SustainabiliTEA: Numi Talks Business
This post is brought to you in partnership with Numi Tea. I'm compensated for my work for Numi, a company that values all the workers + voices that bring Numi to you!
If you've caught my angsty posts on social media lately, you'll know that I'm struggling with all the feelings of betrayal after discovering that some of the ethical companies I'd loved.... well, aren't really ethical. In the midst of this activist identity crisis (who can I trust? have I wasted my time?), Today's interview with Numi Organic Tea is giving me life.
I've been thinking a lot about whether companies can remain "ethical" as they grow. I had some tough questions for favorite tea brand (and long-time L+S+J collaborator) Numi to answer, and Numi's Director of Quality, Sourcing & Sustainability, Jane Franch, graciously stepped up to answer them! Jane is currently leading the development of Numi’s climate initiative, among other exciting projects. Prior to Numi, Jane worked at SCS Global Services with clients large & small to develop, implement and maintain robust & credible ethical sourcing programs. Her work has taken her to 5 continents and countless villages, where she has had the privilege of getting to know the people and places that grow our tea, coffee, cocoa, coconuts, hazelnuts, mangos, and many other delicious treats.
Hannah: Numi has experienced some wonderful growth since the company’s beginnings in 1999. What have some of the challenges been in “scaling up” operations while still remaining true to Numi’s ethical standards?
Jane: We’ve been fortunate in that as we’ve scaled, our suppliers have also grown with us. This is a reflection of the growth in general in the organic, socially certified CPG space. Nonetheless, we have faced challenges in scaling up, primarily related to material availability and managing costs. Because we place an emphasis on our supply chain partnerships and continuity in sourcing, and we require both organic and Fair Trade certification in most cases, we are sometimes faced with material shortages that limits our decision making. Similarly, as we’ve grown we’ve had to keep a keen focus on cost efficiency, which sometimes means prioritizing our sustainability objectives in terms of impact and value to the brand.
H: About how many workers are employed by Numi supply partners? How does Numi manage the company’s supply chain to ensure ethical treatment of everyone involved in the manufacturing of Numi Products?
J: To give an idea of the scope of our supply base, we currently source 150+ ingredients from 26+ countries, although ~75% by volume is coming from 6 distinct supply chains. Within those 6 distinct supply chains I would estimate there are approximately 7,000 farmers and/or workers.
When seeking new opportunities, whether on the customer side or the product development side, we lead with our mission and values. In terms of supply chain relationships, this boils down to knowing our suppliers, and making sure they know us as well. Before embarking on new supply chain relationships, we thoroughly vet potential partners through multiple onsite and remote meetings. Only once we’ve determined that we have a fit in terms of commitment to social impact and continuous improvement do we move forward with the relationship. In addition to our up front emphasis on relationships, we approach ethical treatment of workers through a three avenues:
Numi Supplier Code of Conduct: our code of conduct outlines our expectations with regards to ethical conduct by our suppliers. All suppliers are provided with the Code of Conduct, and during site visits Numi representatives will conduct due diligence follow up as needed. Furthermore, where a supplier is working through a sub-supplier with whom Numi does not have a direct relationship, the primary supplier is responsible for implementing the Code of Conduct at the sub-supplier level.
Site visits: Among our core 6 supply chains, we visit each at least once on a three year cycle, although some supply chains we visit annually. By developing direct relationships with our suppliers, we better understand the challenges they may be facing, both in terms of delivering positive impact to the farming community or workforce, and delivering positive impact to the surrounding natural environment. Through this on the ground process, we can better identify opportunities to support the health and wellbeing of farmers, workers, and their families.
Certification: In addition to our Code of Conduct and face to face site visits with our key suppliers, we see certification as a valuable tool in further ensuring ethical practices within our supply chain. Currently, 67% of our product is socially certified by an independent 3rd party organization. 60% is Fair Trade certified through FLO-Cert, and 7% is Fair Labor Practices & Community Benefits verified through SCS Global Services. Certification offers robust and credible validation, and is particularly useful in those situations where perhaps our relationship to the producer is through an exporter or trader, and is not direct.
H: Do you think it’s possible for ethical companies to compete in a mainstream market without compromising ethics? If so, how?
J: Yes, and Numi is a prime example. What we are seeing now is the values of the ethical consumer are becoming more mainstream, particularly as the millennial consumer comes of age. They are looking for companies with integrity who share their values, while also wanting a safe, clean product that tastes good. Looking at Numi as an example, while we continue to be strong in the natural channels, we are also making inroads into the mainstream market, notably with stores such as Target and Kroger. The natural products industry is booming and becoming more mainstream to the average consumer; brands with certifications are now widely available across all categories and natural product sales grew by nearly 8% in the U.S. in 2016.
Price continues to be a challenge, and yet trends are also showing that consumers are willing to pay more for a premium ethical product if they have a high degree of trust in the brand and the values are aligned with their own.
H: Numi sells wholesale with several large retailers. Does the way that the wholesale system currently works lend itself well to fair wages for all? With so many “cuts” being taken by the various hands involved in the wholesale deal, how do you ensure that workers still get their fair “cut”?
J: Notwithstanding the challenges inherent in the current distribution model, Numi has a firm commitment to ensure that we are paying fair prices for our raw ingredients. This emphasis on the ingredients ensures that farmers and workers are getting a fair deal, and that consumers are also getting the most premium product available. This sometimes means that we have to cut costs in other ways, usually through simple packaging rather than fancy tins and canisters. We also evaluate new sales opportunities and product development ideas with the ingredients in mind, and avoid opportunities that would compromise our values and commitments at origin.
H: Can a large ethical company still be a “slow” company (in relation to the “slow food” movement)?
J: Thinking about the slow food movement as a return to local food traditions and knowing where your food comes from, I think it depends on the company. We are seeing industry-wide – and have for some time now – a trend towards transparent, traceable supply chains. From an organics and food safety standpoint, these supply chains have always been traceable, it’s the transparent piece that is new, and driven by both consumer demand and the growing awareness among brands that it makes good business sense to know your suppliers.
I would consider Numi a small to medium sized company. For us, our values have been at the center of our decision making every step of the way. As we’ve grown, so too has the list of spices, herbs and florals that we are incorporating into our blends. While we have maintained those close, direct relationships with the farms providing our top ingredients – green tea, black tea, puerh, mint, chamomile, rooibos, and turmeric – we’ve had to rely on our blending partners to source high quality, ethical ingredients for the minor spices, etc. This is part of the reason we developed our Code of Conduct, to ensure that our values were present even when we could not be present ourselves to meet the farmers, workers, and processors.
H: Let’s talk about packaging and shipping. How can larger companies reduce or offset the inevitable footprint of these areas of their operations?
J: We approach this through “reduce what we can, offset the rest”. Meaning, we reduce unnecessary packaging, both in our finished consumer goods and in the inevitable upstream shipping materials. Our purchasing and production schedule is designed for efficiency such that we are buying and shipping by the container/truck load and/or pallet load most of the time. This helps to avoid unnecessary emissions from partial shipments or air shipments that might be more typical in a “just in time” purchasing model.
We also do an annual calculation of our shipping emissions and offset these with verified carbon credits through the Carbonfund.org. Since we started offsetting in 2011, we have offset nearly 5 million pounds of CO2 equivalent. Currently, our purchased credits are supporting a small-scale hydro project in India and a wind farm in China.
Our vision for the future is to inset all of our scope 1, 2 and 3 emissions in our own supply chain through adoption or amplification of carbon sequestering regenerative farming practices with our key suppliers. Not only does this have a tremendous potential to reduce the impacts of climate change, it also supports the health and wellbeing of our farming communities by building productive, healthy, biodiverse farm ecosystems.
H: For Numi, how necessary is plastic/non-biodegradable packaging? Is the use of plastic materials limited?
J: Over the years, we have worked to drive innovation in sustainable packaging. We are proud of our achievements as a market leader in the use of 85%+ postconsumer waste paperboard for our cartons, SFI certified corrugate for our shipping boxes, biodegradable non-GMO filter paper for our teabags, and recycledpaper in our teabag overwrap. However, we are also mindful of the need to preserve product freshness so that the premium quality of the product is maintained all the way through to the end consumer. This has been a challenge with our overwrap, which is a 3-layer material with paper, foil and a petroleum based freshness sealant. Through the Sustainable Packaging Coalition and OSC2, we’ve worked with like-minded brands and the packaging industry to develop a biodegradable, non-GMO flexible packaging material that ensures quality while also delivering on sustainability. We are currently testing this material and hope to launch it in our finished products sometime next year.
On the upstream side, our challenge is the shrink wrap that is used to hold a pallet load together. For pallets coming to us in Oakland we have found a recycler that accepts this grade of plastics for recycling, however this is not a perfect solution. Often these lower quality plastics are difficult to recycle into any usable secondary product, and the required energy and associated emissions from doing so can outweigh the benefits. We’d love to see a market innovation for a non-petroleum, renewable shrink wrap alternative. Any ideas out there?
H: Finally, within your role at Numi, what are you the most passionate about, personally?
J: Personally I am most at home on the farm. I love walking the farm with the farmers and workers, learning about how and why they manage the way they do, being inspired by their passion for organics and land stewardship. And building communi’tea with the faces and places where our tea, herbs, and spices are grown. There is so much we have in common as people, and so much beauty in our differences. Working for Numi I have the privilege and opportunity to celebrate our shared values while doing business for good.
H: Is there anything else you’d like to share with the Life+Style+Justice audience?
Keep drinking Numi tea, and keep asking questions! It’s up to consumers like each of you to hold brands accountable and strive towards the vision of an equitable, ethical economy.