Chief Sustainability Officer Nicole Johnson-Hoffman Interview by Harvard Business School’s Podcast

December 19, 2019

Past President of the Global Roundtable for Sustainable Beef and OSI’s Chief Sustainability Officer Nicole Johnson-Hoffman was interviewed by David Abel from Harvard Business School’s Climate Rising Podcast on the topic “Making the Food of the Future.” During the discussion, Nicole and David spoke about the main challenges facing the industry, OSI’s partner companies and how to make the industry more sustainable.

Climate Rising features discussions with Harvard Business and faculty and business and policy leaders about what can and should be done to combat climate change. Other recent episodes of the podcast have covered topics ranging from developing the wind industry, increasing the use of solar power and making agriculture more sustainable.

Below is the transcript from the portion of the podcast that includes the interview with Nicole. The entire podcast, including discussions with Bruce Friedrich from the Good Food Institute and Professor Max Bazerman, can be heard here.

FULL TRANSCRIPT OF INTERVIEW WITH NICOLE JOHNSON-HOFFMAN

David Abel: Joining us to discuss how the fast food industry and other major food companies are changing their businesses to address global warming is Nicole Johnson-Hoffman, chief sustainability officer and senior vice president at the OSI Group, which is an Illinois based holding company of meat processors that operates in 17 countries and supplies restaurants, including McDonald's. In addition to your work at OSI Group, you serve as president of the Global Roundtable for Sustainable Beef. Can you give us a sense of the main challenges this industry faces in trying to reduce its carbon footprint and become more sustainable?

Nicole Johnson-Hoffman: The beef industry is a really interesting challenge when we're trying to make change in a loose organization of individuals and companies that are operating all over the world and in all kinds of different conditions. Here in the US, we have around 800,000 beef producers who are by and large small family farmers. The average beef producer in the US has fewer than 100 head of cattle. It's typically a sideline business for them. It's not their primary business. And so they're not receptive to dictates from large corporations like the one I work for. So helping them to understand the needs of customers and also their responsibility for addressing climate change is a challenge.

David Abel: Tell me more about the kinds of companies that OSI Group works with. Who are your customers?

Nicole Johnson-Hoffman: It's really different in every part of the world that's producing beef, so in North America, we have issues around use of antibiotics and ensuring that we're good stewards of antibiotics and protecting them for efficacy for humans and animals for the future. We're also concerned about protection of waterways, ensuring that we're not overusing water resources to produce beef, and ensuring that the crops that are being planted and harvested in order to provide grains in our feedlots are environmentally responsible. In other parts of the world, you've got some active issues regarding deforestation and protection of natural grasslands, and bee farmers are struggling with how to address those issues while at the same time remaining profitable.

David Abel: Are these companies serious about changing their ways, and why should we believe that they are?

Nicole Johnson-Hoffman: Well, Big Ag is living in the real world. We are living climate change today. We live it in the storms that disrupt our supply chains. We live it in the disease outbreaks that are unexpected and unprecedented in different parts of the world. Climate change is going to impact the food that is available for people and the prices that we pay for that food in the future. And my customers are all in the food business. And so they're working on these issues because they understand that that's part of their long term business plan, and if they weren't, it would be irresponsible for them as business people. They're also trying to satisfy activist shareholders and other stakeholders who are really concerned about the impacts they have in the world. We can try to force farmers to say the right words. Or we can talk instead about the concrete real concerns that we have and that they have and that we all understand to be true and work on those, because the politically loaded words, the politically loaded language that we use is an obstacle to gaining the kind of buy in that we need from the people who actually need to make the change.

David Abel: What are we talking about when we're talking about making this industry more sustainable? How do you define for example, sustainable beef? What does that really mean?

Nicole Johnson-Hoffman: The Global Roundtable was formed in order to sort of wrestle that issue to the ground, and then give a framework for regional beef producers around the world to address their real problems. And so on the Global Roundtable's definition for beef sustainability, we've said you need to address five different big picture principles in order to say that you're working adequately on beef sustainability in your part of the world. You need to address your use of natural resources. You need to address your impact on people and communities, on the animal's health and wellbeing, on the food that you meant to be producing, and whether you're not producing, whether or not you're producing wholesome food for people because that's the whole point. And then finally the effort that you're putting into improving efficiencies and using innovation. And if you're doing those things, we've said you are welcome to participate in this Global Roundtable family and be part of this global effort.

David Abel: Tell us a little bit more about the relationship between antibiotics and sustainability. How does that correlate?

Nicole Johnson-Hoffman: Antibiotics are challenging to our sustainability thought processes. They're similar to use of hormone implants and beef production in that they improve efficiencies, and so therefore improve sustainability outcomes. But people are really concerned about them, and with respect to antibiotics, for good reason. So we know that we have to do what we can to reduce unnecessary use of antibiotics in order to preserve their efficacy for the future. And at the same time, we believe one, that cattle are living creatures that deserve proper care, proper medical care, and their lives aren't expendable. And so if we have the ability to improve their health, we should do that not only for the animal, but also for the quality of the food that we're producing for people. So we believe that to be true, and two, we believe that we do need to not waste that resource. And so for sustainability reasons, we can't allow those animals to die when we could help them live.

David Abel: So more use of antibiotics, actually what you're saying is, can make these farms more sustainable.

Nicole Johnson-Hoffman: Well, if you wanted to simply move your greenhouse gas numbers as an industry, you would absolutely maximize your use of growth promoting hormones in the cattle and maximize your use of antibiotics. In those ways you would produce more beef per animal, more beef for your greenhouse gas emissions in total. And so your GHG outcomes would be significantly better.

David Abel: You've pointed to a need to preserve native grasslands and other measures to protect soil. Why is this important, and what role should regulators be playing to make this happen?

Nicole Johnson-Hoffman: More and more climate work is being focused on the health of soils and the possibility to use soils to help us address our carbon problem. Healthy soils, we know are carbon sinks. They will pull carbon into the soil and capture it and store it over time. If we allow those soils to remain undisturbed, so for example, if we allow them to grow native grasses with really deep roots, we know that they will do the job for us in filtering that carbon from our environment and protecting us. Interestingly, cattle have a really important role to play in that. So if I'm sitting on grasslands, for example, if I'm a landholder in the center of the country, and I'm sitting on some grasslands, and I want to preserve those grasslands, the best way for me to make that land profitable is for me to put cattle on the land and allow the cattle to graze that land. They do a beautiful job of encouraging the proper grasses to grow. And then to work that crop for us. Cattle are uniquely designed to do that, and then also in the process to turn those grasses into really great high quality protein for people to eat.

David Abel: Are there examples of where soil erosion has been a big problem?

Nicole Johnson-Hoffman: I think that's a significant issue across the country. We have not done enough work to help people understand how to keep soils healthy. We have pursued monoculture agriculture in places where that's not great for the soil outcomes. And we've also discouraged farmers from continuing to farm their land and encourage them to do other things with it. So I live in a part of the country that is continually plowing under what used to be agricultural land and putting up housing subdivisions. And then the people move into those beautiful housing subdivisions and complain about big companies and their environmental impacts. This is something that we all need to wrestle with.

David Abel: Is the OSI Group catering more to these new upstarts? Is that an increasing share of your business?

Nicole Johnson-Hoffman: My company is in the business of supplying of the world's biggest brands primarily. So we are really focused on delivering what they want. I have one of my customers who says, I don't know what we'll be selling in 50 years, but I know that we'll be selling more of it than anyone else. My customers are generally agnostic about what they put on their menus. If the consumer wants pickled beets, they will sell pickled beets. And they may be today tied up with their brand, with the certain products that they sell, but they know that those brands can evolve and have evolved over the histories of these companies. And they're able to adapt. You know, for us as a company, we're quite pleased to provide whatever our customers want. And I have some customers who are looking at plant-based meats now, and we're pleased to make those for them. I have other customers who are all in on beef and chicken, and we're pleased to make that as well. It's an interesting challenge to try to find supply chains that can deliver what these big brands require at a level of safety and consistency of price and predictability that they require. And that's very different than the small chains do.

David Abel: You grew up on a small dairy farm in rural Minnesota, and you once even ran a slaughterhouse. What are some of the lessons that you learned from those experiences? And how do they inform the bigger questions about how Big Ag and their customers can become more sustainable?

Nicole Johnson-Hoffman: As you say, I grew up on a small dairy farm in Minnesota, and we worked really hard. We had the world's largest kitchen garden. We had goats and chickens, and we raised a couple steer for beef. And we, my gosh, for a while we had geese. But we fed almost no one with all that effort. The food that we produced from that farm was interesting. It's quality was highly varied, and there was almost nothing left over to sell into the market after all that effort. That's not an efficient way to make food. It makes beautiful pictures. It's gorgeous on Instagram, but that's not the way we're going to feed the world. There will always be really fortunate people in this world who are able to hand select their eggs from the local farmer down the street and pay four times as much for that egg as they would if they bought it from Kroger. But you know, that's just, that's a tiny handful in the great scheme of things in the world.

David Abel: How does that translate into the questions of what smaller farms can do to innovate and serve maybe as examples for what larger production operations could actually do?

Nicole Johnson-Hoffman: I have in my life in my, in my work in agriculture, I have come to love scale. The beauty of being able to drive real change in a short period of time to maximize your impact on the lives of people. That comes from scale. So the slaughterhouse that I ran, we harvested about 4,500 head of cattle every day in that slaughterhouse, and I know we did it to high standards of food safety. I know that we were subject to continue audits by our customers and everyone else under the sun. I know that we had 40 USDA inspectors working in that plant every day. And it was a beautiful thing. So you know, I like that. I do think there's a place in this world for people who want to produce food really lovingly in a handcrafted way on a small scale. And I salute them, and I love what they do. But I also don't believe that that's going to be the way to necessarily reduce our climate catastrophe as it's been described or to address the real problems that we have in feeding the world.