Welcome to the third season of the Troubleshooting Innovation podcast. Josh Allen, award-winning artisan baker and founder of Companion Baking in St. Louis, is redefining ways to think about artisan bread production. In this episode, he tells the story of his team’s trash journey — which led him to be named as a Sustainability Hero by the Tiptree World Bread Awards last year — and how other companies can make sustainability work for their bottom line.

Listen to Troubleshooting Innovation on Apple, Spotify or Google. Hosted by Joanie Spencer, Commercial Baking editor-in-chief. Sponsored by AB Mauri North America.

Joanie Spencer: I’m really excited about this particular episode, because it is such a cool story and I think it looks at sustainability in a very different way than bakers may be used to looking at it. So not long after we met, I got a press release that you were named the Tiptree World Bread Awards’ Sustainability Hero. Now, some heroes are born, and others are made. Would you say you set out to become a beacon for sustainability practices? Or did it look a little different?

Josh Allen: It definitely looked a little different for us. I absolutely did not set out to be a beacon for sustainability. I mean, we were thrilled about the award— my team was incredibly proud of it, and I’m incredibly proud of it — but I still don’t think that we’re beacons for sustainability. But I think where we’ve gotten to has been super interesting and has been very beneficial for our organization in a lot of different ways.

Spencer: So I’ve talked to a lot of bakers who hesitate to create sustainability programs because it’s really hard to make a business case for it. Sometimes it requires a financial investment, and they’re looking at ROI through a very specific lens. But for you, the path was a little different. So I really want to learn how the business need came first. Can you start at the very beginning with how the business came before the sustainability and the benefit that you reaped from that?

Allen: Absolutely. That’s the basis of the whole thing. So [the company was] about 22 years old, I guess, we’d been baking in South St. Louis for 20 years, had dabbled a little bit in some frozen manufacturing. But for the most part, we were a fresh daily local bakery. And as a business owner, and as somebody who cares deeply about the professional and personal development opportunities for my team, in this particular market (St. Louis) — which isn’t growing and doesn’t do a great job of attracting business travel and convention business — the opportunity for us to grow the business and keep expanding was to do some things regionally and potentially nationally. Obviously, freezing plays a role in our ability to distribute our products outside of St. Louis. So in 2014, we found a building. We spent about a year retrofitting it and moved into a new facility in the end of 2015, in order to expand the business and grow into frozen manufacturing. That was sort of the direction that we were headed. What we absolutely failed to do was anticipate or appreciate the challenges of scaling up in the business. And as much as I probably wouldn’t have admitted it then, we completely dropped the ball on a million fronts. We went from about 15,000 square feet to 42,000 square feet we now were responsible for. We were leasing space actually from my family and a larger operation. They had since sold that business, but we still had a great relationship with the folks that had bought it and they were doing our shipping and receiving, or they were managing the dock, they were loading trucks. They were doing things for us that we didn’t really appreciate how much was getting done or taking care of, and even the facility upkeep, they were responsible for the outside of the building because we were just leasing space within it. So it all overwhelmed us, candidly, and we pushed all of our chips into the center of the table as a relatively small business in order to make the investment for the new business. And we just got completely overwhelmed.

The bank was somewhat patient with us for a couple of years. But the bank called me in 2017 and said, “Okay, we better talk about this now because we’re not generating any cash and things aren’t looking in a particularly good direction. It’s time to have a sit down.” And we had never had to do that, you know, we had grown the business pretty consistently for 20+ years and with the generated cash, we were able to pay for investments if we needed them in our old facility. We hadn’t really made that big leap that we made in 2015. So in preparation for the meeting, I just tried to gather my senses about me and figure out kind of where we were and what was going wrong, or what I thought was going wrong. But we still just felt like we were constantly plugging holes in a dam.

As part of it, when we had made the transition — again, because they used to take care of everything and we used to just pay, I don’t know, $600 a month for trash — we never really paid any attention to waste. You know, we threw stuff away in the dumpster, they called when it got filled, and it went away and it came back empty. We never worried about it. And now we were responsible for trash.

So we contracted with the waste management company. They installed the compactor, they picked it up, and then they would send me a bill every month: Here’s the compactor fee, here’s the hauling fee and here’s how many pounds of trash you dumped. I never paid much attention to it for the first couple of years. Again, I didn’t have any context in which to look at the numbers, so I wasn’t paying attention. Well, I just thought that, ‘look, I love to chart things. I like to look at things sometimes unconventionally, so let me put a chart together of what our trash has been. Maybe I’ll learn something as I was gathering all this data.’ I charted these numbers, and I realized that we were generating like 1.6 million lbs. of trash per year.

Spencer: Oh, my God.

Allen: And it just kind of floored me. I mean, we were making about 10 million lbs. of bread then. So it was a number that was just astronomical to me, like it embarrassed me more than anything else.

I’ve always had a good relationship with the bank. So we sort of sat down at this meeting and went through a couple of slides about how poor our gross margin was, and how overwhelmed we were, and then I threw this trash number up. I said, “Look, I think this is the answer. Like I am incredibly embarrassed by this number. I’m not sure, but I think it impacts everything to a much greater degree than I realize. And I don’t think we have the bandwidth to do much more than like really go after one metric right now, because we’re still kind of overwhelmed.” We were still growing, but training new people and it was all this new equipment and just weren’t doing very well. I [asked the bank] to give me a little bit of time to just attack this number. And I think I can solve the financial metrics if we can fix the trash.

So it had zero to do with the idea of being sustainable. We never use the word sustainability. The idea was, let’s fix the trash, because this is embarrassing, and it’s got to be killing us. And we sort of started this three-year journey, where every decision that we made related to trash generation. I said, “Let’s throw everything out. We still gotta make bread for our customers, we still got to do what we’re doing, but let’s make decisions about what equipment to invest in, what process to change and not change, and everything else… just look at it from the standpoint of waste reduction.” Needless to say, this three-year journey led to over 1 million lbs. a year in trash reduction.

Spencer: Wow.

Allen: It’s sort of fixed all the metrics. In the end, that just makes sense. In going after it, we realized that it was fixing metrics that we didn’t really anticipate — yes, of course, your ingredient costs go down when you generate less trash, and yes, the labor costs go down — but we significantly increased our capacity, too. It’s because we were mixing so much more dough than we needed, because of the trim generated by machines or by mistakes or by rushing or whatever it was. So all of a sudden, if you only have to mix five mixes instead of six, you’re increasing your capacity by 18-20%. All of a sudden, all these different metrics started changing and working themselves out. And it was completely, only about the business case. You mentioned that normally it’s hard to make the business case, but that’s the only reason that we did it… and it dramatically improved everything: multiple points of gross margin, multiple points of operating income. This was all it really culminated, and things were going really well obviously heading into the pandemic. We’ve taken some steps back as it relates to profitability, certainly, but the trash journey has continued. And we’re doing better. We created a metric for ourselves that we refer to as trash efficiency. Between safety and trash efficiency, those are the two things that we’re really focused on here. Trash efficiency is sales divided by pounds of trash generated, and we’ve more than doubled that number. So that number was $5.70 in sales per pound of trash when we started the journey, and we just hit almost $13 in sales per pound of trash. That’s had this huge positive impact on the business, and in the end, it’s led to some other great conversations about sustainability, zero trash for landfill and new goals that we’re now generating.

But honestly, none of that stuff was on the table when we started. It was about how the bank breathing is down our neck — as they should be, candidly — and we’ve got to fix this problem quickly. So we just we went after the trash, and it had a huge positive impact and continues to have a huge positive impact on the organization.

Spencer: Josh, I have a journalism degree, so I’m not as good with charts as you are. And you talked about how much trash you are generating, and that you reduced it by more than 1 million lbs. What is the percentage in that three-year journey? What’s the percentage of the waste reduction?

Allen: Well, from an overall trash perspective, it’s somewhere in the neighborhood of 60%. I believe we’re at like 76% diversion from landfill, from where we were, which we’re excited about because what grew out of it was obviously a much more aggressive recycling program. Also a composting program that we were so overwhelmed with when we moved in, that we didn’t really get started with, so all of that 1.6 million lbs. in that first couple of years was going straight to landfill.

What we’ve done in the process of reducing is also figuring out a lot of different ways in which to divert. So our goal now is to get to zero trash for landfill by the end of 2024. I mean, we’re hoping to do it sooner, but you know, that would encompass composting almost everything that we can, recycling what we can, and we’ll still obviously have potentially a little bit of trash, but really looking at it from a much more sustainable standpoint. Obviously the best thing that we can do, and the most important thing, is to not produce the trash or the waste in the first place. So diversion is great, but the real savings comes from not even generating it in the first place.

Spencer: How do you get the companions on board to champion this? Because it can’t just come from you, you crunch the numbers, you see the problem, and you identify a way that you can fix this. But how do you get everyone in the bakery excited about this, to think about it first to not generate trash?

Allen: I’m gonna use the term “easy.” Maybe it’s not the right term. But it’s a little bit easier when you’re talking about trash, because we have folks that come to work every day and want to do a great job. I believe that’s the case with almost all bakers, all employees in every situation. I believe in my heart that people want to come and do good work. And there was nothing worse than coming and doing good work and then throwing it away that for some reason it was out of spec, underweight, overweight, underbaked, overbaked, whatever would happen… and that product would end up going into the trash. That doesn’t feel good, right? There’s an inherent lack of pride that comes with that. What I love about the business is that we take something from nothing every day, and we create a product that customers want. And what we were doing in our new factory was creating a whole bunch of stuff that nobody wanted, and that we had to throw away for any variety of reasons. So when we started talking about it in terms of, “let’s stop doing that, like that doesn’t feel good,” then all these different ideas started generating themselves. And I think everybody contributed.

What’s also been exciting is that we were able to go to manufacturers and have the same conversation: “Here’s what’s happening with your equipment. Here’s the challenge that we’re facing with your equipment. Help us figure out a way to solve this problem.” As we started to go through this journey, we recognize that what we were doing was sacrificing waste for speed. When we first moved in, we always thought speed was the most important thing: How fast can we process dough? When you run things three across, you have to trim the outside pieces so that all three have equal weights as they’re coming down. That created a lot of trim. What we were finding is that we would be running upwards of maybe 8-12% trim on some doughs, right? We weren’t big enough and we had allergen issues or different issues and the way our manufacturing worked in our process, we couldn’t just reincorporate that trim back into the dough. It wouldn’t produce the same quality that we were looking for. We didn’t necessarily mix those things enough that we could take them back to the mixer, we weren’t able to necessarily recapture the trim back into the same product again because we weren’t producing it regularly enough, or whatever happens. So a lot of our waste was trim. When we went back to them and had that conversation, they said, “Look, the larger line runs at a faster speed, but you would run two up instead of three up. And with two up, you have no trim.”

So when we started looking at the piece of equipment from a waste reduction standpoint and not a speed standpoint, we realized that it would cash flow itself right out of the gate. The trim has an expense, but so does the mixing, because if it takes us 25-30 minutes per mix all in, you’ve got the labor cost with the mix. And because with 12% trim, if every six mixes you have to do another mix to get the same yield, you know, you could get more yield and less mixes. So when we started doing the math, recognizing our volume, our size and kind of where we were, we recognize that the machine would pay for itself. That particular investment, which we made at the end of 2019, was a huge component of this whole thing. So we originally were running products with 8-15% trim, depending on what the product was, and when we went to zero, that had a huge impact on our trash. It also made better quality product. It did some other things that we knew it was going to do, but we couldn’t pull the trigger on it or we didn’t appreciate it until we started recognizing the real savings that would take place. If we hadn’t have gone through this kind of trash narrative internally, I don’t think we ever would have looked at the math that way.

So just increasing the speed, we weren’t really big enough to afford it if it didn’t include the savings. The way we were looking at it before, it was hard to pull the trigger. But when we started looking at it in the new sense, and what the trash was costing us to do the hauling and just everything involved with receiving more goods into the building and the handling of ingredients and all of that, when a percentage of those things were going out into the trash, when you reduce all of that, the savings became dramatic. That particular line essentially paid for itself on day one. And it completely changed the way we looked at a lot of different things. That’s been the biggest one from an equipment standpoint. At the same time, we’ve been able to do that with other things, whether it’s different ways in which we handle pre-ferments, recapturing some flour at the dusting stations, all kinds of different little decisions. It’s a series of incremental small decisions that have made most of the savings. But the big savings came from that change in that particular line.

Spencer: I think it’s one of the biggest lessons that is often learned in commercial bakery production: Speed isn’t always about going faster. There are so many drawbacks to just going faster. If you just take a moment and look at the efficiency and shift your thinking, you could find so many more benefits. I feel like that’s what happened with you in this journey of fixing the trash. You discovered a lot of efficiencies.

Allen: Oh, no question about it. Another thing that made a huge impact when you talk about speed is dough checks at various spots. So we never really had an official dough check coming out of the mixer, for instance. A mixer would do it. They would sort of check their own doughs and then they would push it through the fermentation process. And in doing this, we recognized there were inherent problems downstream because of that lack of checks. So we instituted a supervisor dough check at every mix. Is the temperature right? Is the development right? Everybody crossed out every ingredient, and it dramatically improved quality of the products and rework and all of these things by slowing down the process. Because it takes time, like if you have a dough check and the supervisor is not standing next to you, it could be five or six minutes before that can take place. But slowing that down has had a hugely positive impact. The quality improved to the mixes because you knew somebody was going to come check it. But at the same time, we also got a second pair of eyes on a dough to make sure that it was right or if it was at the high end. So let’s say a dough has a 74 to 78 degree tolerance level, like we’ll send the dough downstream if we’re in that rage, but 78 ferments differently than 74. And so at least by having the information, we can pass that on to folks in make-up and let them know, “Hey, this dough might run a little faster, or here’s what you should be anticipating, because here’s what we saw at the mixer.”

It opened up this level of conversation that we didn’t have before, especially in an industry where if you have a 2- or 3-hour primary fermentation, sometimes the mixer has gone home before the dough even makes it to make-up. So when you see something different, you don’t have anybody to ask, right? Because they’re gone for the day. And there’s somebody and they’re like, “I don’t know, I wasn’t here when that dough mixed.” So that communication level has had a huge impact, but it slowed the process down. But you’re absolutely right. Slowing down to speed up makes all the sense in the world. It just was so against what we thought we were supposed to do. And again, the trash thing has really changed our approach to that in a very, very beneficial way.

Spencer: I would say the assumption about speeding up to go faster is pretty typical. But the way that you got to the conclusion through waste reduction strategies, I think, is atypical. I think it’s really interesting. So let’s get back to all of this waste reduction journey. It led you to this Sustainability Hero Award, which you never set out to do. So what was your reaction when you were told you were going to be named a sustainability hero?

Allen: Look, I was thrilled. And I was thrilled mainly for our team, because they’ve worked so hard on this whole trash journey. I mentioned to you that I was invited to do a TED Talk recently in St. Louis about the trash journey, which kind of surprised me. But I think it’s a great story to tell. And in the end, looking back on it — and you know, 1 million lbs. of trash reduction is a really cool number — we’re thrilled that that’s sort of what has what has come out of it. And I think moving forward, now sustainability becomes a big part of the value that we set forth. We certainly don’t want to go back to this waste-creating organization that we were a handful of years ago. So how do we keep from doing that so it stays top of mind? It’s still a big part of our decision-making process, which is pretty cool, but it certainly wasn’t expected. And candidly, as we mentioned at the top, it certainly wasn’t the goal. And we never used the term “sustainability.” Anywhere in this whole thing, I really felt like folks could understand and appreciate that we just got to throw less stuff away. Like let’s stop creating all this trash. If you were doing this at your house, what would you do differently? Because it’s embarrassing, you know, and everybody has gotten on board because it just feels good. Creating sustainable businesses feels good for people. Maybe that in itself is enough of the business plan that it needs to be, because in the end, if we can get investment from our whole team into finding ways to improve, you can’t ask for any more than that.

Spencer: Yeah, I mean, it is just such a good case study and making sustainability an inherent part of the business plan.

Allen: Yeah, absolutely. And I don’t know necessarily how to articulate it any more than saying, “Look, part of your focus ought to be from a business case standpoint, reducing trash reducing waste, and making sure that you don’t create any more than you have to in your process.” I’m frustrated to think because of the 20-year history that we had in the other facility where we weren’t paying any attention to it, because we didn’t have to, that we could have done more than. Obviously I can’t fix that, but certainly moving forward and as I talk to other bakers, you got to make it a function of the whole thing. Trash costs a lot of money. I mean, we went from spending $8,000 to $9,000 a month in waste removal down to $2,000 a month. That’s an awful lot of money just in and of itself, just in spending less in trash. But then the impact that it’s had, and the ripple effect that it’s had through the organization, has been really phenomenal.

Spencer: Well, I think a hidden lesson here. I think you hit the nail on the head, you weren’t looking at it in the old facility. You didn’t look at it simply because you didn’t have to. I would say that’s an invitation for other bakers to lift up those rocks they didn’t think they needed to look underneath.

Allen: Whatever way you can measure it, right. Like we happen to be lucky here in the sense that our folks were weighing it and sending us a report every month. So now we get a report from our composting company: This is how many pounds we picked up from you and from our waste management company. So we know every month how many pounds we’re generating. But you can put a tick mark next to the dumpster every time you walk out with it with a trash can to see how many times are you going out to the dumpster, or take a picture of it and then take a picture of it every Monday to see how full it is, and come up with some kind of measurement. But you got to know where you are to figure out how to reduce it. There are definitely ways to measure even if you’re not getting those waste reports. Then you just figure out how to go after it. What could we do differently to generate less trash? And I will tell you, as someone who’s gone through the journey, that it will have a huge impact on way more than just how much stuff is in there. And then it becomes hugely valuable. It’s a great conversation to have and it’s easy to have with your folks. Because everybody wants that to be successful.

Spencer: Well, I think that is a perfect note to end on. I just love this journey. It’s such an interesting story, such an important lesson and a well-deserved award. I think you are a hero, and you may not have intended to be, but I think you are a beacon for sustainability practices.

Allen: Well, thank you for saying that. I don’t know that I feel that way, but thank you very much for saying it.

Spencer: So Josh, next week, we’re going to take the next step in this conversation and talk about some other unconventional metrics that you use in your production to identify and baseline efficiencies. So I’m really looking forward to next week’s conversation as well.

Allen: Terrific. I’m looking forward to it too. Thanks again for having me on.

Welcome to the third season of the Troubleshooting Innovation podcast. Josh Allen, award-winning artisan baker and founder of Companion Baking in St. Louis, is redefining ways to think about artisan bread production. In this episode, he discusses the importance of relationships in a transactional environment, the benefits and challenges to creating products for someone else to tell their story, and more.

Listen to Troubleshooting Innovation on Apple, Spotify or Google. Hosted by Joanie Spencer, Commercial Baking editor-in-chief. Sponsored by AB Mauri North America.

Joanie Spencer: So I have gotten to know you over the past month or two, and I know that you have some really different approaches to how you go about baking. I’m really excited to dive deep into this episode with exploring breadmaking as storytelling. I’d like to start first with your background because you grew up sort of on the periphery of the industry in distribution. I think it’s great context to start with how you were taught the importance of things like relationships in a transactional type of environment.

Josh Allen: I grew up in the food business, but from the broadline distribution standpoint, so never from a manufacturing standpoint or a production standpoint, but my family had a large regional broadline distribution company that sold everything from frozen foods to seafood to produce to grocery to janitorial. Eventually, they sold that company. I believe they were 101 years old in 2002 when they sold the business to US foods, when US Foods was rolling up regional businesses across the country and kind of getting started here. So you know, they always competed against some national players and some other regional players. And my family was always about relationships, and that’s certainly what we talked about.

The example that I saw set all the time — and obviously things are, to a certain extent, based on price — but to a bigger extent, it was based on relationships. My dad’s feelings were always that taking care of the customer would pay dividends in the long term. He coached me in soccer and baseball and things when I was a kid, and I can’t remember a day that we didn’t make a delivery on the way to a game or the way home from a game. We would go and get something out of the freezer and take it to a customer, or something to make sure that his customers were always taken care of. And we kind of lived and breathed that all the way through and especially as a family business that was multi-generational and included a pretty diverse group of family members. It was just sort of our ethos. And I certainly took that to heart and have tried to maintain that relationship and kind of maintain that reputation, especially in St. Louis with our local business for the last 30, almost 30 years.

Spencer: So correct me if I’m wrong, but didn’t you sort of have a lifelong plan to step into the family business and go into distribution?

Allen: I don’t know that it was a lifelong plan more than just sort of what was expected. I went to school in the Bay Area and really got introduced to food in the Bay Area and started seeing what all these amazing bakeries were doing out there. Sort of by happenstance, I was racing my bike and racing triathlons and looking for jobs in the evening or overnight. That actually turned out to be restaurant work at first and then it turned out to be bakery work, and I just fell in love with it. And for those that have gone into the industry, you’ll know what I’m talking about in the sense that three days in, you either love it or you go screaming. I just happened to fall in love with the process of taking, you know, four or five simple ingredients and making something every day from scratch. And knock on wood. I still get to do that every day 32 years later, however long it’s been.

Spencer: So I want to talk a little bit about that “you either love it or you hate it and you know right away.” Can you describe that experience? Do you know where you were when you fell in love with baking?

Allen: It was probably… Well, I still have one in my office today. I have the original Easy Bake Oven. I do remember stealing my sister’s Easy Bake Oven and there was nothing more magical to me than making brownies with a light bulb. And I still sort of feel that way every time I open the oven. I’m still sort of enchanted by the idea of the transformation that takes place in baking and still load the oven thinking that I’m not sure what’s going to come out right or if it’s going to be correct. I think that kind of curiosity and just kind of excitement about the craft is something that you need to stick it out. Certainly it is a monotonous craft and a monotonous job, one that if we’re doing everything right, then nothing changes every day. And to some that would be incredibly boring. To me, it’s really exciting to try to figure out how to orchestrate 30,000 pounds a day through a system in which nothing ever goes wrong. And obviously things go wrong every day. But, you know, hoping for that one day where it all works perfectly, kind of keeps us coming back every day.

Spencer: This is something that I do find so interesting about you, because this is a craft that, like you said, it has to come out the same every single time if you’re doing it correctly. That said, though, you have some pretty unique approaches for how you do things. And I learned that when I came to St. Louis to visit the bakery. That’s really why I titled your story, “Bread Bakers, Storytellers.” I think it’s probably safe to say that all bakers are storytellers in some way, shape or form. But in a lot of ways, you’re so unconventional. I’m curious to know, what was your aha moment when you realized that you had this ability to create a narrative on a plate?

Allen: As you and I talked about when you were here, it’s for me, and for us, much more about somebody else’s story. So we really love the storytelling process. But we also recognize as a producer for customers, especially in foodservice and fine dining or even fast casual, everybody has a story they’re trying to tell with their food. As the world gets more competitive, and things are starting to change, they need those points of differentiation. And what we love more than anything is a customer who comes to us needing help to tell their story. If bread can play a role in that, whether it’s the first experience with a certain story they want to tell when they put table bread down in front of a table of four at the beginning of a meal, or if it’s a sandwich, or if it’s some kind of appetizer and the way bread plays a role in that — whatever that story is —we’re excited to help them tell it. We don’t have to take ownership in that story.

I think that’s the piece, you know, that goes back to the relationship thing that my family did. Certainly as a broadline distributor, they weren’t selling anything that was going to tell a story at all had to be transformed by those customers, but they needed those products. And we’re needed in the process to tell the story. And we have an opportunity to contribute. But again, we’re very much a supporting cast. I think the humbleness of that and the humility in that is what is most attractive to me. We’re driven by trying to figure out ways for our customers to be super successful. And if we can help them do that, then where are they going to go? Because we’re producing for them exactly what they asked for, and exactly what they were looking for. And it creates a sense of relationship and a sense of loyalty. That’s very difficult to compete with. And you can’t compete with that on price, if you’re giving the kind of attention that you have to give to help them tell that story.

I think our biggest skill is the ability to listen and the ability to not try to overwhelm the conversation and not try to push our narrative on their plate, but help them kind of articulate their own and figure out: How can we support that? What does that bread look like? What is the crust? What is the crumb? Sometimes it’s what is the distribution model? Maybe they have multiple locations and they’re in different parts of the country. And we have to help work through the challenges of whatever it takes to get there. We’ve got to help them try to figure out how to do that, and we really get a kick out of it. I think that’s become our point of difference. We’re looking to grow Companion, but we’re not growing the brand, we’re really growing those relationships.

Spencer: I think it’s kind of funny, your dad sort of trained you to be a baker without realizing that’s what he was doing. Because there is so much relationship that goes into the baking process, aside from putting the product together. I think you had a really firm foundation in thinking about things in terms of relationships.

Allen: Yeah, and I think more than anything, it’s helping folks solve problems. Maybe it’s a distribution problem, maybe it’s a pack problem. Our competition in many instances is so much bigger than us that they can’t necessarily react to a multi-unit operator with just 15 or 20 or 50 locations. And so their choices with the larger manufacturers are “here’s the stock list of products that are available, pick one of those,” and what we try to do — the niche we try to sit on — is you don’t have to pick one of those. Let’s talk about exactly what it is that you need. And maybe for some it’s a mixed pack of something, not that I’m advocating for that but we’ve done that in some instances, or whatever it comes out to be. If we listen to the problem, and then try to solve the problem, as opposed to like a lot of people just throwing our stuff on the table and trying to talk about features and benefits of our products — and that’s great — but in the end, the customer sitting there just thinking, “Okay, here’s what my problem is. And this is all that I want to solve. And you can go through your spiel if you want to. But in the end, this is the problem that I need to solve. And that’s why I am willing to give you a few minutes of my time.”

So we just go have conversations, and a lot of the times those conversations will lead to those opportunities, because we’re listening to what the challenges are. Maybe they need a clean ingredient declaration that they haven’t been able to find before. Again, maybe it’s a certain pack size, or maybe it’s something else that they’re really struggling with. If we can solve that problem, that’s a huge relief to them. Then later on, we can look to sell more things or expand that relationship. But first, you have to solve the problem. And only when you’re willing to listen, and only when you’re really interested in the relationship and not just the sale, do those opportunities truly present themselves.

Spencer: Definitely. And when you’re talking about telling someone else’s story and really hearing what their needs are, and the problem that they’re trying to solve — we talked about this a little bit when I visited you — it reminds me of a book I was reading. It was about an architecture firm, and the introduction to the book talked about the skill of an architect: They put all of their resources and creativity into creating something that’s for the use of someone else. So they build this, they put themselves into it, and then they pass it on for their client to use or their client’s customers to use. There is such a parallel there when talking about your craft. How do you put yourself into developing a product for someone else’s story to tell?

Allen: I think you have to enjoy the challenge of it. So you have to be intrigued by and interested in the process. Because sometimes it can take a long time. You know, some folks are very particular and have a very specific vision. Sometimes those visions are hard for them to articulate. So you’ll go through a number of iterations and every time you’ll think you’re there, then they may change something. At the end, they may say, “oh yeah, but also, this was the characteristic that we were looking for. And we haven’t achieved that.” And sometimes they don’t come out unless you’re willing to go through the process. So we have to let go of trying to get to the end too fast. We really want to take our time and helping them really define what that looks like.

The parallel that you bring up is exactly right. Everybody has a particular style, or they have a thought process or an experience, let’s say as an architect, but still you have to listen to what your customer’s needs are. And you have to understand how many people are going to be in the office, if you’re doing the commercial space, or how many customers are coming in or what the interaction needs to be. It may not exactly fit what you want it to do, the aesthetic may end up having to be different, there’s going to be compromises that have to be made. But if you can let go of your ego in that process, and really be interested in helping that customer tell their story, then I think it’s huge.

And we can help them in a lot of times because, especially with bread, the customers can’t necessarily articulate it all the way through. They don’t know exactly what they want until we go through a few things. And then they have to put it through their process. So you know, we’ve developed buns for customers and we think we’ve got it figured out, and then you know, we go in to do a test and we find out that they put the buns on the flat grill and then throw them into a Cambro for 20 minutes. And you know, the bun has to be able to hold differently than we expected. It’s just the way that it gets handled in the actual operation may require certain formulation changes or different kinds of crusts or different ingredients because they’re going to get abused a little bit, you know, where the rubber meets the road is how their cooks or chefs are going to handle it in the process.

It’s funny, we’ve developed ciabatta for a small restaurant group and they wanted a really traditional ciabatta. We made that. Then in practice, we had holes in there and the crumb structure was open, which they loved in the tasting. But then when they were turning it into bruschetta, the toppings would fall through and that wasn’t working for them. So they wanted us to go back and reformulate or change the process, as we spent more time in it and started to understand a little bit more and we ended up making a change to which oven system it baked in. That solved the issue that they needed, and now they’re thrilled because it’s exactly what they wanted. And again, going through that process with them has really deepened the relationship because they recognize that it was really about getting them to a product that they wanted. It wasn’t about us or what we wanted. It was about what they wanted and what they needed. The biggest benefit, which we talked about a minute ago, is purely just that relationship. It’s no different than with your spouse, with your kids or with anybody. If you listen to somebody, full-body listening and responding to what their needs are and putting folks’ needs in front of your own, it has a tremendous amount of value. And you have to be willing to do that and be able to present that in a very transparent way. It goes a long way.

Spencer: You mentioned ego. And I feel like there’s a line between a baker’s passion and a baker’s ego. Is that line hard to see sometimes?

Allen: Well, I think it depends on where you come from. Growing up in the food distribution business, being an American Studies major in college, doing some restaurant work, some bakery work, I came to the business in many respects equal parts entrepreneurial and equal parts passionate bread baker. I didn’t have a cottage bakery out of my garage making a certain bread, and then I opened a bakery and that was what I loved to do. Sure, I love making products, but at the same time, I’m equally as passionate about building the business and taking care of my people and being a part of the community.

I love the aspect of being a business owner as much as I love being a baker. And so I can separate the two things. It doesn’t have to be my product exactly that presents itself. I’m okay with that. That natural progression has led us and led me and our team to being super comfortable in making products for other people that they need. And they want without having to have a particular style across anything that we’re making. You and I walked the floor, Joanie, and we talked about the fact that there’s a lot of things here that we produce that you see that aren’t exactly artisanal. We make a lot of hoagies, sandwich buns that are very specific to the needs of the customers. They were every bit as challenging to make as a beautiful loaf of sourdough bread. But in the end, the look may not be that dark crusted, blistered, hearth oven-baked loaf of bread. But it doesn’t mean that we don’t believe we’re very talented and skilled and that it didn’t take a lot of energy to get there. It’s just different, and for us, that’s okay. We don’t need a catalog of products that has this aesthetic across the board. That’s the same, we really, really, really enjoy this idea of being a kind of contract or custom manufacturer for folks and helping them achieve that that story that we talked about right out of the gate.

Spencer: It has to be a little bit thrilling to be able to create a bread that, like you said, is it by the definition of artisan “beauty”? Maybe not. But there is someone who’s going to walk into a restaurant and be like, “Oh my god, this is the best sandwich I’ve ever eaten.” And that has to be just incredibly satisfying for you.

Allen: Yeah, and it’s incredible to have the chef reach out and say, “Look, we just won best sandwich or we’re getting all these accolades for our product. And thank you for just being that little bit of part of it. Like we couldn’t have done this without what you’ve done.” Nobody else would say that, which is fine, because in the end, it’s their food and their service and their aesthetic and what they’ve done in the story they’re telling in that restaurant that deserves 99% of the accolades. But there are some micro-vendors behind the scenes, whether it’s a farmer growing them beautiful produce, or us producing a bread specific to what they were looking for. That does play a role in that. I’m just as thrilled to see that happen for them as if it were to happen for us.

Spencer: I want to shift gears just a little bit, because when we’re talking about the narrative, you’re very skilled with telling someone else’s story on the plate. But Companion has a pretty good narrative of its own too. You have two cafes, one is attached to the bakery where you produce the bread and sweet goods, so you have a brand. How hard is it for you, personally, to shift gears between creating something for your customers and staying true to Companion? Because you chose the name Companion for a very specific reason.

Allen: Well, I guess in a certain sense, we’re sort of doing the same thing for ourselves that we do for others. And my sister happens to run our retail cafes. She’s been doing that since we started, and they’re really run as very separate businesses. Working with her to create the breads and the products that she wants to be able to tell the Companion story is really what we’re doing, you know, in the factory or from the wholesale perspective in providing those products. I guess it’s not as big of a departure, obviously it’s our brand and we have ownership in it. I get to play a little bit of a role in in defining the narrative, but we kind of look at it as the same thing and the same presentation. She’s done an amazing job in helping us craft that story and tell that story that we think fits with who we want to be, which is approachable, we want to have just great simple products, we want it to be a little bit fun. And I think she’s done a terrific job with the cafes and doing that.

Spencer: I didn’t get to see the one in Ladue. But the one that is attached to the bakery is just an incredible concept. It just has such a great feeling when you walk in the door. And it’s really something to see that consumer experience when they can order a sandwich and not only watch the steps of how the bread is made for that sandwich, but also read the signage along the windows describing the “why” really behind the steps. That’s something really special about your operation.

Allen: Yeah, we really wanted to invite folks into the process. I mean, that element of transparency was something that was super important to us. And obviously microbreweries had been doing it forever. But the challenge with microbreweries, it’s a guy and a hose, cleaning the floor, you don’t really get to see or interact with the product that’s happening in a brewery other than seeing the tanks usually. By having 30 or 40 bakers working behind the scenes and the process of sort of semi-automation that we kind of talked about, where we have equipment and machines pretty much in every process from mixing to makeup to baking to packaging, but we don’t convey any products between stations. So a baker’s rolling dough in tubs along the floor, we’re dumping into the dividers, we’re hand panning everything on the end, or whatever it is. So there’s a lot of human or baker involvement. But honestly, in the end, what’s been so fascinating for me is that the opposite has also been true, which is the value that it is created for our team to see folks come in and want to eat lunch and watch what they’re doing. It has been immeasurable. I certainly never appreciated that side of the open kitchen. I worked in an open kitchen in the restaurant business, but I was a kid, maybe wasn’t paying any attention. But what we’re seeing is the fact that the bakers really love the fact that what they do is valued by the public enough that somebody wants to come in and watch and see what they’re doing and point and wave. And that’s had a tremendous amount of value for our team, especially on busy days where 200 or 300 people might come through for lunch, I mean, it means a lot to our bakers to see that kind of crowd in there.

Spencer: I love that. So we started out talking about your story and transitioned to telling other people’s stories. And then we’re talking about what’s happening inside the bakery and the bakery team getting to see consumers enjoying the product that they make. And that is also so satisfying. I think it’s only appropriate that we close this episode with talking about, and I mentioned it, the intention behind the name Companion. And with that, can you tell me about the four C’s, and how those four C’s are kind of woven into the operation?

Allen: The Latin root of companion is compagnia, which means “with bread,” so Companion was someone with whom you shared bread or broke bread. And so our mission, our hope, is that people break more bread together. We want to be a catalyst for a conversation, whether that’s bread on the table, whether that’s a great sandwich, whatever that story is that’s being told… We’d love to play a role in or be a catalyst for that to kind of get started. And so that’s where the name came from.

The four C’s that you mentioned have sort of been our value statements. It’s our companions, our customers, our community and our company. We believe that obviously our main thing is to take care of our companions, you know, to keep them safe. Let them be in an environment in which they can grow personally and professionally and they’re compensated fairly. If we take care of our companions, they in turn will take care of our customers, who we need in order to purchase the product, and purchases perpetuate the growth and the expansion of the business. We then need to invest in our community because I believe that’s our responsibility as business owners. And that’s the community in which we serve ourselves, but also the community in which our companions live in. So it’s sometimes supporting things that they’re interested in and their endeavors. And then I believe strongly that if we take care of those three things the company will be taken care of because, in the end, that’s what’s got to keep going to build a sustainable future for us. They kind of work hand-in-hand, in concert with one another. And we try to use that as the backdrop for most decisions: Will this decision benefit the four C’s? And in which way? And do we feel good about that? If the answer is yes, then we sort of move forward with whatever direction that is that presents itself.

Spencer: I love that. And I love how those four C’s are visible throughout the bakery operation, I noticed as we were walking through the facility that they were posted on the walls in various places. I think that really supports this whole idea of baking as a narrative, that it all kind of plays a role in the story that you’re telling from beginning to end.

Allen: Yeah, I can’t add to that. That was that was very well articulated. We’re thrilled to be able to do it. And we still have passion to do it every day. And, you know, our team is more and more excited every day, which is also a big part of it. And as we’ve kind of woven our way through the pandemic, and the ups and downs of that, it’s been nice to have something to sort of hold onto and fall back on and make sure that we can stay grounded. It’s been a really, really challenging two years that we’re dealing with. And it’s really nice to have that foundation, because without that foundation, I think we might just kind of be falling in space somewhere.

Spencer: Yeah. Well, Josh, those are all my questions for this week. I’m really glad that I started this season with a discussion about the art of storytelling in the baking process, because you are truly an incredible storyteller. I think our audience is going to get a lot out of these stories that you have to tell in the coming weeks. So thank you so much for joining me. Next week, we are going to talk about your business case for sustainability, which is truly interesting and landed you a Tiptree World Bread Award as a sustainability hero. I’m excited to dig into that next week.

Allen: Well, I look forward to the continued conversations.

In this episode of the Troubleshooting Innovation podcast, engineering expert Rich Berger suggests how brands can innovate, even if they’re not consumer-facing. Hosted by Joanie Spencer, Commercial Baking editor-in-chief.

Sponsored by Shick Esteve.

Joanie Spencer: I’m excited to talk about this particular topic, because I know you’re going to have a lot to offer. The first thing that I want to ask you is, in the past few years, how have consumers expectations for immediate gratification impacted speed to market for new product development?

Rich Berger: Yeah, increasing speed to market obviously leads to numerous financial and non-financial benefits. I think the more agile we are in manufacturing, the more potential we have to boost our company’s top and bottom lines. In fact, flexible and even mobile customers and consumers demand it. The financial benefits are often directly measurable in our space and, I think, exceed the upfront costs of introducing speed-to-market approaches in manufacturing.

[Here are] some examples of the benefits of speed in manufacturing. First, companies that are built for speed, especially in the innovation space, often realize first mover advantages, right? They’re able to react more quickly to competitors’ moves or market shifts or consumers’ needs with their own product innovations. You also have lower development costs. Because as you streamline processes and limit iterations, it all of a sudden just opens up or releases financial and operational resources that can be redirected to other value-added activities. And then, of course, a larger market share. I mean, a product that gets to market early is likely to face initial competition. A quick introduction also gives a product more time to build market share before — or even if — it declines into, say, a commodity kind of a situation. I also think greater accuracy in our forecasting can be a very positive outcome of speed to market, because the time between product design and product release is shorter. So we may be more willing to greenlight trendy products that would otherwise be denied in those situations.

Spencer: What are some of the manufacturing implications that come with that speed, especially when you’re thinking about engineering and efficiency?

Berger: Yes, supporting speed to market used to be something to consider in the work that we do as an operator. Now, it’s integrated into really everything that we do. Adapting our manufacturing environment to further adapt to consumers’ ever-changing needs can really bring, I think, a competitive advantage. I can share a few experiences I’ve had that have been successful in getting products to market faster.

Spencer: Okay, let’s hear it.

Berger: First, it’d be take a hard look at the shop floor and consider updates [that get you up to the] standards and initiatives we refer to as manufacturing 4.0. And in that environment, success is not just upgrading the machines with sensors, so to speak. It’s emerging technologies, such as autonomous and self-optimizing robots; it’s additive manufacturing, that brings a ton of flexibility into what we do; or the industrial internet of things, which is really changing the manufacturing industry in a positive way.

We now have countless options in front of us, tons of tools to build smarter factories with better performance that can really catapult a manufacturer to the top of the market. The only thing to note is that sometimes these kinds of upgrades can result in capital expenditures that could be beyond a current scope, or a current appetite for investment. But that can be offset with the return that you enjoy through supporting speed to market.

I think there’s a human factor to all of this as well. Maximizing employee productivity is crucial for putting your company on the fast track. Even if your factory is equipped with very advanced process automation, it’s about stepping back and just understanding what are the workflows that are in front of you and the tasks that are being done. And how can you reallocate the human resources to tasks that add more value monitoring and refining? Your engineering or development teams can really be just half the battle. A thorough review of management and productivity tools — or for that matter, lack thereof — will uncover a number of stumbling blocks, which really brings us to sort of a third approach. And that’s what I refer to as sort of a single manufacturing platform.

Spencer: And what’s that?

Berger: Well, it’s maintaining a collection of business processes, productivity tools or even isolated systems that aren’t necessarily integrated. And that can become probably one of the biggest speed bumps, or speed-to-market bumps, that we can experience in manufacturing. Our data is the lifeblood of the business. And if the data doesn’t flow freely, amongst all of these different processes and systems, then the business won’t receive any momentum, in my opinion. So a platform that connects the business end-to-end — with development and engineering, sales, production, R&D — this level of integration not only boosts productivity, but it can significantly improve our time to market in order to achieve long-term results. That well-integrated platform with a number of connectors can certainly help us bring new innovations to market faster.

Spencer: Okay, so I’m gonna ask you to take all of that knowledge that you just shared, and maybe step a little bit outside of your comfort zone with this next question. So sorry, but it’s sort of a chicken or egg question, which is more important, good branding, or innovative product development? And then which needs to happen first.

Berger: I’m glad you began that with “outside of my typical knowledge area,” but you know, I’ve had the benefit of being surrounded by really amazing brand managers in my career. So I’m in no ways a marketing expert, nor do I pretend to have deep knowledge in it.

Spencer: But, you know, that’s exactly why I asked the question is because of your experience. You’ve been part of these really big and powerful, good, strong brands, so I know you have some insight.

Berger: Well, the reason I’ve had the benefit of being surrounded by great brand managers is because many of the brand strategies really have to be supported by the supply chain. So I’m going to try and share a few of my own observations, for what it’s worth.

To your first question, I think branding and product innovation feed off of each other, to be honest with you. I think brand innovation that occurs before your competitors’ can allow for a larger sustainable competitive advantage and can be maintained over a much longer period of time by your brand. So I think innovating before your competitors. It rewards your brand loyal customers with the opportunity to be the first ones with the latest and greatest product on the market. And in turn, your loyalest customer becomes almost your own marketing outlet in a way.

Also being culturally relevant means that the brand is highly adaptable and flexible and “in the know.” So, creating branded products that relate to current trends is a great way to stay top of mind and create meaningful connections with the consumer. I’ve seen innovation, particularly in branding, expanding into new categories, and sort of refreshing those assets with updated contemporary styles, of course, which in turn re-engages customers and consumers. It also helps you stay relevant in a pretty fast-pace market. And then expanding those capabilities and offerings to attract a wider group of consumers really allows for incremental growth.

Lastly, I think that customer needs are pretty dynamic. And they’re ever-changing, probably more today than ever before. Being able to use key insights and translating those into our supply chain network, to better understand their needs, really allows us to see how we’re comparing to our competition, and helps us understand what the consumer wants, what the consumer values, where the value is, and helps the brand stay ahead of the curve.

Spencer: You know, I’m hearing a couple of themes throughout this season of the podcast. And one of them is that you have to have a lot of courage to be first out in the market. And you mentioned that with sustainability efforts, with talent development, and with product development and branding, too. So there’s such a level of courage there, because there’s a lot of risk in being first. But there’s also a lot of reward that can come with it if you do it correctly … and successfully.

Berger: Right. I think you summarized it well. And in fact, I think that approach really touched on a lot of things that we’ve talked about, even in the previous episodes through sustainability, community engagement and people. So yeah, that’s a really good point.

Spencer: And then the second thing I noticed is when you mentioned that need for understanding what the consumer wants, and being able to stay ahead of the competition. It just kind of reminds me what we’ve talked about with data. Having the data isn’t enough, you have to know what to do with it. So I can see that translating into the branding, and the product development as well, that it’s going to help manufacturers stay ahead of the curve.

Berger: And I would just add one more point to that, Joanie, and that is to take the time to understand what your competition is actually doing well. Right? In a way, it’s just recognizing a best practice that perhaps that you can attempt to adopt. But that goes beyond just the brand world. I mean, that even applies in the operations world. It’s understanding what are folks doing well in the manufacturing space. And how can you adopt some of those practices in what you do every day?

Spencer: Absolutely. Okay, so the next question is talking about from your experience, how can a brand be intrinsically intertwined with its operations?

Berger: To me, branding is about people. People build brands, people buy brands. The relationship, that sort of first glance, is a pretty simple one: Build a good brand and others will buy it. At the heart of that relationship is another group of people. And it’s that of the employees. It is the employees who enact the attributes of the brand and whose actions ultimately foster the customer experience. And again, that can be good. Or that can be bad. You know, that’s there’s a risk/reward there.

Spencer: Some say that your most important customer is your employee.

Berger: Right. The actions of your team should reinforce the promises a brand makes to its consumers. If wisely conducted, I think that this reinforcement breeds more success, awareness, sales, loyalty. Employees have, I think, the formidable task of demonstrating the brand by the actions that they take.

Manufacturing organizations tend to attract the attention of general managers, much in the same way airlines do. One only really notices them when they’re late, when ticket prices rise, or when there might be a catastrophe or an issue or a breakdown. When they’re operating smoothly, they’re almost invisible. Right? But lately, manufacturing is getting increasing attention from business managers who, only a few years ago, were preoccupied with marketing or financial matters. It’s kind of interesting how the manufacturing space has evolved in that way.

But back on employees, I just genuinely feel that engaged employees — and we’ve talked about engagement in, I think it was the last episode, Joanie — I think engaged employees build strong brands. So many companies focus on all their branding efforts; on marketing activities like advertising, campaigns, promotions, packaging; yet, one of the most powerful brand assets that a company has is your people. Regardless of what business you’re in, building a strong brand requires that all employees feel connected to that brand, that they understand their role in turning brand aspirations and company values into reality.

I mean, if you’re not inspiring your talent to be brand ambassadors, I think we’re missing out.

Spencer: That’s a really good point. What would you say are the biggest lessons that can be learned when a food manufacturer operationalizes its branding into the manufacturing space?

Berger: The one that comes top of mind would be safeguarding the brand, which is probably the majority of what we do in the manufacturing environment when it comes to brand awareness, and truly differentiating ourselves from the competition, protecting the brand. Really, if you think about it, it begins in the production environment. That’s where protecting the brand begins, really.

Spencer: How so?

Berger: For example, maintaining the highest level of quality possible, that happens in production, that happens in manufacturing, ensuring food safety and compliance. There’s not a lot that we could do in a R&D or innovation cycle, in terms of food safety and compliance, but in manufacturing and food production, we own a majority of that component.

Also, being a responsible operator, by integrating the planet and community in your performance pillars, that goes a long way at demonstrating your values and supporting the brand.

Spencer: I feel like everything that you’re saying … it’s like all of the episodes that we’ve done so far have sort of led up to supporting the brand, right?

Berger: For sure. It’s interesting, yeah. And just sort of a follow-on, I would say, creating a work environment that is safe. I always like to think about it as: Do everything that you can to return your employees home healthier than when they came to work.

And I’ll be the first to admit, I think about a safe work environment as: Let’s prevent a catastrophe. Right? Let’s protect our employees. But I think if we raise the bar even further, and we say, “No, let’s also think about it as how do we enhance the health of our employees,” there’s so many things that we can do right in food production and in manufacturing in that way. And just think that not only does it lead to a positive reputation, but you know, we’ve talked a little bit about the shortage of skills and knowledge, particularly around STEM skills and knowledge … that also leads to supporting an effort where people will want to come and work in that environment.

Lastly, I think brands can be an engine. They can be a conduit, so to speak, toward a more sustainable world. They should be ahead of the market and create products and services that are relevant while, at the same time, helping consumers live in a more sustainable manner. I think this creates a positive influence on both the environment and the communities in which we work, as well as generate dividends through growing demand. A sustainable brand also enhances a company’s reputation and secures future earnings through reduction of risk and maintaining the business over the long term. That’s sort of increasing the brand value.

Spencer: Yeah, and really giving it longevity and loyalty from consumers. I think that is a really good note to end on, Rich. I thought this was really interesting, because we don’t often talk about how the brand relates to the manufacturing process, so I really appreciate your insight. And this has been so fun to do this podcast with you.

Next week, we’re going to take on some listener questions. So we have gone through community involvement, sustainability, talent development, and how to innovate through and for a brand. So I am excited for next week when we take listener questions, which you can email to info@avantfoodmedia.com. Rich, thank you so much.

Berger: Thank you! And I’m excited about answering those questions as well. Joanie, as I think I mentioned on the first couple episodes, depending on how many questions come in, we may not be able to address all of them. But this conversation is really important to me. And if anyone has questions that perhaps we don’t address in the next episode, I will respond to all that we do receive, and I look forward to that.

Thank you. It’s been a great conversation with you and sharing this conversation with the industry. I’ve really enjoyed it, Joanie.

In this episode of the Troubleshooting Innovation podcast, engineering expert Rich Berger explores how a bakery can innovate solutions to labor shortages, supply chain disruptions and the evolving relationship with automation. Hosted by Joanie Spencer, Commercial Baking editor-in-chief.

Sponsored by Shick Esteve.

Joanie Spencer: Now, Rich, we have been talking about community involvement and sustainability [in this season]. And now we’re going to talk about people. It all revolves around what we ended the last episode on: talking about a paradigm shift around who the stakeholders are and what benefits them. How are people playing into that?

Rich Berger: That’s an interesting question. It’s probably been a couple of years now, but there was a business roundtable of a group of about 180 CEOs of America’s largest companies, including Julie Sweet, Brian Moynihan, Tim Cook, Jeff Bezos, Larry Fink. The roundtable’s statement of the purpose of a corporation is that first, it puts stakeholder responsibility on equal footing with shareholder responsibility stakeholders, of course, those being employees, suppliers, vendors, customers and their communities. I think that’s really fits well with our conversation.

There has never been a better time than now to be investing in your workplace, the environment of the workplace and your employees. Here we are in the middle of a pandemic, with many labor shortages. And if we cannot invest in that workplace and our employees, it just makes it more difficult to sustain a skilled workforce in the food industry.

Spencer: So I’m going to ask you a little bit of a personal question. You are an engineer and you started your career in offshore drilling. What attracted you to food manufacturing?

Berger: Yeah, I did. I did start in offshore as well as heavy industries such as utilities, and pulp and paper and chemical. I would say that in our food industry, that the diversity of problems to be solved, is certainly one at the top. Also, the challenges that food companies face, which I think show up as opportunities, to have a direct influence on the health of the supply chain, and opportunity to really make a difference in what we do. Also, the speed in which innovation is adopted in this industry is very exciting; the creativity that has to be there, the speed in which you have to seed and nurture and commercialize new products to stay present and current. And lastly, I think the people in our in our industry — and in many ways, the industry feels like one team — it has a feeling of helping each other solve problems to generate value for all of our consumers.

Spencer: Absolutely. Now, you mentioned supply chain and you also mentioned innovation. We can’t have a conversation about manufacturing without addressing the supply chain disruption that’s happening. And a shortage of labor is a huge component of that. So how is the lack of workforce directly impacting innovation?

Berger: Yeah, there aren’t many food companies at this point who are immune to our current and future skilled labor deficits. There are just many things that need to be addressed in order for that labor gap to shorten. But innovations need to begin in order to prevent future supply chain disruptions. For example, automating simple tasks so that employees can work more efficiently and focus on the core.

Managing workflows with software. For instance, employees can often waste time trying to figure out what to do next in a process, whether crucial steps have already been done and even which steps to prioritize when multiple projects are going on simultaneously. A software tool, for example, can automate the process and provide, for example, a searchable database of current and archived prospects and projects, and even record which processes have been completed by which employees. So just managing those workflows are super important.

Improving productivity with online video, I’ve also seen as a huge benefit. Messaging, collaboration, doing that digitally really brings a lot of value. The visual factory concept can be very useful here, where an operator might have the tools to quickly send a video, for example, to maintenance on an equipment issue. Tools such as that help the team become more responsive to the day-to-day tactical work that we do, thus freeing them up and freeing more time up to focus on that core that I mentioned earlier. And lastly, I think just simplifying the work process with digital checklists can also help greatly.

Spencer: So automation is definitely becoming a solution in our industry for the workforce shortage. How is that relationship between people and machines evolving? And the reason why I asked this question, I talked to a baker once who said yes, automation is really helping, but it doesn’t necessarily teach employees the process. And so they become button pushers, but they’re not bakers. What does this mean for innovation and manufacturing? How are they gonna come together?

Berger: Great, great topic. I would start with the fact that job openings in manufacturing have grown to double-digit rates since 2017. And they’re actually very near the all-time high recorded in 2001. The pandemic probably has put us over the top there.

A recent study by Deloitte shows that between 2018 and 2028, an estimated 2.5 million positions are going to remain unfilled. And I think that there’s many factors that contribute to this. First, the available workforce consistently lacks the STEM skills needed to fill modern industrial jobs. And many times, that means developing those skill sets gets transferred to the operator, right? And that’s okay, and that actually is something that we have to continue to do is to be developing those skills with our employees. Skill sets are shifting and the shifting is related to the use, as you mentioned, of advanced automation. Continuing to develop those skill sets is very important, because it’s very different than even what employees were doing on the shop floor 10 years ago, right?

A persistent misperception, I think, exists about the nature of manufacturing jobs. I think that probably contributes as well. And then we’ve got, you know, a wave of retirements from Baby Boomers who have held significant accrued knowledge over the years.

And lastly, I think the hidden factory dilemma facing the frontline due to a lack of collaborative tools is some of which I had mentioned earlier. The good news is that technology can be used to address these challenges. I think it improves retention, attracts new talent, improves the work environment and engages workers to build those vital skills in the workforce. I see food companies doing this in a lot of different ways. For example, software systems, AI, and machine learning are right now being implemented to help companies identify top talent, attract individuals with that critical thinking and programming skills needed to to manage automated systems. And to keep that talent once they’re hired.

Collecting and leveraging resources, for example, from retiring employees. Building new, more engaging training programs that perhaps are designed for the next generation. Implementing apprenticeship and one-to-one training programs, I think, are super valuable. And many times they’re supplemented by technology, which is helpful. And lastly, leveraging technology to supplement jobs and expand performance opportunities in the organization.

Spencer: Can you elaborate on that a little bit?

Berger: Yeah, it’s similar to some of the visual factory topics that I was talking about earlier, in that we can supplement jobs through many of the new technologies that exist to actually expand the skill sets of the employee base, vs. limit them and silo them. Investing in engagement is also super important. According to, I think it was the corporate leadership council survey that was recently completed, the most engaged workers are 87% less likely to leave. Wow. So if we think about that as a goal in retaining talent, it’s a challenge for us to sit down and try to think about how do we engage with our workforce. The top companies to work for, in that same study, had a 13% voluntary turnover rate compared to almost triple that in comparable industries. So look, the data is there that says engaged workers stay on longer than those who are not.

With the cost of replacing an employee sitting at one and a half to two times an employee salary, retention is really one of the areas in which companies can have the largest impact on their bottom line.

Engagement is the first step in doing that. It boosts overall work satisfaction, it communicates with transparency, it forces us to think of ways to provide tools for employees to solve problems quickly and implement multiple communication channels. A single interface can sometimes remove barriers to quick communication, from really anywhere in the organization from the boardroom to the frontline, making it faster and easier to to address challenges.

Make people comfortable and empowered to provide feedback. For example, we talked about little bit about this in the first episode, in that a lot of this leads to trust, which leads to quite a bit of great ideas that come from the team.

Spencer: You know, I was actually thinking about that first episode myself, when you mentioned that. We talked about how it’s not enough just to have a voice, the workforce needs to know their voices will be heard. So that’s important to understand in this discussion

Berger: Absolutely. Training programs, engagement oriented communication platforms, and improvements to the management style and in the organization can really all have a direct impact on our ability to find and hire top talent. When your company becomes a company that everyone wants to work for, you won’t need to fight for the best of the best any longer; they will come to you.

Spencer: Right. I’ve always felt that it’s important to have a company that people want to come to work for. I think that’s key. So I have a question for you, Rich. You mentioned the STEM skills and you talked a lot about technology. I recently participated in a panel for the CAPS program, and talking about the food industry as sort of a hidden gem for STEM students in high school as they think about their college plans and career plans. So what are your thoughts on what the food manufacturing industry can do to sort of open the doors and be a visible, viable career opportunity for students who are going into STEM programs?

Berger: Well, I think it’s badly needed in our industry. You’re exactly right. We need to continue to think about ways to attract those skills into the industry. Skills such as these don’t have a start and end point. I see it as sort of a continual educational journey. So what I have seen many companies do is dedicate resources to continued education, even after the hire, to continue to develop and sharpen skills. That’s what folks want; they don’t want to hire onto a company and not continue to learn. That’s very important.

Another component, I think that can be very beneficial, is how we begin to adopt more technology in our industry, because that will also attract people with those skills. When they see the industry using tools, machinery, systems that bring the latest technology to the operation, people want to be in that kind of a work environment. So that also helps greatly.

Spencer: I totally agree. And I think, as an industry, we could probably do a better job at promoting that. I was actually talking to a supply chain executive for a major snack manufacturing company, and she said she was hosting some interns for the day. She asked them, “What’s the biggest surprise that you’ve seen?” And they all unanimously said, “I had no idea there was so much technology involved.” So I think that technology could be used as a recruitment tool.

So Rich, there’s one other topic that I want to cover. And that is the industry, you know, we are facing a labor shortage crisis. But culturally, we are also facing a crisis of diversity. So how can we shift our thinking and look at diversity as a workforce solution, as opposed to a problem that needs to be solved?

Berger: I really like how you introduce the question because I think a lot of folks, including myself, sometimes think of it as a problem to be solved when really it’s a solution to so many things that we do in the food industry. Workplace diversity is taking the HR world by storm really more than ever. Food companies are prioritizing Diversity, Equity and Inclusion (DEI) initiatives and investing resources into making sure their teams are set up for success. Focusing on DEI is not only the smart thing to do, but it’s also the right thing to do. I feel strongly that diversity has tangible and intangible benefits.

Joanie, in our space, there’s no doubt that challenges exist. They’re there, and we have all faced them, such as aligning DEI goals with the broader organizational goals, or overcoming bias, and even sort of a natural internal resistance to the process. But if we can overcome those challenges — and we can — there’s numerous benefits that I see, Joanie.

To answer your question, first I would say new perspectives. When you hire people from diverse backgrounds, nationalities and cultures, you’re bringing a fresh array of perspectives to the table. This can lead to benefits like better problem solving and increased productivity. Think of it as a scavenger hunt, okay? Would we find more success by sending everyone on the team in the same direction? Or would we gather information more quickly by having a team that splits up strategically? So I think that “new perspectives” piece is a big benefit.

Second, a wider talent pool. It brings a ton of value. Employees are no longer simply seeking a nine-to-five job that pays well; they’re looking for space where they can grow. We just talked about continuing to develop skills, right? They’re looking for space to feel accepted and to be challenged. And that’s why a company that embraces diversity will attract a wider range of candidates who are looking for a progressive place to work. Moreover, I think that the millennial and Gen Z generations are the most diverse in history. Only 56% of the close to 90 million millennials in the country are white, as compared to 72% of the just under 80 million members of the Baby Boomer generation. A 2020 Glassdoor study found that 76% of employees and job seekers report a diverse workforce as an important factor when evaluating companies and the job offers that they get. So as a result, diverse companies are more likely to attract the best talent.

Third, I think workplace diversity leads to innovation. If you think about it, the correlation makes total sense to me. If you have a homogeneous group of people, chances are that everything from their thought patterns to life experiences to problem-solving skills are likely to be similar as well. And sameness doesn’t lead to very creative solutions, right? On the other hand, a diverse group of employees will contribute unique perspectives that can lead to, I think, breakthroughs in thought. It’s really the same reason why companies go off-site for important strategy meetings, right? Or why a change in pace can help you solve that problem you’ve been stuck on for days. New circumstances, new environments are known to spark fresh ideas. And I think that’s part of that, why workplace diversity leads to innovation.

Fourth, I think better employee performance and diversity and inclusion go hand-in-hand. When you create a work environment where employees see a representation of a variety of cultures, backgrounds and ways of thinking, they’re more likely to feel comfortable being themselves. I think this, in turn, leads to happier and more productive employees.

And lastly, increased profits. There are a ton of studies out there that show diverse teams simply perform better and, as a result, bring in more profits. McKinsey did a report in 2015 on a little under 400 companies. They found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean. Another interesting stat: Those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. A similar study that McKinsey did found that public companies in the US with diverse executive boards have a 95% higher return on equity, even those with homogeneous boards. So clearly, the data shows Joanie that that diversity pays off.

Spencer: What do you think the food manufacturing industry needs to do to take those steps, of broadening the talent pool and and looking in new and different places in order to create a diverse workforce but fill that gap? Are we looking in the wrong places? Are there other places that we should be looking? What’s the magic answer?

Berger: Well, I’ll have to think about that one for a bit. The only answer I have is cast the net wider.

I would say, go into it recognizing the benefits that we just talked about. It will drive the hiring team to seek out more diverse candidates, because they’ll see the value diversity brings to the business and, when that value is in front of us, it truly drives us to seek out more diverse candidates in the process. Whether that be cast the net wider, or further, or continue to appreciate the different points of view of the different cultures and the different backgrounds. All of it, I think, brings the value that we just talked about. And when that’s recognized throughout the organization, it actually becomes part of the process of looking for candidates.

Spencer: And I do feel like diversity is going to breed diversity. And as companies engage in technology, and they engage in a diverse workforce, then students and employees and just people in general, when they look at the industry, they’ll see people like them, and they will be attracted to the food manufacturing industry, don’t you think?

Berger: Absolutely. In fact, I’ve seen it.

Spencer: Okay, Rich. Well, I think those are all of my questions for this episode. And I just want to remind our audience that our last episode, which will be two weeks from today, Rich is going to answer listener questions. So if you have anything that you want to ask rich and have him take a deeper dive into, you can send an email to info@avantfoodmedia.com. And we will address those in our last episode.

Berger: Looking forward to it.

Spencer: See you next week!