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Catalyst – In conversation with Chobani

Candid conversations with ESG leaders 

It isn’t easy to build a profitable business that also does good for people and the planet. In this series the Catalyst team talk to the leaders of businesses who are driving positive change. 

Join us as we speak to Lyn and Tim from leading food brand Chobani Australia about the challenges and rewards they’ve experienced to date. Learn why purpose is entwined with Chobani’s DNA, where they are innovating to create impact and how success followed structural change. 

Guests:

Lyn Radford, Managing Director and Tim Browne, General Manager ESG & General Counsel, Chobani Australia 

Interviewed by Tim Clover, founder and CEO of Glow, the research-tech behind the Catalyst program.

Read the conversation transcript below.

The purpose in Chobani’s DNA

Tim (Glow):

I went to an ESG summit recently where there were a lot of people with sustainability roles or consultants, trying to understand this emerging ESG space. What I saw was huge momentum and a massive amount of goodwill from brands but also quite a lot of confusion around how best to move forward because there is no one way, there are 15 different ways.  

From Chobani’s perspective, what drives you as a business to embrace ESG considerations?

Tim (Chobani)

I think it’s always been part of the DNA for our team.

Internally, everyone regularly refers to Hamdi (Chobani founder & global CEO) and his business philosophy – and quite rightly, because he has created this business from nothing. And he’s evolved it to ensure that we’re a company that gives back both to the communities in which we operate and serve, but also, fundamentally by ensuring that our impact on the environment is no more deleterious than it needs to be and that we’re actually contributing to a positive sustainability outcome. There’s a lot of businesses waking up to ESG, and while we haven’t always called it that, for us it’s just been inherent to what we’ve always done. 

It’s also consistent with the way Hamdi has always operated, and he’s recently been recognised for his efforts and advocacy in this space by being appointed as a UN Sustainable Development Goals Advocate. Equally, here in Australia, we’ve picked up and run with this ethos because it’s genuinely part of our corporate DNA, but now we’re really seeking to focus with a bit more clarity in this area around what it is we do and need to do to have the most meaningful impact going forward. 

I was fascinated by your opening point, because I attended a major ESG summit earlier in the year, which I thought was really interesting as the focus was overwhelmingly on sustainability. And yes, that’s a hugely important global and national issue. We’re certainly very clear that sustainability is a big part of our ESG agenda, but it is only one part of it. What we do on the social impact side of things is also critical. Hamdi has always said that the birth of this company wasn’t when they created the first product, or when they perfected the recipe. It is when they invested in building the local baseball field for the community where they operate in upstate New York. And that’s what we’re trying to emulate here. 

B Corp versus be good

Tim (Glow)

One of the trends that we’ve seen in the last few years is an increasing interest in businesses becoming B Corporations, which is obviously both setting a standard and creating a badge that you’re able to publicly proclaim based on a certification.

Is becoming a B Corp something Chobani would do?

Tim (Chobani)

I think we share the sentiment around what B Corps are trying to achieve. And I know that we’ve explored this previously, although there are slight complications for Chobani Australia because we obviously ladder up as a subsidiary of a US-based company. 

But, to your point, it’s a bit like a badge that says “we are a good business”. Whether or not we seek to formalize our approach through a structured certification remains to be seen, and there may be good reasons for doing so, but at the moment we are just focusing on getting our own backyard in order. 

Lyn (Chobani)

For me, these things like the APCO award [for sustainable packaging] mean something. But ultimately, we’re much more of a company that believes in action and doing the right thing for its own sake, rather than always measuring and publicizing our activities. At the moment we’re not currently bound by investors, for whom things like B Corp certification might be really important. Maybe one day we will have other investors to align with, but for now we don’t. Our journey has always just been about doing something because it’s the right thing to do, rather than do it because it’s what people expect us to do. 

Tim (Chobani)

Basically, for now we’re really focusing on where we can have the greatest impact, not on whether or not that leads to some form of additional certification. 

"And to do that you need to be profitable, so we can do more good at the end of the day. For us, the more profit we make, the more good we can do in our communities. We also invest in better technology and equipment to make the factory more sustainable, but ultimately we don't do it for those reasons. Some businesses can become obsessed with gaining [sustainability related] certifications and lose sight of what they’re actually in business to do. And I think that can be harmful."

Lyn Radford, Managing Director, Chobani Australia

Finding your focus

Tim (Glow)

Is there a particular area of ESG that Chobani is focused on?

 

Tim (Chobani)

We’ve taken the approach of focusing on those areas that are most relevant to us, and where our business has the ability to make a real impact and potentially a role to play more broadly in society. There’s lots of great and very compelling initiatives on the wider ESG agenda, so it’s a little bit like choosing your favorite children! But we’re fundamentally a manufacturing business – we create food and we produce waste as a byproduct of that. So, we’re very focused on ensuring that our packaging is fully recyclable, and we have a plan to meet all relevant APCO targets, including to ensure recycled content is used going forward. Obviously, as part of our manufacturing processes, we’re looking at more circularity and diverting all waste away from landfill, ensuring that it can be used productively whether through recycling or other purposes – “whey” being a classic example given we produce that as part of our processes. But then we’re also acutely aware of the fact that we have a much broader impact on the environment. So, we’re going down the path that many businesses are to develop our own roadmap to net zero, and how we can seek to achieve that locally. So, on the sustainability side, the three clear areas of focus that we’re putting a lot of effort into are packaging, waste and our preliminary GHG assessment. 

Impact through innovation

"On the social impact side, we want to have the deepest and most lasting impact possible. We produce food so the area where we're going to focus is food insecurity."

Tim Browne, General Manager ESG & General Counsel, Chobani Australia

Tim (Chobani)

What we do in this space needs to make sense – as a food business we want to prioritize the types of initiatives where we can make  a difference. So we’re looking at ways that we can be quite targeted in our partnerships, including how we donate product to ensure that we’re having the greatest impact possible for those that really need it. Foodbank is a great example – we like to think that what we do with Foodbank is best in class. We created a bespoke product that sits on shelf with the support of our retailers, and whereby 100% of profits  go directly to Foodbank. To be clear, we don’t make a cent out of that product. Our retail partners and suppliers also jumped on board and contributed to the initiative which means more profit in the upstream and downstream supply chain goes directly to Foodbank. It’s not a token gesture: every single dollar we make goes to Foodbank. We think that’s best in class, and [Foodbank] loves it. 

Additionally, with Foodbank, clearly their business feeds those in need, so we donate product regularly – that’s made to order stock rather than  end of life or short dated products. This means that Foodbank knows what is coming and can rely on our products – so they can be planned in how they distribute to those in need. 

We also recently assisted them with their “hamper drive”. They needed a site where people could drive in and drive out for a “no-questions –asked” food hamper drive. And we were fortunate enough to have the right sort of premises to help and an army of Chobani volunteers willing to bring it to life. The demand was just off the scale, and very sobering – there are a lot of people out there who are really struggling at the moment and Foodbank did an amazing job in helping them with access to nutritious food in a dignified manner. 

So, food insecurity is the key area where we’re focusing in terms of social impact. 

We also support the local primary school in Dandenong (where we operate), with their breakfast club, by providing reliable volunteers, and also donating yogurt and fruit, to ensure the kids have a healthy meal start to their day – which is so vital to fuel their learning. 

We’re really trying to be targeted to ensure we have an impact but also to ensure it is meaningful to our team.

Lyn (Chobani) 

Don’t forget the transparency piece as well. It’s not the sexiest of things to talk about but we’ve just released our updated modern slavery statement. And the team are working on transparency through the supply chain all year round which is really important. It would be easy to put our head in the sand and say we actually don’t care about how we get the ingredients or what happens for us to get these ingredients. But that’s not what we’re doing – the team are very focused on literally deep diving into supply – I think we’re now at 10 levels down [in supply chain].

Ideas from anywhere

Tim (Glow)

I wanted to ask you a question about the Food Bank initiative, because this is something very different from a leadership perspective.

When you come up with those sorts of campaigns, did you sit down with Foodbank and come up with the idea and then take that to the retailers? Or was that something that Foodbank brought to you?

Tim (Chobani) 

I think we should be quite candid about this. Within the business, we happily invite ideas from every corner of the organisation. In fact, this particular idea came to us from a new starter who had been in the business only a matter of weeks. She was inspired by the Chobani story and Hamdi’s legacy. And then we took it to Foodbank who loved it. From there it was obviously a process to get it in with retailers, but my understanding is that they all jumped on board rapidly as well. It was amazing how quickly everyone worked together to make this happen with a really short runway.

Tim (Glow)

Definitely a program with a difference that one. Is that something you plan to do in the long term to sustain as a product line?  

Tim (Chobani)

It is something that is on the roadmap. We’re conscious of ensuring the message and delivery remain relevant and don’t get stale though. We think it’s a really natural and compelling way for us to make an impact, so provided it still stacks up going forward then yeah, it’s absolutely still on the radar.

Lyn (Chobani)   

There were also a lot of learnings from this. We can actually do it even better next time because we’ve learned so much through this process. For example, it was difficult for Tim, in his legal capacity, because we had to set up almost like a charity to be able to collect money on behalf of Foodbank. That’s why this product means so much more because it was a difficult process. So, to get this up and running we’ve learned a lot and Foodbank are loving the partnership. We’re keen to do much more with those guys moving forward because this is what we do – we make food and they feed people who need it.

Tim (Glow)  

Are you doing anything to encourage other brands in adjacent categories to get involved in that sort of initiative to drive impact?

Lyn (Chobani)

I would hope that other brands see where it’s been shared and see the publicity that it’s generated for Foodbank and, you know, some publicity for us. But that’s not why we’re doing it, we would just hope that other brands strive to do good as well. And that way we can have played a part in contributing to them stepping up. That’s a part of us doing it, to be honest, because we’re only one small food company.

"But imagine if we could inspire other brands to do exactly the same thing. Imagine the amplified impact that that would have for Foodbank? We want other brands to get on board and steal the idea with pride."

Lyn Radford, Managing Director, Chobani Australia

We would absolutely share our learnings and IP on this with anyone who came and asked because there’s nothing in this for us to keep it to ourselves, it would completely defeat the purpose. And that’s maybe where a retailer can play a role as well to talk to their categories to try and get other similar initiatives kicked off.

Communicating your ESG story

Tim (Glow) 

We hear a lot from consumers that it is great to hear that businesses are going to be Net Zero in 2030 but they want to hear about the issues that the business is addressing and where they are at on their journey. 

What do you think is the right way to communicate your progress? 

 

Lyn (Chobani)

Obviously, unlike the retailers, we don’t necessarily have a direct relationship with the end user. So, our ability to speak to them can be a bit harder. 

I agree that talking about plans for 2030 or 2050 means nothing to anyone. I think we should be seeking to communicate the milestones along the way that we’re undertaking to ultimately comply with that goal. 

I mean, there’s only so much room on pack as well, so you can only seek to communicate that many messages at once. But we’ve obviously got other channels through social media and advertising and so forth, but it’s not always easy to talk about these messages in advertising. 

We probably don’t talk enough about all the issues that we are facing and solving in our own business though. For example, 95% of our packaging is completely curbside recyclable. Most people wouldn’t know that. The only one that isn’t is our pouches and that’s because we haven’t found a packaging supplier who can help us solve this issue, although pouches are obviously recycable in store through RedCycle. It doesn’t mean we’ve given up on finding another solution though – we’ve had a project going for three years to try and find a curbside recyclable pouch. It’s important to us because one of the things about sustainability is that consumers find it really difficult to figure out how they can help in terms of what does their purchase do. And so, for us, the easiest thing we can communicate is that our packaging is recyclable, because then by making that choice, they’ve made a better choice.

I think we’ve got to be really targeted on how we approach the consumer messaging, and how we help them understand how they can help us because if we started talking about more complex issues like water usage or waste, then I think that would be a step too far because it is too complex. 

 

Tim (Chobani)

As Lyn said, we’re pretty buttoned up on packaging, although we need to continually evolve, but it’s the other side of our operations that the consumer never sees which are the areas we need to communicate and seek to meaningfully mitigate going forward. Some of those components have much more of an environmental impact, so how do we help people understand that and how hard we are working on those issues without alienating them at the same time? Imagine if we started talking about water usage in a time of drought?

To assist with this challenge, we’re doing an assessment on the environmental footprint of one cup of yogurt at the moment. Our US colleagues have done this previously and it showed that roughly only 12% of our emissions are coming from packaging, with the rest coming from other various sources, I.e. the cows that produce milk which is one of our key ingredients.

But how do we talk to people about cows when we’re not the farmer? It’s actually quite complex and difficult to explain to people and communicate to them without alienating them. And it’s this risk that we need to navigate. 

 

Tim (Glow) 

That’s an interesting point we see with some brands. It’s such a complex thing to unpack that they become muted on certain points, because they’re not sure where to start. And we also see with brands like Chobani, who’ve got so many good programs happening, that often the good work is not being shared to the extent it could be.

We call this ‘green whispering’, which is the opposite of greenwashing – it’s where a brand is doing a lot of good things but doesn’t talk about it. Which means consumers often don’t recognize the values of the brand and therefore aren’t spending with them in the way they would if they were aware.

How well do you think you are communicating what you do? 

 

Tim (Chobani)   

There’s a lot of nervousness in the industry about “greenwashing”, despite so many brands actually just trying to do good and work their way through some very complex issues. And we’re all learning about this in real time and seeking to improve our practices to ensure we have as minimal impact as possible. But yeah, it does feel like at the moment that if you pop your head up on these issues, some people will focus less on the good you’re doing and want to talk more about where you still have work to do. I would definitely put us more in the “green whispering” kind of category, rather than shouting from the rooftops about our efforts. 

 

Lyn (Chobani)

I think we’re more prepared today to talk about what we do based on all the hard work over the last 11 years in Australia. The success of the business enables us to maybe now start to have a voice on some of these issues that we are really passionate about. But before then, when we were nobody, who would have listened to us anyway? We didn’t have any credibility in this space. So, I think you’ve also got to get to a certain point to be able to have a seat at the table or a voice on certain issues. 

 

Integrating ESG into management metrics

Tim (Glow)  

How does sustainability feature on Chobani’s management dashboard? 

 

Tim (Chobani)

I’m quite proud to say that we’ve got six strategic pillars, some of which I’m sure you could guess are about product, revenue and growth, but three of those six are actually about our ESG agenda – sustainability, social impact and governance. 

So, half of our six business objectives focus on ESG and we measure, track and are accountable for those in exactly the same way as the other commercial pillars. There’s no hierarchy in them, they’re all on a level playing field. 

And in terms of the “G”, it isn’t described internally as “governance”– we actually call it ‘business of the future’.  That’s really important for us, because to do more good, we’ve got to remain in business, and keep growing – we’ve got to make smarter and better choices. As a business, we’ve got to continue to evolve, and ensure our governance practices are robust and keep pace. And we’ve got to do the right thing always, so that’s why this is an equally important pillar alongside social impact and sustainability and our commercial drivers.

 

Tim (Glow)

That’s brilliant. Thank you, before we finish is there anything else you’d like to add? 

 

Lyn (Chobani)

I’d like to go back to your point around strategy. Tim’s role has evolved from General Counsel to take on ESG responsibilities because he is very passionate about this space. And so it was easy to elevate these pillars in our strategy and to appoint someone to actually look after them. I’m a firm believer that structure follows strategy. 

"So, we can talk about all this great stuff that we want to do around sustainability and social impact and governance, but until you actually resource it with the right people and provide them the structure and the space and the budget to go and do things to make it happen, nothing will. It's just words on a page."

Lyn Radford, Managing Director, Chobani Australia

About Catalyst

Catalyst is an open-source research program investigating consumer concerns about social and environmental issues. The program is building a body of knowledge to fuel conversation, action and behavior change by supporting businesses with insights that fuel their own programs of action. 

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