Food System Change: Errol Schweizer Interview with Green Queen

Original: https://www.greenqueen.com.hk/food-system-change-whos-making-decisions-whos-benefiting-whos-gaining-the-wealth-errol-schweizers-got-questions-exclusive-interview/

GQ: Let’s start with your background. You used to be VP of Grocery at Whole Foods and the company can really be credited with changing the grocery game in the U.S.- it helped usher in the era of the conscious food shopper. Would you agree with that and what do you think made Whole Foods so different from other retailers? 

ES: I think for those years, Whole Foods was growing at 20% annual compound rate in sales. A good chunk of the 1990s into the 2000s, when I was there, and even into the 2010s, the employee base was super motivated and creative and empowered to just do things differently. To do more local sourcing, to develop relationships with innovative brands and develop new product assortments, new store formats. We had a lot of freedom to develop new supply chains. Retail is about giving customers what they want, you know, it’s rinse, wash, repeat. It’s very dialectical, it’s a practice space. You figure out who’s keeping you in business, how to make them happy, and keep giving them what they want. So they come back. And that’s all we did. 

I spent half my time working with suppliers on product development negotiations, I spent the other half of my time reviewing data, just to see what customers were doing, not what they were saying. I didn’t care about the marketing reports, I wanted to see what they were buying. We found all these ways to slice and dice our data – just spreadsheets and database work on how they are shopping and what they are looking for. That’s really what led us to figure out that folks love organic. 

Organic consistently grew faster than the company sales. Especially once we figured out how to meet the demand and build those supply chains. Other attributes like health foods and kosher foods were really strong growth drivers too. Anytime we did anything around things like grass-fed or sustainably-raised animal proteins, and we rolled out the 5-Step Animal Welfare Rating, we’d see a lot of adoption and repeat purchases. Customers were very much into entrepreneurs and supplier stories like diverse, socially, ethically motivated companies that treat their employees well and were committed to a healthier food system. That kind of authenticity meant a lot and that’s really what customers were buying. We had that freedom to do that, at that time at Whole Foods. That was how we tried to stay a few steps ahead of competition, and at some point, you know, with capitalism, folks catch up. A lot of other retailers started figuring out what that secret sauce was, or at least aspects of it around product development and private label. 

When I was there, I had oversight over the private label 365 items that we launched in our departments. So we used it defensively against mass market brands and other chains’ private labels as a way of retaining customers. Creating a real brand strategy, a two or three tier brand strategy in each category where you had a value – an everyday line item, and then you had a premium option. Looking at how you can flex that with promotions, programmes and markdowns, and making sure that folks had options to stock up and save as well. It was a lot of fun, with retail stuff and crossing that with the ethical authentic sourcing, transparent supply chain model, which I think other retailers are doing their best to adopt aspects of – but as you know, a lot of retail in the U.S. is racing to the bottom in terms of lower prices and expenses and cutting back on store labour. It creates this real contradiction in terms of what they’re saying and they’re doing, in terms of their assortment versus like what I said earlier, which is the real secret sauce. How you treat employees, how you empower them, how you compensate them in terms of that being related to the success of the enterprise.

GQ: Let’s go into a topic that’s really on peoples’ minds right now – regenerative agriculture. This term is suddenly being thrown around by everyone, including fashion companies, and it’s good there is more awareness. But do you think it’s possible to transition to a completely regenerative agriculture philosophy of growing food and crops and feeding a world of 10 billion?

ES: I think the problem with regenerative is it doesn’t have a definition, it doesn’t have a real framework. It’s a set of practices that a whole host of different companies and organisations are talking about. And there’s some crossover with it. Then there’s a whole lot that they’re leaving out. So I actually don’t think regenerative is the right word or concept. For this, I think there’s aspects of regenerative that are really important or seem to be consistent in terms of soil health, soil biota, and how you treat the land. But regenerative in a lot of ways is a watered down, a sort of commodified version of agroecological practices, which have been demonstrated in tons of research over the past years of how peasant and indigenous agroecological systems are more nutrient dense, more productive, and create more biodiversity. 

So when you look at these sort of Global North, Western-centric certifications, whether it’s USDA Organic – which is great and I support – or regenerative, there’s a mess of a whole dozen different certification and rubrics and frameworks, or other sustainability markers, and even established yet really obscure certifications like “biodynamic”. They all borrow aspects of agroecology. In a lot of ways, large-scale organic is essentially input substitution without toxic pesticides. Regenerative misses a lot of the narrative that organic misses around labour and social justice – who’s at the table, who’s making decisions. It’s very top down, it’s very much driven by large corporations and NGOs. And there’s a very sort of uncomfortable racial undertone to it, particularly in the U.S., around lack of representation and diversity. You know, unfortunately, I do believe we have no choice other than to feed 10 billion people through a variety of sustainable agriculture and food production methods, including regenerative techniques, but if you look at what the definition of agroecology is – what the principles of it are – that’s what really attracted more of my interest and attention.

Because every time the food industry comes up with the certification, it’s just picking and choosing in order to stay in its comfort zone and not make too many changes, sort of like rearranging the deck chairs. There’s a lot of positives with regenerative, there’s a ton of positives with organic. I’m a huge fan, but it’s also missing a lot of things. Just the fact that with organic, it doesn’t make a difference to the lives of farm workers. They’re not getting doused with pesticides, but they’re not necessarily getting paid better or getting overtime. Farm workers in the U.S. are exempt in most states from the Fair Labour Standards Act (FLSA), which is slowly changing – a number of states have started to adopt better form worker regulations including Washington, California, New York State. 

Agroecology recycles input reduction so that you have a closed loop. The focus on soil, the focus of animal health and welfare, as well as the fact that we need to get rid of concentrated animal feedlots. The industrial meat production system is one of the most evil things in existence, up there with things like the arms trade and maybe the war on drugs, and agroecology also talks about biodiversity. You’re not talking about monocultures, and that’s what a lot of what genetic modification has been about, creating these vast monocultures of production, mostly for animal feed as well for processed ingredients, seeds and oils, for example. You know, economic diversification, the sharing and co-creation of knowledge, like all this stuff that you don’t really talk about because that means having other folks on the table, it means talking to your suppliers as equals and including your employees in the decision-making process. That means including farm workers in conversations about the labour process on farms, in addition to farm owners, and culturally-appropriate diets and biodiverse diets. Let’s talk about what folks want to eat and how they can eat in a way that is grown sustainably and ethically, and not just impose the standard American diet or standard Western diet, with an overlay of “it’s plant-based” or “it’s organic”. There’s fairness and governance within the supply chain too. Once again, who’s making decisions, who’s benefiting, who’s gaining the wealth, right? This goes back to participation and decision-making. So, there’s a lot about regenerative that just doesn’t touch any of this stuff. 

Regenerative essentially talks a bit about animal health, a bit about biodiversity, and definitely talks a lot about soil health, and it talks a bit about input reduction and recycling. But most of the seller stuff fits into the political economy of food systems, which regenerative has not really touched, and in organic, it’s been watered down since the 1990s. I was an activist in the 1990s, trying to get organic standards passed and trying to be agroecological. But as it got mainstreamed, approved and then attacked, a lot of this stuff got left on the cutting room floor. Especially around fair labour and farm workers stuff, but also how the decisions are made. And, you know, also around biodiversity as a tonne of organic monoculture these days. The problem with the question is, I don’t think we’re having a holistic enough conversation about the food system, and who’s making decisions and who’s benefiting, as opposed to fetishising particular techniques, whether it’s regenerative or organic, or on the other hand, GMO and monoculture and cell tech and food tech, you know, and that’s where I think the political economy comes in. That’s what I’m very interested in these days.

GQ: Do you think that the idea of ethics in our supply chain is a newer idea? As you say, we focus a lot on fetishising technique and talking about inputs and genetic modification, but we’re only now spending more time talking about the plight of farm workers and what they deserve. Do you think that consumers are willing to pay for fair labour, given that even in the retail supply chain, food delivery or car hiring industry, we’re just wanting convenience and leisure at a cost that doesn’t allow for living wages for the workers?

ES: This is a great question. I think this needs to be solved at the policy level. You know, as a retailer, I know that when a customer is in a grocery store, they are maybe looking at a product for like two or three seconds. They see a certification or something they recognise or that has a positive affirmation for something they believe, on the one hand, or they’re telling their two kids in the shopping cart and thinking that I just need to get through the store. Or they’re on a website in-between zoom meetings. It’s just not the right solution. This needs to be at the policy level, and I can’t speak for all countries, but in the U.S. we need to really fix our labour laws. We have really weak labour laws for an industrialised Global North country. We have something called the PRO Act, which is in front of Congress these days, which would make it much harder for big companies to bust unions and it would protect union workers. Unions are the heart of the middle class – it gave us so many of the benefits we now take for granted. Yet unionisation is hovering around 11%, while more than 50% of American workers would want to be in union. So I think that’s the first thing. 

The second thing is in terms of gig work and delivery. At this point, it’s established, right? But gig app companies and the tech companies essentially extract 30% from the system in order to run their business and pay back investors, and maybe you have a handful of executives with huge windfalls. We’re talking about 30% that’s extracted three ways from the retailer or the restaurant, sometimes double-digits in terms of commission, from the customer, who’s paying a fee. Then from the supplier or the brand in terms of the retail facing apps, who are paying participation fees, as well as promotional fees. And foundationally, the gig apps are based on precarious, underpaid labor, and they're funding legislation like Proposition 22 to expand gig work that doesn't classify drivers as employees with the labor protections that go along with that. That is intrinsic to their business model and vision for profitability. So if you’re going to take that 30%, and all that wealth extraction that’s going to Silicon Valley and a handful of big wigs, and asking whether this is the best way to do what is obviously necessary and frankly, has been done before, like there was pizza delivery before. I think the point here is, once again, political economy! And my thought is: make it a public utility. The public is going to cover the cost of delivery. And in the same sentence, we’re going to fix a lot of food access issues, because a lot of food access issues are around geography and location, in addition to everybody’s gonna be paid a living wage, they’re gonna have regular hours, the people will control the app, as opposed to the app controlling the people, which I just call it digital sharecropping. It’s when the app pretty much governs your labour, which for me, is somebody who works. As somebody who has done delivery, I’ve done retail, I’ve worked in warehouses. I feel I’m very fortunate that I was born when I was, and that I was able to make a living out of [this work] and I was not subject to the type of labour process and exploitation that is endemic to the food app/food tech space now. It’s now built into the business model, it’s built on the reduction in cost at the foundation, which is that last mile of who’s making the delivery. And in the U.S., it’s very racialised, where not all, but the majority, are people of colour. Usually younger people could keep up with the pace, but also older people, and still plenty of white people. It’s a really tough industry, if you’re working in it. 

I think a lot of the experiences that are coming out make it seem really dystopian, yet, customers want it. Especially in the pandemic, or people like us who don’t necessarily always want to go out and go shopping. It’s also a privilege. So that’s why I would say, let’s put it into the public sector, people are gonna want that. Then in terms of retail itself, there is a ton of documentation about how in the U.S. the profits from the pandemic for large retailers are double-digit comps, huge growth, huge profitability. Retail margins are usually super thin and during the pandemic, their margins were fixed and stayed the same, but because the sales grew so much, the variable skyrocketed. You had huge, huge wealth extraction where larger retailers gave huge salaries and bonuses to executives. They cut back on pandemic hazard pay, many of them did layoffs and restructuring. For some of the larger retailers like Kroger, for instance, there was an overall wage decline for Kroger workers while their executives got huge payouts. Or Walmart, where the Walton family made an insane amount of money – in the nine-figures over the pandemic, more than Jeff Bezos, who made I think was something like US$70 billion in the pandemic – yet they did these restructurings and layoffs. 

I have a pretty dark assessment of retail work. You had hundreds who died, tens of thousands who got sick, you have walk outs and folks stepping up and pushing back. I will always step up and support folks like that because once again, the political economy, the maths of who’s benefiting from this – it’s a highly unfair system that benefits shareholders. All these retailers are doing shareholder buybacks these last few years. What does that mean? That’s wealth extraction back to the investors as opposed to holding the cash in the business or reinvesting in the business, or god forbid, giving people bonuses and raises and creating a new level of compensation. 

Here in the U.S., we have the Fight for $15, which was really popular since 2010. That’s really what the living wage was in 2010. It’s 2020. Now, we could comfortably say if wages had kept up with productivity, the minimum wage would be US$25 an hour. If wages had kept up with the rate of Wall Street bonuses, they’d be US$44 an hour minimum wage. We’re talking about Fight for $15 and you have all these restaurant and retail associations and private equity groups fighting that. I think it’s something that we can’t leave at the consumer level, because it’s all rigged. It’s all rigged by the time they get there. We need to readjust the whole value equation for what folks are compensated and what food is worth. 

Then finally, we need to refocus and continue to strengthen consumer subsidies as opposed to production subsidies. During the Trump administration, they pretty much gave away US$65 billion in production subsidies, primarily 99% of which went to large-scale, white-owned farms, for commodity crops and processing ingredients and the meat industry is subsidised to the tune of about US$38 billion a year. It’s horrifying to think that essentially, we’re underwriting one of the worst industries in the world with our tax dollars. There’s a lot of crossover between those two numbers. 

But thankfully, SNAP (Supplemental Nutrition Assistance Program) has been funded, which is the food access programme, and we need to expand that. We’re having really intelligent conversations about universal school lunch, which is a great way to address food access. 

Then lastly we need to figure out how we readjust the value equation so that everybody who’s working in the food system is paid fairly, and is treated fairly. Here we don’t have a universal healthcare system. I’m an independent entrepreneur and so I pay out of pocket US$2,000 a month for good healthcare, because my wife is recovering from cancer. We have to have that. But imagine if I could reinvest that money or do something else with it, maybe even work less, who knows? 

For American workers, they’re lucky if they have a healthcare plan with their employee that covers their stuff. Then for gig workers, they’re precarious and if they’re lucky, they could get on an Obamacare plan. For many of them, they don’t have healthcare. They are biking around New York City or San Francisco or Chicago, in the traffic, without health care. Terrifying. I was a bike messenger for a while, so to me, that is like risking your life just to put food on your table and pay your rent. The whole equation is backwards. I think we need to continue to educate consumers, but it’s really about policy, about folks coming together, to organise, to make substantive changes to impact everybody for the better and stop or slow down this wealth extraction from the food system that’s really just benefiting just a small number of actors. So that’s my take on that. 

GQ: The million-dollar question here at Green Queen is your take on cellular agriculture. In your piece on cellular agriculture on Forbes, you asked a lot of important questions. What are your views on that technology and speaking of ethics, do you believe we can get to a post-animal-eating world? Do you think that we should?

ES: Let’s start with what I agree with, which is that the current food system is evil, and needs to go away. We’re talking about billions and billions of animals slaughtered. As we’ve seen during Covid-19, it’s highly exploitative to workers. I’ll just say that we’ll need a just transition for workers in industrial meat and dairy production, right? Let’s just put that on the table. The question there is, you’re talking about the caloric needs that industrial meat production fulfils and how to replace that. It goes back to what I was saying earlier about decision-making and who’s in charge? Who’s making the calls? Why haven’t agroecological processes taken off? They are popular and we keep seeing it in terms of the signals in the marketplace in various ways. Ithink a lot of it goes back to funding and investors, and what folks with resources are willing to take bets on. I say this as somebody who’s in that system, as an entrepreneur and board member for a number of companies, I’ve had to fundraise. It’s very difficult. It’s humiliating, it gives me a bad taste in my mouth, and you’re always having to position what you’re passionate about, what you care about, for folks with the resources to help you do it and scale it. 

What food industry investors are willing to invest in these days is a lot of, you know, glitzy tech stuff, just to be frank, and a lot of what they’re looking for is quick returns, hockey stick growth, it’s high risk, high reward. So on the one hand, we’re seeing a lot of cell-based culture stuff being funded. On the other hand, I think folks who are advocates for it should be very wary of the type of money that’s coming into that space, and what not only the returns that will be asked for, but the potential ownership, governance and control of those technologies will be within the next two to three or four to five years. Once you know those investors, and they’re accountable to their limited partners, they’re accountable to their shareholders, you know, they need to show that return, and then also the fact that it’s high risk money and that not all those companies will make it. But then, it’s also investment that’s not going into other aspects of the food system. You know, I’m on the board of a lentil and bean company and we’re in 2,500 stores. We have great sales, growth, great customer response and loyalty – wonderful brand and brand name. It was hell raising funds for the company, it was absolute hell for 18 months trying to find a group of investors that agree that plant-based means also eating plants, like lentils, beans, hemp. So my experience with that really soured me. I’ll continue to work within that space, because that’s part of my job, but what are the priorities from the investor? That’s where the political economy piece comes in here, and that’s where a lot of what I was thinking was, towards the end of my article was the ownership and governance of the technology in addition to whether or not it’s open source IP. 

I wanted to get to the last part of that first, because that’s actually the most important to me. Because, once again, I don’t fetishise technique. I’m really interested in the political economy, diversity and the choice within the food system and the big sustainability questions. When I see food technology come out – this is somebody who’s literally been asking the same questions for 27 years, I’m a biologist and a chemist, I’ve worked in labs and am very familiar with biotechnology and agriculture – I was asking these questions since the 1990s. Like what is the direction? What are they solving for? For world hunger, oh we’re going to reduce pesticide use. Then you can, years later, look at the results of these technologies and they’re endemic in the food system, enabling highly concentrated oligopolies, and seed and agricultural inputs like pesticides and herbicides. We’ve not solved world hunger. In fact, you could probably say it’s just as bad or worse, because there’s other issues around world hunger.

So you could also say that because some of these technologies were geared towards efficiency and productivity at the farm gate, they’re rapidly adapted by farmers. They weren’t consumer-focused. We’ve seen a growth in health and diet related issues related to processed foods, and it’s not just not about the GMO, but the fact that most of the ingredients are processed, and they go into either animal feed for concentrated mass slaughtered meat and poultry, or they go into chips and soda and distillers. We’re asking these questions 25 years ago, and for me, I still have the same sort of questions. Getting back to your question about cell-based meat, my main issues of concern revolve around what it’s being fed, what the cultures are being fed and what the caloric or feed conversion is, like how efficient it is relative to meat. I’d love to see life cycle analyses of cell-cultured meat versus agro-ecological systems versus organic regenerative systems. I don’t think it’s going to be worse, but I’m asking the questions. Other questions involve the waste materials, I call it the poop – how much is produced per pound, who deals with it and what’s in it? Also the byproducts from production itself – what’s in the tea i.e. the liquid that the cell-cultures are brewed in, in these fermentation tanks? What do you do with the other stuff that’s in the steep? How much of it is produced per pound of meat, when you’re talking about literally tens of billions of pounds? That’s what you’re going to need to produce to give a decent ROI for all this money that’s flooding in? Well, what are these externalities? That’s what I haven’t really seen anything on. And there’s, I think, some good research on hormones and antibiotics. I am concerned about whether or not any of that goes back into the waste stream, it looks like they’ve figured out how to make sure that it doesn’t go into the consumer facing product itself.

You know, these are questions that I have thought of as a retail buyer, but also a retail buyer who has worked on quality standards like non-GMO, and grass-fed and plant-based. It’s also about what the regulatory rubric looks like? So I wrote it as a guide, a general guide, and I got one gentle critique from a plant-based scholar activist that this should be disambiguated. I actually said, no you’re right, these are geared towards different actors, like my whole conversation about governance and ownership. That’s really towards the founders and investors. My gut tells me we know what this is going to look like. These are going to be structured as Ubers and Twitters and Instagrams as opposed to work around co-ops and collectives and maybe even employee-owned, which for me, would be preferable. 

At the end of the day, folks are going to adopt these because they are funded and not killing billions of animals so that you can have a burger. That’s where it feeds into this. I think what folks are now calling the sort of old protein category. 

Finally, my other question would be, it’s more personal because I have food allergies and sensitivities. I know a lot of folks, friends, and family who have inflammation-related diseases. I guess just the basic question is whether this stuff is gonna make us sick? The work that cell-culture is built on in order to give it the mouthfeel of a steak, it’s going to be maybe crustacean shells and maybe plant-based and maybe GMO. It may be plastic, I don’t know. Is that digestible? Is it bioavailable? Is it going to make my joints hurt if I eat it? This is what I have to ask every time I shop and buy food, not just for myself, but for family members who have Lyme or friends who have rheumatoid arthritis, or whether they’re recovering from cancer. We’re talking about tens of millions of people who have these diet-related illnesses, but also illnesses related to what they can or really should not eat, as well as allergies, like gluten-free and soy and wheat and peanuts. 

That’s one of the main concerns I’ve always had about the Impossible Burger. It’s not whether or not the GMO is going to kill you. It’s obviously not killing people. It’s not a safety issue. It’s an allergenicity issue and the fact that it has inflammatory ingredients and cross allergenicity with soy, possibly, possibly peanuts, and definitely wheat gluten. So you exclude a lot of us from buying these types of products because of these ingredients. I’m just like, for me, it just stresses me out. It’s like, okay, is this yet another food tech that is going to contribute to food-related allergies, food inflammation issues, as well as other issues in the food system beyond sustainability? Because I do think there’s a lot of folks who are not so ‘just vegan’, but also animal-rights focused, and it’s like let’s take it because anything’s better than this mess. But then there’s a lot of us other folks who have other issues and priorities that make it difficult. It’s personal, stop excluding the segments of the populace who had these concerns. I think that’s a lot of these folks have not been exploited or lied to, but the whole paleo and keto thing, which I think is kind of sketchy without great scientific data, but for those folks who have those issues, they’re attracted to it because it doesn’t make them sick eating that way.

That’s something that I think not only the plant-based sector, but the cell-based sector is overlooking. Those are the issues. It’s a lot. As you can tell, I’m super neurotic, I overthink everything. And you know I read a ton of literature around this research and around the development. I didn’t find a lot of really clear answers, what I did find was a lot of investor froth, a lot of cheerleading, and a number of industry-funded researchers who are enthusiastic about the technology, but that makes me question their ability to ask tough questions and uncover and disclose potential externalities. They have a very focused narrative saying that this is better than factory farms, which I would hope it would be, and therefore it is a solution. For me, that’s one aspect of it that I’m not writing off because it is important. 

Finally, the whole investor space, I’m just not a big fan. I think the tech investors are very short-term in terms of their real focus on sustainability, and you’re saying that this type of technology will take cattle out of the equation and the environmental and climate change related aspects of cattle, and factory farmed animals, and that’s good. But what about the feed? What are the cells being fed? My theory or my hunch is that it’s probably GMO, because what else is cheap and widely available? You’ll just further process GMO, conventional monoculture corn, soy, maybe canola or cotton into something that can be put into the steep for the cell cultures. Therefore, you still have the same problems around land use, just you’re pulling a lot of animals out of the equation. Once again, what’s the land use conversion relative to what you need to feed a pound of cow or pig versus a pound of cell-based? I don’t know. I just want folks to think this stuff through. I want more people to ask the questions. I want more questions to be asked. Frankly, I’d love to see answers. I’d love to see third-party independent, peer-reviewed research talking about this stuff. Because we have to be careful. 

Anytime there’s a sense of urgency about solving a problem – I’ve been trying to solve these problems for 25+ years, like a lot of us have been working on this stuff – when something new comes in and it’s shiny, well-funded and saying we’ve got the solution, my gut is always: let’s slow down. Let’s think this through, be really deliberate about it. We’ve seen that story before. I think with this, you know, I’m genuinely concerned about these questions. I hope folks take it to heart, take it seriously. Then also, I hope that the folks who are in development and the finance side also respond. Then finally, the regulators need to develop a regulatory framework. Then frankly, the real regulatory framework we need is around true cost accounting and true costs of meat. 

Honestly, we could do a lot more good to the food system by just saying, meat needs to reflect the true costs of production. It needs to take into account the hog manure ponds and the oceans of cattle manure, the run-off into the Gulf of Mexico, the costs associated with animal feed and 70% of GMOs and millions of acres of conventional monocultures of corn and soy. Meat needs to take into account the cost of labour for slaughter and processing, and not just the health and wellness, and the fact that hundreds of workers have died and thousands have gotten sick. It’s not a pleasant job. I would not want to have to slaughter and kill and dismember things for a living, [it’s a big] psychological emotional toll on workers. 

Then finally, what is a just transition going to look like if we’re going to get out of that and say that we need to greatly reduce meat consumption, we need to greatly reduce production of this really destructive form of food? What do we do with all the workers? We have to make sure that they’re taken care of. That’s what a just transition is about. Once again, it goes back into the equity and diversity piece of cell culture and will that be any better? Will all these questions around social justice also be resolved within cell culture? So far, I’ve gotten zero indication that they do take into account the social justice diversity equity piece for workers. There is, as you’ve documented, a more diverse cohort of founders and even investors, but in terms of the folks in the supply chain, either way and once again, the political economy makes me very sceptical about those aspects of the technology. I know that was probably more than you bargained for.