that as we're racing towards 100% regen potato acreage as fast as possible, the financial barrier becomes more and more obvious. And so we recognize that there's extra support that is needed, and this is a priority for our business. So we really allocated resources to work towards how do we make this as efficient as possible to be able to help support the growers from a financial perspective? So we have a team that works on grants to help our growers get there faster. Because of the diligent work of our grant team, we were allocated $6.9 million and federal funds from the USDA, our CPP, for sustainable potato farming in Wisconsin and Maine, for example. We've also set up a lot of proactive incentive programs with Farm Credit Canada, kids agriculture, Rabobank, NatWest, and we've also partnered with our customers.
Audrey Leduc [00:13:40]:
And so this is where the storytelling aspect really comes to life, is that, you know, if you're going to see a big customer like McDonald's Canada, for example, and you say, well, you have an iconic trio right now. You have a burger, you have a Coke, and you have a fry, think about a future where you don't have access to this fry anymore. What happens to your iconic trio? So, obviously, all of a sudden, the ears perk up and they're like, well, what do you mean, and what can we do? And so together with McDonald's Canada, we created a million dollar future of potato farming fund for canadian growers. And this is really cost sharing grants to help farmers scale their regenerative transformation. What I will say is that this was particularly appreciated by the growers because we really tried to make it, as I'm going to say, straightforward as possible. A lot of the grants that are available out there through government have a lot of red tape, and you need to be a certain type of writer to be able to kind of understand what it is that the underlying question is looking for. Well, this is not the case for this fund. It's really about, you know, thinking about what's going to have the most impact, having direct conversations with the growers, and then, you know, being able to provide the money and move that forward.
Audrey Leduc [00:14:54]:
So it's been really exciting to see the customers be more and more interested in helping us ramp this up as fast as we can.
Saif Hameed [00:15:04]:
Makes perfect sense, Audrey, and just dig into that a little more. A lot of what you've described, I think is similar to what we see other food leaders doing where they are responsible for a large share of an individual ingredient or product. Like with you guys and potatoes, you'd have a Starbucks and coffee, you'd have a Mars and cocoa. And I think that McCain's is doing some fantastic work in terms of leaning forward to support farmers in this transition. That still, however, is really much like early stage and small amounts of. I was going to say small potatoes, but like small amounts of money. You know, in the scheme of things, how do you see this getting to mainstream, where it doesn't necessarily have to be just McCain's carrying the industry and it doesn't have to be just grant funding? Is there like a sort of a green premium of some sort? Is it just that prices might rise for products coming out of regenerative systems in setting? Is that an opportunity here? Like, how do you see the overall dollars stacking up for growers moving into this environment?
Audrey Leduc [00:16:07]:
So I think this is going to translate a lot on the consumer side. We want all of our potatoes to be regenerative, so there's no premium. We're all going towards that 100% objective. But where it's going to make a difference is whether does the consumer want to put their money. And so we have, for example, like a new line that we're preparing that's going to be a McCain product sold in grocery store. That's going to be a regen fry. Well, that's where we're going to be kind of first to market, first to attract that and tell that good story about regenerative agriculture and see how this is where the consumer is going to come in and kind of put their dollars behind their support.
Saif Hameed [00:16:51]:
I'm going to say, I think that's really interesting in the consumer space, the consumer narrative space, I'm seeing two interesting dynamics play out. So on the one hand, when I speak with most of the big fmcgs, the usual suspects. What they tell me is that their internal marketing data and consumer data tells them that consumers won't pay more for a sustainable product. And if they see two products that are identical qualitatively and at the same price, then they pick maybe the more sustainable product, but they won't necessarily go and pay more out of their way for that product. At the same time, I also see some great examples of first movers going out with something that is quite innovative and quite unique. One of my favorite examples is the Evian nude bottle, which I think is now, it was sold in France originally. I don't know if it's gone further now. I saw it in Paris in a train station, and it basically is the Evian bottle, but no label.
Saif Hameed [00:17:50]:
And so it's literally just a plastic bottle. Label less, and Evian is embossed, and only one player can get away with that. If all the bottled water brands go label free, then suddenly it gets super confusing. Evian did that first, and then it's very hard to follow. Sprite is doing the same thing. I can see the EVR reception has been quite a bit stronger. And it looks to me like, with the reach and fry, you're going in the same direction, where once you do that, really, it's very hard for anyone else to come out with a doppelganger offering. Is that how you're thinking about as well, where actually the first mover gets a big advantage in this play?
Audrey Leduc [00:18:26]:
I think the first mover definitely gets more of the media attention, but there's a lot of, I'm going to say, collaborative efforts that have to be done across the category in some markets, because these markets are so big when it comes to potatoes, we're basically neck to neck with competition, and it's about we're all supplying the same supplier, but just we can't, you know, handle the volume on our own. And so I always kind of, when I'm thinking about, like, fostering partnerships and tips for people to think about, you know, what, what are the possibilities? I always have, like, three things that I'm living my work by, and I used to be a lobbyist, so this is kind of how I manage my stakeholders. I think you will have a really high chance of success if you show up with strange bedfellows. So if you show up with, you know, like, we've been working with Syngenta, for example, on driving pollinator mix and looking at, you know, what are some of the opportunities? And we're working with our competitors for some of our suppliers to be able to really offer these, like, category changes, because it makes no difference for a big customer like McDonald's. If McCain says, well, we're doing this, but no one else is doing it, ultimately, all the potatoes go to the same places, and so they want to see systemic change. I'm going to say also the second one is avoid the Cinderella syndrome. So don't wait until it's midnight to start building relationships. It's really important that, like, as you're thinking about risk mitigation, that you're reaching out to government, that you're reaching out to customers, that you're bringing the growers in, trying to really manage your stakeholders in a holistic way so that when something happens where like we're experiencing a drought in a region or we're, you know, everyone is already assured that we're working in good faith and that, you know, the communication is a little bit easier.
Audrey Leduc [00:20:24]:
And then the third one to the comments about partnering across the industry is never level towards the bottom. Always try to pull everyone to the top. And so while we're in a position right now where we're leading on a lot of the regenerative agriculture space and we have indicators and we have our own framework, I'm really happy to see that the industry is going towards being a little bit more transparent and showing their cards, and not just on regenerate, but like on packaging, for example, everyone is facing these huge EPR expenses. And so by working together with Coca Cola, with Unilever, with the competition, and talking about, well, can we increase the recycling of LDP plastic? And should we be all using the same plastic to make that easier? That's really how you're going to get systemic changes. So I'm glad to see that there's more collaboration in the industry. I have excellent, you know, I call them colleagues that sit with the competition, and we do exchange quite a bit on how we can make the industry better, because ultimately, going back to what we said at the beginning, it's the entire food system that needs to thrive. And there's still a lot to address. So I think it's better if we're doing it as an industry.
Saif Hameed [00:21:40]:
Audrey, I think its fantastic also that youre able to have this momentum and tell this exciting story in North America. I know we often think about regenerative agriculture as a Europe centric kind of change intervention. And I think a lot of the big european food companies were early pioneers, but obviously, you kind of need the north american food system to move for us to be able to make a sizable dent. When you think about other markets, do you think there are some markets that are just better placed to transition towards regenerative practices versus others? And where im coming from is I was previously running an agricultural business as a sort of side hustle while I was at McKinsey. And at some point I tried to go into, for example, canola, and I found that actually in Pakistan, where I was trying to set up a canola farm, we were just not able to get the varieties that would deliver the kind of yield that would make us competitive versus, let's say, canadian canola or canadian rapeseed, which was just a much larger industry than we were. With regenerative practices, I think it's less of an IP heavy barrier to entry as compared to what you have with seeds and other inputs. But it's almost harder because it's a practice and experience and expertise related barrier. Do you see that playing out? And if you flash forward five years, six years, in a world where you're sourcing 100% of your potatoes from regenerative systems, do you actually think that the geographic landscape of where you're sourcing from might shift because some regions just adopt those practices more efficiently?
Audrey Leduc [00:23:10]:
That's an interesting question. So there's a lot to consider. First off, I think it depends on kind of what's your do you want to be a big fish in a small pond or a small fish in a big pond? For example, in North America? So the growers at Ioversea, we have fewer growers with extensive amounts of land. And so in terms of the adoption of acreage, it has benefits and downfalls. When you look at Europe, for example, my counterpart in Europe has a ton of growers with smaller acreage. So she has more stakeholders to manage, more people to convince. I say convince in parenthesis, but more people definitely to manage in her transition towards regenerative agriculture. So it is a bit different that way.
Audrey Leduc [00:23:56]:
I'm going to say that from a geographical perspective, the biggest thing is going to be climate change. That's going to be the biggest decision maker. And I hear it from the astronomical amount of data that we've been collecting in the last few years when it comes to agriculture, we're able to now ideate, what does the future look like in five years, ten years, and make our purchasing decision based on this. For example, if we know that there's an area where the WRI says that it's going to be a water scarcity area, you probably don't want to have all of your growers in that region. You probably want to look elsewhere. We have a lot of our sustainability commitments that go in that direction in terms of addressing water scarcity, reducing our use of water. The varieties also have a huge impact because of that. We have varieties that are much more drought resistant than others.
Audrey Leduc [00:24:55]:
We have varieties that are much more sustainable in parentheses, that use, for example, that produce 30% less CO2 emission than some more traditional varieties. So once you compare all of these items, you can make good decisions in terms of where you are looking for your business to go and where you should invest. But I think there's opportunity everywhere. And again, we have had global success with the adoption of regeneg. And I think that's because again, the growers who are the ones that know this the most intimately are seeing the benefits themselves.
Saif Hameed [00:25:31]:
Yeah. And Audrey, just to pick up on one aspect of the many, many great pearls there, you talk about drought resistance. And I think a lot of the value that I think about in Regen Ag is actually nature and biodiversity as well. I think a lot of the momentum, however, for regenerative agriculture has been driven by climate change and specifically carbon centricity in recent months. To what extent do you think that theres a carbon tunnel vision problem here? And maybe a slightly related point. To what extent do you think Regen Ag creates trade offs between different metrics? Like actually, maybe its great for water and in some ways worse for carbon or fantastic for nature and maybe less good for something else? How do you think about those sorts of trade offs in the mix?
Audrey Leduc [00:26:17]:
I think that obviously resource allocation is finite. So if youre going to put money somewhere, youre going to have to decide what, what are you going to be focusing on? But what I love about the framework is that it really addresses all of this, not as an all or nothing. You know, the idea of this progression is really about making sure that there's none of like what you say, what you, what you call like a selection of like one indicator at the detriment of another. All of them need to be kind of addressed in an increasing way. And so that's why we had, you know, several levels. It's not like you're in or you're out. It's really about how do you progress on your journey. That's the benefit of having a framework versus a all or nothing kind of approach.
Saif Hameed [00:27:04]:
And Audrey, as you think about, I guess, gauging the impact of that framework, what is it that you're looking to track and get a sense of? And when I think about sort of relevant data, I think about inputs and outputs. And I think that in regenerative agriculture practices, you could potentially look at inputs and you could say, well, we're reducing the fertilizer intensity, we're reducing the pesticide intensity. We expect that this is correlated with positive outcomes on emissions, water, et cetera. And you kind of just correlate those inputs to outcomes. Another aspect might be you actually trying to measure the outcomes themselves, whether it's like soil sequestration or species density, which is of course, notoriously difficult. How do you think about data in this space? And how do you think about gauging success or progressive.
Audrey Leduc [00:27:52]:
Yeah. So I invite everyone to go to the mccain.com website. Our regenerative framework is available. So we have two, actually, one for the northern hemisphere, one for the southern hemisphere, because they obviously have different opportunities, different challenges. And so the indicators are extremely varied. So, like, it goes from, you know, minimizing soil disturbance, and then we're thinking about, like, reducing tillage, for example. So either when your engage is reducing tillage across the rotation by 10%, and then advance is 25%, and then in leading, you go all the way up to 50%, for example. So that's kind of what I'm talking about when I mean the progression, but then in terms of the results.
Audrey Leduc [00:28:33]:
So we have been tweaking our framework to be in alignment with the SAI approach, so more output based. And what I'm noticing is that all of the customers, there's trends in sustainability, right? So I'm going to say, like, ten years ago, everybody was talking about plastic and packaging. And then in the last few years, it's been a big focus on SBTI. Then we went into regenerative agriculture, and now we're kind of at a point where everyone is questioning scope three. Everyone wants to understand, what are you doing about scope three? Because ultimately, it's a huge percentage of a company like McCain's emissions, the overwhelming majority. And then it also impacts, I mean, if I take care of my scope three, it reflects well on my supplier, on my customers scope three. So when they're looking at the big picture, they're really pushing for us suppliers to make a difference. So when I see initiatives like the Walmart Gigaton project, for example, where they're looking for a whole gigaton to be removed from the atmosphere by 2050, year on year, I need to produce my numbers, my data to Walmart.
Audrey Leduc [00:29:42]:
And if I am improving my data year on year, I become a giga guru. So I get recognition, I become a supplier of choice. And so it becomes a better narrative when you're like, okay, well, we're doing all of this. Of course it's costing us money in some countries where we have a carbon tax, for example, then it becomes an easier narrative because right now, $65 per ton. But if we wait and we don't do anything, then how much deeper are we going to have to go in our pockets? Down the road is also about how do we get the whole momentum across the industry, how do we get our suppliers to be involved? And I think that that's where we are with our growers, right? Now. So we are at a point where we've created the framework. We have a good handle on which of these indicators reduce our CO2 emissions. And we are in the process of finalizing a more formal program to be able to say, well, you have an air seeder now.
Audrey Leduc [00:30:40]:
This is the impact depending on how many acres you've used it on versus last year when you didn't. And so we're going to be able to showcase the progress from engaged all the way to masters in a very quantitative CO2 way that I think is going to be extremely appreciated by the customers. But also, you mentioned tunnel vision before. We can't let that us having the perfect handle on that before we start making progress. So I think that it's, we've been encouraging all of these indicators because we see the farm resilience benefits. We don't necessarily wait. We haven't waited until we had the full picture of what that represented in terms of CO2 emissions benefit. We're doing that kind of now.
Audrey Leduc [00:31:34]:
But I would say the most important thing is that you're always kind of striving towards the next thing and you're always moving forward. If you're waiting for things to be completely baked, it's going to take a.
Saif Hameed [00:31:45]:
Long time, as long as a baked potato. Sorry. But if I kind of just think, if I sort of summarize a little what I'm hearing, I think what's nice is that you've got kind of both sides of a system change here. You are changing the supply side system. And I think whats nice is that youre moving the whole of it. Youre saying, actually 100% of what we buy is going to be produced by regenerative system. And so theres a whole supply chain shift. At the same time, youre making the market for products that will be produced through regenerative systems.
Saif Hameed [00:32:19]:
And youre making the market both in the b two b side of your business and the b two c side. And so on the b two B side when you speak with McDonalds, what im hearing between the lines is also youre creating the demand on the McDonalds side, not just for McCains to supply regenerative french fries, but actually for every other supplier also to start supplying that. And in the same way, on the b two c front, when you come out with the regenerative french fries, a consumer product, youre sort of making the market there as well and creating the demand for that. I think the natural question that flows from here is if you think about the strategic advantage for McCain you know, in its industry. And I know we obviously want to, you want to bring competitors along to help create the system, but if you think about your strategic advantage and why this makes sense for McCain's and McCain's shareholders, like, how would you articulate that, you know, even just in a few sentences?
Audrey Leduc [00:33:10]:
Well, we're the first. And that first action has been tremendously useful for us, like a big, big differentiation point. This has required a lot of resourcing, a lot of investment to move towards to the point where we are in regenerative agriculture. I know for a fact that, and no one is going to be able to kind of like, catch up with us in the very near future. You know, I think that there's an element of being the first to act that is non negligible. That's really what's interesting for the shareholders. But they're just as excited to see the positive data that's coming from better soil aggregates and better water retention and more yield. Again, I'm lucky to work for a company where sustainability really is a lens through which we try to make all our business decisions.
Audrey Leduc [00:34:06]:
And while it's nice to be the first, and we've had some really exciting success, for example, with Burger King, we had an LTO with our regen Fry at our, the Burger Kings locations in Canada for, you know, a couple of months where we were able to, like, have the McCain logo in the franchise and talk about regenerative agriculture and talk about the benefits. We created also a great game on Roblox for kids called Regen Fries. It was actually meant for an audience of, like, teenagers. And you can go in and you can plant your potatoes, and you can play in the metaverse and learn about regenerative agriculture, learn about the benefits. And then there was an element, a partnership with a restaurant called Bored and Hungry, where you could then show up at the Borden hungry restaurant and actually consume the regen potatoes that you had planted in the metaverse. So there's a lot of momentum that we're getting because we're the first. And so I think that's a non negligible differentiation point and something that I'm really excited about.
Saif Hameed [00:35:11]:
I think thats definitely something to get excited about. Audrey, when I look at how the packaging industry has been thinking about this strategic advantage, I know that a number of packaging suppliers that have been transitioning things like furnaces to hybrids and making significant capex investments to reduce the emissions intensity of their output. I know that theyre anticipating being pulled into long term contracts with certain customers that want to basically get as much of the green stuff basically as they can and sort of lock in those relationships. Do you see that as a lever that McCain's might at some point be pulling as well, which is if you manage to transition some growers, you might also just think about how do you actually create some sort of a unique relationship that ring fences this? Is that a tool in the toolbox?
Audrey Leduc [00:36:00]:
Yeah, of course. I mean, the future of potato farming fund, for example, is a two year fund. And so that means that when comes the time to do an RFP, you're thinking, well, we already have all this great work undergoing. It's kind of an additional tool in the toolbox. Exactly. To make sure that the nature of the business is not just about, well, I'm going to sell you this amount of potatoes and this is how much it's going to cost. It goes beyond that now. It goes about like, well, you know, we can work on regenerative agriculture progress together and we can volunteer together because we have this really cool program called chips in where all of our employees get 8 hours to volunteer and things like that.
Audrey Leduc [00:36:37]:
So I think the business has moved from just talking about potato dollars to, okay, how are we really making sure that we should like suppliers that are doing the right thing? And this is where I think that McCain is ahead of the curve because we're really striving to always improve across our four pillars of society. Sustainability.
Saif Hameed [00:37:00]:
Super helpful, Audrey. Audrey, I normally try and summarize the content of the conversation, but this has been such a fun and wide ranging conversation that I feel like any summary would not do it justice, but I'm going to try. So if I would say, I think that we went in different directions all over the last, all over the episode, and I think that I'm taking away three or four particular bits and pieces. One is around just the need to take an end to end system view of the problem. And so what you've orchestrated at McCain's is just a remarkable, you know, you're at the early stages, but what you're orchestrating is a remarkable system change that takes along growers, peers of yours and customers and consumers. And you're sort of, you seem to have initiatives actually at every step of the way there. Even the roblox example, for instance, is a really nice early stage consumer intervention. And so I really love the whole system change lens that you take.
Saif Hameed [00:37:57]:
I also really liked the thinking around costs and benefits. You think about regen AG, not just from the sustainability macro lens, but also what does this do for specific indicators, whether it's carbon, nature, biodiversity, water resilience, risk mitigation, and then also like cost reduction, pesticide use, fertilizer use, etcetera. And I think that's a really nice set of positives to weigh against the undeniable financial costs that it involves to shift towards a regenerative system. I then loved how you're bringing your lobbyist experience and toolkit to play in telling a really powerful narrative. And I think the narrative is really strong one and really helps you articulate why there's a great cost benefit trade off here and why system change is necessary, and then just to bring it together. And I think this is great advice for your peers also in other industries, and we speak with many of them, which is being the first, actually can have a big advantage because you shape the ecosystem in your direction and in line with your narrative. And by the way, you might also end up locking in a lot of the different stakeholders on both sides into this, into this system change, and into this narrative that you're a core, integral part of. And I think that's a really enviable position for any company to have going into the next decade.
Saif Hameed [00:39:21]:
So I've taken away a phenomenal amount from this conversation. I hope our listeners have as well. Audrey, I wanted to just say a big thank you to you for joining us.
Audrey Leduc [00:39:30]:
Absolutely. And I'm really happy to. And if I can just leave you with one last thing, it's really what makes me the most happy is when we have employees that are interviewing for a job at McCain in like across all the functions, HR finance, and I hear them comment on our sustainability report and how they feel that our values align with theirs. And I will say that a robust sustainability strategy is such a powerful recruitment tool. And I always really encourage all of the stakeholders, the competition, everyone, to really think about how can you do storytelling around some of the key elements that you're putting forward for storytelling? Because you're going to recruit more well rounded, excited, passionate candidates that want to make the business better. And that's really how you're going to get to the next level.
Saif Hameed [00:40:24]:
And I think for many companies, that almost is enough of a big value proposition, actually, to make this worthwhile. So big. Thank you, Audrey, for sharing that as well. Also wanted to say a thank you to everyone else who is listening. Please subscribe to stay updated for future podcast releases. I can't promise that we'll match the quality of Audrey's, of Audrey's episode, but we'll certainly try so big. Thank you.
Audrey Leduc [00:40:47]:
Thank you very much.