The Sustainable Table - Business Leaders Talk Welfare
Pioneering cage-free solutions in Asia with Dawn Neo
In this episode, we sit down with Dawn Neo, the Director of Corporate Engagement at Global Food Partners, to delve into the transformative steps companies are taking towards cage-free implementation in Asia. As a trailblazer in this field, Dawn shares her invaluable experience and insights, offering a unique perspective on the evolution and future of the cage-free movement in the region. Join us for an enlightening conversation that uncovers the challenges, successes, and innovative strategies driving this critical change.
In this episode, we sit down with Dawn Neo, the Director of Corporate Engagement at Global Food Partners, to delve into the transformative steps companies are taking towards cage-free implementation in Asia. As a trailblazer in this field, Dawn shares her invaluable experience and insights, offering a unique perspective on the evolution and future of the cage-free movement in the region. Join us for an enlightening conversation that uncovers the challenges, successes, and innovative strategies driving this critical change.
Hello everyone, Welcome to our podcast, the Sustainable Table Business Leaders Talk Welfare. For those of you joining for the first time today, welcome. My name is Elissa Lane and I'm the CEO and co-founder of Global Food Partners. On this podcast, we interview thought leaders in the fields of cage-free and other sustainability, responsible sourcing and welfare initiatives. We have with us today my colleague, Don Neo, Global Food Partners, Director of Corporate Engagement. We've been getting a lot of questions from food businesses related to specific solutions. We've been getting a lot of questions from food businesses related to specific solutions that we've been sharing on the podcast and related to the different implementation strategies and other information we've been sharing in the past months here. So today we wanted to break it down and do a bit of a deeper dive into these solutions.
Speaker 1:Dawn oversees our work with food and hospitality companies in Asia, supporting them to achieve their cage-free goals and deadlines in the eight countries in which we operate. She's based in Singapore and was one of the first people, if not the first person, to work on this issue in Asia, supporting food and hospitality companies to adopt cage-free policies. Starting about eight years ago Now, her focus has shifted from adoption to execution, so there's nobody better to have this conversation with than Dawn. Welcome Dawn. Thank you for having me, Lisa. So can you start by telling us about yourself? I know I gave a quick bio, but anything you want to add?
Speaker 2:Well, I have a background in food science and food technology and I've always been interested and curious about how food is produced and nutritional aspects and how it's related to health and sustainability. So I think prior to joining, starting work on farm animal welfare, I wrote about the food industry in Asia for some time and innovations in technology and that was really fun, and now I'm really really happy to be working with the industry to move to more sustainable practices.
Speaker 1:All right, thanks, dawn. So I mentioned that you started working on this issue about eight years ago. You were one of the first people to work with companies on cage-free, so can you give us a quick snapshot of what the situation was like with cage-free when you first started? For example, how is cage-free production and have you seen certain changes over the past years?
Speaker 2:Definitely. I mean eight years ago. There were very, very few cage-free producers in this region and when we first started talking to companies they found it very, very difficult to adopt policies and those that have already committed. They found it difficult to achieve any implementation at all Because what we had was very kind of free range native breed kampong eggs, native breed chicken production.
Speaker 2:When you talk about cage free, free range commercial scale cage free was few and fine between was few and far in between. So part of my work at that time was to engage with producers as well, to encourage them to start cage-free production and for them to see that there's a growing demand. So, compared to then, now we have a lot more cage-free availability, a lot more brands you see in the supermarket and also certification schemes available. Back then there wasn't any certification schemes and typically when we work with companies they would want their suppliers to be certified and in some countries there are also some government standards, like in Thailand and Philippines, and in some markets In Asia some governments are already working on standards for labeling. So I think it's made significant progress over the past eight years.
Speaker 1:And you mentioned a couple countries. So is that where you've seen most of the progress? And when you're referring to more and more production, is that across the region or specific markets?
Speaker 2:I think across the region we have seen a general increase. In most countries that I know of, whether it's Thailand or Indonesia or Japan, china, there are certainly more producers transitioning to KH3 production over the past few years few years and those that are already were already doing k3 years ago. They have improved or expanded their k3 production because of the increase in demand. So overall, I think, just more availability, more brands and we've also seen a reduction in prices in some of these markets where it used to be double or triple the price In some markets. Now it's possible to get cage-free eggs at maybe between 30 to 50, 60% price difference. Great.
Speaker 1:All right. So my next question is related to how a company can make implementation progress in Asia and the different markets in Asia. I know on the past podcast we've talked a bit about and there's been mentions of physical sourcing of cage-free eggs, working with producers, also working and implementing our credit system, our impact incentive system. So I wanted to break it down a little bit for the listeners who might be in a situation where they're trying to implement in Asia. So, as we know, some companies have made good progress towards 100% cage-free in Asia. Many we work with are making progress.
Speaker 1:In certain markets they're able to find physical cage-free eggs. Some companies are just starting to implement. So, for example, we know that there are some companies reporting 40%, 50% implementation in Asia, but they're committed to 100% by the end of 2025. But they're still stuck in some markets. So how can they keep increasing that percentage if they're just stuck? Like you said, there are some markets where cage-free is growing. Some markets are slower. So, let's say, a company really wants to implement, is able to make progress, but they're just stuck in some places where they cannot find cage-free eggs.
Speaker 2:How do they make progress when they're stuck? I think it depends on what makes them stuck. Our clients tend to come to us after they have tried calling up producers, trying to source from their existing suppliers as well, and there are various reasons. I think we can go to them. We can go to a few. If it's certification related, like if they're able to get cage-free eggs already but their suppliers are not certified, then you know it's relatively easier to deal with. We can provide technical support to the producers, train them, upskill them to meet good animal welfare standards so that they can get certified.
Speaker 2:In some cases where they have operations in remote locations and they have a logistics issue, that can be a little bit tricky. But how we've dealt with it was to see where the properties are located, do a brief assessment, talk to the procurement team, talk to suppliers to see what's possible and, if it's not possible, to source it at a reasonable cost, if the logistics cost is too high, then we may propose incentives and that can happen in multiple countries like China or India or Indonesia, where production happens in one region but the consumption and the demand is in other areas. There could be other reasons lack of supply. In some countries really, there's only one or two cage-free suppliers and the availability is lacking. We have to work with these companies to grow that supply and maybe encourage these producers to scale up once they see more and more demand from their clients.
Speaker 1:Thanks, dawn. So you mentioned impact incentives and I'm realizing on the past podcasts we haven't really I've too deep into incentives. We've mentioned it here and there. Can you briefly explain what impact incentives are and how it works in general?
Speaker 2:This is the program that we pioneered and it's the world's first credit trading program for book and claim. But the difference is that transparency and safeguards in the system. Where producers have production that's not sold, they are able to still sell their production as regular eggs and get an incentive from companies and food and hospitality companies that are having difficulty in some locations to source cage-free eggs. They can still support producers located in another part of the country and meet their commitment easily and save costs because they're not getting the eggs transported to their properties or their locations where they operate. So in this way, I think it's a win-win solution for both producers and corporations in this cage-free transition and through this kind of support we're able to increase the availability of cage-free eggs because the producers are receiving the orders from the buyers and eventually, when they hit a certain tipping point, there will be economies of scale to make these eggs more affordable and in the years to come it'll be easily available and easier to source for these companies.
Speaker 1:Okay, and so for impact incentives, are there a few cases. You mentioned a few things, but if you could say, like the top three reasons why a company would choose impact incentives, what would those three reasons be?
Speaker 2:First of all, I think it's to meet their commitment in cases where they really cannot find a supplier, to give them cage free eggs for some locations, it could be one way to meet that commitment and to report progress. Secondly is to really support getting hands out of cages, because it's the same number of hands that they're helping, whether they're sourcing from a producer near them, if possible, or they're sourcing from a producer that's located in another part of the country. And thirdly, I think, is to reduce cost, Because we are reducing logistics costs. In some of these very large or complicated supply chains, you're cutting out the middlemen and you can save between we have seen between 20 to 50% of the cost of sourcing just by doing incentives. Okay.
Speaker 1:So can you give a real life situation I know we can't necessarily say the company's names and give details, but a real life situation where a food or hospitality business has decided to use these incentives, so like were the challenges they were facing that led them to use incentives, and just how did it work for them? If you can like, kind of give us step-by-step.
Speaker 2:One example could be a hospitality company that we work with. So they have already found suppliers that are certified in some parts of Indonesia. But they were interested and they are still interested in making progress in other parts of the country. But there's just a lack of suppliers and those suppliers in other islands like Sulawesi or Bintan could be quite small in scale and couldn't give them K3X. So they came to us asking about incentives and we checked with the existing network of producers that we have and those that are in the incentives program.
Speaker 2:Some of them can't even deliver eggs to these remote areas and even if they do, the cost of logistics is very, very prohibitive. It will make the eggs cost a lot more. So we did an assessment and figured out that in these cases where it's very remote, like in Bintan or in Makassar, if they do incentive, they will save about 50% to 60% of the sourcing cost compared to shipping the eggs from Java, and I think it's something that's quite attractive to these companies and also they will be able to report progress, Even if these hotels are willing to pay double the price or triple the price. Sometimes producers can't even send the eggs to them. They are producing, for example, less than 100,000 eggs a day, and the demand from all these companies that have commitments combined is a lot more than that. So there's not enough eggs available in some countries.
Speaker 1:Okay, thanks, okay, yeah, I know this is a program we're really excited about at Global Food Partners and it's just nice to have a solution for a company who is committed to 100%. But, like you said, there are challenges in some locations that we just can't solve right away. And incentives, like you said, still creates the impact Same impact, same number of birds out of cages and I think one of the really great things is the advocacy groups that endorse it as well. So, like you mentioned, the companies can report progress and it's been nice to see companies getting on board with this and knowing being excited to report the progress and knowing that the advocacy groups fully accept this as progress. So I think just the impact and I think the whole movement and the company is just understanding it's the same impact on the birds and it's the path towards physical cage-free eggs and just growing the movement and cage-free production.
Speaker 2:Exactly. It's a good bridging solution to bring on the supply and to make it more affordable in the years to come.
Speaker 1:So you mentioned that costs can be brought down and you just gave an example of how the percent costs can be brought down for hospitality companies using incentives. Is this normally the case? Can you share with listeners if it's normally the case that costs are brought down with incentives and what the reasons are for the cost savings?
Speaker 2:yeah, we work with companies one-on-one to on various cost reduction strategies and incentives is just one of them. We we help to save costs through other methods as well, but through incentives I think what I explained just now by cutting out the middleman, distribution costs, logistics costs, that's a huge chunk of savings already. And also by giving the farmers economies of scale, they may be able to give you a better quote, better price. These methods, I think, are very interesting to some of our clients who are very cost sensitive because they may not be able to pass on the cost increase to their customers, which may not be the end consumers. They may be supplying other companies and in this region the awareness is still growing for cage-free eggs, so they may not be able to charge a lot more or increase the menu prices as easily as some other customers. Thanks, that makes sense.
Speaker 1:So, yeah, thanks for breaking it down for us. So what's your favorite part about working on this issue in Asia?
Speaker 2:I think it's a real challenge and it's very, very satisfying to see that we've been able to bring real solutions to companies that were previously stuck for various reasons, and to see that they are also taking on these suggestions and these cost-saving solutions and implementing them easily. I think it's been very satisfying.
Speaker 1:And how do you see this transition in the next, say, year to year and a half as companies reach their deadlines? Positive.
Speaker 2:Yeah, feeling positive about it, because we've already, I think, worked with several major companies on this topic and with any, I think, commodity that's nascent in the market. That is a tipping point and as we work together collectively, I think we will hit the tipping point soon. And once the tipping point is reached, then it becomes a lot easier, a lot quicker, for the transition to happen.
Speaker 1:Great. So I have one last question, and it's a question we ask all of our guests on the podcast. So what is the best piece of life advice you've ever received?
Speaker 2:That's a tough one. I think I like many, many wise sayings, but there's one that I go to again and again, which means don't listen to respond. Listen to understand. Good one. We understand the situation first. Understand where the other person is coming from before we jump into respond 100.
Speaker 1:great well, thank you for joining us today, dawn, and thank you for sharing your knowledge and your experiences with our listeners. To be notified of our latest episodes, don't forget to subscribe to the Sustainable Table Business Leaders Talk Welfare podcast. Wherever you get your podcasts, such as Apple Podcasts, spotify, youtube Podcasts and more, see you soon.