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Taking value chain transparency, feed sustainability to the next level
82 Plays9 months ago
DSM-Firmenich's David Nickell explores how life-cycle assessment tools and real-time data reduce the environmental footprint of feed and animal protein production.
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Transcript
Introduction and Sponsor
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Feed Strategy Podcast.
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I'm your host, Jackie Remke, Editor-in-Chief of Watts Feed Brands and Feed Strategy Magazine.
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This edition of Feed Strategy Podcast is brought to you by FeedStrategy.com.
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FeedStrategy.com is your source for the latest news and leading-edge analysis of the global animal feed industry.
Discussion with David Nickell on Sustainability
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Today we're joined by David Nickell, DSM Firminich's Vice President of Sustainability and Business Solutions for Animal Nutrition and Health.
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He's here to discuss developments in value chain transparency and to explore FEED's part in advancing sustainable practices.
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Hi, David.
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How are you today?
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Hi, Jackie.
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Very well, thanks.
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And thank you for the invitation to join this podcast.
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Thank you so much for taking the time to join us.
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Well, to set the stage for the audience, why don't you tell us a little bit about yourself and your background?
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My name is David Nickell.
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I'm based here in the headquarters of DSM Firmish.
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I've been in the animal industry for about 30 years now in various senior executive roles, very much focused around sustainable business practices and how we turn sustainability into good business.
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I've been driving force behind a number of different initiatives.
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One of which of course is all about the measurement of animal production footprint and environmental impact.
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but also in terms of developing other sustainable solutions like the Veromaris business addressing things like the Omega-2, Omega-3 issue in aquaculture and what have you.
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So a broad experience across all industries, all species industries worldwide.
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Given your extensive background in the area of sustainability, what do you think are the biggest environmental challenges facing animal feed manufacturers today?
Environmental Challenges in Animal Production
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And how has the feed industry's approach to sustainability evolved now?
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in the last few years specifically?
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Yeah, that's a great question because the feed industry is really a driving force in the sustainability of animal protein production.
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The contribution to the footprint of meat, milk, fish and eggs is strongly driven by the footprint of the feed.
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And of course, within the feed, it's the feed ingredients that matter how those ingredients, row crops, for example, how they were grown, the inputs going into that
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agronomy, and that varies, of course, across different crops, harvests, for example, and across the whole basket of the different raw materials used by the feed industry.
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And it's super important to the overall footprint of that animal feed.
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If you look, for example, at the broiler business, up to about 80 to 90% of the footprint of the chicken meat will be driven by nutrition.
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And a big part of that is what goes into the feed.
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So the feed producers have a big role to play.
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They spend a lot of time and effort understanding exactly what is the footprint of the materials they're taking in.
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So their purchase goods and services, you can say they're scope three, that really matters.
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But at the same time, of course, not only delivering a more environmentally friendly feeds, but also ensuring that the feed does deliver on the animal performance as well.
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Can you tell us a little bit about how lifecycle assessment tools or LCAs are used in feed production?
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Sure.
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Life cycle assessment methodologies allow the feed manufacturer, the formulator to fully understand the footprint of the feed.
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So basically every feed ingredient will have its own footprint.
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So what went into growing the soy, for example, the corn or the wheat, and that will vary depending on the growing cycle, where it's come from, the type and the amount of fertilizer added, the amount of irrigation, et cetera.
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All that adds up to a footprint for that particular raw material and it varies significantly amongst crops.
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So the footprint of corn is not the same from every area or every grower.
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So it's really important to get down to the primary data to understand what is the footprint of the crop that you are using or the feed ingredient that you are using in your feed.
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If you know that primary data that gives you greater insights into what is the overall footprint of the feed,
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And also that gives you a very good insight into what does that mean in terms of the footprint for the animal producer, assuming the feed conversion, feed utilization by the animal is understood.
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So it's really important that the feed manufacturer can footprint the feed at the same time in line with the nutritional specifications.
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of the feed itself.
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So as I said before, it's all very well producing a very low footprint feed, but if that feed doesn't perform in the animal, the animal has to eat a lot more feed to produce the same body mass or weight.
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Then you'll probably find that the footprint of the animal protein may be even greater.
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So you have to look at feed formulation, the footprint of that.
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as well as the utilization of the feed by the animal itself.
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So the total nutritional space is important.
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And that's exactly where you need to have an LCA platform like Sostell, which is connecting all of these component parts.
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There you see the real impact you have as a feed manufacturer on the environmental footprint of animal protein.
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And that is the point.
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That's what everybody's interested in.
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What is the footprint of the meat, milk, fish and eggs, for example.
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Can you examine what those typical hotspots that producers uncover are and how they are typically addressed?
Decarbonization and Data for Informed Choices
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There's a big focus, of course, in decarbonization of the value chain.
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That's a big, big topic just about everywhere.
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And feed producers now getting more granular on their data, on the footprint of the ingredients coming into their mills, get to understand that
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Yeah, some ingredients have much bigger footprints than they had imagined, whether it's carbon, for example, that's very much a focus area.
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trying to reduce that carbon footprint is really important.
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So they then look at alternative supplies, alternative raw materials, but also understanding that it's all very well going for, let's say a low carbon raw material, but if it has a very high water footprint, for example, or any other environmental dimension, that might be something which you don't want to see and you want to mitigate in that area as well.
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Having this detailed
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insight overview of the full environmental feed ingredients is super important and it allows the industry to make informed choices.
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They understand where the hotspots are in the feed and what to do about it and what to change.
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And what does that change mean in terms of course formulation, the nutritional values and the manufacturing of that feed.
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But then LCA data, as I said, enable the feed manufacturer to really make those informed choices.
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What strategies do nutritionists use to balance optimal animal performance with environmental sustainability goals when they are formulating feeds?
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And this can be by species or any other input that you think should be explored.
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Yeah, the most important thing, of course, you've got to look at the complete ecosystem.
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As I said, the feed is one part, a very important part into the environmental footprint of the animal protein itself.
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So,
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You, for example, could reduce the environmental footprint of the feed, but if the feed doesn't perform nutritionally and it turns out to have a much higher, food conversion ratio.
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So you're using more feed to grow that same kilo of chicken life weight.
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Then potentially you could end up with a broiler with a higher footprint than perhaps
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where you're using a feed, which may have a slightly higher footprint, but may be much more nutritionally dense, have a much higher or better performance in terms of feed utilization.
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So you have to consider the complete nutritional area, the feed itself, the composition of the feed, but also how the animal itself is converting that feed.
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Ultimately you're measuring what is the footprint of the animal protein.
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And that's what the nutritionist needs to understand them and ensure both of those things are met.
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What role does data transparency play in driving sustainability improvements across the entire farm and fork supply chain?
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And are there barriers that still exist?
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So data is really important.
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It is the new currency, you could say.
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What is now recognized is that you really have to get down to primary data that is really in the detail.
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Every harvest of every crop will have a different footprint and to make improvements, then you really need to be using primary data.
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The days of using averages or proxy data sets, just simply not good enough.
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And then when you look at the whole value chain and the incremental improvements they're trying to make at the least cost of, for example, carbon abatement, then every small reduction improvement counts.
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And that therefore means you have to look at data.
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You need to look at that primary data.
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You need to be able to handle that data at scale, and you need to be able to transpose that data from raw data into valuable insights, which can then steer your business.
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Those insights in terms of footprint
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of course, need to be transferable down the value chain.
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So again, data sharing and understanding and recognizing data sensitivities are very important.
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So data is really at the heart of understanding more sustainable processes using LCA as the preferred option of tooling to be able to do that.
Regulatory and Consumer Influence on Sustainability
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Do you see regulatory requirements and or consumer demands shaping sustainability priorities for feed manufacturers specifically and
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Where do you see the most pressure for those changes?
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When you're seeing changes coming in from multiple dimensions, whether it's from the consumer wanting to have more transparency at the retail shelf in terms of what is a sustainably produced piece of meat, for example, through obviously regulatory compliance, depending on the size of the company, for example, a CSRD, European space.
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But also you see the demand for data and footprinting
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coming in the financial sector as well, in terms of securing finance going forwards, understanding what is the climate related risk of a balance sheet of a bank.
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Increasingly, they're asking their clients for this information.
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So what is your footprint and what are you going to do about it?
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So what's your plan of reduction and that you're using the correct tooling and the correct methodologies.
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LCA is the tooling to be used and that you are using the appropriate data.
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And again, I come back to the whole topic of primary data.
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There's a lot of drivers that are moving the needle in this respect, everything from the consumer to the financing, the level of compliance, depending on where you are in the world, but also of course the value chain itself where large food companies and retail have set science-based targets, a commitment for carbon reduction, for example, typically reduction targets by 2030 and beyond, they need to be able to show
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incremental reductions year on year.
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And the vast majority of their footprint, the so-called scope three, which is principally what's called their purchase goods and services will be coming from the farm, from the farming process, including the feed manufacturing.
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So as I said, in terms of a broiler business for a retailer, 80% of their footprint will be related to the farming of that bird.
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So
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The value chain is very interesting in terms of what's happening up at the top of the value chain, where it all starts and how that can be, how the footprint can be reduced, which technologies, productivity improvements can be put in place and how that is measured in a credible way.
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And ultimately it comes then down to how do you get that if it's getting that carbon reduction accounted for on their scope three reduction ledger.
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And that's all about insetting of carbon and moving of carbon through the value chain.
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So there are strong drivers, as I said, in the value chain and associated stakeholders as well, that are very interested in the footprint and how to reduce that footprint and doing it in a credible and very scalable way.
Collaboration for Improved Footprint Assessments
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Let's examine how DSM Fermanich partners with formulation software suppliers.
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Yeah, we work with all
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Feed formulation software suppliers, we're agnostic in this space.
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It's all about bringing the solution to the industry.
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And as you know, the industry uses a variety of feed formulation software.
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We're working with all the main ones, ACE systems, data core, best mix, and many others to provide the ultimate solution for the feed industry, for the integrators and the value chain.
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As I said, feed is such an important part of the environmental footprint of animal protein.
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Feed formulations, rations change.
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all the time based on the raw material intake.
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So making sure that the software connections between feed formulation and Sestel work very well can basically footprint feed formulations at scales or mass uploads and calculations footprints really important.
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And increasingly so because recently with the announcement of the best practices around environmental labeling of feed,
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This means on a batch by batch process, the feed manufacturers will increasingly need to have this ability to be able to, transparently, communicate the footprint of the particular feed being made, down to the labeling, for example.
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So having that connection between feed formation software, the ERP systems and what have you advanced to Stell makes all of this very possible to be able to do that at scale.
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Thank you so much, David.
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If you'd like more information about Sustel, please visit www.sustel.com.
00:13:59
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What technical capabilities does the integration of lifecycle assessment tools directly into feed formulation software provide that wasn't previously available to nutritionists and feed producers?
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Basically what happens is that in a recipe management system feed formulation that you're formulating feed, but you don't understand necessarily what the feed footprint is going to be.
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This connection enables that to take place very, very quickly.
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It could be a mass upload of many feed formulations at any one time.
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So the feed formulator immediately understands what's the footprint of the feed that they formulated.
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And that footprint can be viewed within the
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Feed formulation software.
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So the user, the feed formulator is not having to necessarily look into a different system.
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They will see this footprint in its full dimension.
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Okay.
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So full LCA in every dimension in their formulation software.
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So it makes it very user friendly.
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If they want to then understand exactly what's going on in that footprint to do a bit of a deep dive and play with some scenarios, then of course they can look at that within the Sestel program and using that software.
00:15:09
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So they have all these tools at hand to really understand what is the full footprint of the formulation itself, and also be able to do a deep dive and understand what's driving that footprint, where changes can be made to make improvements, et cetera.
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It makes it all very transparent, which before was not the case.
00:15:29
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How does real-time environmental impact data during the formulation process change decision-making compared to conducting sustainability assessments after feeds have already been developed?
Real-time Data and Decision-making in Feed Formulation
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Well, of course, footprints of the raw materials which you have in your silos, that's what you're going to be using, of course, to formulate the feed.
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So you're using what you have in the mill.
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So everything that you're formulating there and then will have the associated footprint.
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But of course you can model different formulations if you know the footprint of the raw materials that you could purchase from the supply chain.
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And that in itself can and does impact purchasing decisions.
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You then make choices buying perhaps soy or corn from different suppliers from different regions, countries, for example, at any one particular time.
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And there's a strong demand from the feed industry to understand
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What are the precise footprints of the particular crops at any one time and where and how they can access those crops to make it perhaps a more sustainable feed with at least the same nutritional profile.
00:16:39
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What types of environmental metrics would feed producers be able to track using the integrated platforms and how granular can the data become?
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Basically with the integrated platforms, they can, as I mentioned before, look at the full environmental footprint and that's typically in 16 to 19 dimensions.
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Okay.
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And it's adhering to the EU PATH, product environmental footprint category rules for animal feed.
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So very compliant and also to start is ISO assured as well.
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So they can get the full environmental footprint.
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And as I said, within Sestel, they can then also drill down into what's driving that feed, which particular raw materials, not just the raw materials, but also other inputs, for example, the utilities, the steam used and what have you, what is really contributing to the footprint of that feed.
00:17:33
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So that ability to deep dive, drill down and be able to run multiple different scenarios.
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You know, what if I change this?
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What if I change that?
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What does it mean?
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Gives the feed or the nutritionist, the feed formulator, all the tools they need to be on top of the game.
00:17:50
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For companies already using formulation software, what does the transition to incorporating sustainability modules typically look like in terms of workflow changes or staff training?
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The most important thing is to make the user experience really straightforward and simple.
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And that's what we've been focusing on.
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The idea is not to
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significantly increase the cost of this to the industry is to make this a simple flow.
00:18:19
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Data, of course, has value.
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It's not for free.
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But the usability of the platform is very important.
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How to navigate the platform.
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The amount of training is very little.
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It's very intuitive to use.
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And that's the key.
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It's the case with any software that anybody uses.
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And I think we're all
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as individuals very aware of that where any of us struggle with software or interfaces then it's a turn off right and we look for alternatives the name of the game is to make sure that it's really intuitive it fits in with existing practices okay so it's not disruptive it's a very easy addition which gives a lot of value and insights as i said to the company to the feed mill and to the nutritionists feed formulators
00:19:03
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Beyond measuring environmental impact, how might this type of integrated sustainability data influence broader business decisions around ingredient sourcing, product development, and customer relationships within the feed industry?
Influence of Sustainability Data on Industry Practices
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So when you look at sustainability, you really need to think systems wise, ecosystems.
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So you get out of your typical vertical business dimensions.
00:19:30
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The footprint of the feed, as I mentioned before, is very important.
00:19:33
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It's a very important input into the farming process.
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And likewise, a farming process is a very important part for the processor and the food service company or the retailer.
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So all joined together.
00:19:48
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And understanding then what is the requirement of your customer in that chain, making sure you're delivering exactly what they need is what it's all about.
00:19:59
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If it's a carbon reduction, if it's to do a water footprint, say you're in a water stressed area, these sorts of things, nitrogen impact.
00:20:05
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These are all the things you need to consider.
00:20:08
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And that in itself will drive decisions around what changes we need to make to be able to adhere to the value chain's needs.
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whether it's on carbon, whether it's on water footprint, you name it.
00:20:22
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And having that transparency then allows everybody to understand exactly what to do and how to act.
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Thanks again, and thanks to you for tuning in.