John Shegerian: This episode of the Impact Podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of Fortune 500 corporate investors, family offices, institutional investors, industry experts, and impact partners. Closed Loops platform spans the arc of capital from venture capital to private equity, bridging gaps, and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com.
John: Hi, this is John Shegerian. I never could have imagined when we started the Green Is Good radio show back in 2006 that it would grow into a big podcast called The Green Is Good Podcast. Now, we’ve evolved that podcast to the Impact Podcast, which is more inclusive and more diverse than ever before. We did look back recently at some of our timeless Green Is Good interviews and decided to share some of them with you now. So enjoy one of our great Green Is Good episodes from our archives. Next week, I’ll be back with a fresh and new episode of the Impact Podcast. Thanks again for listening. I’m grateful to all of you. This is John Shegerian.
Voiceover: Welcome to Green Is Good. Raising awareness of each individual’s impact on the environment and helping to create a more beautiful and sustainable world. Now, here’s John Shegerian, Chairman and CEO of Electronic Recyclers International, and Mike Brady.
John: Welcome to Green Is Good, Mike. It’s so great to be in the studio with you again today.
Mike Brady: Hey! Buddy, right back at you. We just look forward to every week getting together and entertaining, informing, and empowering our audience. You know, one of the things I love about working with you, John, is when we talk about things environmental and Lord knows, we face a few challenges on good old spaceship earth here, but you are such a solution-based guy. That’s just in your DNA. I know that’s how you live your life but you bring that to the table every week.
So rather than gloom and doom and people going, “Oh my gosh, what are we going to do?” Well, will show you a couple of things. I mean, we’re always constantly discovering new things that we can do, each of us as individuals just doing small things. Do that globally and you’ve got a changed world right at your fingertips.
John: Right at our fingertips, and today is a special edition of Green Is Good. We’re going to call it the WW edition of Green Is Good because in the first half we have Woolf Farms on. And Woolf Farms is just another great example here in the Central Valley, of a local entrepreneurial venture that has changed the world just by the solutions that they’ve implemented on their farms. And on the second half of the show, the other W is Walmart and a grand legacy, amazing powerhouse brand, international brand and they’re going to come on and discuss what they do to help the sustainability movement and how they push the Green Revolution forward.
So again, this is the essence of ‘Why’. Mike, you and I do the show. We love having local brands, we love having small growing brands from across the world, actually, but we also like to show the grand international brands and what they’re doing. So today is a perfect merry and the fact is even Woolf Farms works with Walmart. And so we’re going to even show the interrelation of how small brands work with international brands which lead to massive changes around the world.
Mike: And, you know, one of the things too, I think part of the takeaway, if you are an entrepreneur or somebody that isn’t quite yet, got it into action, on an idea that’s been noodling around in your head for a while. You just might find the inspiration here to think, “Okay, so you’ve got a local company [crosstalk] that is now dealing with a worldwide giant”. The biggest retailer on the planet, the biggest employer in the United States, which is Walmart. Now, if they can do it. Is the possibility exists that you might too? That you might find your idea when given wings, will find the proper distribution platform. That’s a real possibility.
John: Local company.
John: Oh! It very much is. And it doesn’t matter, big or small, you can. As Mike always says, “Make small changes which will lead to big solutions”. So we want everybody to tune in today because the WW, Woolf Farms and Walmart edition of Green Is Good is going to be extra special. So come on back to here, Stuart Woolf, at Green Is Good.
Voiceover: If a little green is good, more is even better. Now, back to Green Is Good with John Shegerian and Mike Brady.
John: Welcome back to Green Is Good, and we’re so honored to have our local ecopreneur rock star, Stuart Woolf, who is the president and CEO of Woolf Farming and Processing and also the managing partners of Harris Woolf California Almonds and Los Gatos Tomato Products. Stuart Woolf, welcome to Green is good.
Stuart Woolf: Well, it’s a pleasure to be here. I don’t think I’ve ever been called a rock star, but I guess that’s a good thing.
John: Hey, listen, this is, it’s something to tell the kids at least, right?
Stuart: Yeah, that’s right. Thank you.
John: But you know, your company is again one of the great local brands here in the Central Valley of California. You’re doing great things, you’ve been named agribusiness of the year and have a whole list of awards. It would take me the whole show to go through them. But why you’re here Stuart, is to talk about all the great things you’re doing to lead the Green Revolution. And, you know, I just love your mission statement here, ‘The simple notion of feeding more people with fewer resources is how you build your family business.’ That is an amazing mission statement.
Stuart: Well, thank you. It’s something. We’re very, very proud of it. You know, my family started this business in ’74 and we go back and look at those early budgets. What’s really amazing to me is that we’ve more than doubled, most of the yields that we were budgeting in 1974. Today, on the same footprint and ground, using fewer resources, fewer labor hours, less water, and we’ve kind of doubled all of our production. So it’s not unique just to our farm operation. A lot of the farmers throughout California have been able to do this and it’s really remarkable.
John: Well, we’ve read some great articles on you and your family, Farming and Processing Company. And one of the great relationships you have is with Walmart and how you’re using solar and other renewable practices to help meet Walmart’s goals of less packaging. And of also using vendors that are totally green in their DNA, and then with regards to sustainable practices. Why don’t you tell us about some of the most recent projects that you’ve been involved with? With regards to you’re farming business and also Walmart.
Stuart: Well with Walmart, let me first tell you that we grow… For example, let’s talk about processing tomatoes. We grow processing tomatoes in Fresno County.
John: Okay.
Stuart: And we send them to our processing plant, Los Gatos Tomato Products. And so, we sell bulk tomato paste to a whole host of customers that then, in turn, sell those retail products, the likes of a Heinz, to Walmart. And through the years we’ve read a little bit about some of these larger companies that are interested in making their supply chain a bit more green, or taking carbon out of it, and what have you.
And being out here in the west side and a farming area that is short of water. We had plenty of lands, we had plenty of sunshine and you think about it. We’ll use sunshine to produce tomatoes, onion, garlic, all these crops. We figured, “Well if we can’t farm all the land. Why don’t we use some of that property to capture that sunlight to grow electricity or produce electricity?”
And that kind of fits in also with some of these larger green trends, if you will, throughout the food business. And we just assume this would better position us, it would give us a better profile for those companies, like Walmart, that certainly are looking to take carbon out of their food chains.
John: So explain, like your new, your one of your more recent projects, the solar tracking system that you did with it, tell us a little bit about that.
Stuart: Yeah. So about a year ago, at Los Gatos, we built a single megawatt, tracking solar system that sits on about six and a half acres. We spent about $6.5 million on it. But the project, actually we work with a company called SPG Solar, that helped us line up the financing and what have you. So it wasn’t a huge out-of-pocket expense for us and it’s able to generate about 25% of our requirements at our tomato processing plant. [crosstalk]
Stuart: I’m sorry, please.
John: No. I want to go over that a little bit. First of all, SPG Solar, Tom Rooney, a great, great company, has been on our show before, he’s doing great things. So, explain this, so we all understand this simply sort. You didn’t have to come out of pocket, SPG Solar found you the financing for this and now you have a huge energy saving. Is this how it works?
Stuart: Well, the way it basically works is you have a system that is in place that’s going to generate a megawatt of energy every year. In between, various tax incentives, rebates from PG&E. You get renewable energy credits that one day, you could mark it under the governor’s AB 32 legislation, and all this. You layer all this stuff together and we went to a bank that basically finances this thing, over a 10-year period, we’re on an annual basis. We’re paying for that project and there’s a slight saving for us.
Now, if the cost of energy goes up, which I believe it likely will, then that savings grow over time. And so, essentially, the project is paying for itself [crosstalk]. And we enjoy the benefits of having this greener profile.
John: So it’s also… so it’s a hedge against future potential, rising energy costs, and it creates a great green profile and the continued green profile for Woolf Farming and Processing.
Stuart: Yeah, you know, one of the things, you just nailed it. One of the things that really persuade us was as we look at energy costs in California and the growth of the state, and all of these factors. We believe the cost of energy can only go up. So this is a hedge. We’ve looked into what it will cost us to generate energy out of this solar project and the project was financed over a 10-year, but its useful life, they estimate to be over 25. So we’ll enjoy these benefits for a long time to come.
John: And when you speak of the benefits, can you share some of the round numbers? And with regards to the environmental benefits just from your system itself and from you taking this action on what you’ve created for the communities and the area around you?
Stuart: Sure, you know, actually these projects, when you take them on, and the EPA actually has a schedule of what the benefits are from an environmental standpoint and our project. The EPA suggests that effectively running the solar project would offset about 37,000 tons of pollutants over a 25-year period, That’s the equivalent of just less than, about, burning 4 million gallons of gasoline. It’s the equivalent of over 7,700 acres of pine trees. And when you lay it out over a 25-year period, I mean they’re pretty impressive offsets.
John: So it’s a significant environmental benefit and environmental benefit for all of us to understand when you make this kind of investment?
Stuart: Yes, absolutely. And lastly, I want to throw in there again, by virtue of putting this project in place. We develop these energy credits that ultimately they talked about the possibility of having an open exchange and market for energy credits. We think these will grow in value over time and maybe marketable.
John: So Los Gatos Tomatoes Products is in a penny service area. What was the tipping point for your board, for you, personally, for your family, to go ahead and jump in with this kind of project? These aren’t small dollars we’re talking about for any company, big or small. Where did you guys… How did this all shake out in the board room or family dinners?
Stuart: Well, I can tell you, we had a lot of discussion around our boardroom. And ultimately, one of the driving factors for us, when you lay out all the economics and everything, the project does have a positive payback. We could easily have spent money on a new tomato harvester or some other thing with a quicker payback, but the other way we looked at this, we own a lot of farmland out in Western Fresno County and we couldn’t farm it all. I mean, because of water restrictions, and so a solar project requires no water. And so, we were thinking, “Well, here we already have the asset of the land. What could we do on that land that wouldn’t require water that could generate a return for us?” This was another layer in our decision-making.
Again, I mentioned the governor has his AB 32 legislation, is looking at reducing the amount of carbon coming out of industries, and what have you throughout California. We think this better positioned us in the long term if that legislation does come forward and have an impact. Again, it required very little out-of-pocket capital for us. It was a kind of a self-funding project. And again, the basic investment fits with our mission of producing more food with fewer inputs and resources. So when we laid all the staff out, together with giving us that green profile, it was pretty compelling.
John: Well, Stuart, you mentioned earlier too, I’d like to revisit if you will, for just a second, the energy credits, which you said, I believe if I remember correctly, “Will become even more valuable in the future”. So that’s like an investment, like a savings bond, sort of thing, or putting some money in a CD, if you will, to just break it down. The credits become even more valuable as energy in the future becomes even more expensive, correct?
Stuart: No, that’s correct. And ultimately, as I understand the legislation, is that if you hope to expand, or your current operations, and you need to increase your carbon profile, or what have you, you may have to go buy credits to offset your usage, to offset whatever carbon you’re producing. So I believe the State of California is going to continue to grow and I believe we’re going to continue to have economic activity and growth here. And so, these credits over the course of time, if we’re putting, kind of, a cap on how much carbon industry can emit, and they’ve got to buy these credits as offsets. They’ve got to grow in value, I would think.
John: All right. Will this become a tradable commodity to another business down the road, possibly?
Stuart: Yes, that’s what they’re talking about. But we have other processing facilities. We’re in the frozen vegetable business, we’re in the almond processing business. And so, these credits, we may use them internally in other parts of our operation, or we may very well be investing in more solar installations in other parts of our operation. But this was our first step in it and I can tell you, working with the folks at SPG, these guys built a project, it came in under budget. They built it faster than they had promised and it’s generating more power than what it was rated to do. I mean, we’ve been very, very pleased.
John: And we’re big fans of Tom Rooney. So, this is so great to hear the living proof of what really, how this really works in the fields, in the real world. So, we’re so glad you shared with us the SPG Solar connection. Also, now, let’s toggle and pivot over to the Walmart connection. Your name in different articles has been mentioned with Mike Duke, and Mike is doing great things at Walmart. Explain how this decision of yours, and the greening, and the further greening of both Woolf Farms and Los Gatos Tomato Products has helped you build a closer relationship with Walmart and their goals.
Stuart: Well, I have to tell you. I, again, don’t have a direct relationship with Walmart. I sell to people that remanufacture and virtually, as you well know, all of these guys. See, Walmart is an opportunity.
John: Right.
Stuart: And our basic belief is if we have a greener profile than other suppliers. It puts us in a better position as we move forward, and hope to build our own markets and customer base. And I can tell you, I was just recently, I was in Oak Brook, Oak Brook, Illinois at McDonald’s headquarters, and I was struck that we were talking to those folks about the tomato crop in California and the unique nature of our vertically integrated farming company. And those folks ask me more questions about the solar project than our history of farming, or food process, and what have you.
John: Isn’t that interesting? [crosstalk]
Stuart: They just zeroed in on that thing. And again, I think they’re interested in aligning themselves with people that are, quite frankly, making these kinds of decisions and investments.
John: And what we’ve learned along the way, what Mike and I have learned when we’ve talked to people who have created the next greatest widget, or a sustainable organic product is that, when Walmart, or as you point out, a McDonald’s makes a decision to support people like you that are making green and more sustainable products and decisions, it really moves the needle. It pushes the Green Revolution forward much faster.
Stuart: Well, I would hope so. We believe if companies like McDonald’s or Walmart really take a hard look at, say Los Gatos, and as a part of their supply chain. We think the solar project may be a hook. If we get them here to actually come to the ranch and see the operations. They’ll find out, we have one of the shortest halls in the industry, we actually truck our…
Because our plants are in the middle of our fields of tomatoes, we have a smaller carbon footprint there. We’re making fewer passes in the fields with our tractors, the way we’ve laid out our fields, and the buried rep. We’ve taken a number of steps, quite frankly, pursuing yield and reducing costs that ultimately all fall in line with the basic, their basic goal, of taking carbon out of their supply chain.
John: Gotcha. Gotcha. You know, Stuart, I know the solar project is one great step in the right direction, but I know, as you’ve pointed out, your family’s mission statement and your business mission statement have really been intact for a while. So what other green things? I know you have many other green initiatives. Share with our listeners and the fellow farmers out there, and other active people, and also retailers, and people that will be looking to buy your products. What other things are you doing to make your company more sustainable in its practices?
Stuart: Well, we’ve done a lot of things, but some are just the basic things we’ve done. You know, Fresno County by itself, is the largest tomato-producing region in the world and we stack a tomato plant in the middle of the tomato fields. So we’re not trucking tomatoes all over the state, what have you?
John: So lower carbon footprint just from that.
Stuart: Oh! It’s huge, the amount of miles that we use. We used to truck tomatoes from our farm, about 177 to 100 miles up towards, you know, heading north to the canneries in Sacramento and Tracy, and what have you. We no longer do that. Our average haul here on the ranch is about 5 miles. And so, we really have taken a lot of truck miles off the roads. Out in the fields and here, we’ve done things like, use GPS and standardized our bed configurations. All that means is, every year we can grow a crop on the same bed, using the same drip systems, without having to run tractors to disk everything up, and lay the new furrows out and everything. We’re just simply making fewer passes all over this ranch.
My father, years ago, started investing in all kinds of distribution systems on the ranch, so we could move water all over this property. So we could properly rotate the crops and maintain the health of the soils. This is how we’re able to get… We keep pushing the envelope on yield with fewer inputs. It’s fantastic.
John: How does it work in the agro? Because you’re really the, no pun intended, the top of the food chain, in terms of your massive success, Stuart. And your family’s business has really grown tremendously over the years. Do you share best practices with other leaders in the ag industry, both here in the Central Valley and other parts of the United States, and other parts of the world? Is that how this works?
Stuart: Yeah, you know it’s funny when you’re a farmer, it’s common practice to share best practices if you will. And these best practices that we have, we’ve adopted from a lot of our neighbors and vice versa. And so we do all get better together, but you know, just one thing about California, it’s something that we just take for granted here, how diverse and how productive this region is. But the rest of the world, they typically come to California to find out, how to do it better and more intensively, more efficiently, and what have you, We’re not racing over to Europe, or Africa, or South America to figure out how to do it better. They’re coming here.
That’s the product of having the UC system here and its land grant mission of helping agriculture in their research and development of better farming techniques. We’ve enjoyed the benefit of all of that here. I think we’ve done a good job, but I think all of my neighbors and friends in the Valley are doing just as good a job. We’re not that unique.
John: Hey, you know, we’re down to the last 2 minutes. Do you have…? You know, we have a lot of entrepreneurs, or budding entrepreneurs, or entrepreneurs-in-waiting, or people who want to reinvent themselves. Can you share some pearls of wisdom of your experience of being a CEO and now a green entrepreneur? A lot of people want to be the next Stuart Woolf. Do you have some pearls you want to share with our listeners out there as we wrap up the show?
Stuart: No, I would just tell them to sort out and think about what the possible opportunities are going forward. And for us, we look at, like 50 years, and realize we’ve got more than double the food production throughout the world to feed the world. And we think California’s well-positioned, and so we think there are great opportunities here. If you can hunker down, get more efficient, people are always going to eat and there’s going to be more of them. So I’m very optimistic. I think agriculture is a great place for a young person to come and stake a claim. Unlimited demand going forward.
John: And with regards to agriculture and where it intersects, also, with the Green Revolution. Do you feel very hopeful that they’ll be more entrepreneurs like you that get involved with solar and other great kinds of technology and make their companies greener and better?
Stuart: Absolutely. It’s happening now. And I think there are plenty of opportunities there. I’m very excited about the future.
John: Well, you know, Stuart, we are so thankful for your time and honored that you came on today, Green Is Good. For our listeners out there that want to learn more about what Stuart’s doing and his great family business is doing. You could go to www.woolffarming.com. Stuart, Stuart Woolf, you are really a visionary, ecopreneur, and truly living proof that green is good.
Stuart: Thank you for the kind words.
Voiceover: If a little green is good, more is even better. Now, back to Green Is Good with John Shegerian and Mike Brady.
John: Welcome back to Green Is Good. Now, wasn’t that a great first half of the show, Mike?
Mike: Well, once again, I’m totally inspired, John. Just totally inspired.
John: You know, we brought Fresno to all our listeners. It shows how local the solutions can be in the Green Revolution and we’re going to go from Fresno-based, Western Fresno-based, good companies. Now, we’re going to go to Bentonville, Arkansas to bring on one of the greatest global, international brands in the world, Walmart.
Mike: Well, you know, I think I came across his statistic and you are much better with numbers, and facts, and figures than I, John. But am I correct in what I thought I heard, that Walmart is the single largest employer in the United States?
John: You know what? We have to ask Kory Lundberg, our guest from Walmart. But I think you’re right, but I don’t want to say specifically. But I think I’ve heard that also.
Mike: They are big.
John: Oh! And when they make a decision, it truly moves society. And that’s the great thing because, with that kind of platform, they really do have a huge role in moving the needle in the Green Revolution.
Mike: Yeah. There’s a talk about a bully pulpit like President Theodore Roosevelt used to call it. And he was one of the first true conservationists. But TR would be very proud basically of the leadership role that the folks at Walmart do take when it comes to environmental responsibility.
John: They were one of the folks that have gotten ahead of this and they’re still a huge leader in this, and I think it’s going to be truly a fascinating conversation today because they touch so many facets. It’s just not also their own internal processes and procedures, but they demanded of the vendors that sell to them, and that then creates a massive ripple effect across so many platforms.
Mike: Well, as we spoke earlier when I worked for one of their major vendors, a major record company. Walmart was very exacting about the packaging that we would distribute our videos, our games, our DVDs, even our gaming platforms if you will. The hardware that went with it as well, as the chips and the salsa, the software. Really, they were very exacting about using minimal packaging and one of the legs of the environmental sustainability movement is Reduce, Reuse, and Recycle. Well, they were all about reducing the unnecessary packaging and they had their own recycling going on.
John: And they continue to use their platform for the greater good. I think our listeners are going to be fascinated. We’re going to take Green Is Good now, over to Arkansas. So come on back to the other side, to hear Walmart at Green Is Good.
Voiceover: If a little green is good, more is even better. Now, back to Green Is Good with John Shegerian and Mike Brady.
John: Welcome back to Green Is Good. And we’re so honored to have our special guest, Kory Lundberg, who’s the Senior Manager and Head of Sustainability Communications at Walmart. Welcome Kory to Green Is Good.
Kory: Thanks, John. It’s great to be here. I appreciate the opportunity.
John: Well, you know, this is truly a momentous day for Mike and I. And I’m going to just share with our listeners one more time, because of Walmart and all the great things you do, and the invitation that Jenni Dinger extended to me in 2007, to come down to Bentonville and be part of a think tank where we got to speak to an audience of your vendors, on how to green, or how to better green the United States and the world.
I thought up green is good as part of my remarks that day down in 2007 then trademarked it while I was going to the airport in Bentonville. And literally, it’s because of your great company Kory, that we’re here today and we’re able to use Green Is Good as a platform to help share with the people across the United States and even the world who listened to it on iTunes, how to really be part of the solution. So, thank you.
Kory: Oh, you bet it. And that’s a really neat story. And, boy, how little did we know back in 2007, just how right you were about green being good. And the thing that’s so interesting is, that’s kind of a great example of kind of how we’ve gotten to where we are, is bringing in people, experts, like yourself to come in and talk to us. You know, we’ve been retailers, we’ve been retailers since 1962 when we started, and so the whole sustainability area. We had some ideas but we didn’t have all the ideas. And so it was bringing in new ideas in the experts like yourselves to give us guidance and give us help, is really how we’ve been able to be so successful at this.
John: Well, Kory, I just want to start at the basics. I know you have three main sustainability goals, even though there are so many things we could talk about, and we’re going to get to a lot of them today. Why don’t you share with our listeners, the three main sustainability goals at Walmart?
Kory: You bet. When our sustainability program was outlined in 2005 by our then CEO, Lee Scott. It really came down to three goals. It was number one, to be supplied with 100% renewable energy. Number two, to create zero waste, and three, was to sell products and sustain people and resources. I mean, it really comes down to… that’s where our footprint is and that’s where we’re able to make a big difference.
John: When I’ve heard Lee’s remarks back then, and I want to hear how you evolved that from ’05 to 2010 and what Lee Scott said, “Those goals of sustainability.” I remember his remarks. They’re not even low-hanging fruit though. That’s fruit on the floor. He’s the first person I ever heard say, “Food on the floor.” And I’ve probably used it a million times since then, but to me, that really stuck with me. Tell us how you evolve that vision from 2005 to today, and what you’re doing today Kory.
Kory: And I’ll tell you, John, there’s still a lot of low-hanging fruit out there, as new technologies emerge and develop, it creates low-hanging fruit all the time. But, really, when we started the goal and the focus was, let’s make sure that we have our operations, let’s make sure we have our own house in order. The focus when you talk about Walmart is our buildings and our fleet. We outlined some goals to make our buildings more energy-efficient and produce fewer greenhouse gases, which was kind of a stretch goal because our buildings in the US were already very efficient because as you know, Walmart is about lowering costs and operating more efficiently. So we’ve always looked for ways to lower our energy.
But what we did discover, as we went through this process, we were able to increase the efficiency of our buildings, not just here in the US, but we met this goal in all of our global markets. You imagine when you have 8,400 locations across 15 countries, the size and scale are really able to make an impact. Now, you can share those learnings, what we have in the US, we can share those with our team in China, or our team down in Costa Rica. That’s one of the big things that we realized early on, is that Walmart’s scale and our size is something that really provides a benefit in trying to move the needle in the area of sustainability.
John: That’s such a great point, Mike, and I have been so lucky to have guests that have created revolutionary or even evolve just legacy products that are now greener or more organic. And one of their comments to us, the common thread that they say, is that besides being on Oprah Winfrey Show, which of course moves the needle, when Walmart decides to make a purchase, and they get to stock your shelves, and you decide to carry them. That pushes the Green Revolution faster, further than anyone, other movements. We know that your size and scale are amazing and our listeners should really understand that that you get to be a leader on so many levels, Kory.
Kory: Well, and I think probably our best example of that is with concentrated liquid laundry detergent. We announced in 2007, that’s all we were going to sell in our stores is concentrated form, and by mid-2008, we had reached that goal. But what we have found is, manufacturers aren’t going to make the 33-ounce bottle and the 100-ounce bottle, they’re all going to go to the concentrated 33-ounce bottle. Now, you’ll see that on all of Walmart shelves, but anywhere you go to buy liquid laundry detergent, it’s going to be the concentrated, the concentrated version. So that’s really had a ripple effect across the entire retail industry and that’s something we’re really proud of.
You talked about, obviously, the savings and water, and plastic in terms of the packaging and cardboard. But think about the savings you get from a smaller packaging on your transportation. So now you’re able to put the same number of bottles of laundry detergent in fewer trucks. You’re able to get more of that laundry detergent on your shelves. So now when the customers come in, they’re going to be in stock and get what they’re looking for. And then, it’s more convenient for them to take home the 33-ounce bottle, and at the end of the day, when they’re done with that, they’re creating less waste in their home as well.
So it’s really looking at products, not just in terms of packaging or resources, but really over the entire life cycle of where can you make improvements or where can you make benefits, that are going to be good for our customers, our communities, and, of course, in our company.
John: Kory, you could not have put that any more succinctly. That was like, that was the entire process. And if you want to know about efficiency and the ripple effect thereof, you’ve just heard it from Kory Lundberg. I mean, the domino effect is just amazing and that’s what we’re so excited to talk with you about, talk about that some. Because I remember when I was sitting in your amazing auditorium down there and they were many other suppliers there, and I was listening to the goals that you were outlaying for the suppliers. How do you engage with your suppliers, to then keep continuing and pushing the green movement forward, more and more? Explain that process.
Kory: Sure. It really comes down to explaining to them what we’ve learned as we’ve gone through this process. And when you talked about making things in a smaller package or you talk about a manufacturing process that reduces your greenhouse gas emissions. Really, what that means to our suppliers is it reduces their costs. The main thing that causes greenhouse gases is energy. So you reduce energy, you reduce your energy bill. You use less cardboard in your packaging, you’re reducing your costs there.
So it’s really helping suppliers understand that, as they go through this process, it’s really about making them more efficient. It’s about enabling them to build and produce a better quality product at lower costs for them, and for our customers. And so, as they get involved and they kind of see what the benefits of that, that are. They are right on board and they become some of the biggest advocates out there, in terms of finding ways to do things better. How can we innovate even more to make our product even better?
So it’s just kind of that process of going through the education with suppliers and letting them know that, this is really a great business decision. It’s, green is good, but it’s also good for the business, as well, in terms of lowering costs and being able to pass those on to customers.
Mike: Well, you know Kory, that is so true. And John and I were talking about this off-air, and before we got you on-air today, shared a little bit, but we’ll share with the audience, at a one-time point in my career, I was working for a major record company. I did the promotion, but part of it, after the promotion side of my job ended, I worked in the distribution end in customer service, and Walmart was one of the absolute biggest accounts that we had.
Now, how does Walmart drive business at that time? Walmart was really beginning, and this was supposed to… this was back in the late 90s. And very exacting about how the packaging of our CDs, our DVDs, our entertainment software, and even our gaming platforms. Walmart insisted on minimal packaging.
Well, it did reduce our shipping cost, number one. It also enabled us to ship more units per pallet. We had to reconfigure a few things, but the folks at our company figured out real quick that while we had to make some adjustments and there was some grumbling initially. It’s like, “Wow, we are getting a lot more efficient in our own business.” Just as you said. I can back that up 100% And we were able to ship a lot more units to Walmart.
Kory: And, Mike, that’s such a great example, especially, with the DVD suppliers that you’re talking about because we brought them in and asked them, “What can we do? How can we make this packaging better?” And, you know, everybody knows what the case of a DVD looks like, it’s pretty standard. Everybody knows and it’s really kind of hard to make any changes to it. But what the DVD supplier that you’re talking about did is they were able to actually cut out some of the plastic insides of the case. And that reduction alone helps them eliminate 28,000 metric tons of greenhouse gas in one year.
So, again, it goes back to reducing greenhouse gas, reducing energy, being more efficient, and that’s one of the things that we’ve realized in our own fleet, as we become more efficient as our suppliers are working with us to become more efficient. Our focus is really on, how can we drive fewer miles? Initially, we started, well, how can we be more fuel-efficient? But then we realized, “You know, it makes a lot more sense to not drive that mile than it is to drive that mile more efficiently”.
And so, just last year in 2009, the last numbers we have, our fleet through all of the different things that they have done was able to deliver 77 million more cases to our stores and we’re opening more stores. We’re growing. So there’s more product to be delivered but they did it by driving 100 million fewer miles. Imagine what the business benefit is right there. That saved the company, just in what the fleet did, nearly 200 million dollars in one year. It’s just thinking things differently than what you’ve always done and using the green is good.
The lens of sustainability is about all the different things that you’re doing. Is there a way to do it differently? Is there a way to do it better? And when you look at those different things, invariably you find out there are better ways to do it and it ends up with a benefit to you and your customers.
John: Well, and Kory, that’s so well put in. For our listeners out there that are near a computer now or are going to be near one soon. I want them to see your great website, walmartstores.com sustainability, so they could see more about what you’re doing. Let’s talk about, you know, sometimes we tackle simple issues on the show, sometimes more complex.
The issue of energy, Kory, seems more and more complex every day, especially, with some of the crazy things that we’ve seen. Tragic things we’ve seen this year, in the gulf and other parts of the world. The issue of renewable energy continues to be a drumbeat you hear about but is yet to be shaken out on how people are going to implement it. How is Walmart going to achieve its 100% renewable energy goal? And how has it been working so far?
Kory: Well, John, that’s a great question about how we’re going to achieve it. And, right now, I’m not sure we know the answer to that question.
John: Okay
Kory: But that doesn’t stop us from looking for ways to increase the amount of renewable energy that we bring in and use in our systems. We’ve got 30 solar sites that we have in California, Hawaii. We’re testing a couple of, probably, our coolest things that we’re doing, we’ve got Sam’s Club in California, and a Walmart store in Worcester, Massachusetts, that has small wind turbines, or what we call micro wind turbines. And they’re actually mounted on the light poles in our parking lots. So there are 17 of them in California, there are 12 of them in the store in Massachusetts.
Those generate, probably less than 5% of the energy needs for those particular facilities. But, again, it’s an incremental step. So maybe one day, you have a store with solar, and with the micro wind turbines, and a fuel cell, and that’s how you reach 100% but are continuing to look for different ways that you can implement renewable energy into your energy mix. And it’s not always just, well, what is the next new idea for renewable energy out there, you’ve got solar, there’s thin-film solar, there’s the micro wind turbine we’ve talked about, we’re also buying wind from a big wind farm in Texas.
So within all of the different categories, there are other categories to look at. We’re committed to working with these various vendors and companies to find out, is there a way that we can help you develop your technology? And, again, with our scale and our ability to test and pilot different techniques and different technologies, can we help bring this technology to market quicker by our use of implementing it? So I think that’s how we’re going to get there. It’s going to be a long process. We still got a long way to go. I think we’ve just scratched the surface and what we’re going to be able to do. But we’re going to play a role in helping develop that and make it available to others.
John: One of the other great trends we’re seeing here, Kory, in the United States is the issue of recycling, you know, right now the average American throws out about 4.3 pounds of waste a day, 54% of it goes to a landfill, 13% of it gets incinerated, and about 33% of it gets recycled. When you listen to people at the EPA and other great, big waste organizations, who are far smarter than I am.
Their analysis is over the next 7 to 10 years. The trend is we’re going to flip-flop those numbers where recycling is going to be about 54% rate, and incineration is going to stay the same, and landfills going to be at 33. How was Walmart going to help in that whole recycling revolution? What are your goals with regard to recycling?
Kory: Well, our goal is, to one day not send anything to a landfill.
John: Okay
Kory: The latest numbers we have for last year is, we sent 64% of the solid waste generated by our facility somewhere other than a landfill, which is pretty impressive because there’s a lot of stuff that comes out of the back of our stores. And what we did, it was maybe 2 or 3 years ago, we started thinking of what’s coming out of the back of our stores, not as waste, but as a commodity. So what’s the value? We really wanted to extract the value out of the waste stream.
John: Right.
Kory: We found that we’ve been able to do that. So we do a number of things. We have a robust recycling program, with cardboard bales. And we have, what we call is our super sandwich bale, briefly what it is, imagine, you can picture the regular cardboard bales, well, now, imagine using that same bales, you put a thin layer of cardboard down on the bottom, then you throw in plastic bags, paperback books, paper, aluminum cans. We’ve got 32 different items that go in there, and then you put another thin layer of cardboard over the top and you bundle that together.
And so, we’re recycling millions of pounds of commodities a month through that. And some of that is actually going back to suppliers, being turned into raw materials, and ending up in products that go back on our shelves. So, there’s really a lot of opportunities out there. It’s just again, thinking about it differently.
John: Kory. Well, that’s really the new trend. I mean, what we call Urban mining. I mean, really, that’s Urban [crosstalk]. That’s the new trend. Yeah, so, I love it. So really, you’re on the cutting edge of that trend and you’re pushing that trend.
Kory: Absolutely. Yeah, and one of the things that we’ve struggled with is, what you do with your organic waste as a large supermarket retailer, as well. And we’ve been working with a number of vendors and we’re looking for solutions and we think we’ve probably come up with a couple of things that are really going to work and really help push that 64% number, even higher. Ultimately, the goal is 100% in the US, that’s by 2025, and globally we haven’t set a time for it.
But, again, think about the scale of Walmart, 8,400 stores around the globe, none of them sending anything to a landfill. There’s a lot of commodities out there now available. If you’re using recycled commodity instead of a virgin commodity when you’re making your product, again, that’s lowering your costs.
John: Absolutely.
Mike: Well, you know, I’m wondering too. And you’re talking earlier to Kory about the diversity of types of alternative energy and you’re talking about organic waste. I’m sure that somebody in the company right now is thinking in terms of possible biomass before bringing some of the energy equation in the line, along with solar and wind, etc.
Kory: Yeah, absolutely. I mean, that would be the ultimate win-win, if we can find a way where we take the waste out of our stores and use it to create energy to power our stores. I don’t know that technology is where it needs to be right now. But, again, that’s something that we would be willing to work to help develop and make it viable for not only us but for others as well because that solves two really big problems right there. Well, it solves sending stuff to the landfill.
John: That’s right.
Kory: The greenhouse gases that are associated with trash it’s decomposing and, then, also energy needs. So there’s a lot of opportunities out there. And like I said, we’ve still got a lot of work to do in this area, but we’re proud of what we’ve done so far.
John: And you’re doing amazing work, and your point about Urban mining is so important that our listeners understand that. When you’re getting back the commodities to the people, so they could use those commodities to make new products from, instead of making it out of virgin ore. We learn, Mike and I, have had ALCO on the show twice already, and the great people from ALCO educated us on the fact that that’s a 95% energy savings when you recycle aluminum, which is an infinite recyclable, as opposed, as you said, Kory, making it from virgin ore.
Kory: Absolutely. And, boy, that number, 95%, that’s just amazing and you imagine you multiply that over every can that your listeners use in the course of a day or a week. I mean, that really starts to add up in a hurry.
John: Kory, talk a little bit about… we’re down to the last 44 minutes or so. Your taglines are amazing, in terms of saving money and living better, and obviously, through sustainability, you’ve proven already on the show how you’re saving the customer’s money and they’re able to live better naturally because they have more money in their pocket because you’re actually creating a nicer environment in the world to live in. Talk a little bit about other engagement efforts you’re making in the stores with your customers, right now, so they feel the whole sustainability movement besides listening to it on this show.
Kory: You bet. I think one of the things that we’re proudest of in that area is late last fall, we started a program, I should say late fall 2008, we started a program where we started donating food to Feeding America, the Feeding America food banks. This was food that was 3 to 5 days before its sell-by date, which is probably another week or so before its expiration date. But in doing that, we were able to provide food to these food banks that they don’t normally get.
We’re talking produce, and protein, meat, and different things like that, and things out of the bakery. And in 2009, Walmart and Sam’s Club in the US donated 127 million pounds of food to Feeding America. And as most people know, the last year or so, it’s been tough economically. And so, food banks really had a big need and that was again one way where Walmart was able to come through and help. And show the customers what the value is of having a Walmart in your area, is that we’re able to help the folks in your local area, especially, when they need it most.
That’s just another example of the different things that we’re doing to help engage. We talk about sustainability, in terms of Sustainability 360. So, engaging our own four walls, but it’s also engaging our associates. We’ve got more than 2 million of them around the world. Our customers, we serve more than 200 million of them a week and our communities, we’re in 8,400 of them around the world. So when you take all of that into consideration, you really have a large potential to do good.
John: We’re down to the last minute and a half and that’s a brilliant point, Kory. You found an amazing way, Walmart has found an amazing way to balance the beauty and the importance of the localness of your brand, but also the international and the global strengths of your brand. So that’s amazing. But do you want to share, we’ve had guests on and we always ask, “Hey, give us a little visibility on the future.” Because we know this whole movement is a process. It’s not going to happen overnight, there’s no one magic bullet, give us, in the last minute or so, one or two pearls of wisdom on the visibility of where you’re taking your sustainability mission in the coming years.
Kory: I think a couple of main points. Number one, is we’re going to continue to make progress and work towards our three overarching goals, that we’ve talked about, and the second one, is really engaging our suppliers and our supply chain to bring some transparency into the supply chain. And from transparency into how products are made and what goes into making them, and making that information available to customers so that they can make better, more informed decisions when they’re in our stores.
John: That is just so well put and I just want to share again with our listeners, go to Kory and Walmart’s great site, walmartstores.com batch list[?] sustainability.
I want to say, Kory, again from Mike and I’s, the bottom of our heart. Thank you for taking the time to come on. Because Mike and I wouldn’t even have this opportunity, but for Walmart inspiring us to come up with green is good, the Green Is Good wouldn’t even be in existence. So I just want to say a big thank you to you and Jenni Dinger, and all the great people at Walmart. Kory Lundberg and Walmart, you are truly living proof, that green is good.
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