Episode 90: Scaling Regenerative Supply Chains with Anthony Corsaro

Hi friends, this is John. Welcome back to the Regenerative Agriculture podcast where we usually talk about agronomic science and cultural management practices and everything that relates to regenerative agriculture out in the field and how it applies to human health and all that fun stuff. But today I want to talk about something a little bit different. I want to talk about what is needed to actually scale regenerative supply chains and supply webs. Not just what is needed in the field, but what do we actually need to make this work on scale. Over the last year, I've given a number of keynotes at different events where I've talked about how we're in this situation where once more, large CPG companies are putting all of the responsibility and all the pressure for regeneration on their sources, on the farmers who are producing food. And the conversation is being framed around we need to verify or certify regenerative farmers. And that to me is a problem because what we really need is regenerative supply webs and supply chains that regenerate the capacity for stewardship. And by regenerating the capacity for stewardship, I mean that we need to pay our farmers really well. We need to pay people well. If we want to regenerate landscapes, we need more people to care for those landscapes. And that means we need to be able to pay more people and to pay them well comparatively and competitively to what they'd be able to be paid in other high reward industries. So that's the broad context and setting. I've invited Anthony Corsaro here, who's a good friend, and Anthony, I've been so impressed with your work and all the noise you've been making, all the progress you've been making. And tell us a little bit about your story, your background, what got you here, and some of the fun stuff you're working on today and any comments you have on my opening monologue.

Yeah, no, really well said and just so appreciate the opportunity to join you, John. It's always great to spend time with you. And you know, this is, this is a full circle moment for me because when I started working in the space, you know, three or so years ago, people like yourself were really at the vanguard. And I would say leaders that I looked up to are idols of mine. And just being able to share this space with you means a lot. So thank you. My background is Midwest rooted. Like yourself. I come from a large fresh produce distribution family business. So mainly DSD to retail. So what that means is we buy from all the large grow packer, shippers in the fresh produce world, the Doles, the Taylor Farms, the Organic Girls, the Chiquitas, the etceteras and then you know, get those products to the retailers, mainly the independent retailers. I left after a leadership role in that business managing a team of about 60 people that sold 3500 plus items to 2500 plus retail stores in 20 states. So know a little bit about the food system. Been the family's been doing produce and in the food system for you know, close to 100 years now. But those are my roots. I switched because of that human health component that you mentioned. You know, I have an autoimmune disease and I had a really, really transformative journey around food is medicine and regenerative agriculture and higher nutrient dense food. That really led me, I would say more upstream to figure out, okay, I can tell you exactly how to get product from California to Indianapolis and then to Traverse City, Michigan. But I know very little about how it's grown, why it's grown that way, how that affects, you know, everything else. And I got very curious about that and leaned on that curiosity to date to really allow me to share space with, with folks like yourself and do lots of really cool things. And I'm happy to, to kind of share more. But really what I work on is everything that has to do with consumer packaged goods companies in the regenerative landscape. Mainly the emerging brands. So the less big national multinational CPGs and more so the sub $100 million, sub 50 million dollar, even more like sub $25 million brands that they are actually doing the real work of in my opinion, building the regenerative supply webs, honoring the farmer, rewarding the farmer, paying the farmers a fair wage and internalizing all the costs that the big guys get to externalize right now.

Why do you think these smaller CPG companies have the opportunity to begin being the change we want to see in the world rather than the big CPG companies? I mean, you look at the large CPG companies, you think, okay, these are the folks with all of the economic clout and the wherewithal to really change the landscape if they choose to do so. What prevents those Titanics from moving?

Yeah, I think the fact that many of them are publicly traded and so they're very beholden to shareholder reporting and quarterly earnings and all the things that you can't really make. You can't really turn that massive barge rather quickly. So I think there's a flexibility and a lack of, you know, certain strangleholds on what they can do that the Smaller folks have the advantage in, you know, I put out a post the other day that basically talked about, I see the bigger players have the resources and they're looking for the how to. You know, like, hey, we want to do this. How do we do it? We don't really know how to do it, especially in their context as, as we're kind of talking about here. Then the smaller players are doing it right. They're doing it really well, but they don't have the resources to continue to do it. And that, I think, is where the rubber meets the road. And I see a lot of folks really lining up to give the big folks with the resources the how to. And I see a lot less folks coming to the smaller people that already are doing the work, know the how to, to give them the resources to continue to do it. And that's, you know, that's where my work really intersects with the investment work because we have to better resource those smaller folks to get them to a level of competition where they're actually taking market share from some of the legacy players and, you know, putting pressure on them from a competitive landscape. And not just, I think, the current pressure, which is Scope three emissions potential, climate reporting coming down the pipeline, you know, activist shareholder pressure, you know, I think that those are all tools that have moved the needle and there's some clear examples of that. But I don't think they're going to cause the transformative change that we really need, in my opinion.

Right, I agree. One of the conversations I'm interested in getting your perspective on, when I'm out in the field talking to farmers, many of the listeners here of the podcast are farmers and agronomists and people who are out in the field. And I hear this constant refrain that people are producing really high quality, nutritious food, extraordinary quality wheat or extraordinary quality soybeans or rice or whatever the case might be, and they're having a challenging time finding a home or anyone that's interested in compensating them for producing a higher quality product. What's the pathway to change that landscape?

Yeah, I mean, any supply chain with direct traceability back to the farmer is going to have a higher cost because to basically segregate that supply, to have that traceability, to maintain that throughout the processing process, whatever that is, even fresh specialty crops, we're processing them to some degree. Right. We still have to cut them, package them, etc. So I think that's the real challenge is we've built these large machines, right, to get things from Crop to food item. And it's really hard to not, you know, you know, to be able as a farmer, what I've seen, to pull yourself out of that, right? To pull yourself out of that highway and take the side road because the side road has got more potholes. You know, it's, it's not paved, maybe it's a slower ride, it's more expensive, so you're maybe making less margin or you're maybe moving product less fast, you know, and it's really hard to kind of paint a broad stroke because apples are really different than wheat, which is really different than beef, which is really different than dairy. Right. You know, like we have these mass machines across all those different commodity types with their own individual nuances at this point that it really looks different, I think depending on the commodity. And that's not even kind of accounting for multi ingredient products. Right. So like not only are we talking about just apples and beefs, beef and milk, which are kind of single hero products that are easier to kind of tell a regenerative story or maybe find a regenerative brand to take to market. It's like, what are we doing with ice cream now that might have 20 ingredients? And what is regenerative enough for a product like that? Where it's like, what percentage of the ingredients need to be regenerative? Does it need to be certified? Does it need to be traceable back to the farmer? Can we use a ingredient supplier versus direct trade with the farmer? You know, there's all these, there's all this nuance in these questions, depending on, to me, the geography, the crop type and the end product that's being sold to the consumer.

I'd like to back up just a step. You mentioned a key phrase a bit ago, the transformative change that we desire and that we really need. What does that transformative change look like to you from a CPG and a food systems food supply web perspective?

That's a good question. It looks like a lot of things. My, my brain is skipping over itself trying to come up with a succinct answer. But from a CPG perspective, I think right now we produce cheap, unhealthy food that is very disconnected from farmers and doesn't share risk across the supply chain. Right. So what's, so what's the opposite of that properly priced food that is healthy and nutrient dense where the stakeholders in the supply chain have equal risk and reward profiles? I mean that, that to me would be the high level that I paint and the reason why I try to be Such a champion for the emerging or the smaller brands is like, those are the folks that I see living that work. And look, are they perfect? Are they doing everything right?

No.

But with 100 or a thousand x less resources, you know, I think they're, they're putting forth an effort that's really commendable and much more respectable in my opinion, than a lot of the larger folks. And look, I don't, I don't want to just paint a broad stroke that all the large players are not doing anything right or they're, you know, they're all predatory or like whatever. Like, I think a lot of the work is still moving the needle in a positive direction. It's very well intentioned, but I also think it's tough to put together a really long list of things that are truly transformative and things that I think are going to really move the needle in the way that I see some of these smaller, more nimble folks doing.

I love the way you share your thoughts on sharing the risks, sharing the wards and having that balance across the supply chain and supply web reminds me of a story. I've shared this story a couple of times in presentations of the Dutch fruit and vegetable distribution. The relationship that exists between Bakker and the farmers and Albert Hayne. And as the story was relayed to me, this is probably seven or eight years ago. I actually visited with some of the farmers and the packers in the supply web. They have this incredible relationship where you have three organizations. You have Albert Hayne on the retail side, Bakker being the processor, packer, shipper, the farmers who own a stake in Bakr and are also the producers of each of those three levels. No level has salespeople and no level has buyers. And they all have open, transparent books. Their margins are completely transparent to the other two players. And the farmers are actually determining when the sales are going to be for specific fresh vegetable items and at what price point. There's complete margin transparency, complete risk reward transparency across all three of those organizations. And they have this incredible powerful relationship. And you know, to me that is such a wonderful example of what a regenerative relationship really might look like where we don't have these extractive relationships where everyone is trying to take advantage of the other, if at all possible for their own benefit.

Yeah, it's a beautiful thing. I don't know a ton about that specific example, but, but you know, that sort of model is what we need to move towards. I think it's gonna take a lot of change and much more. Higher levels of Trust. It's probably a shame that I don't even know about that model, because whatever models exist like it now, we need to do a better job of kind of boxing up and doing case studies and teaching about like I remember in business school all the Harvard Business Review cases we did. Like, we need what is that version but for Regen Ag all up and down the supply chain, you know, and who's gonna put that together? I think that'd be like an awesome tool. And the Forum for the Future is a nonprofit organization that works with a lot of, you know, big multinationals, smaller folks, farmers. And they put out a bunch of really cool literature lately around kind of this transition from these current transaction infrastructure and supply chains to the supply web that I really liked, the way that they, you know, the vocabulary and the vernacular that they use and some of the framing that they used. You know, I read it and I was like, wow, this is great and it sounds awesome, but I think we're still much, much further away from that. But the thing we probably don't talk about enough in the regenerative landscape is the retailers, the retailers in this country. And I want to guard against that being a lazy, knee jerk response to me being a big brand advocate. Because as a brand advocate, you know, retailers are the gatekeeper to access to the consumer. So you still have to do a ton of work, you know, once you're on shelf in the retailer to get a consumer to buy your product. But if you're not on shelf, you can't sell something to that person at that store. Right. And I think the retailers are really confused about what regenerative is. I think they're finding it really hard to programmatically execute because they can't do it in a super simple binary way like usda, organic or non GMO or whatever you want to kind of throw in there. But we need retailers to step up. I mean, I need to see more, I think, effort and I need to see more skin in the game from retailers because that's a big. In all these conferences and all these conversations, we really tend to not include them at all, which is big, big problem. Because if you want to talk about farmers and then processors and then brands and then consumers, if you don't talk about retailers that sit between brands and consumers, that's a huge miss. And they really are the gatekeepers of commerce.

That's a key phrase. And I was just about to ask you, who controls what actually ends up being accessible and what ends up being available? Is it the distribution Supply web or is it the retailers and the context for this? I've had folks in the regenerative agriculture space. They have the belief that if we produce really nutrient dense food that has a higher degree of nutrient density and there is sufficient consumer demand, consumer demand for that higher nutrient dense food will generate enough change that it will change the supply webs. I don't believe that to be true. And I've asked for examples and with the knowledge you have, the space, you would have a particularly qualified view and opinion on this. But I've asked for examples. When has whenever has positive demand as compared to negative demand created a significant transformative change in the food supply chain? I can't think of a single example. And I've searched, I don't know of a single example in recent history. In the last hundred plus years, there's many examples of negative demand. When Upton Sinclair wrote the Jungle, and when you have a disease or a pathogenic outbreak on spinach, for example, there's many cases of negative demand producing significant change. But when has positive demand produced significant change? And my counterpoint has been that I feel reasonably confident that there is very little consumer demand for strawberries that are picked mostly green and that are white on the inside and don't have great flavor. I feel reasonably confident there is very little consumer demand for tomatoes that resemble cardboard more than they do tomatoes. And so those are cantaloupe that are as hard as a rock. Those types of products that have been produced to fulfill a specific need. That need is for the retailers and, or for the distribution supply chain so that they can ship and transport well. And so I guess there's a lot for you there to comment on. But the key question in my mind is who really controls the quality of the tomato on the grocery store shelf, on the retailer shelf?

A lot of people. And I think what you slayed out there was, was really well said. I do think the increase in flavor and the increase in nutrient density will move the needle. Is the nutrient density thing a silver bullet? I'd probably agree with you there that it's not right. I've never had that framing of kind of the positive versus negative demand. So I like that you just, you just threw that into my brain for the first time. And that's, that's helpful. You know, who controls the quality of the tomato at the grocery store? This is a good question for me because I know, I know a lot about that supply chain. What I think folks don't understand is how many hands that tomato touches before it Reaches, you know, the grocery store. So let's just talk about a hot house grown tomato in Canada that's coming to a distributor like an Indianapolis Fruit in Indianapolis and then going to, you know, a Dorothy Lane market in Ohio. Right. We'll use our little Midwest paradigm here. Right. So, you know, pure flavor is a popular grower, packer, shipper of hot house products. Right. So pure flavor grows the tomato. You know, they put it in a case, they put it on a pallet, they deliver it to Indianapolis Fruit. It sits at our warehouse for however many days. You know, we have quick turns because we're a good operator. But for some bad distributors, it might sit there for 10, 15 days. You know, for us it's probably one, two or three. Then it goes to the grocery store. You know, is it refrigerated and does that, does that harm the flavor and the quality? Is it not refrigerated? What temperature is it stored at? Is it stored in the back room? Is it forgotten about at the, at the store level and not put out by the retail clerk for five days? And so there's a lot of, I think confirmed studies that show flavor and nutrition is, is drastically increased by decreasing the amount of time between harvest and, and consumption. And you know, there's just so much that can go wrong in our current system. And I don't want to totally bash the current system because the current system's really strong and efficient at what it does, but I think people think there's a hole behind the grocery store that you just like go in and grab the products out of and then throw them on the shelf. And it's like, that's not how it works. So just think about, think about how much time can be elongated through that whole process and how many people could mess up, for lack of a better words, you know, the quality of that piece of produce that ends up, you know, at the retail store.

What you just described reminds me of another goosebump creating moment in the Albert Hayne Bacher relationship that I described previously. They set a goal of having their fresh produce move from the field, the refrigerator in 24 hours. And they achieved that goal over 90% of the time. Isn't that incredible?

That's wild.

Now granted, it's a small geographic area, it's very different from the United States, but that's still a remarkable accomplishment.

Yeah, that's wild.

Yeah. So coming back, you haven't really answered the question yet, or maybe you have broadly, but who is the combination of decision makers who desire tomatoes that hold and Ship supremely well. Who select and choose that over flavor.

Well, on the fresh produce side, especially at the large chains, you basically have like a vice president or kind of a director of produce, and then you have individual category buyers for certain categories. So you might have a tomato buyer, you might have someone that runs the melon program, you know, the salad program. And the reason in the produce worldwide, you know, we've gotten so kind of consolidated is that person, especially at a Kroger or a Walmart, they want to lock up programs, right? So they want to have a handful of growers or, or labels or brands that they just buy everything from for the whole year. They can plan the pricing, they can plan the ads. You know, there's. It's this whole reverse engineering process to basically make it as simple and easy as possible for the consumer at the grocery store, which I think is great from a retail experience perspective. Right. It's really easy to go in when stone fruits in season and see the huge stone fruit display at a really nice. Because it's on ad and it's bright and beautiful or whatever. But we've probably lost, you know, some of that flavor and some of those nutrition and some of those other things in that process. And I don't know what the perfect. What the perfect balance is there. Right. Because, you know, I walked into a city market here in the Colorado mountains today, which is a Kroger banner and it's a nice grocery store. You can get a lot of good food there. What percentage of it is regenerative? Probably a very, very small percentage. But for the average American consumer and what they can spend on food, I think we're doing a pretty good job. Right. Are those consumers probably making the best food choices while they're at that store and buying fresh produce versus Cheez its and Cheetos? Probably not. You know, food to me is like talking about politics. Like, you can't talk about taxation without talking about immigration, without talking about climate, without talking about, you know, so it's really, really hard to come up with what's. What I would call like black and white binary solutions because there's so many variables that are interwoven with each other that just make it very difficult, which is the challenge that I know you and I love.

Yeah. You know, there is. It strikes me that there is a part of this conversation that I understand that some farmers understand that perhaps retailers and the distribution supply chain doesn't understand because they haven't experienced it yet or not to a great degree. We know that there is A strong correlation between nutrient density, or shouldn't say correlation. I think arguably it's causation. When you have exceptional nutrient density or nutritional integrity. You have fruits and vegetables which store and ship really well. This is something that we pay a lot of attention to for any crop that gets stored for extended periods, say potatoes or apples or onions, when they spend very long periods of time in cold storage, then we pay very close attention to nutrition and nutrition management because we know that nutrient balance is going to determine the quality of, and the storability of that fruit and how much of it can come back out of storage and be sold for fresh fruit. And there is this phenomena when you have fruit that has exceptional. I dislike the term nutrient density, but we'll call it nutritional integrity. Has. Yeah, nutritional integrity. High quality fruits and vegetables don't rot, they don't decompose, they dehydrate. Very few people get to experience that consistently. Like, occasionally we'll buy citrus, two different batches of citrus and one will become moldy and spoil and the second one just dehydrates. And it doesn't occur to us to ask the question, well, why the difference? What's the difference between these two? And I make this point because there is this assumption in our existing supply webs that the pathway to having shippability and storability is to mature, have specific genetics, harvest fruit when it's still relatively immature, refrigerated and so forth. But there is another factor that. And that is this nutritional integrity. What if we had, I mean, Steve Grof has shared photos of tomatoes that he has stored for 150 days without spoiling. And we've done the same.

Wow.

And so I've actually had lettuce. I have photos somewhere of lettuce that was in the refrigerator 150 days without molding and was still crispy and crunchy. So if we had that type of nutritional density and quality now, that completely changes the nature of the conversation about shippability, storability, shelf life.

What I think is the challenge there is your route to market or your retail channel. There is no middle ground, right? So you're either a farmer's market, like vendor or you're going into mainstream grocery. And there's some nuance there around. Is it Walmart or Kroger or is it the local mom and pop or is it, you know, a local co op that's maybe more so like the farmer's market than a Walmart, but either way, you kind of have to go into one system. And so I Just think back to your question around, hey, I'm a farmer, I'm growing a great product. Like you're either in one system or the other. And where I think there's a huge opportunity is building the regenerative infrastructure, right, to create routes to market that are somewhere in the middle. What I think the challenge has been is solving for profitability. You know, it's just like those more chains, you know, they're so scaled and efficient that they're lower margin, but they're still profitable. Right. And the farmer's market is not as accessible from a price point perspective and they're making a decent margin, but you're still toting your stuff to the farmer's market, you're still putting up your stand, you're still putting a lot of labor in as the producer and you have to become your own kind of brand marketer. So I don't know what the solution is, but that seems to me to be the very clear problem in terms of, I guess I would call that increasing market accessibility for, for the, the growers. And you know, it's funny you mentioned the nutritional integrity. You know, in our world, every retailer that buys from us, and I speak like I'm still there, they want Driscoll berries, right? And why do they want Driscoll berries? Because in the produce department, that's one of the few brands that really, really exists and is really strong. That is basically known as the category leader. You know, like in watermelons, the average consumer is not going to say I want a Dulcinea watermelon or I want a certain specific type of watermelon. But in berries, you know, Driscoll's is the go to guy. And I can't speak to anything Driscoll's does. On the agronomy side, I have no idea. I've never visited them, I've never talked to anyone, but I can just speak to anyone as a distributor of their product. Their berries, on a very, very high level consistency, tasted better than other vendors that we bought from and had way less spoilage. And that is an item that if I'm in Indianapolis and I'm getting them from California, you know, they're going to be at a minimum three, four, five days from, from harvest before I get to them. And I need to move them as fast as possible because that's just a high spoilage item. And so not only were we able to sell them for a premium, they tasted better. The retailers love them. They spoiled less. Right. So that was just an example that came to mind in the fresh produce world as you kind of spoke to that topic.

Yeah, that's an important example. And I think there is a strong element of nutritional integrity that is a part of the Driscoll story. And there's also a genetics component which, when you think about nutritional integrity, is strongly associated with genetics. Those two are two different sides of the same coin. Well, arguably there's more than two facets, but both very important pieces. So when you think about creating market access, facilitating market access, obviously our conversation so far has largely been focused on the produce market or the produce side of it. But there's also grains, there's all these other commodity materials as well. What does the pathway look like? I asked you the question earlier of what does transformative change look like? What does the pathway look like of creating the better world that our hearts know is possible?

Well, the reason I've. I've settled on early stage CPG is I think it's gonna be really hard to change the distribution in the retail model from what it is. Right. Like, I don't think we're gonna solve for. I have to sell my product into UNFI to go into Whole Foods, or I have to sell my product into KHI to go into sprouts.

Right.

But what I do think we can do is I think we can fund and build emerging brands that put pressure on legacy brands through that route to market.

Right.

That have higher nutrient dense food, better relationships with farmers, you know, higher compensation for farmers, more worker equity, better soil health, all the things that we're kind of all after. And some people would push back on that and say, hey, I don't know if that's transformative change. And I would say back to that at its current scale, it's not. But the whole point is if we can get some of those brands to be $100 million plus brands, you know, then we're putting a real dent into this thing and we're affecting real amounts of acreage and real supply chains, etc.

So tell us a bit more about the scope of the work that you're doing today. You shared a bit of your story, your background, but what are you, what are you cultivating today?

Yeah, I'll give, I'll give a little background too, into kind of why the work began and whatnot. But, you know, I came into the space with a very open mind and a lot of curiosity, and I wasn't trying to be dogmatic about where I felt like I could help. You know, that's. That's really the mindset I've had the whole time is just how can I help with all this stuff? And as I had, you know, 1W2 role at a company by the name of Regenerative Food Systems Investment, which is a news and events company that covers investing in region ag. And as I was making private investments myself to the tune of now 22 private investments, and as I was trying to do entrepreneurial work in the space, I just saw a real dearth of knowledge, attention, investment, understanding of this consumer packaged goods pathway as a solution for, you know, as a market based solution for the agronomic challenges on farm, right? So I, I coined a term called upstream disease which you know this, your line of work is much more focused on the farm gate and rightfully so. And look, regenerative agriculture is all about transforming the farm gate and changing the farming practices. Duh. Like we all get that. All I'm trying to say is let's not think that every problem and solution is at the farm gate to change the farm gate, right? Like we have to examine this whole supply chain and solve for the whole supply chain or it's just not going to work. Or it's not going to work long term.

Completely agree with you, Anthony. The reality is we have the current system that presently exists with all its maladies and challenges because we designed it this way, like this. This didn't come about arbitrarily. You achieve what you incentivize. And from a, from a national governmental policy, from a policy perspective and a supply chain perspective, we designed what currently exists. So we shouldn't point to a finger at farmers and say, hey, you're at fault for creating this situation because they did exactly what they were incentivized to do 100%.

And I felt like if I googled how to be a regenerative farmer, I would have thousands of resources on YouTube, on Google, on websites, on blogs, from individual thought leaders like yourself and influencers. And I could go on every social media and learn about that. But if I googled how to bring regenerative food to market, that list is much, much smaller. Or how to be a regenerative, you know, how to be an entrepreneur or CEO of a regenerative CPG brand, you know that that's non existent. And so really the work started with media, started with the podcast, it started with the blog, you know, the region brands podcast and the Regen Brilliance media platform. And that was twofold. That was to solve what I saw as this huge information and education gap in the regenerative Ecosystem. And two, it was my self study. You know, I remember in college you could take these, these elective courses or independent studies and this was my version of that. Right. And so I like to tell people I'm getting a PhD from Regen Brands University because having all these conversations, being an investor in some of these companies, being an advisor to some of these, these entrepreneurs, I'm learning what are the main challenges they're facing, how can we drive change for those folks? And I feel like if you made the list of that kind of support for farmers for a region transition, it's millions of bullet points long. And if you make the list of that kind of support for these CPG entrepreneurs, it's me and like a handful of other people which is not going to get the job done, you know, at all.

I'm thinking Anthony, of how the tremendous need that exists that you just identified and the question I want to ask is obviously farmers are farmers for a reason. They generally, there's a few exceptions, but most farmers are in farming because they enjoy growing things, they enjoy producing. They're, they're not marketers, they're not processors. There are a few outliers and acceptance of course, but they're in the minority. And so with, within that context and setting, I think the question is what can we as farmers, what can we do to create the change that we want to see with facilitating market access? What are the shifts that we can support?

Yeah, I mean I hate to, I hate to give the farmers more work to do because I think my, a lot of my thesis around the work is we're trying to create less work for the farmers, right? We're trying to build the brands that are the marketers, that are the aggregators, that are the market access point. But basically what I would say is be open minded to different routes to market and try and find what I would call the supply chain actors that are more aligned with your values and goals. Right? That's going to look different for, for people based on where they are, based on what they grow, based on, based on what they can grow, what they don't want to grow, what they know how to grow. I mean, so it's hard to kind of write a broad based description or prescription but you know, you got to find collaborative partners, right. Because there's two options. You do it yourself or you do it with other people.

Well, I think you gave the answer that I was expecting Anthony, and what I was looking for and the fundamental is, I think for us as farmers, many of us have Become too comfortable growing a handful of crops. And just if we really want to help facilitate creating a difference, then that may mean we do need to reach out and to find those other partners and to grow crops that are perhaps a little bit differently from what we're currently growing. Perhaps we grow red and blue corn instead of growing yellow corn, or we grow food grade corn. And I point this out because I have some conversations, I'm sure not nearly as many as you do, but I have some conversations with these smaller emerging CPG brands and I hear this constant refrain. I would love to source regeneratively grown xyz, but I don't know where to start looking. I can't find it.

Yeah, that's definitely a problem. I'm not exactly sure what I think the hierarchy of problems is, right? And like where do we start? But that's certainly one of them. And that to me is usually a broker or there's another kind of middleman that like serves that purpose right. But where I really see an opportunity is whether it be certifiers or whether it be agronomy type folks or whether it be these research institutions, you know, we have to have resources dedicated to commercialization and right now we just have resources dedicated in my opinion to research, agronomy and certification. Right. But if we can't help the farmer actually get that, like get paid for that product, right. Then like what, what are we doing? And I feel like we're kind of dancing around this work with some of the stuff that we do. And I do a lot of this unpaid one on one, right? Like hey, I'm looking for this, I'll post about it on LinkedIn or hey, I'm looking for this ingredient. I'll connect them with someone I know. But we have to build that, that infrastructure of connectivity just like all the other things we've kind of talked about today, which, which is a challenge again.

To the point you made earlier. It's going to take a lot more than a one man band to facilitate that and to scale it.

Yeah, and the elephant in the room that we haven't talked about is money. Right? You know, the great philosopher method man from the Wu Tang Clan said it best when he said cash rules everything around me. Because what I see in the landscape of all regenerative initiatives is yes, there's technical assistance challenges, there's community challenges, there's, you know, the, the CPG brands we work with have typical CPG brand challenges. But what's everyone's biggest challenge? It's really capital and it's really being capital constrained. And so in a farmer context, sometimes that's they're not getting enough of the food dollar in their supply chain. Not necessarily that they need investment capital.

Right.

It's that we need to move the capital. In my context, working with the CPG brands, a lot of them just need more investment capital to do the early stage infrastructure building, brand building work that's necessary so that capital constraint looks different based on each context. But why I took the role at RFSI while I'm still so proud of the work that that organization does and why I think, you know, we need to 100x the noise that an organization like that makes is none of these problems can be solved without changing incentives like we've already talked about and changing capital flows. And that can look different based on the farmer, the context, the supply chain, the route to market, etc. But you know, those are the solutions that are really going to drive change. You know, I appreciate what you've said historically, John, around, you know, I think investing in farmland's great and there's clearly some awesome economic incentives around consistent incomes and appreciation. It's an inflation hedge that attracts investors. And look, we, we should have way more regenerative farmland investors than we, than we do. And we will. But it's not the only place we need to place capital. And in my purview of what's going on in the capital markets for regenerative ag, we're doing a decent job in farmland, we're doing a decent job in venture capital, ag tech. Whether you think that's a real solution or not, that's a different conversation. What we're doing a horrible, horrible, horrible, horrible, horrible job of, it's investing in infrastructure and brands and that's really where the rubber meets the road.

It's almost accurate to say we're doing next to none. Yeah, there's next to no investment going into that space. Yeah, yeah. Which is, yeah, it's a, it's a point that I made at RFSI on a panel a couple of years ago is that investing in farmland is safe, it's secure, it's low risk. But if you truly want to make a difference, if you want to make a significant impact, you can impact so many more acres and create and facilitate so much more significant change by investing in facilitating market access, whether that's in a CPG brand, whether that's in processing facilities, whatever it might be to fill certain gaps. You have the opportunity to impact such so many more acres and make such a Bigger impact than you can by Investing in farmland. $100 million invested into farmland. It doesn't go very far. That's not very many acres. Yeah.

And it makes me think about Tom and 4P Foods, which is a regenerative food distribution business in the Washington D.C. area, the Virginia, the state of Virginia. And John, Tom's definitely someone you should have on the podcast for sure to talk about kind of this market access and this infrastructure. But you look at that business and you know Tom, Tom's not at the, the highest revenue number ever. I think he's like just about to eclipse. Him and his team are just about to eclipse the kind of the $10 million mark. But when you look at the life changing work they've done at the farm gate because of that annual $10 million in revenue and the legacy revenue and the packages they've moved through that building in that business, like that is the kind of medium ground solution that does not exist yet. And the fact that I can only give you one example, I can give you a second one, which is Hudson Harvest in the Hudson Valley of New York, which I've also invested in. But that's a joke. Like that is an absolute joke. And I'm sure there's more out there that I just don't know about. But the fact that those are the only two I can name being so ingrained in this space shows the vast problem we're up against.

Yep. The tremendous opportunity. The tremendous opportunity. So this is a question that I often ask earlier in a conversation. You may have alluded to parts of the answer already, but looking at this, you have a unique piece perspective, a perspective that many farmers don't often get the advantage of hearing from. And so my question is, from your point of view, what do you see or what, what do you believe is true about agriculture that is different from the mainstream view? What is different from your, what point of view do you hold that is very different from any others?

Yeah, I might have two there. This is very biased to my upbringing and my family's legacy. But I do not believe that every middleman is bad.

Right.

Like I can tell you. Like, I know the service that we brought to both grower packer shippers and to retailers as a distributor of produce. And we earned every penny of that margin that we made. Right. And the things that we did of service for both the, the grow packer shippers and the retailers like really helped move food throughout the supply chain. So I just, I caution folks against the broad stroke painting of all middlemen are bad.

Right.

Like we need middle supply chain infrastructure. So that's the first one. And I got a second one for you in a second.

Yeah, I completely agree with that. If we want to look at the very large scale supply webs that we have today, I mean, we just, I just mentioned a bit ago that many farmers don't want to be marketers, they don't want to be processors. And so you, in those contexts and settings, you have no choice except needing to have multiple middlemen through a supply web. It's when those relationships are truly collaborative and not predatory or not transactional, they can work so incredibly well. And I think when you have a few examples, a few middlemen who have really predatory relationships or highly transactional relationships, as we have had with perfect example of beef processors for the last half a dozen years, it gives producers a really sour taste in their mouth about what the rest of the supply chain might look like because they don't really know because it's not transparent.

Yep, agreed. And kind of in that similar vein, my second one is like, the farmer's market's not going to save us.

Right.

And the farmers market economy has boomed and the amount of farmers markets has drastically increased, which is awesome. I love it. I support my local farmers markets, depending on where I'm living, and go there every week and like buy as much stuff as I can from organic, regenerative local farmers. But we can't grow coffee in Colorado. No, we, we can't grow cacao in Colorado. So not only from a scale and an impact perspective, but just from a, like the days of eating seasonally are over. You know, like we're not going to get the mom in Naperville, Illinois to not want blueberries 52 weeks out of the year. Like that, that ship has just sailed. And so we can have a philosophical conversation about whether that's right or wrong for the world. But I think if we're trying to solve problems and admit to the constraints of the current, you know, economy we live in, like the farmer's market is awesome. I support it so much. I don't want to be, I can't endorse it enough. But for the big problems, I don't know if it's going to get us home.

Yeah, completely agree. I don't need to add any thoughts to that. Going back to a question that I had asked earlier and I'm going to ask you to a slightly different angle kind of a two part question. Where do you see. And again, just being considered, the fact that many of Our listeners and much of our audience are people out in the field, producers, farmers. Where do you see significant areas of opportunity for them in this space? And what do you think might be the limiting factors that are holding them back? I mean, you spoke about capital being an obvious one, but are there any others?

Two opportunities that I see are find those collaborators like we talked about that are really interested and good at telling your story. Right, right. So not only is it a market access of, hey, get this crop into some food product, or as it is, you know, to a consumer, but. But it also is helping tell our story. Right. And I would say have multiple. Have multiple offtake partners.

So one.

One example that comes to mind is Luke and Ali Peterson at a frame farm in Minnesota. They work with Lil Bucks, which is a buckwheat brand that I'm invested in. They work with Simple Mills, they work with Patagonia Provisions. And Luke has this amazing regenerative grain operation with this awesome rotation because he can sell the buckwheat to Low Bucks, he can sell the Kernza to Patagonia Provisions. And then I think he sells Kerns at a Simple Mills. And maybe one or two other things that I'm just spacing out at the moment. I think sunflower, sunflower seed or sunflower something is one of them. But that to me is a regenerative ecosystem. And those folks are fresh in my mind because they just had kind of a field day all there together. But those brands showed up. They know Luke and Ali, they know what they look like. They're on zoom calls with them, they're sharing risk with them. They're rewarding them for that risk. You know, that is a truly regenerative supply chain. And I think if we got really in the weeds with all them, they say it's not perfect and they tell us how they'd want to change things. But when I compare that to DiGiorno's 100,000 acre wheat commitment, which I. Which I think is great and hopefully it works out, that's going to flow through Ardent Mills and adm. You know, how much more regenerative or whatever word you want to insert, how much better is that relationship that Luke and Allie, I think, have with those brands versus whatever relationship those wheat farmers are going to have with ADM, Ardent Mills and DiGiorno. I put a lot of money to say that, you know, the first one's a lot, a lot stronger.

And why is it stronger? Because you mentioned a keyword, relationships. You actually have authentic relationships rather than transactional relationships. If you want to call it that.

There'S a really hard problem and solution to quantify and to build financial models and things around. But it's also like think, you know, for any specific example, natural food retailers want to support regenerative brands. We know that at the C level and at the VP level they've made commitments, they say all the right things at conferences and I truly do think they're talking about these things and they're making, you know, they're making progress. But when it lands on that category manager's desk that's already overworked, right undercompensated and needs to buy off of a spreadsheet of certain metrics versus that relationship dynamic or some of those less quantifiable metrics, it becomes a challenge and they're just going to do what they've always done or they're going to do what's safe. And we have to create more human capital. I guess to have that relationship, to have that flexibility, to do some things that maybe we can't exactly articulate on paper doesn't mean they're not valuable, it doesn't mean that we can't eventually do that. We just might not be able to do it at this moment. So I don't know, I don't know what the exact solution is for that, especially in this inflated recessionary kind of economic environment because everyone's reducing headcount, everyone's reducing salaries, everyone's kind of cutting back in terms of those resources. But if I look at the brands that I think are doing an amazing job building supply webs with shared risk and proper ROI across the board, they have an over indexed investment in human capital and in relationships. And it doesn't mean that the financials don't also work. It just means that the human capital piece is a bridge to that end that's driving those results.

Hmm, that's really interesting because I only have, I have very limited experience. I've got one company that we've been working with a bit at aea, Citizens of Humanity. They have been entering, truly you could call them regenerative relationships with their producers, entering into relationships with farmers and sharing in the risk, providing upfront capital and providing them with premiums. It's, it's been remarkable to see how they have evolved their operation, their relationships with producers and they're actually running a very lean team. I think the total team at Citizens of Humanity is like four people or something like that. It's a tiny team, but they're doing.

Amazing work and it might not always mean more people. It might just mean redirecting some of the resources that person has to this versus something else.

Right, Yep. Yeah, that's a good point. Is that those four people on that team are actually having conversations with farmers directly, not indirectly. They're not going through middlemen. They are. They're not buying from gins, they're buying from farmers.

Yeah.

And it's, it's impossible to do that with some prescriptive standard set or practice list or, you know, we have to standardize things and we have to verify things and we have to have that mechanistic approach to a certain degree for certain reasons in the supply chain. But I think if you're building something from scratch, especially if you're not having that conversational equity, it's really, really hard to put together Win win solutions that actually move the needle and actually last.

Yep, exactly. So, Anthony, what's the question you wish I would have asked?

Man, that's a good question. I wasn't ready for that one.

What's an important topic that we haven't yet talked about?

Yeah, I guess maybe I'll throw it to the piece of the work that we haven't talked about a lot, which is the formalizing of the investment work. So historically I've made angel family office investments, which are basically, you know, myself and my family acting as a private Investor. We've made 22 investments across the supply chain all the way from the farm gate to consumer brands. You know, I've really decided to focus on the CPG side. And so Outlaw Ventures, which is the investing entity, is currently in strategy and fund formation mode to raise the first venture capital fund, which will be a 30 to $50 million fund dedicated to emerging regenerative brands. And you know, the question maybe to ask there is like, what? What is success? What when we do this podcast in 10 years at the end of that fun life cycle will be success? And my really simple answer that I've been sharing with folks is, you know, Epic Bar got acquired by General Mills for $100 million and scaled to whatever revenue number they scaled to. And Epic Bar is now in all the leading natural retailers. It's in convenience stores, it's all across the board. And I'm not going to get into a philosophical conversation about how regenerative they are. Are they regenerative enough? Do you like that they're land market certified by Savory? All that aside, you know, we know that's a much higher level product in those categories that they created products in than the existing brands that is much more regenerative and higher on the regenerative spectrum. And so the, the ideal of the fund and the goal of the fund is to create the next however many Epic Bars. You know, I'm going to say at least 5 of our investments need to. Need to reach that kind of goal because, you know, full circle moment, we're going to come back to the whole let's make the better bigger and the bigger better. If you look at the effect that that Epic Bar acquisition had on General Mills and their strategy, and once again, we can poke holes in their strategy all they want, but I do think they're one of the better folks in terms of what they're doing. It had a huge effect on them. Right. From a competitive standpoint and then from an acquisition and an integration standpoint. And we have to just put way more wins like that on the board.

I think we often don't appreciate enough the impact that one player can have in the marketplace that one player can have, A, by providing competitive pressure, but B, also demonstrating the opportunity and creating some excitement. And so there's a combination of different influences that come into play here. But it's been very obvious for us in our space here at AEA that we can never be all things to all people. We don't aspire to be all things to all people in the regenerative agronomy space, but what we can do is we can set such an extraordinarily high bar of excellence that we force other people to change their game and to step up to the plate simply as a result of our being present in the marketplace. That has been happening incredibly well. So imitation is the sincerest form of flattery. And it's remarkable to see how the entire landscape has shifted just in the last three to five years as a result of us and other people like us being here for a much longer period of time. It's a lot of fun.

Yeah. But even that, John, is an example of consulting versus selling or back to the human capital, the relationships. Because knowing a little bit about Yalls business and what y' all do, you know, these people aren't showing up at the farmer's doorstep and trying to shove certain products down the throat. Obviously they're going to make agronomic recommendations and they're going to try and sell stuff eventually, but they're really trying to sit with those folks and say, hey, educate me. What's going on? What do you need? What's going on out there? You can speak to it more Eloquently than I can. But we just need more of that in general. Yeah, right. Whether we're talking about any sort of spot on the supply chain, we need, we need a lot more of that kind of a focus.

Thank you, Anthony. That's a great ending note. So to all of our listeners, Outlaw Ventures, Regen Brands, look it up. Anthony's doing a great, really great work. Anthony, thank you for all that you bring to the world. Really inspired to. I'm looking forward to seeing the change that you're going to be creating in the next 10 years. I look forward to that conversation in 10 years from now. Actually, I think it's going to be sooner five years from now.

Right back at you, John. I really appreciate it, man. Thank you so much.

Thanks for listening, everyone.

Happy Growing the team at AEA and I are dedicated to bringing this show to you because we believe that knowledge and information is the foundation of successful regenerative systems. At aea, we believe that growing better quality food and making more money from your crops is possible. And since 2006, we've worked with leading professional growers to help them do just that. At aea, we don't guess. We test, we analyze, and we provide recommendations based on scientific data, knowledge and experience. We've developed products that are uniquely positioned to help growers make more money with regenerative agriculture. If you are a professional grower who believes in testing instead of guessing, someone who believes in a better, more regenerative way to grow, visit advancingecoag.com and contact us to see if AEA is right for you. Thank you for listening and we look.

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