We all want to eat local, sustainable food. We make ethical choices about whether to buy free-range eggs, and we weigh the costs of going for the certified organic option.
But what about regenerative farming?
As investors there’s a growing range of regen-ag projects to support, but now the produce from that good work is hitting supermarket shelves.
Wide Open Agriculture, based in WA, is a leading manufacturer of food and drink products that come from regenerative farms, plus, they’re listed on the ASX.
The company’s most well-known brand is Dirty Clean Food. They sell oat milk, which is being sold as the world’s first regeneratively grown, carbon neutral oat milk. Dirty Clean Food also sells beef, lamb, poultry and pantry staples.
OnImpact wanted to know more about this evolving space, and we spoke to Managing Director, Ben Cole, about the importance of regenerative farming, their struggles to find local manufacturing facilities (they’re currently building their own facility), as well as investor and consumer appetite for the new breed of alt-milks and regen-ag products.
Is ‘Regenerative’ the new ‘certified organic’?
The short answer is no. Regenerative farming is less about ticking boxes and achieving a certification. Instead, it looks at the core production processes and farming processes, focussed on not just producing healthy food, but also improving, rather than degrading, the soil and the land in the process.
“After talking to farmers it became clear that the term ‘regenerative’ was language that they were using. They showed us it was not good enough to be sustainable. It was about a process of continual improvement, but also overlaid with the fact that we live in Western Australia with ancient soils with very low organic matter.” Ben Cole says.
“To us, regenerative farming is really about demonstrating your commitment to soil health, which is particularly rich in carbon, protecting and expanding biodiversity on farm and nurturing your water cycle.”
Definitions aren’t perfect, and regenerative can be interpreted in many ways, but for the team at WOA, it’s about setting high standards right from the outset and leading the market.
“Dirty Clean Food is the first food and drink brand that has committed to being regenerative. We’ve set the bar pretty high. We have some really detailed, Dirty Clean Food supplier requirements, from their commitment to carbon and carbon assessments through to a regenerative farm plan.” Ben says.
“It means different things to different people. To some, it means more trees on farm, to others it’s about eliminating and reducing fungicides, which we are. Others ask, are you still using herbicides and pesticides, yes we are, but it’s integrated pest management systems and we’re really trying to mitigate it.”
The company and its varied products are defining a new way of producing food for mainstream production. They’ve cracked the major supermarkets, and they’re preparing to invest in their own manufacturing infrastructure. But what’s also transformational is the systemic impact they’re having on how land impacts and production processes are factored into a business model.
“This year, I think the most exciting outcome is the transition from practices and stories,and into natural capital accounting, which is really putting soil health, biodiversity and the water-cycle on a balance sheet and profit and loss statement.” Ben says.
Bringing Manufacturing Back to Australia
When WOA was first planning to manufacture oat milk, made from regeneratively grown oats, they had no problems sourcing the raw product, but they couldn’t find a manufacturing facility that could manage their small initial run of product.
They had no luck in WA, they scoured the East coast, but there was no-one able to accommodate them. Even in Asia they had no luck. And it wasn’t until Ben was at a trade fair in Amsterdam that he found an Italian facility that was willing to give them a chance.
“I found this amazing family owned business in Italy, who actually showed real commitment to sustainable and regenerative farming, and we’ve actually taken them on the journey around regenerative farming.” Ben says.
And while soy and almond milks have been popular in the past, they’re now on the wane, with oat milk as the rising star.
WOA and Dirty Clean Food is now producing the world’s only regeneratively-grown, carbon-neutral oat milk, and that’s despite the very long supply chain that goes all the way to Europe, and back again.
They offset their emissions with ACCUs, and they’re able to maintain their carbon neutral status, but they knew offshore manufacturing wasn’t sustainable.
With their early success they’ve now got agreements to supply Woolworths, and with healthy revenues, and some additional capital, they’re building their own manufacturing plant in WA.
“So we know our carbon emissions, and we know that 40% of them are from transportation. So what we did last year is successfully raise money to allow us to bring manufacturing back home.” Ben says.
“It’s a huge milestone for us, but also for the ecosystem of plant-based products in Australia, which is still really nascent.”
By bringing production back to WA the company will not only reduce the carbon footprint of their product, but they’ll also improve their gross margin by some 10%.
Having achieved carbon neutrality they want to go further, and that will involve ‘insetting’ their emissions. While offsetting is all about funding carbon sequestration projects, carbon insetting involves improving not only you’re own direct emissions, but also improving the lemissions profile of those involved in your supply chain.
For WOA that involves working with the farms to improve their practices, plant more trees and further enrich the soil.
“The farming sector has a big opportunity in terms of climate impacts, it’s a land sink, as well as an emission source.” Ben says.
“So that’s our theory of change, and the way Dirty Clean Food and its products can really help the regenerative sector grow and build in WA.”
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Next Stage of Growth
The company is focussed on growth across their key pillars; lupin protein, oat milk, and meat products. They sell both direct to consumer as well as through retailers, with the Woolworths deal offering a toe-hold in national distribution.
But they’re looking beyond Australia having signed an exclusive 2 year distribution agreement with DKSH, to distribute its carbon neutral oat milk in Taiwan.
It’s the fifth major distribution agreement that DCF has landed in the past 7 months. DKSH is a major operator in the region, the company estimates the deal will represent around $AUD650,000 in sales.
Another major deal was with Monde Nissin (MNA) in Australia, to supply plant-based protein concentrate ‘Buntine Protein’. It’s made from lupin seeds, it’s regeneratively grown, and can replace animal-based ingredients for food and beverage. MNA will use Buntine Protein as it main protein ingredient in a range of foods; the company owns brands including; Nudie, Black Swan, Peckish, and Wattle Valley.
“We’re now on track to be a $12 million per annum business. And we want to double that and double that, again” Ben says.
“Woolworths have been great, they’ve been a very supportive partner, and we’re now starting to have conversations with the other large retailers as well.”