Sourcing ingredients via small brands is the first step in building a regenerative supply chain

Published: February 26, 2020
Issue:

By Georgie Smith

Consumer demand for regenerative agriculture is starting to grow. But what good does that do without regenerative products on the shelf to purchase?

Creating a core group of regenerative ingredients and getting products rapidly into the hands via small, nimble brands and direct-to-farmer partnerships is key to solidifying the regenerative market demand, according to Sara Harper, founder of Grounded Growth. An online platform of farmers and brands, Grounded Growth works to help members make connections, identify opportunities, educate on best practices, and share regenerative marketing support among members.

Harper’s group is focused right now on three key ingredients—corn, rice, and wheat. She expects to have regeneratively-grown wheat flour, sourced from farmers within the Grounded Growth network, by the end of 2020.

Small start-up brands like Around the World Gourmet, a gluten-free pizza manufacturer out of Bellaire, Ohio, aren’t waiting for the regenerative ingredients to come to them. They’re creating them.

Founder Jennifer Kocher is buying a small mill and will soon be grinding regeneratively-grown rice, sourced directly from Arkansas regenerative farmer Adam Chappell. Kocher and Chappell connected via the Grounded Growth platform.

Kocher plans to use Chappell’s rice first for her products—her gluten-free pizza crusts use rice flour as the primary ingredient. They then offer it up for sale to other brands as an additional income stream. She also plans to start grinding other regenerative ingredients, including sorghum sourced from Kansas farmer Justin Knopf, another Grounded Growth member.

For Kocher taking the step to grind regenerative rice flour was a no-brainer. Her customers are already concerned about the environment, food nutrition, and supporting farmers—all critical components of the regenerative movement.

From a marketing perspective, Kocher sees this as an opportunity to stand out from the competition and keep one step ahead of the big brands.

When I see something that I think has potential for growth I want to dig in and do it, I don’t want to wait,” Kocher said. “I’m a small company, but I don’t want to stay small forever. As soon as something gets popular, the big brands are going to do it.”

Kocher is right. Big brands like General Mills, Applegate Farms, Patagonia, and even Anheuser Busch are already touting the benefits of regenerative agriculture. But how they will source regeneratively-grown products out of diverse and global supply chains gets tricky fast.

Taking a “supply shed” approach to regenerative agriculture

General Mills, which has pledged to put one million acres into regenerative by 2030, is looking to a “supply shed” approach, according to Shauna Sadowski, head of General Mills’ Sustainability, Natural and Organic Operating Unit.

General Mills is encouraging its supply chain to embrace regenerative growing practices by providing farmer education. Plus, they are exploring a potential “ecosystem services market” that would reward farmers for positive regenerative farming practices on both carbon and diversity measures, Sadowski said.

We’re trying to step back and look at this more broadly,” she said.

Harper argues that’s still not fast enough. It will be small brands, working directly with regenerative farmers to create a directly-sourced ingredient supply chain that will allow regenerative to “scale up to the tipping point.”

Connecting small brands directly to the regenerative farmers will create a direct route to increased profitability for regenerative farmers. If more farmers see an end-product benefit to regenerative, more will be likely to do it.

Consumer education is key to regenerative agriculture

Both Grounded Growth and General Mills are focused on the marketing and consumer education component of regenerative agriculture.

General Mills’ research has shown that consumers don’t connect things like soil, water and climate change to the products they make, Sadowski said.

When you are trying to sell them a solution for a problem they don’t know exists, that’s actually kind of a big challenge,” she said.

That’s why General Mills has identified specific brands and potential “hero products” to lead the educational component. General Mills-owned brands Annie’s, Epic Provisions, and Cascadian Farm are all working on regenerative products. Annie’s currently has two regenerative-branded macaroni & cheese products on the market. Wheat, spelt, and peas used in the products are sourced from regenerative organic farms in Montana.

Harper, meanwhile, is focused on package labeling that will drive “super consumers” back to a brand’s website for more details. These would include data that show a farm’s progress in improving soil, watershed, and nutrient density of their crop.

Harper said the complexity of the regenerative concept is why Grounded Growth is working first to get regenerative ingredients into foodservice—chefs, hospitals, schools and university cafeterias—as the initial foray for educating consumers about regenerative food. There are more opportunities in those scenarios for direct-consumer education, whether it’s placards on tables or talks from chefs.

Will a regenerative organic label cause confusion?

Then there is the marketing problem of whether we need an approved label for regenerative, or will that confuse the issue?

Rodale Institute will be releasing its Regenerative Organic Certification label this year, accord to Diana Martin, Rodale’s director of communications and marketing. They expect to see certified “regenerative organic” products on the shelf by the end of the year.

Without a clearly defined label, there’s “danger of regenerative being greenwashed,” Martin said.

For certification, growers will first need to be USDA organic certified. The regenerative certification process will be a private certification managed by a Regenerative Organic Alliance. Certification will be predicated upon outcome-based standards, Martin said.

We have to be looking holistically. We have to be looking at systems and the big picture,” Martin said.

Sadowski said the immediate threat of global climate change means we don’t have the time to build out a different supply chain for regenerative or create another confusing label for customers.

Less than one percent of land is certified organic; we recognize we need that 99 percent involved as well,” Sadowski said. “What we know is that this work matters. We need to do the work now, address climate change and find ways to be part of the solution.”

In the end, regenerative agriculture holds the promise that consumers are clamoring for, Harper said. It just needs to happen in a way that gives farmers and brands a clear pathway and motive to get there. And that consumers understand.

Linking regenerative farm-grown ingredients directly to the brands that source them is the fastest and most transparent way to get there right now, Harper argues.

Regenerative has exactly what the consumer wants,” she said. “But in order to do that, either you have to have all the farmers buy-in, which isn’t going to happen. Or you have to have a separate infrastructure. The pathway for the farmer is focused on the smaller brand.”

© Copyright The Organic & Non-GMO Report, 2020