Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg Business Week with Carol Messer and Tim Stenebek.
Speaker 3: On Bloomberg Radio.
Speaker 4: It is Global Recycling Day, and on that Bloomberg Sleslie Coffin,
Speaker 4: writing at the start of twenty twenty four this year,
Speaker 4: Here's what she said. It is no secret that recycling
Speaker 4: in America is broken. The Environmental Protection Agency estimates that
Speaker 4: the US has a combined combined recycling rate of only
Speaker 4: thirty two percent for materials including glass, plastic, cardboard, and paper.
Speaker 4: That figure reflects collections from industrial, commercial, and residential trash.
Speaker 2: Well, yeah, I mean, not great news, not great numbers.
Speaker 2: We're spending the rest of the program talking a little
Speaker 2: bit about what's going on, at least the next two
Speaker 2: guests who are with us about what happens in the
Speaker 2: world of sustainability. First up is Tony Parata of PA Consulting.
Speaker 2: His broad area focus is on sustainability, economy, and the
Speaker 2: organization works with companies and industries. He joins us from Westport, Connecticut. Tony,
Speaker 2: good to have you with us this afternoon. How are you.
Speaker 3: I'm good. Thank you for having me.
Speaker 2: Yeah, thanks so much for joining us. When you hear
Speaker 2: thirty two percent when it comes to materials like glass, plastic, cardboard,
Speaker 2: and paper. That's from the EPA. Obviously not surprising to
Speaker 2: you because you work in this space. How do you
Speaker 2: think we get that number higher?
Speaker 3: It's a massive opportunity.
Speaker 1: There's a number of ways that we can work together
Speaker 1: to get that number higher. First, technology, better mechanical recycling
Speaker 1: practices leveraged by AI and robotics. Second, new recycling methods
Speaker 1: are coming on the scene, things like chemical recycling that
Speaker 1: go beyond just mechanical recycling. And finally, what we're most
Speaker 1: excited about is a move away from plastics altogether into
Speaker 1: alternative materials. As low as those recycling grades are, it
Speaker 1: does represent opportunity both for enhanced collection, but also a new.
Speaker 3: World and the new horizon of new materials.
Speaker 4: Well, Tony, you know, it's interesting too, And I always
Speaker 4: feel like when there's need to be made, people kind
Speaker 4: of can go and do the right thing, or you know,
Speaker 4: tax policy can also make us do the right thing.
Speaker 4: What is it though, that moves the needle the most,
Speaker 4: you know, in terms of sustainability initiatives, at least in
Speaker 4: your world, what you've seen, it really kind of moves
Speaker 4: people company industries to do the right thing.
Speaker 1: In the world of materials like plastics and aluminum and glass,
Speaker 1: what we've seen, especially here in the US, is a
Speaker 1: bottle return deposit system does a lot to.
Speaker 3: Move recycling rates upward.
Speaker 1: So here in the US and in my hometown of Connecticut,
Speaker 1: now we just raise the redunption rate from five cents
Speaker 1: to ten cents. It's been unchanged for the better part
Speaker 1: of three decades, so that was a major move. Bills
Speaker 1: and initiatives like that do an immense amount to.
Speaker 3: Be able to increase the collection of those materials.
Speaker 2: Is it just I mean, is it kind of a
Speaker 2: waste of time for us to be talking about the
Speaker 2: consumer end of this? Isn't doesn't so much of this
Speaker 2: happen on the industrial side of this stuff.
Speaker 3: Would agree? If you take the mentality of I have
Speaker 3: a problem to solve.
Speaker 1: Yeah, I'm going to convince three billion individuals to quote
Speaker 1: unquote do the right thing. Or would I prefer to
Speaker 1: convince a thousand companies to change the way in which
Speaker 1: they go to the market.
Speaker 2: Well, what are the regulations around companies? Because it seems
Speaker 2: like that really is what moves the needle with this stuff.
Speaker 3: Regulation is definitely the tip of the sphere.
Speaker 1: There's been a lot of talk around extended producer responsibility
Speaker 1: and the cost that firms will incur as a result
Speaker 1: of manufacturing and producing these items, but again, major opportunity
Speaker 1: for the companies.
Speaker 3: I get it right.
Speaker 1: At the end of the day, sustainability is in essence
Speaker 1: talking about using resources properly and that allocation of those
Speaker 1: resources it means better business.
Speaker 4: Hey, Tony, how has the recent news from the SEC
Speaker 4: and chair Gary Gensler had an impact? I'm thinking about
Speaker 4: the SEC now forcing companies to disclose their greenhouse gas
Speaker 4: emissions for the first time, but we should point out
Speaker 4: watered down a key requirement after there was some heavy
Speaker 4: lot being from industry groups. But this alone, how am
Speaker 4: I change kind of the story and the impact and
Speaker 4: move us to a much more sustainable world.
Speaker 1: Well, I think the story that we've seen unfold for
Speaker 1: the past ten years is there is a real embracing
Speaker 1: of this concept, in particular by the capital markets. So
Speaker 1: the lack of a climate action plan inside the company
Speaker 1: is the lack of a business continuity plan.
Speaker 3: It makes you less investible.
Speaker 1: So by embracing the notion of sustainability, greenhouse gas emission,
Speaker 1: and being transparent in that data collection. In your activity
Speaker 1: in essence as a leader of an organization, you're helping
Speaker 1: make your firm a more investable asset class and your
Speaker 1: future proofing your own business.
Speaker 2: Hey, I want to talk a little bit about other
Speaker 2: issues that we've talked about on our program when it
Speaker 2: comes to sustainability, and a lot of that has to
Speaker 2: do with sort of the effects that we're living with
Speaker 2: each and every day because of decisions that have been
Speaker 2: made and production over the last fifty to one hundred years.
Speaker 2: We talked about single use plastics and the idea that
Speaker 2: we're starting to see microplastics show up in places that
Speaker 2: we do not want them. And we talk about pfast,
Speaker 2: these so called forever chemicals tainting water streams and the
Speaker 2: water that we're drinking just from the tap in certain areas.
Speaker 2: How do you think about all this stuff, Tony, in
Speaker 2: ways to kind of, like, I don't know, keep yourself safe.
Speaker 1: So it's clear to a large number of us that
Speaker 1: the amount of plastic that we're producing at scale is
Speaker 1: just untenable. On top of that, to your well made point,
Speaker 1: the medical community is stepping in and every week discovering
Speaker 1: more and more places that plastics in particular show up.
Speaker 1: What is heartening and promising is a whole raft of
Speaker 1: new technologies coming onto the landscape. So things like seaweeds
Speaker 1: inalegenates and plant based fibers are being used to replace
Speaker 1: plastics in particular. You've got companies like not Pla. They
Speaker 1: won an Earthshot Prize late last year. PA actually helped
Speaker 1: them with their initial technology. We're seeing a whole revolution
Speaker 1: in the world of plant based fibers. There's a technology
Speaker 1: called pull pack where they're using fibers to replace plastics
Speaker 1: of all kinds. So as disheartening as one may see,
Speaker 1: some of the data look like there are immense opportunities
Speaker 1: to be had and new technologies coming onto the marketplace
Speaker 1: every day.
Speaker 4: Right How quickly though? Can it change the needle? Like
Speaker 4: I totally get into it. Bloomberg very involved in the
Speaker 4: earth Shot Prize as you know, you know, but I
Speaker 4: still am surrounded by a lot of plastic And if
Speaker 4: I go to buy anything, there's certain aisles in supermarkets
Speaker 4: and various stores that all it is is plastic containers.
Speaker 4: So how do we you know, I talked about Gensler
Speaker 4: chair sec chair Gantler. I mean a lot of lobbying,
Speaker 4: and these are whether it's the petroleum industry, the plastics industries,
Speaker 4: I mean spend a lot in terms of lobbying. Their
Speaker 4: survivability is at stake. Some would say, so how do
Speaker 4: you ultimately move that needle?
Speaker 1: I would offer one example that just dropped last week.
Speaker 1: Crick the coffee company. They disrupted the world of coffee
Speaker 1: years ago with a single serve pod and we all
Speaker 1: get to choose the flavor and the style and the
Speaker 1: amount we want in our homes. They just launched last
Speaker 1: week in the US and you product called the k Round.
Speaker 1: It's basically a plastic free coffee capsule that you can
Speaker 1: use in your home without the need for using plastics
Speaker 1: or aluminum. It's that type of innovation that will not
Speaker 1: only solve the material in the waste side of it,
Speaker 1: but I expect that to be a huge commercial and
Speaker 1: consumer success.
Speaker 2: Wait, these are the ones that you don't have to
Speaker 2: send these back to recycle, right.
Speaker 1: No, it's literally a pressed coffee pod that's coded in
Speaker 1: a non plastic coating. You drop that pressed coffee pod
Speaker 1: into curious new machine and you get the same amazing
Speaker 1: experience that we all come to know and expect, just
Speaker 1: without all the extra packaging.
Speaker 4: Hallelujah.
Speaker 2: But you know, there's some stuff that you just feel
Speaker 2: like can't be made in a sustainable way, like legos,
Speaker 2: the things I step on.
Speaker 4: Every day, Tony, do you have a solution thirty seconds
Speaker 4: left for do you have a solution for something like legos?
Speaker 3: For lego?
Speaker 4: Not yet?
Speaker 1: We should have those folks call PA and we can
Speaker 1: help them.
Speaker 3: The medical industry is moving more sustainably.
Speaker 1: That's another key area that's been problematic for safety reasons
Speaker 1: and regulatory Yeah.
Speaker 3: But again, technology is here to save us. There's a
Speaker 3: lot of amazing discoveries on the horizon.
Speaker 2: So when I really hurt myself on the lego, I
Speaker 2: will be given a medical solution.
Speaker 4: That will make sugar sugar.
Speaker 2: Yeah, yes, exactly, that's what you say when you step
Speaker 2: on a lego.
Speaker 4: Those things really really really hurt. Tony. Thank you so much,
Speaker 4: really appreciate it. Certainly a space that we care about,
Speaker 4: and it is great to get some time with you.
Speaker 4: Tony Parata. He is sustainability and regenerative economy expert at
Speaker 4: PA Consulting Jettings from Westport, Connecticut.
Speaker 3: Those things hurt.
Speaker 2: They've been, to be fair, they have been trying to
Speaker 2: make them more sustainable. They can't figure out any way
Speaker 2: to make My understanding is they can't figure out a
Speaker 2: way to make them with a material that's plastic that
Speaker 2: has the same precision.
Speaker 4: Now I get it right, so that it's still a
Speaker 4: toy that kind of works.
Speaker 1: All right.
Speaker 4: More to cum folks, this is Bloomberg.
Speaker 2: Well, there are a few certainties in this world, Carol, Yes,
Speaker 2: death taxes, and the styrofoam cup that you pour your
Speaker 2: hot water into when you make cup noodles.
Speaker 4: Ramen totally get it.
Speaker 2: We've all been there, boiled that water, pour it in
Speaker 2: the cup. Get yourself from the middle college. Yeah, who
Speaker 2: didn't survive on this stuff in college or at some point?
Speaker 2: Right Well, I'm talking about it because it turns out
Speaker 2: that after all these years, Cup Noodles is finally getting
Speaker 2: rid of that polystyrene foam cup and releasing a microwavable
Speaker 2: paper cup. I've actually got it in my hands right
Speaker 2: now because Brian Huff is CEO and president of Nissing
Speaker 2: Foods USA. It's the maker of cup Noodles. He's here
Speaker 2: with us in the Bloomberg Interactive Broker's Studios. Brian, good
Speaker 2: to have you here.
Speaker 5: How are you Thanks for.
Speaker 2: Having me, Yeah, definitely, thanks so much for joining us. So,
Speaker 2: first question, what took so long? Because we haven't been
Speaker 2: using this type of material and things for a long time, you.
Speaker 5: Know, as we were looking at our business, and we
Speaker 5: obviously have had that styrofoam cup since nineteen seventy three
Speaker 5: when we started producing in California. So we continue to
Speaker 5: look to evolve the brand, to involve the evolve the business,
Speaker 5: you know, and certainly the cup in the packaging is
Speaker 5: a big part of the brand. So we want to
Speaker 5: continue to lead in this space. And it was a
Speaker 5: great time for us to start to look at alternate materials,
Speaker 5: not only you know, from a sustainability perspective, but also
Speaker 5: now it's microwavable.
Speaker 2: Yeah, so was it a concern? Was did it take
Speaker 2: so long to make the change because you were concerned
Speaker 2: about changing the brand. And forgive me, I know you've
Speaker 2: only been at the company for a few months, so
Speaker 2: you can't speak to totally the history of it, but
Speaker 2: I'm just curious, you know, it's why a change like
Speaker 2: this comes now versus twenty years ago.
Speaker 5: I think A big part of it was finding the
Speaker 5: right materials. So you know, it's not as easy as
Speaker 5: just moving from where you were to paper in terms
Speaker 5: of how that product and that experience you have are
Speaker 5: But secondarily is retooling our entire manufacturing process to be
Speaker 5: able to deliver something like this to the marketplace, which
Speaker 5: was a significant investment for us, but we think the
Speaker 5: right thing to do for the business and the brand.
Speaker 4: Well, you know you and to be fair, like you said,
Speaker 4: only a few months at this company, but you are
Speaker 4: at Kellogg's for twenty four years, Like you understand this
Speaker 4: consumer package good space in a big way. You've worked
Speaker 4: at several different companies. I'm never quite sure what the
Speaker 4: margins are on these things. But to change packaging, like,
Speaker 4: what is it that in general kind of why it
Speaker 4: takes a while to make some changes in it?
Speaker 2: Is it?
Speaker 4: Like to help walk us through it?
Speaker 5: Well, I think ultimately, especially a large consumer package goods companies,
Speaker 5: they're built on efficiencies and effectiveness. So our manufacturing plants
Speaker 5: are manufacturing about nine hundred cups per line per minute.
Speaker 5: So to be able to make a change, to have
Speaker 5: to shut down the lines, retool the lines in this
Speaker 5: particular case, almost seven weeks of not producing on our
Speaker 5: manufacturing lines to be able to retool and rebuild the
Speaker 5: lines to convert from styrofoam to paper. So it's a
Speaker 5: pretty big undertaking.
Speaker 2: So see, you have two factories here in the US
Speaker 2: FU facilities that make these when you were retooling them.
Speaker 2: How do you make up for the factories that are
Speaker 2: shut down?
Speaker 5: Well, ultimately we move from a five day schedule to
Speaker 5: a seven day schedule, twenty four to seven, sleep on.
Speaker 4: The factory floors like Elon would.
Speaker 5: Do as you can imagine every you know, in building
Speaker 5: up inventory and making sure we've got the right inventory
Speaker 5: levels around the country, pulsing the business as we as
Speaker 5: we could to make sure that we could make this
Speaker 5: move effectively and continue to service our customers.
Speaker 2: And fair to say that the decision and the change
Speaker 2: was in effect or in process before you joined the company,
Speaker 2: it was, yes, But in.
Speaker 4: General, I guess what I'm trying to understand, because you
Speaker 4: are someone who understands this space and have been in
Speaker 4: it for a long time. Prime is that consumers. You
Speaker 4: and I talk about it all the time, Tim, and
Speaker 4: I know what. I've got a daughter who's about to
Speaker 4: be twenty one, And just like the importance of understanding
Speaker 4: what a product stands for, the materials, the impact on
Speaker 4: the environment. This is not a new discussion, So I'm
Speaker 4: just trying to understand, Like, when does a company like
Speaker 4: Nissan or somebody else finally decide, Okay, it's time for
Speaker 4: us to change this product because either consumers care or
Speaker 4: some other dynamic or financially it finally makes sense.
Speaker 5: Yeah, and I think the way you suggest it makes
Speaker 5: makes perfect sense. It takes a while for you to
Speaker 5: continue to read what that consumer is saying. Is it
Speaker 5: really cool what they're.
Speaker 4: But is it consumer based that ultimately makes you, guys
Speaker 4: make the change?
Speaker 5: Well, I mean I think it's consumer based. Sometimes it's
Speaker 5: company based as well, and what your company's values and
Speaker 5: mission are. So our company is doing business in about
Speaker 5: one hundred countries, and I would say that in some
Speaker 5: countries they're much more progressive the cares of sustainability. Europe
Speaker 5: is a big one. So Europe is leading in this
Speaker 5: particular space and the US is probably behind in a
Speaker 5: lot of these different packages and packaging types. So for US,
Speaker 5: as a global company, we spend a lot of time
Speaker 5: looking at our global footprint, looking at potential regulation that
Speaker 5: may happen over time, and for US wanting to be
Speaker 5: a leader in the space.
Speaker 2: Talk toors, we're Bloomberg, So we like numbers. Here, Sure,
Speaker 2: a publicly held company based in Japan more than eight
Speaker 2: billion dollar market cap at this point here in the US.
Speaker 2: How big of a market is it for your products
Speaker 2: versus other countries? I mean, how important of a market
Speaker 2: is the US?
Speaker 3: For Essen?
Speaker 5: It's becoming more significant every year. But the raman category
Speaker 5: globally is almost fifty billion dollars, So it's a very
Speaker 5: very large category internationally and globally domestically about three billion,
Speaker 5: So a sizeable food category here in the US, and
Speaker 5: you know, we are starting to be a material part
Speaker 5: of the overall organization in the US.
Speaker 2: That means that three billion dollars does that include that
Speaker 2: includes CpG and restaurants.
Speaker 5: It does not include restaurants, so this is just retail.
Speaker 2: Oh wow, Okay, so that's that is pretty big.
Speaker 5: All right?
Speaker 4: So I'm going to go there because I kind of
Speaker 4: asked you about it. So when do we get the
Speaker 4: sodium down fifty percent?
Speaker 3: Like I've talked about what consumers.
Speaker 4: Want again a younger you know, whether it's my daughter
Speaker 4: or other people are looking at these things and being like,
Speaker 4: oh wow, like taking a second thought. I didn't really
Speaker 4: think about it so much in college.
Speaker 2: Did not cross my right eart.
Speaker 4: But I mean, and I know you said you guys
Speaker 4: are working on it.
Speaker 5: We are, and there's a lot of good technology out
Speaker 5: there in terms of reducing sodium without lessening taste. Right.
Speaker 5: So a big part of this is we are a
Speaker 5: product that is consumed each and every day, right, and
Speaker 5: consumers vote, and a lot of what they vote on
Speaker 5: is not only nutritionals, but it's also taste. So you
Speaker 5: have to have both. So we've got a global team
Speaker 5: in R and D. We also have a domestic team
Speaker 5: in California that's continually looking at the new technology of
Speaker 5: how that sodium hits your taste buds, how you can
Speaker 5: simulate a higher level of taste and flavor and reduce
Speaker 5: the sodium, and something that we continually operate and work on.
Speaker 5: And the product has gotten much better over time and
Speaker 5: will get much better in the future. But that's a
Speaker 5: great question.
Speaker 2: Talk a little bit about product category in the US,
Speaker 2: and like the most popular products, this is this I'm
Speaker 2: holding for the people listening on radio, cup noodles, chicken.
Speaker 2: I'm really I feel like, yeah, you don't need hot water,
Speaker 2: you just need water.
Speaker 3: We've been on air for a couple of hours.
Speaker 2: There go get some We love that, so thank cute.
Speaker 2: But is this, I mean, is this the flagship product?
Speaker 2: The chicken chicken, cup noodle.
Speaker 5: Chicken category is the flagship?
Speaker 2: What portion of revenue does that account for for the company?
Speaker 2: For for us, so I want.
Speaker 5: To say us, it's about forty percent of our Wow,
Speaker 5: that was amazing. Now there's multiple one products within that
Speaker 5: proc that was total brand.
Speaker 2: Okay, total brand, not just chicken flavor. Okay, So it's
Speaker 2: and then and then the top ramin category two is
Speaker 2: certainly a big one for.
Speaker 5: You, huge categories, yeah, and great brands.
Speaker 2: And that's sort of almost the remainder because yes, when
Speaker 2: I was struck by looking at the website, how how
Speaker 2: much the products haven't changed in a long time. There's
Speaker 2: still the classic products, which says, okay, wait a second,
Speaker 2: there is that loyalty here.
Speaker 5: There certainly is, and there's certainly other flavors. Yeah, and
Speaker 5: it's an iconic brand and as we innovate, we want
Speaker 5: to continue to keep innovating too. On our traditional and
Speaker 5: our original, which in this particular way, we looked at
Speaker 5: packaging as a way that we continue to deliver new
Speaker 5: news and innovation.
Speaker 4: That's what I was going to go to, right. We
Speaker 4: spent so much time talking about the tech world and
Speaker 4: the tech community and innovation disruption. How do you guys
Speaker 4: think about it in the food space? What it means
Speaker 4: for you? Where it is a well known brand, kind
Speaker 4: of iconic if you think about it, Carol.
Speaker 2: There's a band store where you can buy a cup
Speaker 2: Noodle's trucker hat and a cup of Noodle's beanie.
Speaker 5: Very cool, by the way, I should have brought one
Speaker 5: with me.
Speaker 2: Yes, we're here next time, Carol. Okay, I might get
Speaker 2: you some top romin socks.
Speaker 4: Okay, just get about forty five fifties.
Speaker 2: Oh those are still doubt.
Speaker 3: I'm sorry, All right, stuff?
Speaker 4: What's innovation or disruption for you, guys? As you think
Speaker 4: about this space, you.
Speaker 5: Know what we look at is when on a three
Speaker 5: year rolling basis, about fifteen percent of our revenue actually
Speaker 5: coming from innovation. So we're continuing to look at other
Speaker 5: premium spaces that we can go more different and unique ingredients,
Speaker 5: certainly authentic Asian and hotter flavors today are big sellers.
Speaker 5: So it is a constant investment that we're making in
Speaker 5: innovation and truly is the future growth of the business.
Speaker 4: We'd be remissed. We usually start this way twenty twenty
Speaker 4: five seconds. You are CEO of and Foods here in
Speaker 4: the States and so on and so forth. How would
Speaker 4: you describe the global market environment the economy right now?
Speaker 5: I think the I think the economy is really challenging,
Speaker 5: and you know, I think there's a lot of mixed
Speaker 5: signals as it relates to the economy. But consumers today,
Speaker 5: especially in the US, are continuing to be you know,
Speaker 5: are hurting. So for us, you know, we have seen
Speaker 5: some different changes in in our channel mix. So we
Speaker 5: see more people moving to the value channels, the clubs
Speaker 5: and the dollar stores. We've got a big business in
Speaker 5: the value the value channel or dollar stores across the country.
Speaker 5: So we've certainly seen some of that migration and we
Speaker 5: believe part of that is the economic conditions in the US.
Speaker 4: That's fascinating, great stuff. We covered a lot of ground. Brian,
Speaker 4: Thank you, thank you so much, pleasure meeting you both
Speaker 4: same here. Safe travel soon. Brian Huff he's CEO and
Speaker 4: President of Nison Foods USA, joining us here in studio