A Regenerative Agriculture Future for Cotton Growers - Part 2

Hello everyone. Welcome to Part two of our Cotton Regenerative Cotton Webinar. For those of you have not seen me on our webinars before, my name is Kish Johnson. I'm Director of Sales for Advancing Eco Agriculture. We are a primarily a consultancy company. If this is the first time you're being a part of an AEA webinar, primarily a consultancy company that's been pioneering in the regenerative ag space since about 2006 and and through our industry leading use of SAP analysis, we very quickly realized that there's a lot of products out there that just don't move the needle when it comes to crop nutritional uptake. So we also have a very biologically friendly NOP compliant range of micronutrients, predominantly products to help improve overall soil health and plant health. But anyway, I have the pleasure of introducing two very good friends of ours now, aea Amy Williams, CEO of Citizens of Humanity Group and Gary Friedman as well, the COO of Citizens of Humanity Group. And can't be more excited. It doesn't get old. Every time we meet and we do this, then talk about what we're up to. For those of you who are joining for the first time, we will be posting part one if you missed it at some point next week. So do make sure you go back and look at part one with AEA's founder and chief Vision Officer John Kempf and one of our successful, one of many successful cotton growers that we have a part of the AEA program, James Johnson as well. But with all of that, I'm going to hand over to Amy if I can, to start us off here. We're going to talk more about what we've been up to together as a partnership. So Amy, good to see you again. Good to see you. Gary, over to you.

Thank you. Keshe, thank you for such a thoughtful introduction. And thank you to everyone who's joining the webinar this morning. My goal as we start the conversation is to share with you more about our company so you understand who we are as a citizens team and how we got into this partnership and the important focus and attention on regenerative agriculture. And then Gary will take over from there and talk more about the specifics of the program, the partnership with Kiss the Ground and AEA and how to participate in our Kiss the Ground Cotton program. So to start I'm going to do a share screen and hope that this works because I'm sometimes a little technically challenged. Okay, so here we go. Let me just take that right up to the beginning. Okay, so. So what I want to start with is just an understanding of who we are as a company. Citizens of Humanity group has been around for 20 years. We started the company, Gary was one of the founders of the company with a focus on creating best in class quality product. We wanted to develop and design product that was thoughtfully designed and utilized the best raw materials and had a design sensibility that was also lasting. Our products and our brands sit within three distinct brand groups which you can see on this slide. Citizens of Humanity, Agoldie, Citizens of Humanity, Men's and Goldsign. Each of them have a unique esthetic proposition, but have the same tenets and values in terms of our product development and design. You can see a little bit of an overview of the aesthetic of each of the companies and certainly if you are able to read this with or without glasses, a sense of the style elements that make each of them unique. As we think about our company and the way we approach the market, one of the things that we pride ourselves on is very controlled and quality distribution. We work with about 900 retail partners around the world globally, and do so with our own sales and development teams in each of those markets. We are one of the few vertical manufacturers of this category of product. So supply chain and sourcing have always been at the root and the history of our company. This, however, is the first time that we're going further back in the supply chain and starting in and with the most important element of the product, which is obviously cotton. As you well know, over the last 20 years, we've invested heavily in our production facilities in both Los Angeles and Turkey, where we manufacture all aspects of our product range from denim jeans to denim items, knitwear, woven shirtings and other elements in that casual classification. The cotton that we're talking to this group about would be utilized in all of those programs. When we think about sourcing, we also partner with the best mills around the world. And I'll share a video with you so you can get a better sense of who some of those partners are. But right now they include Candiani, Orta, Kayahara and Carabo, all of whom understand that US Cotton is considered best in class and currently source cotton from this part of the world. That video, which I can also we can forward to you after the call, along with our regenerative cotton video, takes you through our full supply process. So as mentioned, and you'll hear from Gary, the cotton that we want to work on and what we've done this year is actually take American grown regenerative cotton and move it to our main suppliers in each of those markets that we've talked about. We're also in conversations at this stage with Parkdale to understand the opportunities to utilize this cotton and knitwear for both American spun knits and then with partners over in Turkey. As we, as we have mentioned, one of our goals is to migrate all of our products to regenerative cotton in the coming years. So for us, this is not a pilot project and it's not a capsule collection. This is an intention to move from conventional cotton and organic cottons to a full range of products that are offered in regenerative cotton solely. I'm going to pause here and hand it over to Gary and let him talk a little bit more about what we've done in 2022 with our initial farmers and cotton partners. And then we'll take the conversation from there in terms of 2023 and what we're looking to do.

Good morning to everyone. Excuse my laryngitis. About 15 months ago, one of our suppliers recommended that we watch the film Kiss the Ground. And we did. And that inspired us to realize that we needed to take our vertical operation back to the beginning. So we began the quest to figure out how to source cotton that would meet regenerative farming standards and be able to use that cotton in making our products. We were introduced to a variety of people over the next few months and organizations that we thought could be helpful to make the program meaningful. That's how we met aea. One of our a student that works for us did some research on who was working in the regenerative agriculture field and they recommended aea. At first, frankly, it was difficult to get them to believe that we wanted to do what we were saying we were going to do. Finally, we convinced them. And last year, for the 2022 season, even though we started a little bit late, we were able to partner with five farmers, five farms and farmers to grow more than 1 million pounds, 1.1 million pounds of cotton that is now been ginned and baled. Some of it on its way to our one of our denim mills to be turned into denim fabric for which will be launched into stores the fall this year. We think we had great success with that and we want to expand the program. So we also partnered with Kiss the Ground foundation, which is dedicated to bringing regenerative farming on a broad scale in the United States and throughout the world. So what we learned is that every farm and farmer has different challenges. Every farm is located in a different place, sometimes even neighboring farms have different challenges. So our program is designed to meet with farmers on a one on one basis and come up with a program that meets the standards of the Kiss the Ground Cotton Program, but also takes in consideration the challenges that each farmer faces. What we we're looking, we're hoping to establish minimum three year commitments that we make and ask the farmer to make. Our program, as I've indicated, is very flexible. We want everybody to feel that the challenge is not too great. What we offer to the farmers is, along with the flexibility, we will offer monetary and educational help.