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11.2.2022
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Neutral Foods Could Change Everything for Organic

(Images courtesy of Neutral Foods)


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Mark Cuban, an early backer of Neutral Foods, calls the company a “game-changer.”

Yet, one could easily speculate that his effusive praise of Neutral Foods doesn’t fully encapsulate why this brand’s success is so critical to the organic community.

This is because Bill Gates is a significant investor in the company, and if Neutral Foods can empirically demonstrate that small organic farms are an essential part of the equation when it comes to a warming planet, it may fully open his eyes to the fact that organic — and not GMOs — is the path moving forward.

Until this point, he has not been convinced.

UNIQUE APPROACH

As the first carbon neutral foods company in the U.S., Neutral Foods is on a mission to radically reduce the carbon footprint of agriculture.

“We did a lot of work looking at the $860 billion grocery market, and the vast majority of ag-related emissions is from animal proteins and what goes into feeding the animals,” said CEO Marcus Lovell Smith. “That is why we decided to focus on dairy, and in 2023, we’ll be moving into beef.”   

While numerous companies have committed to being carbon neutral by a future date, Neutral Foods has a few distinct advantages.

First, the entire business was designed to be carbon neutral from Day 1, with all of its organic milk and butter products Carbon Neutral Certified by SCS Global Services. Second, its brand name and packaging fully leverage this carbon neutral message to consumers. They are inseparable.

Neutral Foods uses models to calculate the greenhouse gas emissions from its current operations and the climate benefit of each potential farming project to prioritize investments. For every project that Neutral invests in, the company conducts long-term effectiveness monitoring to quantify the reduction or removal of greenhouse gas emissions the project has delivered. Whatever climate impact the company cannot eliminate through its portfolio of on-farm greenhouse gas reduction or removal projects, it purchases carbon credits to offset the difference.

neutral foods organic insider offset scope 3 emissions

When measuring its own carbon footprint, Neutral Foods factors in every single direct and indirect emission, also known as Scope 1, Scope 2 and Scope 3 emissions.

That means accounting for each step along the way — the carbon impact of the cows, their belching, their feed and how the manure is managed; fuel usage to transport feed to the farm, milk to the processing facility and cartons to the distributor and retailer; all activities at the processor, distributor and retailer; and ending with the consumer impact, finishing at the landfill where the carton ends up.

The company works in a very collaborative manner with small organic dairy farmers — all of whom have between 50 and 250 cows — to figure out which carbon mitigation investment would be best for them. The projects could be anything from changing how the forage is being produced, investing in technology to reduce manure-related emissions, implementing strategies to keep compost decomposing anaerobically or advising on intercropping with a rye grass to keep weeds down.

Neutral Foods has found that there are four main barriers that prevent farmers from embracing these practices — financial access; a lack of confidence or expertise to re-risk the solutions; project management and oversight; and the complexity of monitoring and measuring whether there is a real climate benefit.

Operating in Oregon and Washington, the company currently has ten projects in the ground, functioning and reducing greenhouse gases, with another 30 projects in various stages of development.

Given that Neutral Foods is flush with cash, having raised a $4M seed round in 2021 and a $12M Series A a few months ago, the obvious question for organic advocates is whether it will expand to the Northeast and provide badly needed support to the small organic dairy farmers whose contracts were cut by Danone and Maple Hill.

“I would love to do some projects next year in New England,” put forth Marcus Lovell Smith. “This is about scale, and I would like to us to be all over the country. If we sell a small amount of elegant milk, that is nice, but it means we haven’t done our job.”

EARLY SUCCESS BUT DATA IS CRITICAL

Since launching last year, signs of early success in the marketplace are clear.

It has achieved nationwide distribution with Whole Food Market and Sprouts, and is in more than 2,000 doors. Yet, just like any other organic food company, Neutral Foods must prove to its investors that its model is a viable and profitable one.

However, its data around decarbonization strategies, of which everything is third-party certified from external auditors such as the World Resources Institute, is absolutely critical — for both the company and our industry.

Far too many people have been misled into believing the false narrative pushed by the GMO industry that organic provides vastly inferior yields and is actually worse for the environment.

Yet, what must terrify ag-biotech executives now is having to account for Scope 3 emissions; meaning, identifying the carbon footprint of all of the petroleum-based pesticides that are sprayed on GMO crops. When they are forced to do so, the yield argument, which the GMO industry has hidden behind for decades, will completely fall apart.

That is exactly the reason why we are seeing massive pushback against Scope 3 emissions disclosure.

And it is exactly the reason, among others, why we wrote that mandatory ESG reporting standards will be the most important development ever for organic.

Neutral Foods being profitable and having third-party certified confirmation that its decarbonization strategies are working will be essential to help change the mind of the most influential billionaire in the world when it comes to agriculture.

As I told CEO Marcus Lovell Smith at Expo East in Philadelphia a few months ago, “You have to get Bill Gates to see the light.”

And the best shot we have to convince him is with the data.

With gratitude,

Max Goldberg, Founder

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This Week's Quick Hits

Quick Hits

* On December 5th, Gero Leson, vice president of special operations at Dr. Bronner’s, will be hosting a seminar “How to Build Fair and Sustainable Supply Chains for Agricultural Products.”


* Fashion industry heavyweight and television personality Nigel Barker has joined ecofashionCORP as celebrity creative director.


* Terviva has partnered with Ciranda to distribute Ponova oil, a non-GMO and soon-to-be organic oil that has never been commercially available before for food production.


* Regenerative shoes.


* Ocean’s Halo has partnered with Smile Compostable Solutions for sustainable broth pods.


* Organic rice visionaries and founders of Lotus Foods, Caryl Levine and Ken Lee, released their cookbook RICE IS LIFE.


* Haberman has named CPG and brand marketing veteran Doug Moore as its chief commercial officer.


* Jim Riddle, former chair of the National Organic Standards Board, on the horrendous hydroponics ruling and what we can do about it.


* The Organic Farming Research Foundation is funding research on organic farming systems for BIPOC and socially disadvantaged farmers.


* Organic burger chain Burger Village is now open in NYC’s Tribeca neighborhood.


* The first recyclable restaurant in Sweden has kelp chairs.


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