BRAND SECRETS AND STRATEGIES

PODCAST #56

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #56

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Dan: Welcome! If you've been tuning in much, you've heard me say repeatedly I love talking to entrepreneurial leaders. I love hearing their stories, how their brand got started. Typically, their story begins with a solution that they were trying to fill for their own needs or for someone that they know, cared about, and love. Today's story is really unique. You're going to love it. Today's story is about someone who took a vision quest to China, to a foreign country. She and her partner took the time to learn how the farmers are producing their product, the crop, the rice. They took the time to get to know the farmers, to understand how they produce the rice, why it was unique, and what is important about it, and then find a way to improve upon it.

They seek to understand before they seek to be understood as Stephen Covey would say. As a result, they uncovered a new passion. They didn't go to China to learn how to grow rice, to start a rice business. They went to China on a vision quest to find a purpose that was bigger than them, something that they could get behind. What they found was a love and a passion for new products, something that had been somewhat undiscovered. They instantly saw a niche, an opportunity to help the local community, the farmers, and to help provide a new sustainable source of income. They also identified a better way for them to produce their crops, and then take their crops to market. What I want to share here is what makes natural natural.

What inspires natural are people that look beyond themselves, people that focus on solving a real problem, people that come up with a creative and innovative, and inspirational idea, build a solid selling story around, and add rocket fuel to it as a result. Today's story is about Lotus Foods, their products, and how they continue to inspire and change the industry for good including their work with a Climate Collaborative, OSC2 and beyond, they're taking a leadership role in the way that rice is produced, leveraging their strategy of one crop per drop. Here is Caryl. Good morning, Caryl. Thank you for making time for us today. Could you start by telling us a little bit about yourself, and how you got into the rice business?

Caryl: Oh my goodness, good morning, Daniel. That's a question that is really interesting because 25 years ago, Ken Lee, my partner and I wanted to start something entrepreneurial. We decided to take a market research trip to China. He is American born Chinese. This was after Tiananmen Square. We knew that China was an economic force to be reckoned with, and so we thought what a great place to start our vision quest, and so we took a two-months market research trip to China, came home with 90 ideas, but it was the black rice in the first few weeks of our trip that we found in the Southwest corner of China, which is known for its 26 different minority tribes. We were in a dire minority tribe in a village.

Imagine sitting down to steaming balls of black rice, whereas in Asia, mainly, it's a white rice culture. We just love the rich nutty taste, and the texture, and next day, we ran to the marketplace, and said to the farmers there, "Tell us about heime, heimi meaning black rice." There and every place else that we went to in China told us that rice was an Heirloom variety. It was called tribute rice. It was to ensure the longevity of the Chinese emperors. Two months after that when we were working around the forbidden city, Ken said, "Wow! If we are fortunate enough to do this, we'll call it forbidden rice, the emperor's exclusive grain." That's what launched Lotus Foods.

Dan: Interesting. Let me back up a little bit, vision quest, I mean, I hear all sorts of great stories from people, founders, and entrepreneurs talk about how they got started. What made you want to go on a vision quest to begin with?

Caryl: Well, we were a new couple, and when we met, we were creating some events together, and we realized how well we worked together, and we decided, "Let's start a business together." We wanted to do something innovative, and yet, we had no idea it was going to be in food until these market research trips to China, but we both had passions for food. Again, when we found out about the rice, I mean, our DNA was set over the course of this journey, and that we had no idea about the rice farmers, and imagine being a rice farmer, number one, not having enough to eat, number two, not having enough income from the crops that you grew.

That informed how we were going to do our business with direct and fair trade. It had to do with biodiversity. We learned that imagine all these heirloom varieties' potentially going extinct, because there was no market for it. We said, "Oh my goodness, we're only going to do heirloom varieties to help perpetuate the biodiversity of rice. Number three, going in from learning about conventional farming versus organic farming, so it's a very organic process for us too, whereas the deeper we got into the subject, meaning rice, and creating markets for rice, and the whole food industry, the more it informed us how important it was to change this food system, and how we were going to inform our business.

Dan: That is so interesting. I talked to a lot of people about focus groups. I'm sure you've probably used them in your business before, but a focus group is where you bring a lot of people in a room. You ask for their opinion, and frequently hear what they think you want them to tell you, but here, you're actually going out in the field rolling up your sleeves, and actually doing the work. What I find interesting and really inspiring about this is that you're able to step back, and see a problem coming from the outside looking in, and then work to come up with a solution, so I applaud you for doing that.

Let me back up a little bit. Black rice versus white rice, could you explain a little bit more about that, and why that matters, why it's different, what's unique about it, and what should people come away with? Where I'm going with that also is that you're talking about the taste, the texture, et cetera. Most people, I don't know if they're really aware of what black rice is.

Caryl: A great question, Daniel. First of all, Lotus Foods, we were the pioneers in what we're calling pigmented rices. Most people know pigmented rice or a whole grain rice as brown rice, so there was always white rice and brown rice. What we did at Lotus Foods, we introduced red rice and black rice. Brown rice means that the bran layer of the rice is still intact. That's where all the nutrients are. White rice, basically, they mill. They rub off that bran layer, and white rice is usually just like white bread, back in the Marie Antoinette days, was always the preferred bread. Brown bread was peasant bread.

The refined bread or the refined grains were more of the elite grains. Then it took for us here in the U.S., the 60s', the Hippie Movement, and the macrobiotic movement to show us that, "Wow, we weren't getting the nutrition of the whole grains," and that is where you started the brown rice. What we did at Lotus Foods, we went one step beyond that, and that red rice and black rice have something called anthocyanins. These are the phytonutrients, the antioxidants that are inherent in the pigment that are actually really the dietary fiber, and the life sustaining proteins. It's interesting. One would think, the darker the grain, the more antioxidants, but actually, it's the red rice that actually has something called proanthocyanins in it.

That even makes it more nutritious than even the black rice with the anthocyanins. It's fascinating. There's a lot of research done by some of the universities like Arkansas that actually backs up this research, backs up these figures.

Dan: That is fascinating. I had no idea, so let me ask you, what typically happens when people remove the outer husk? Do they just throw it away? Does it just get discarded?

Caryl: No. Again, most farmers are very holistic. They understand holistic farming management living systems way more than we do. Every single part of an animal or a plant gets to be used, so basically, the fiber basically is used for animal feed. The bran, actually, in this country, that's where they sometimes make rice bran, or there's great uses for the husk.

Dan: Interesting. Going back to the rice itself, so you found a way to capture a product that's unique, and then you talked about how it was destined to become extinct. It was going by the wayside. How did you identify that this was a problem? How did you know that was an issue?

Caryl: Well, first of all, you think about what are the two most exotic rices that this country has ever imported? It's Jasmine rice and Basmati rice. That's what people actually recognized as exotic rices, but when you think about the hundreds of thousands of different rices that have grown in each region, then you start to really realize, and these are what the farmers in the small villages, and the small family farmers are growing. We found a rice in Madagascar in the Lakota region. It was like a Jack and the Beanstalk story, and that a farmer found an overlapped sack, and in it, had a few grains of rice. It looks so different than anything else that he has ever grown, and so he babied this rice, and kept cultivating it.

Years later, it's actually now the most beloved rice of that region. It's really wonderful to be able to go into specific regions, and ask the farmers, "What's your favorite rice?" Actually, what they grow is usually what you want to export, and so you have to first make sure there's enough to feed the farmer, and the local community before you actually even think about exporting a rice or our culinary palates here.

Dan: I love that. I really love the idea that you're actually asking people what they have versus telling them what you want, which I think, is so cool because a lot of people don't really understand, and don't realize this. I would never have tried anything different if I had always been given what somebody thought I wanted to buy. The whole idea behind that is that you're creating differentiation. You're giving the customer what they want, but you're also opening up their eyes to other possibilities.

When you're talking about rice from different places, how many different places do you source rice from?

Caryl: Well, we only source ... First of all, rice is grown in three-quarters of the world. Rice is probably one of the most popular crops and caloric intake for the world. When you think about the millions and millions of rice farmers out there, and how many different kinds of varieties of rice there are, it's just daunting and mind boggling. Right now, we're working in about six different countries. The reason why at this point we're leavening ourselves is that about 10 years ago, we were introduced by Cornell University Center for International Development in Food and Agriculture, while we were doing all this work that I was explaining before, keeping the biodiversity of rice alive, and changing from conventional to organic farmers, they were working with farmers around the world teaching an agroecology methodology that was a more sustainable way of growing rice, because most people don't know that rice is the biggest waterhog, and water not only is one of our most precious resources, but actually creates methane.

Flooded rice paddies contribute up to 20% of manmade methane emissions. If we could just change the way we grow rice, we can actually have incredible economic social and environmental impact. In 2008, we totally recommitted Lotus Foods to just work with farmers who were using this system of rice intensification, which is a lousy name for sustainable rice innovations that we actually call more crop per drop.

Dan: That makes a lot more sense.

Caryl: Again, it's just fascinating the road that rice takes you on if you can just imagine that each year, global or conventional rice production consumes a quarter to a third of the planet's renewable freshwater. Yet, if so much of the world is actually cultivating rice, how much impact they can have. This was actually drawn out in Paul Hawken's new book called Project Drawdown. This book contains one hundred of the solutions that can reverse global warming. One of them was System of Rice Intensification (SRI).

Dan: You won an award or an announcement or something. I was doing some research before. Can you talk a little bit about that from him? You were recognized for doing this.

Caryl: Well, the award didn't come from Project Drawdown. The award came from the Climate Collaborative. It was the first of a series of awards from the Climate Collaborative that is conjunction with the National Co-op Grocers and Climate Collaborative. It was for the Outstanding Value Chain Engagement Award. These new award programs actually recognized companies and individuals in the natural products' industry who are leading the way in responding to climate change. We couldn't be more honored for this recognition, because it's a journey, and everybody in the industry can really do their bit, and if everybody does a little bit, we really can move the needle.

SRI is truly one of the transformative things that we can do, but there is so much more that everybody can do. If we can just remember that most of the rice produced on this planet is also grown by women, and that women are the most vulnerable to climate change, and this is some of the things that are brought out in Project Drawdown, that we can really have some amazing impact on our activities.

Dan: Well, congratulations on the award. There's a lot of stuff you've gone through that I want to unpack. I was talking to Victoria Hartmann at a Naturally Boulder event. I do want to have her on the podcast too, but she was sharing with us some of the statistics. Can you go back and talk about how rice is produced traditionally versus SRI, and what is the difference and what's unique about it? I think, it's important for people to really understand what's different, what's unique, and the way things have been done versus the possible future?

Caryl: Sure. What's really unique about SRI or more crop per drop or this agroecology methodology is that it's not a technology. It's a methodology. There's no inputs. There's nothing to buy. It's just a mindset. How do you change 5,000 years of how one grows rice? Very simply, and it's just really six steps. In conventional rice farming, you usually take a much older seedling. You have a nursery, and so it's usually a 30 or a 40-day old seedling. In SRI, you take an 8 to 10-day-old seedling. We call it two leaves. That's a much younger seedling. Then imagine when you grow a vegetable garden, and you're selling seeds, and all of a sudden, your carrot seeds are all together because you don't really know how many seeds are going to actually germinate.

When you've seen your carrots, you would very carefully take up the seedlings, and with very little shock and abuse, you would actually uproot them, and with the embryo and everything else within all the root, you would then carefully transplant it. Well, that's what happens with SRI. In conventional farming, a much older nursery, they would basically dig up ... It looks like a bunch of chives or scallions. Dig something up. Shake the dirt out of it. Bundle it up, and almost leave it in the sun before they're gone, and do all that before you're going to transplant into the rice paddy, which is a flooded field.

In SRI, you're carefully uprooting with a trowel. You're uprooting the entire plant with the embryo and the root intact, and carefully then putting it into a wet field, but not into a flooded field. With about a foot apart, they usually use string, or they make a grid, and you make these rows, and one seedling and potentially one or two seedling per foot. In a conventional, you have 10 to 12 of these larger rootstock, and so when you're finished with a conventional rice farm, it looks pretty nice, and yet when you have an SRI rice field newly planted, the field looks pretty scraggly, and so the rice farmer next door who is not doing SRI says, "Buddy, I don't know what you're doing, but you're going to starve."

Within a month or two, all of a sudden, that farmer looks over at the SRI field, because now, what happens is that there is no transplanting shock, because what happens is imagine if you have to take the conventional rice, and you're jamming it into the mud so it takes root, and your roots are going into a U shape. It takes about four or five days for the roots to actually cling, go back down, and cling into the mud, whereas the SRI field is already carefully transplanted, and because of more spacing, you get more photosynthesis, and so the roots become much, much larger, and all of a sudden, your plants are much larger.

Your plants are much larger. We call it profuse tillering. Tillers are the rice stalks, and by the end of the growing season, the conventional rice farmer says to the SRI farmer, "All right, now, you have to teach me what you're doing, because your fields doubled and tripled the yield that I have."

Dan: Wow.

Caryl: It's a lot easier to see this pictorially. On our website, I think, we take you through those six steps, but it's really just changing how rice is grown. It's a grassroots revolution, where it's really farmer to farmer, or NGO to farmer showing the difference, and asking the farmer to potentially not in the first year do all their rice fields, but change over a period of time that the rice farmer actually gets comfortable with this new methodology. In the last 45 years, it has spread to over 57 countries and over 25 million farmers.

Dan: Interesting. I will put a link to the website on the podcast and the show notes and on the webpage. One of the things that was interesting as I'm looking at this, and my dad's a geologist. He's a scientist. It's laid out in a grid just like you would do it very methodically, very organized. I was laughing about that, but it seems counterintuitive. I understand now that you've explained it. Thank you for doing that, but it just seems counterintuitive that if you put less on the ground, you're going to get more. Thank you for going through that.

Caryl: I did forget one very major step, which I would like to share. In SRI farming, the reason why one floods a field is to mitigate the weeds. Rice learned to survive in water. It doesn't thrive in water, because basically, the water mitigates the weeds, but actually rots the roots. That's also that flooding is what creates the methane. In SRI farming, the women go through with something called a conical weeder. What's wonderful about this weeder is a very simple mechanism that costs anywhere from $10 to $15, that the women are standing upright, and using this little rotary machine to go in between in the rows, and basically, it cuts the weeds. It turns up the weed, and then that leads the green biomass back into the area to use as green compost as well.

It not only aerates the soil, it actually mitigates the weeds, and puts the green biomass, and the women are upright instead of being bent over, which is usually one of the major fallback of conventional rice farming is that women can spend up to 400 to 500 hours bent over or sitting in flooded rice fields exposed to parasites, so leeches, with conventional rice farming. That doesn't happen with also SRI rice farming. It's another real benefit and a major benefit.

Dan: I can't imagine having to be bent over all day. That would be so difficult. You see pictures of the people working in the rice fields. Thank you for sharing that. When you talked about this cultivator, is that the thing that you see at the hardware store, that has two star-shaped wheels, and you just roll it along in the dirt?

Caryl: It's similar, but this is specifically made for and also designed by farmers made for rice fields.

Dan: Is it more labor intensive then? I'm glad you shared the difference in flooding versus not flooding? Is it more labor intensive to do it the SRI way versus conventional?

Caryl: Only in the beginning because you have to learn a new methodology, but we actually have a lot of studies from women. We also spend a lot of time in the field and interviewing women who are the farmers, and we have a quote in a lot of case studies. In one of our brochures, there's a quote from a Cambodian woman farmer. She says, "We now have more time to look after our children, sew, and clean. We now only spend one to two hours in the field, and can work during the hours when sunlight is not too strong before we had to spend all morning and most of the afternoon in the field." That's why we say more crop per drop is a water smart and woman strong way to grow rice.

Dan: Love that. That is so cool. Thank you for unpacking and sharing all this. Again, it seems so counterintuitive, but I get the wisdom of it, and why this makes so much sense. When you're talking about the seed and the nursery, where do they get those seedlings for the nursery?

Caryl: These are seedlings that are actually propagated from each harvest. Again, that's what's so beautiful about heirloom seeds. These are not hybrids. These are not GMO seeds. These are seedlings that are passed down from generation to generation, that you always save seeds from each crop.

Dan: They're new seeds. I've heard some farmers keep seeds around, and they use a little bit each year. You're actually regenerating fresh seeds every year if I understand it correctly?

Caryl: I believe so. I'm not 100% sure, but my understanding is that the seed comes from, as I said, passed down from generations, from crop to crop, but actually, I would assume that from each crop, you save a little bit of seeds for the next year.

Dan: Fantastic. That makes so much sense, because that way, you're not having to grow them.

Caryl: That's what we do in a vegetable garden. That's what I do in a vegetable garden.

Dan: Exactly.

Caryl: I always let some of my vegetables go to seed, and then I collect the seeds, and save them.

Dan: That's exactly where I was going with that. By doing that, then you're actually producing a more solid sustainable method of farming, and that you're not actually having to go to the store to buy more seed. It's already there for you.

Caryl: Oh absolutely, and the farmers can't afford that. Again, they reuse everything that they cultivate or make. If they had to buy seeds, again, one of the things that is really also hard to do for farmers is making enough compost. That's why a whole holistic system of farm management is so important, so if you have a cow, and you're making manure, then you can actually use the manure to make biogas too. That not only will light your house, and use for cooking fuel, but you'll also be able to make compost with that manure too. It's a whole part of the whole system.

Dan: This might be getting a little bit too under the weeds, but in terms of composting, and regenerating, flooded versus not SRI, how does a traditional farm regenerate the field year after year? As I understand it, they have to flood the field, and then they let all the water run out. Then where does the water go? How do they recollect it and bring it back?

Caryl: There's a difference between a rain-fed rice production, and irrigated farming rice production, or having a pond next to you. Ideally, again, this is where the holistic biodiversity of a farm is so important. In a lot of the farms that we work with, they have a rice field. Then they have a vegetable garden. They also have some livestock. Then they have a fishpond, or they have an access to a river or irrigation. You're using the water potentially from the fishpond also for irrigation purposes, but you also have the fish, so you can actually have that exchange, but there are also lots of farms that are solely depends upon rains. With global warming, and the change, it's really affecting when we have enough rain.

In India, and particularly in the Punjab, where Basmati, a lot of the Basmati comes from, they've had to keep digging deeper and deeper wells for irrigation purposes, and they've depleted the watershed. In some places they can't grow rice. Water is truly our most precious resource, and something that is incredibly serious in rice production, and for human health. I mean, water is a right. Everybody should have clean water.

Dan: Absolutely.

Caryl: Unfortunately, not everybody has access to clean water, and especially in the developing worlds.

Dan: I saw a thing in the news recently that said that the average American uses about 130 gallons of water a day, but in South Africa, because of the extreme drought, and I forget the name of the town, they only get 13 gallons per day. Can you imagine the dramatic shift? Yeah, water is a huge issue, and as you say, clean water. I appreciate you're getting way into the weeds with this, but it's so important that people understand this. As a consumer- facing company, how do you communicate? You've done an excellent job in the website. How do you share that?

Where I'm going with that Caryl is that consumers look beyond the four corners of the package to understand what's in the package, why it's unique, and why it's different. They want to feel good about their purchase. What initiatives are you taking to help consumers understand what's unique, why it's different, and why they should care?

Caryl: A great question, and we've spent the last 20 plus years doing that, because when you're an innovative company, you have to educate your consumer. What is your point of differentiation? Of course, it's done on the package, but you have only a few seconds for it to hit a consumer, for a consumer to zoom in on your package versus the wide variety of whatever product it is, whether it be rice or mustards, or pasta or whatever, and so packaging is extremely important, but to tell you the truth, it's not really the end all be all, because not that many people read everything that you put on a package.

You could tell a story, but that's actually the biggest challenge, so it's educating the retailer. It's educating the consumer. Now that we're so fortunate to have social media, which really gives you a wonderful platform along with your website, but it's a constant challenge, and one that I don't know if we're that successful as well. I mean, you do it through promotions on shows. Everybody wants a sale. They could be saying, "Wow, this black rice, I've heard about it from Dr. Oz. I've seen it in my magazines, or I've read it in the newspaper." It's $3.99, but all of a sudden, it might be for a pound of rice, all of a sudden, it's on sale.

"I'm having a dinner party. I'm going to try it," or it's word of mouth. It's, I think, one of the hardest things, and that a CPG company has to deal with.

Dan: That's why we're doing this podcast, exactly why we're doing it. Here is my frustration. Natural does natural better than anyone else. Certainly, no argument there, but I don't think that natural does as good a job as it should of defining the value proposition that's behind it. What I mean by that Caryl is this. Just because a product is natural, because it's clean grown or it's organic or whatever, I don't think that's enough. I think, natural companies need to celebrate what's in the product, why it's unique, why it's different. Here is what I'm getting. If you are what you eat, then what you eat matters. What I mean by that is for example, I use this example all the time, if you eat generic bread, you're hungry almost immediately.

If you eat the best mainstream bread out there, then you're satiated for three to four hours. If you eat the organic equivalent, you might be satiated for an extra hour or two. The point being is that extra 50, 60 cents, whatever it is at shelf, translates into a much better value down the road, because you're giving your body nutritionally what it needs. What you've just shared with us is that your rice is more nutritionally viable. It will help fuel my body, sustaining me longer. Therefore, it is worth the extra money, one. Two, I can feel good about my purchase, because you're giving back. You're training people how to do something that's unique, that's different, that's better for their planet.

Three, you're making a lasting contribution to the overall health and welfare of the planet. I think that those need to be celebrated equally as opposed to the packaging. What's interesting, and I was thinking about when you're saying to people the packaging doesn't really matter, and to your point, the only time I read the cereal box is when I'm sitting at the table eating breakfast. My point is being is that you're right. People don't really go in, and study it, but what's unique about the consumer today is that they do the research at the shelf. They physically walk up to the shelf. They do their research, and they start asking friends and family. This is one of the things that, I think, another opportunity for natural brands is they think that the product once they're sold under a retailer, their job is done.

Wrong, the selling process never ends. It extends well beyond the purchase, well beyond the checkout lane at the store. It extends to their family and their friends who try their product, who talk about it, who celebrate it. Your point in terms of social media, communicating that value well beyond the final sale of the product, that is so very, very important. What have you done, or what strategies would you recommend that brands use, or what have you seen that works?

Caryl: Daniel, before I'd answer that, and I will answer that, first of all, thank you. You've gone into so many incredible interesting points here that I think we should talk about a little bit more though.

Dan: Certainly.

Caryl: What you were describing for certain is our tribe of natural consumers who really say, "I'm going to give myself and my family the most nutritious food, and I don't mind paying more for it, because it's worth it." They get it, but that's still a very small percentage of the overall population. That is to me one of the biggest things that a CPG company, a natural product company has to do, and that is the most challenging. How would you jump that leap from your tribe of natural customers and consumers to what we call grocery or mass grocery consumers who value this? It's not just the Walmart shopper. It's more than that.

It's growing, and it's getting better, but it's still to me at a snail pace, because they also should be consuming the best food as well, but it's more of a perception that food should be cheap, and food should never be cheap. That's part of our problem. A lot of our farmers, I don't really want to go into the farm bill, and the subsidizing and all that, but we have to realize that actually, paying for food is one of the best things that we could do to help the farmer, and get the best food that we can, and that we haven't done that yet. Basically, too many people shop for sales or shop for price, and we live in a country that has so much variety that it's overwhelming to get to a shelf, and say, "Oh my God, how am I going to pick?"

Sometimes when I shop myself, I take great pleasure in looking. Just the other day, I was in a store, and this man was on the phone with his wife, and said, "I'm looking at the ramen. I know you want ramen, but I see 10 million different kinds of ramen here. Tell me what you want. Tell me what I'm supposed to do here." I think, that's a big problem as well is number one, the price of food. What we are trying to do is to work with the mass grocers, the grocery stores, because we have such a good ... We're doing so well with our natural products consumer. We're now really putting a lot of our energies into the consumers who don't usually buy our products. That's been challenging, but it's exciting.

Then going back to your strategies, again, trying to work with the stores on promoting on basically shelf presence that you can ... we're doing for the first time, we're creating our first shippers. We have a new product that is a instant ramen noodle soup cup, so you can have an organic noodle with a really good flavor profile that you can actually open up the cup, and pour boiling water into it. We've created this really cute shipper that actually holds the cup like your cup holder in your car would hold it.

Dan: Cool.

Caryl: Again, doing some innovative work that gets some attention, but also tells them that this is a convenient product, but because of the convenient product, you don't have to sacrifice good taste and nutritional value.

Dan: I love that. Thank you for sharing that.

Caryl: Yes, I hope that answers your question about one of the strategies.

Dan: Well, it does, and thank you for sharing that. I hate the notion we hear from the experts every day saying that, "Price is the only driver at the shelf." I disagree because it completely devalues everything we've talked about and the reason for this podcast. I always liken this to the ripple in the pond, where we, the committed natural shopper, are the ripple in the pond, where it first occurs. It’s those trends that are driving all the health and sustainability trends across our entire ecosystem, so before it becomes a tsunami, and it ends up on a big box store, this is where the trend starts. I was talking to Jon Sebastiani from Sonoma Brands about this. His background is in wine.

He said, "You know, the difference between a $2 bottle of wine versus a $2,000 bottle of wine, people buy the anticipation. They buy the quality. And when you talk about a wine, you talk about the vintage. You talk about the flavor of where it was grown, and how it's unique to that vintage, to that grape, to that area, to that land, to that climate, and yet we don't celebrate that as an industry." That's what I'm getting at, so thank you for sharing that. I think, that's where the value is.

Caryl: We call that the terroir. We talk about that in rice as well. What we're trying to do is you talk about wine, chocolate, tea. Those have been successful commodities that have jumped from the commodity to premium. We're trying to do that with rice, because rice is one of the largest commodities, and yet, specialty rice, organic, heirloom varieties of rice, that's what we're trying to do is make rice a more premium satisfying nutrient-dense specialty product. We haven't been as successful as wine, chocolate, and tea, but that's one of our goals as well. Thank you for bringing that up.

Dan: No, thank you. Again, that's why we're doing this show, because I want to educate people on why this matters. I want people to walk away, and be able to say, "I get it." Whether this is a commercial for Lotus Foods or for you, or for other natural products, the point being is this. You need to understand this. Again, going back to the price argument, if price was the only driver of the shelf, to your point, then decadent and luxury products would be declining in sales, and they're not. They're skyrocketing. By paying a little bit more, but getting more value, and in the long run, it lasts more, I mean, I remember where when I could buy a pair of socks, and they would last a year.

Nowadays, you buy a pair of socks, and they last a couple weeks. The quality is not there, so I'd rather pay more for one purchase or a pair of pants, or you name it instead of being a disposable society. Thank you for sharing all this. On that note, now, let's transition into your role with OSC2, because I think, again, you need to be celebrated for what you're doing. How are you taking in that message, and leveraging that within the natural community? Where I'm going with that Caryl is OSC2. They're doing some amazing work. Then how does that translate to your work in the Climate Collaborative?

Caryl: We just joined, I think, about three years ago, but I applaud so much Ahmed from Numi Tea, and Lara Dickinson who started it, and all the brands. My colleagues. I’m honored to be amongst these incredible thought leaders. OSC2 is such an incredible group. Imagine you have this like-minded group that you can go to for some of your most pressing problems, or you share what's working and what's not. For OSC2 then to start something like the Climate Collaborative, where they can start engaging the entire industry, so imagine, I think, it took the first year of the Climate Collaborative to get 200 brands to sign up for focusing on climate change, whether it be on renewables or packaging, the nine different enterprises that you can be a part of.

I'm so proud to be a part of that, but the other thing that OSC2 does is they have a Rising Star segment, whereas CEOs like ourselves and the other members of OSC2 can help mentor the Rising Stars in the natural products' industry. They also have a natural product university, where our employees can go and take actually lessons, workshops whether it be on PowerPoint or on excel, or on mindful leadership. It's really been a fabulous group, and now, there is also a new group that started in Boulder. It was called Naturally Boulder. Now, OSC2 and Lotus Foods and other members of this community have become part of a new group called Naturally Bay Area. I’m very excited to be a part of that, because we're all in this together.

We cannot do this alone. We all joined together. Then we can actually move the needle. I don't want to be working in silos. I don't think anybody else does either. This work is too hard. I really love the fact that we have these three groups.

Dan: Gary Hirschberg and I we're talking about how we vote with our dollars, and the point being is we need to make a difference ourselves. We need to take responsibility, because clearly, our leaders, our paid leaders are not doing it for us, so thank you for sharing that. In fact, actually, I had Ahmed Rahim on last week's podcast, last Thursday, and I have also Lara Dickinson and Kathy DiMatteo on our show. The point being is that sharing this and communicating this, and helping people understand why this is so important is, I think, the key.

I think, the opportunity like you said there is strength in numbers as uniting as a group to magnify or amplify that ripple in the pond so that more people understand this, so that we gain more traction at shelf. I believe the future of CPG is in these small brands. To that end, I've been asked by the Category Management Association to speak at their natural conference last week, and FMI to help educate their members on what makes natural natural, and why it's unique, and why it's important to help spread this message. This is a big part of doing this podcast, so thank you for sharing. When you're talking about the Rising Star, and I've talked by the way to Ahmed, about that in the Natural Product University, can you talk about what you've learned? Can you share some of the things that you experienced, some of the wins that you've had? The whole reason I want you to share that is because I'd like to get more people involved in this important cause.

Caryl: I'm not sure I understand your question, Daniel.

Dan: Well, what are some of the things that you've learned that you didn't know? In other words, you joined the group. Cool, so as a mastermind group, what are some of the things that you've come away with? How has that made you a better leader, a better entrepreneur?

Caryl: The Rising Star group is a separate group of smaller companies that we mentor. Then the OSC2 core group is the core CEOs. Yes, there are masterminds. Basically, they're very confidential things where you can actually choose, and this is what you should do, choose a problem, a challenge that you have, and basically, take this challenge. You're very vulnerable at this point, and bring it to your CEO colleagues, and ask them for help. It could be help in supply chain. It could be help in finance. It could be help in any part of running a CPG business.

They've been very, very helpful, not only to the company that is presenting the mastermind, but in just hearing the advice and the feedbacks from your fellow CEOs, and their experience, because the beautiful part of a mastermind is you're giving advice from your actual experience. If I were in your shoes or from my experience, this I what I recommend, which is, I think, invaluable advice.

Dan: I think, to go one step further, sometimes, having people help you redefine the problem in solvable terms, and have you come out. Like what we're talking about when we started this conversation, for you to go to China and spend the time there, and do the vision quest, but to have someone take you back, or take you out of your daily routine, and then have you really think about the problem in solvable terms gives you an opportunity to come up with solutions that you may not have felt possible. My point being is that we’re all so busy that sometimes, we overlook what may seem obvious. Again, I love the group.

Caryl: Absolutely. That's why these are really important groups to have. Just like if you have a mentor, or I think, it's important to have a mentor or to have a coach, and these CEO meetings are invaluable.

Dan: Yeah, I love what they're doing. The Climate Collaborative, you won an award. You were talking about it a little bit ago, and it's on your website. Can you share with us about the award, and then how did that come about? Then what is your role, your relationship with the Climate Collaborative?

Caryl: Well, we're a sponsor of the Climate Collaborative. This is the second year. The awards' program as I said is a new program. It just started last year, the second year on the Climate Collaborative. It's still a very young collaboration, but again, doing amazing work in the two years it’s been in existence. I think, there are now over 250 brands that are part of the collaborative. Yet, that's just a drop in the bucket if you think about the fact that there is at least 1,500 plus brands and probably more, but Erin Callahan, who is the director of the Climate Collaborative, is doing a great, great job. The award that we received was on outstanding value chain engagement.

Basically, what we do of course is we are engaging with our farmers, working with them in creating markets for this SRI-grown rice. We're starting really from the very grassroots of the supply chain, but it's fascinating. Take for instance in Indonesia, the farmers that we work with, they're sourcing rice that uses up to 75% less water with using the SRI methodology than conventional farmers in the same area. Imagine with yields of six or seven tons per farmer, they're able to produce a kilo paddy using only say 860 plus litters of water. That compares to over 2,700 liters per kilo of paddy on another rice field.

Therefore, that means that you're saving almost 4,000 liters to produce a kilo of paddy. It's just amazing to think how this translates, this work really translates. It also translates into more income for us in Indonesia. It's $4 a day income compared to $1.7 a day for conventional farmers.

Dan: Wow, impressive.

Caryl: We're blessed that we really have worked so closely with our supply chain that we can actually document this. One of the things I'm really excited about is that there is this whole regeneration of currency and of thought processes that we can actually monetize carbon credits potentially, or water credits, or women empowerment credits to actually monetize this to go back to the farmers. That's what I'm working on right now. Please don't ask me how we're doing this, because I'm still trying to figure it out, but it is so exciting that there's a new way that is being created now with cryptocurrency to actually create a token system that actually is the funding. The money can go back to the farmers when you're monetizing carbon, water, or women credits.

It's at these nascent stages, but it's so exciting, and that's what I'm really looking forward to doing with Lotus Foods and also the Climate Collaborative once I understand this a little bit more as well.

Dan: I appreciate you're sharing that. I won't drill you on it, but let's just say that it's inspiring. It truly is. I hope that we can help communicate the value of what you're doing on the package. Again, consumers want to feel good about what they're doing, about their purchases. My point being is that you can't always takeoff work to go work at a food kitchen or a food bank, or go to a third world country, but by supporting a brand that does something like you're talking about, the giving back, that's making a sustainable difference. That's one of the things, I think, we need to be focused on more as an industry.

We need to figure out like we were talking about a better way to sell that. Again, why would someone buy a $2000 bottle of wine when the $2 bottle of wine is sufficient? I mean, it has grapes in it. I know, there's a big difference, but the point is we need to do a better job as an industry of explaining what's in the bottle, of explaining what's in the box, or the package, and why it's unique and why it's different. Thank you so much for sharing all that.

Caryl: The other thing that we didn't talk about was direct or fair trade as well, because I think, that's really important because we give premiums on organic and SRI, and basically, these premiums, they go anywhere from 25% to 50% higher prices that are given directly to the farmer. This translates into bit more income to the farmer. Once the farmers have more income, then they too can do more, put more inputs on their land, send their kids to school, and again, you have this multiplier holistic effect that everybody thrives within the family, the community, and the world.

Dan: Absolutely. In fact, you'll get a kick out of this. If you listen to the Seth Goldman interview that I did, he actually talks about it as teaching those people how to read, the kids and the people on the farms. He's effectively putting his workforce out of business, putting himself out of business. Not literally, but we're teasing him about the fact that he's educating the communities that he relies upon for the crops that go into his product. As a result, they can then go into something bigger and better, but it's the right thing to do. Again, that goes back to that ripple in the pond. Thank you for sharing that.

Can you tell us about Lotus Foods? What is Lotus Foods? What are your products? What's unique about it? What do you have? What are your offerings? Where can people find it? Just in general, a quick commercial about Lotus Foods, and why it matters.

Caryl: Thank you, Daniel. Lotus foods is the leading organic and heirloom rice company that is focusing on sustainable rice production. We partner and direct and fair trade with small family farmers around the world who are growing rice more sustainably while preserving rice biodiversity. I think, it's also important to mention that we're a B corp. Through being a benefit corporation, we're committed to changing how rice is grown around the world by focusing on a rice growing methodology that we're calling more crop per drop. We truly believe that we can change the world just by the way we do business.

Our product line includes the pigmented heirloom and organic rice varieties that I mentioned in the beginning of the show such as forbidden rice or red rice or Madagascar pink rice. We also are doing rice ramen, so ramen is typically a wheat-based product, but we've been able to make rice ramen, and again, using some of the pigmented rices as well, millet and brown rice ramen, forbidden rice ramen, Jade Pearl rice ramen, which is infused with bamboo leaf extract which is really another great nutritional value. We do Arare rice crackers. This is a beloved rice cracker style from Japan, but again, usually conventionally made with white rice. We're making it with black, red, and brown rice.

Caryl: Pad Thai Rice Noodles, rice delights are, again, a cleaner and more nutritious like Krispie-treat, again, made with black, red, and brown rices. Our products are available in most major retailers throughout the U.S. and Canada of course including whole foods, but also, we're selling rice ramen in Costco.

Dan: Good.

Caryl: It's been a wonderful journey. I feel so fortunate and blessed to be able to do this work. Although we've been around for over 20,000 years, we feel like we've just began.

Dan: I would concur. I mean, the fact that you're able to launch new initiatives in terms of what you're talking about, the credits and being able to help the farmers. Again, you need to be celebrated for that. Thank you for all you do in the industry, and for the planet, for the community. I'll be certain to put links to Lotus Foods and any of the other things that you think I should include in the show notes and on this podcast webpage. If you could send me that, that would be great. I really want to thank you for your time. Anything else that we missed? Any advice for young entrepreneur?

Caryl: Well, I think, any young entrepreneur has to have the passion and the commitment. The commitment is huge. It's not easy, but I think, it's one of the most exciting things that one can do if we're going to change the food system, and change how people eat, and then actually, leave this world a little bit better place. I can't think of a better way to do this than through what we put in our body.

Dan: Absolutely, it gets back to if you are what you eat, then what you eat matters. Thank you so much Caryl for sharing your time and your insights and your leadership. Again, thank you for all you do in the industry. I really appreciate you making time for me today.

Caryl: You too, Daniel, thank you so much for the good works that you do as well.

Dan: I appreciate that. Thanks. I want to thank Caryl for coming on today and for making time for us. What an inspirational story. I'll be sure to include the link to Lotus Foods, The Climate Collaborative, and OSC2 on the show notes and on this podcast webpage. You can get to them by going to brandsecretsandstrategies.com/session56. Today's freebie is my Simple Solutions To Maximize Broker-Distributor Effectiveness. I thought this would be appropriate because it talks about leveraging your sales story with a common voice with your distributors and your brokers to ensure that everyone understands exactly what your value proposition is.

You can learn more about how to increase your sales story at Turnkey Sales Story Strategies, my free course. Thank you again for listening, and I look forward to seeing you in the next episode.

Lotus Foods https://www.lotusfoods.com

The Climate Collaborative https://www.climatecollaborative.com

OSC2 http://www.osc2.org

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