Connect with Braden: https://www.linkedin.com/in/braden-cadenelli-a0737b108/

Full Episode Transcript:
Adam (00:05):

I'm Adam Larson and welcome to Count Me In, the podcast that explores the world of business from the management accountants perspective. Coming up, I speak with Braden Cadenelli about the realities of implementing sustainability practices in the food industry.

Adam (00:20):

Braden is a professional baker in pastry chef who runs six state-of-the-art test kitchens for Puratos, a company which makes ingredients and products for bakers patissies, and chocolatiers around the world. This podcast helped me understand how sustainability practices must be baked into the financial planning and budgeting process at companies in order to drive long term value. And Braden is finding that management accountants are excited to work with him on his sustainability issues, especially when he brings the treats. Let's listen in now. Braden, thank you so much for coming on the podcast today. We really appreciate you coming on and sharing your expertise with us. And as we jump in to get started we know that many businesses are dealing with the reality that adopting sustainable business practices is really what's needed to be successful in the future and also is what's needed for our planet. Can you share a bit about your story, about how you came to see that this is a need and how you started the process with your company?

Braden (01:20):

Of course, Adam, thank you so much having me on today. I really appreciate it. And I'm excited to get to share and talk about a subject that I'm very passionate about, and that is sustainability and specifically sustainability within the food industry. There's really for our specific company where I work. We're Puratos, we're a bakery ingredient company. There's really two specific factors that have led us to our sustainability initiatives. The first one is that we are a family-owned company and the second generation of those families is starting to move into leadership roles within the company. And sustainability is a very important topic to younger people. Not to say it wasn't on the radar of the generations before not to say it wasn't important. It's even more important to the leaders who are coming up now, not only through our company, but in other companies as well.

Braden (02:18):

The second is consumer demand. We work in the food industry. There's a large demand over the past 10 to 15 years to clean up food. And a lot of people say they want to have food labels where they can pronounce everything on that label. If you're going to put that focus on cleaning up your food label and caring so much about the food you are creating as a food manufacturer, you have to care about how you're creating it. You have to care about every step of the system that gets you to that final finished product. And what that means is nowadays you have to have a sustainable system if for no other reason so that you can continue to be a successful business in the marketplace.

Adam (03:11):

I can see how that would be super important, especially if you're listening to your customers. Has it been difficult to start that path as especially with, you know, you're listening to your customers, but you also have to worry about your bottom line. So there's so many different things that you have to weigh. What has that process been like? Especially, you know, obviously this is a podcast for accountants, you know, what's this been look like as you're looking at your bottom line, working with your finance team, trying to see what is the best way to do this?

Braden (03:40):

Well specifically in my role. So to fill the listeners in a little bit, I manage a network of test kitchens within the United States and we have six test kitchens. That means I also have a little bit of a reach into some of our other practical physical facilities. When I work directly with our finance team in this aspect, it's all about long term planning. It is all about targeting the solutions that are going to work for our kitchens, and then making sure that we have the financial capital to be able to implement those solutions. So it's really, I have monthly meetings with the finance team, making sure that I am telling them what it is that I'm going to be looking into purchasing why I need to make these purchases and building out a proper budget. A lot of my job around sustainability is actually around budgeting and making sure that I'm doing the research and I'm talking to the right industry people and finding the right solutions and then finding ways to plan for them.

Adam (04:43):

That's great. So you have a really good relationship with your finance team then, because obviously if you didn't, you wouldn't be able to work on this project at all.

Braden (04:51):

Exactly. No, I'm very lucky. I mean, sometimes I have to bribe them with a cake or a cookie or a brownie if I really, you know, annoy them, if I forget to submit a report on time or if I forget to put a project through in power steering the right way. Generally speaking though. Yeah. We have a great relationship. It's really, for me, very interesting to get, to see that side of the business and get to play a role in planning out these long term projects and what the finances for those mean.

Adam (05:22):

So as you've become a partner with that team, are there other teams that you've had to kind of become a bridge with to kind of make this project a success?

Braden (05:32):

Yes. That's a great question because you cannot accomplish anything in any kind of business. It doesn't matter food industry or not. You cannot accomplish anything without learning how to partner with and work with other departments and other people. I heard a great saying once, and it was said to catch people's attention and it was all business is personal. And a lot of people, especially if you grew up watching eighties movies, you go, well, what about all those movies where they just said, oh, it's nothing personal. It's just business.

Braden (06:01):

All business though is personal because you're conducting business with other people. So what I've had to do is I've had to, A.) Get buy in from my own department, because when we're talking about sustainability, we're talking about changing people's daily activities because we are changing or removing resources that they are used to having. So I need to find solutions that they'll buy into. And so that they see the long term vision of this. I then have to sell the finance team on why we need to budget for this. For example, let's say we need to remove one use disposable item, but we need the CapEx to purchase a reusable item in its place, reusable that involves a capital expenditure, right. Something that I'm gonna use once and throw away. That's more OPEX. I control. I'm lucky I control OPEX for my department. I only have a small say in CapEx, right?

Braden (06:59):

The other people that I really have to have buy in from is our engineering team. They're the ones who are out there helping me, scour the industry and look for solutions. And then helping me implement the solutions. Because if we're talking again from a financial perspective, it's not only the solution. If I'm replacing, let's say a piece of technology, let's say a piece of bakery equipment that is very heavy in a certain type of utility usage. I need the tradespeople to take out the old machine. They need to install the new machine. There's an entire part of that process that isn't necessarily seen by everybody, but I need to worry about it and I need to get buy in and make sure that everybody is well aware. The finance folks know the full scope of the project. The engineers understand the budget they have to work in. And my team and the research and development department know the vision and understand why this is the direction that we have to go in.

Adam (08:00):

So that's quite an undertaking. And I think you've kind of described, you know, what it looks like to make a kitchen sustainable, to what a test kitchen sustainable. Are there other things that you've had to like kind of work through? Like, are there some examples of what it looks like, you know, as you've gone through that change management process with the team members saying, okay, you can no longer use this one single-use project you have to use now use this, but then that, oh wait. But Braden, this is adding this to my, you know, to my task. What do I do now? You know? So how can maybe give some examples on that?

Braden (08:31):

Of course. Yeah. So in the bakery industry, and this is one that is really applicable to every aspect of the industry, whether you are the corner baker or whether you are creating a consumer packaged good, that goes out on a retail shelf at let's say a grocery store. And that is, I just used the word package, packaging. Everybody uses some kind of packaging and that packaging has a purpose, right? It has a function, A.), look nice, of course we want it to look nice. It also has a protective function or practical function of allowing you to pick up an item and move it with you. And a specific example, everybody in the industry, they low and they love their little gold boards that they put their little pastries or their cakes on. They love 'em they're everywhere. Go into a bakery and guess see gold boards everywhere.

Braden (09:22):

I came in one day and I said, well, everybody, we're going zero landfill. Guess where these gold boards go? The landfill, ding, ding, ding, ding, ding. We have a winner. They go in the landfill, guess what? We're gonna do, everybody we're gonna not use gold boards. Once we find a solution that works, ding, ding, ding, ding. Yes, we have a winner. So that was a very concrete example where we very quickly had to identify a solution that was not sustainable, that was accepted throughout the entire industry, and then work to find a solution that would meet our needs, still meet our customer expectations while being able to be a sustainable solution that in the long run. And if we wanna talk from a financial standpoint, actually save us money. And that we hit on it earlier is something that we have found from going through this process is that if we manage it well, we can actually have cost savings in the kitchens being more sustainable.

Braden (10:26):

In this specific example, we went to mainly reusable boards and we found a local vendor who could make them. And then when they need to be disposed of which is really once they break, because they're washable, they're reusable. Once they break, they can still be put through an up cycling process. Now, when we're going and bringing something externally to our building, we found solutions through compostable materials. And that's another key factor. Sometimes you actually have to find multiple solutions to replace the same conventional product in a sustainable environment, in a kitchen environment, really until the industry catches up. And that's actually an area where we struggle sometimes is that certain aspects, certain areas of the industry are behind are sometimes kind of aggressive goals.

Adam (11:29):

So what do you do in that case? If the industry you find that the industry's behind, do you wait until they catch up or do you just say, Hey, we're ahead. And we hope that they recognize that we're the leaders.

Braden (11:39):

There's a few different paths we can take. We will try to find a creative solution to the problem, which generally means we simply stop using a certain material. And we may even stop that process entirely and look for a new process that will, at the end of the day, get us, you know, the same result or at least get us to our goal. That's one way we can do it. Another way, if we find that we are a little bit ahead of the industry, is that we can go and we can try to challenge certain players in the industry and say, look, here's the need we've seen. And this works because where I work again, we're a larger company and we can say, look, we've identified this need. Can you help us get to where we need to be? That's a second way. A third way is really about managing output.

Braden (12:41):

And whenever we talk about a kitchen system, basically, as in most systems, you have input, you have output. We want to have either less input because that's sustainable. Just buy less stuff. I had a person in a meeting, raise their hand and say, well, why don't we just try to buy less stuff? And I went, you win the meeting, everybody, there's your directive buy less stuff, right? But we have to manage those inputs and we have to manage those outputs. So if we find that there isn't necessarily a new input that is sustainable, we will work with consultants who are experts in sustainable practices. And we will try to find a way to get that material through our system. And then out in a way that is better than it was before, which right now I said the word earlier, a lot of times it means upcycling. And that's an entire other issue. How people feel about that and that practice. And there's many, many different areas of that practice. We have found though that when we find the right local partners and we find companies that are doing it in a responsible way because of the volume that we can create, that can be a positive net impact for us in a way of mainly the goal there is to have less items go into the landfill.

Adam (14:10):

So I'm sure that the things that you've been talking about, our friends in the manufacturing industry, people who work in factories or run factories can really relate to some of the stuff you've been talking about. Have you seen the same effect that they've been, we've been hearing from them about some of the supply chain issues and those types of things. I know that food items may not be on that list, but the things to make the food items with, I'm sure you've been running into that same issue.

Braden (14:32):

Yes. Oh, food items. Every, every item is on that list. And that's actually been for us in at least the kitchen area of the food industry in some ways positive. It goes back to what I was saying earlier about replacing disposables with reusables, especially about a year and a half ago, there was a huge spike in the price of disposable metal pans. And there was a price increase because the supply dropped. So getting the pans became much more difficult. The prices shot up. We made the decision at that point to stop buying them. That's it, we're done. We're going to budget in the money to replace them with reusable, washable pans, just the way it was done, 50, 60 years ago. And I can tell you from going in and out of a lot of large scale factories, they have been, they've never stopped using reusable pans. They have lines where the items are deposited in the pan. It goes through it's baked. Then they have a CIP system, which means clean in place. Everything runs through this dish washing system. It's just one continuous line. And then it goes back and it just gets baked again. So it's, again, if you have the right kind of water reclamation in that point in water recycling, it actually can be a very sustainable system.

Adam (16:05):

That's, that's great to hear. So we've kind of covered the gamut right now and if we look at, as we kind of wrap up the conversation as if you can like look in a crystal ball, what do you think the industry's gonna look like as we go five, 10 years out and the sustainability kind of continues? Do you think it's gonna be the, the thing that everybody's doing or is it just a fad? Cause sometimes these better practices for the environment don't really last so what do you think it's gonna happen?

Braden (16:33):

I truly 100% feel that it is not a fad, that this is how we will operate in the future. And it will only become a more important way that we operate and that all of the manufacturers of consumables are going to shift to a more sustainable model. We've already seen it in packaging, in making packaging either 100% recyclable through your standard recycling networks or making it compostable. There are concerns there, which is why it is sometimes slow going, cuz you have to remember food is compostable. So if now your packaging is also compostable, this can become an issue in terms of the shelf life of your entire system. Especially if that system is in any way, shape or form brought into contact with water, it can kick the process off, which can be an issue at the end of the day though, this is the future.

Braden (17:39):

The food industry realizes that everyone that I talk to, all the customers that I work with, they realize that and they are taking steps in that direction. I would be floored if this ended up just being in five or 10 years of fad, because I go to the trade shows. I see what companies are working on. I see some of this behind the scenes work and what's coming down the pipeline and it's only going to become more top of mind and more important because there really is that connection between not only better food for you, but a better food industry, you truly at the end of the day are not going to have one without the other. And if consumers are demanding one, then the other has to follow.

Outro (18:31):

This has been Count Me In, IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMAS website at www dot Ima, net.org.