How brands can create a more inclusive supply chain

Marc Washington looks at the supplement industry, a world he’s navigated for much of his professional career, and says he doesn’t see “a lot of people who look like me.” When the Black CEO of the just-launched Muniq prebiotic protein brand looks at who controls the supply chain that supports that industry, the picture gets perhaps more troubling.

“It’s 90% white men,” Washington says.

The problem is obvious to anybody who has attended a SupplySide event—a supply chain that is by its nature very diverse overseas turns suddenly white at executive/management/ownership level as soon the ingredients come ashore. In the summer of Black Lives Matter, there is genuine sentiment around diversifying the industry, the c-suite and the supply chain, but for people like Washington, troubled by the de facto homogeneity and achingly slow progress, there is both impatience and suspicion that good intentions will be lost to short attention spans.

“Let’s make this not become a passing fad for the summer of 2020, and then we move on and have not made a fundamental shift,” says the former Irwin Naturals CEO. “We can’t let this moment pass.”

Taking stock

CRN President Steve Mister shares some of Washington’s frustration. In June, Mister wrote a guest piece for Natural Products Insider calling out the industry: “In this time of reflection, I have also considered how few faces of color there are at our trade shows … and in the c-suites of the companies I routinely visit. I think about CRN’s own board of directors and committee members, and I think we can do better.”

Two months later, Mister says the conversation has started but needs to be more open, more constant and more widely shared. “I think it is being talked about internally at some companies, but I don’t think it’s being talked about enough.”

And having those discussions stay internal doesn’t do enough to push progress across the industry, Mister says. “I think we should be talking about it not just internally but across companies.

To create a more inclusive supply chain, diversity needs to be added to the list of questions every manufacturer asks every vendor, Mister explains. “At the end of the day, you want quality ingredients that are well made at a reasonable price point, but that doesn’t mean asking about diversity of workforce and hiring policies and things like this shouldn’t be part of the mix when you’re vetting potential vendors.”

One farm at a time

Gaia Herbs isn’t waiting for vendors to solve the problem. The company sources ingredients from around the globe but also seeks to grow a network of farmers in the United States, with inclusion and equality planted in every field. The Gaia Roots program provides grants to expand access to herbal remedies, and creating inclusive opportunities in the supply chain is a growing focus of the program, says Alison E. Czeczuga, the company’s sustainability and social impact manager. “When you look, from a sociological perspective, at the U.S. and our social systems—what has failed and what role can businesses play?—it is clear that inequality is an area that needs a lot of attention,” Czeczuga says.

Growing attention about systemic flaws in the food system highlighted by the COVID pandemic has created urgency and awareness that should not be wasted, Czeczuga says. “We’re seeing, really, an upheaval of a lot of systems that haven’t served people, and agriculture is no different there. So, I think there’s a lot of energy and enthusiasm and support from white-led companies to recognize that funding and investment is needed to really level the playing field.”

Herbs can be grown on small farms that could never compete in the commodity crops arena, and Gaia wants more of those farms to be owned and run by people of color. Part of the plan is to support and cooperate with training programs that put the tools and know-how in the hands of minority agricultural entrepreneurs like Clarenda “Cee” Stanley. Stanley grows at her Green Heffa Farms in North Carolina, land she hopes will be a “a teaching farm in which other BIPOC [black/indigenous people of color] farmers can come and learn.”

Stanley says she found Gaia’s approach encouraging because they were willing to explore and evolve the program. Humility is essential. It’s not just philanthropy; it’s a partnership, she says. “Gaia is doing more than many, but they also recognize that they are in a position do to even more,” she says. “They are working in partnership with me to be able to create that.”

To get started in agriculture, Stanley explains, farmers need training in the basics of running a farm. A partner is an important component of making the economics work. “The goal is that I want to equip small farmers with the ability to grow herbs for a Gaia or to become a Gaia themselves, if that is what they decide to do.”

That partnership and potential is very much rooted in raising medicinal herbs. Stanley sells teas and other products incorporating herbs and says it allows her farm to be profitable in an agriculture system that often mandates scale over quality product and practices. “Any time you can go into a specialty crop, it’s going to be more cost effective, especially if you have a smaller piece of land,” Stanley says. “I can’t grow corn on 15 acres to scale.”

Czeczuga says that Gaia’s ability to work with different growers at different scales is essential to make the partnerships work, but she says that every company needs to build that flexibility into efforts to diversify the supply chain. And it will take far more than one company to make substantial change. “There’s a lot of potential for new models to emerge, especially new cooperative models,” Czeczuga says.  “I think it’s going to a take multi-pronged approach and continued industry conversation and collaborations just for us to have space to talk about this and to develop real strategies that address these systemic things.”

Alternative models

New programs and new ideas might need to start small to create big change, says Slow Money founder Woody Tasch, who is advancing a Slow Opportunities for Investing Locally (SOIL) program based on a “Beetcoin” model that will allow people to invest in local agriculture. The investments fund zero-interest loans to support small farms.

The SOIL concept works in communities that have the interest—communities that have the small organic farms nearby—but those communities tend to be racially and economically less diverse, Tasch says. 

“They are super dominated by white people; there is no question about it,” says Tasch.

But the model does not have to remain trapped in that world, he contends. Tasch calls Slow Money and SOIL “a small NGO with a big mission,” but also an example of a radical approach to change. Zero percent loans are “about as radical as you can get.” “There is going to have to be a massive effort,” he says, to create more agricultural opportunities for people of color in more areas. “Some kind of dollars are going to have to be used in a new way.”

The natural products industry and any industry that touches the food system should be involved. “What we have to do is have a lot of these happening and have many of them be not in Boulder,” Tasch says.

The natural products industry doesn’t need to wait for a program of massive change, it can also get involved at a one-farm-at-a-time level right now, says James Hafner, executive director at Land For Good, a New Hampshire organization working to help farmers on smaller farms stay on land. Hafner says agriculture can be a tough business and farmers of color need the same stability that white farmers need. Brands can give them that stability by making long-term contracts directly with the farmers.

“It’s partially developing the markets and getting people to understand what products are needed,” Hafner says, “having a relationship with the farm, showing them that it pencils out for them.”
Hafner points out that there are USDA callouts supporting farmers from disadvantaged populations and other programs for BIPOC farmers, but the direct transactions and connections between brands and farmers is the part the industry needs to develop to support a more diverse supply chain at the farm level.

“Anything that the industry can do to provide some stability when farmers are making decisions can only help,” he says.

Measuring success

Traditional Medicinals has long highlighted social impact as a metric of success in the company business plan. Visitors to traditionalmedicinals.com can learn about the five schools the company built in India or the $1.1 million donated to nonprofit programs. But Josef Brinckman, now a research fellow for medicinal plants and botanical supply chain at the company and formerly the vice president of sustainability, says the company needed to look inward to see where they measured up in terms of diversity.

B-Corp certification helped them do that. “You have to provide data with regard to the ethnicity of your employees, advancement opportunities, management opportunities, gender balance in management and all of that,” he says.

He is also quick to point out that companies don’t need to complete the certification to run the audit that B-Lab outlines. “It’s just a tool,” he says.

It gave Traditional Medicinals a deep self-assessment, but it also gave them a way to look at vendors, and some of the same standards apply up and down the supply chain now, he says. It forces them to build relationships that go beyond the purely transactional. “We get herbs from wherever they come from, and that automatically has caused us to have to develop relationships with people from different backgrounds,” he says.

Tools that measure success are integral pieces of any program that is going to achieve real change. Tracy Snider helps lead the Balchem Women’s Impact Network for the New York-based ingredient company. The network was created to help move Balchem toward better gender equity, and Snider says the company is measuring success by the level of engagement. Helping women network and support each other will be what changes the company culture. “And it really needs to be treated like a business activity,” she says. “It’s not a club.”

That network-and-communicate approach, Snider believes, does not have to be limited to gender diversity issues, she says. “This model could translate across many different types of diversity initiatives.”

Muniq’s Washington says measuring success in the supplement industry should include diversity at all levels, whether its intentional networking, formally inclusive recruitment efforts or conscious vetting of both vendors and service providers.

He also believes it can’t happen overnight. Diversity, he explains, breeds diversity. At industry events, he knows he will be one of very few Black executives. But he doesn’t accept that can’t be changed. If the industry can grow a more diverse c-suite, it can attract more people of color into the management team up and down the org chart. “I think we are going to have to plant some seeds in terms of encouraging those who are from diverse communities to get engaged in the natural products community,” he says. “Why would I, if I am an aspirational businessperson, chose to plant my flag here, in an area that hasn’t historically shown a strong desire to welcome or encourage people like me to come into this space?”

If the industry is more successful at creating diversity in its ranks, Washington says, it might also be more successful at attracting more diverse consumers. “How do we make sure there is representation in how we go to market so diverse consumers can feel like, ‘Hey, this could be for me. I am seeing people who look like me use the product. I see people behind the product who look like me.’”

For that to work, Washington says, that representation of diversity must happen at every level, including the supply chain.

“I look at this as a full, end-to-end thing.”