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- Susan Rockefeller
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Spotlight On:

Kering Greater China

What's the Story?

You’ll know Kering Group as the fashion conglomerate behind high-end brands like Gucci, Saint Laurent and Balenciaga. In the Greater China region, Kering—under the management of President Jinqing Cai—has fostered a spirit of sustainability across their own brands and in the industry at large, celebrating and creating opportunities for start-ups that develop solutions around alternative raw materials, green supply chains and more.

How are they different?

Sustainability is a core value of Kering’s overall strategy; their motto, “crafting tomorrow’s luxury,” envisions the circular economy as an important part of any luxury business. And they didn’t just jump on the bandwagon either; in 2012, Kering publicized its first major plan to minimize environmental impact, and they’re on track to continue that reduction by 40% by 2025. By 2050, they’ve pledged to be carbon-neutral. Through projects like their sustainability-focused K Generation Award for start-ups, their “Fashion for Good” accelerator, and their textile innovation lab, Kering is showing how a fashion group can also treat the planet responsibly.

What inspires us?

Kering is one of the biggest players in the high-fashion space globally. To see them taking a leadership role in the sustainability game is critical, as others will inevitably follow. Already, programs like their start-up accelerator have supported more than 50 groups in pursuing sustainability solutions for the industry.

Q&A

Jinqing Cai

President, Kering Greater China

The fashion industry isn’t always on the same page as environmental sustainability. But for Kering Group—one of the biggest and most high-profile luxury fashion conglomerates in the world—sustainability is a key value as they look to the future of the brands they manage like Gucci, Saint Laurent, Balenciaga, Alexander McQueen and more. Jinqing Cai, president of Kering Greater China, has helped lead the group’s efforts in the region to identify and support solutions. (Think: sourcing more sustainable materials; disrupting the textile value chain to limit negative environmental impacts.) “We set the trends in fashion and lifestyle,” Cai told Musings. “We have the responsibility to change our business models and engage other industries and customers with us.” To that end, Kering has launched programs like a Sustainable Innovation Award, a “Fashion for Good” accelerator, and a textile innovation lab. Plus, they’ve committed to going carbon-neutral by 2050, and minimizing their environmental impact by 40% by 2025. “We do not do sustainability to sell more bags; we do this because we truly believe this is the right thing,” Cai explained. We can only hope other major industry players will follow Kering’s lead. I look forward to joining Kering’s K Generation Award event taking place in Shanghai next month where we will celebrate the innovative highlights with entrepreneurial companies chosen for this prestigious prize.

As an executive at a major luxury group, how do you see your role in fostering an ethos of sustainability in a large company? How do you approach that conversation?

One of the key roles of the luxury industry is to provide high-quality, innovation, creativity and artisan craftsmanship. Luxury needs natural resources to develop its business, so to continue for the long run, we need to preserve these resources. As a luxury player, we think we have a leading role to play. We set the trends in fashion and lifestyle, so we have the responsibility to change our business models and engage other industries and customers with us.

One of your most recent initiatives, the new Kering Sustainable Innovation Award, has a goal of fast-tracking sustainability projects in the Chinese luxury sector. Why is this a priority? What do you hope to achieve?

We believe China plays a critical role in pioneering global sustainable solutions—and can unlock the future of sustainability. That’s why we launched the K Generation Award in December 2018, an award focused on accelerating sustainable innovation in China’s luxury and fashion. Our motto is “crafting tomorrow’s luxury,” and we are starting this program—powered by our partner, Plug and Play—to identify promising, change-making startups and technologies in China that have the potential to disrupt the current textile value chain, bringing positive environmental and social impacts. In particular, we’re looking for startups in Greater China that address challenges of alternative raw materials, green supply chains, retail and use, and the circular economy. Anyone interested can connect to the platform to apply: https://www.plugandplaytechcenter.com/Kering-plugandplay/

What can other companies take away from programs like this award?

More and more companies understand that, as businesses, we have responsibilities toward communities, new generations, and the planet. The Kering Award is an invitation to other companies to join the ride in China. It is part of a 360º approach from the Group to join forces, share resources, and explore collaborative solutions in order to move the fashion industry in a more sustainable direction.

China is often seen as a titan of consumption. Do you think that’s an accurate perception? How can—or should—companies approach concerns about consumption, when it’s also the engine that drives business?

At Kering, we consider that behind each consumer, there is a citizen. In China, people are now aware of the pollution and the damage caused to their health and living environment. I believe this awareness is now extended to what they buy, and fashion is part of it. According to various reports, Chinese consumers are both demanding and buying more green products today than ever before, reflecting this increased consciousness. The question is not “Are Chinese consumers ready?” but “Can fashion brands still ignore our issues?” The answer: “No.” Thanks to our CEO François-Henri Pinault, we started our sustainability journey a long time ago. We do not practice sustainability to sell more bags; we do this because we truly believe this is the right thing and the only answer to the major issues we face.

What are the biggest challenges facing the luxury and apparel spaces when it comes to adjusting to the realities of our planet’s health? How has Kering tackled these challenges?

To us, the key issues for luxury are about changing the status quo and improving traceability. We view sustainability as our responsibility to minimize the impacts of our business and help change our industry’s business model overall. We believe innovation and collaboration are crucial if we want to drive more sustainable practices in our industry. Thanks to our EP&L results, we identified that 90% of our impacts are in our supply chain, among which 70% are linked with raw materials. This is why our actions focus first on smart sustainable sourcing and alternative materials.

Last year, we published our Kering Standards for raw materials and manufacturing processes. We initiated a collaboration with the Fashion for Good – Plug and Play Accelerator in Europe in 2017 to identify innovative solutions along the entire apparel value chain, from alternative raw materials to circular technologies that extend product life. From biodegradable glitter and fabrics made from algae to new ecological dyeing processes and breakthrough technologies for recycling clothes, today Kering has supported over 50 start-ups that have graduated from the Fashion for Good – Plug and Play Accelerator. So this partnership with Plug and Play is one solution.

Kering’s Materials Innovation Lab in Italy is another kind of solution: it’s a hub made available to our brands, so that they can integrate more and more sustainable fabrics into their collections. Since its creation, the lab has gathered over 3,000 sustainable textile samples.

As a longtime supporter of the arts, from your position on the international board of the New York Philharmonic Orchestra to your career at Christie’s, how do you see the role of the arts and arts patrons in forwarding sustainability efforts at large?

Art and music are, ultimately, human creativity, along with science and technology. These areas transcend cultures and boundaries. I believe sustainability is also one of those universal values, relating to all humans and the planet we live on.

I hope with my experiences in and connection to the art and music world, we can collaborate with artists and art patrons, find creative and innovative ways to promote sustainability, and transform cultural mindsets. Only in this way can we create harmony with nature and the environment.

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Spotlight On:

MilkRun

What's the Story?

Farmer Julia Niiro founded MilkRun to save her community in Portland, Oregon as 90% of America’s small farms face extinction, which means our ability to directly purchase from our food producers faces extinction as well. She is utilizing technology and sustainable practices to bring back the original home delivery model used by farmers to supply their local communities (the days of the milk man). Though it’s only available in Portland right now, MilkRun is working on starting up in Seattle by the end of this year before eventually expanding to Austin and Denver.

How are they different?

Other food delivery companies are simply picking up items from a grocery store (or dark store) and delivering it to your house. That model utilizes the problematic industrial food distribution system, and adds an extra step on top of it. Less than 10% of the profit from the food you buy in a grocery store goes back to the farmer who grew it. With MilkRun’s model, 70% of the purchase price goes directly to the farmers (30% goes to MilkRun), and you always know exactly where your food is coming from.

What inspires us?

Everyone benefits from MilkRun’s system. Farmers who genuinely care for the Earth and the mouths they are feeding are rewarded for their work, and consumers get to put quality food on the table with a transparent, stress-free process. Plus, they only work with small farms who support natural and sustainable practices. All animal products come from farms that are both Animal Welfare-approved and Global Animal Partners-certified (GAP), which ensures animal welfare from ranch to processor.

Q&A

Julia Niiro

Founder, MilkRun

Farmer Julia Niiro received firsthand experience of the negative effects  brought about by mega-industrialized farming as 90% of America’s small farms face extinction and huge corporations take over while pushing profit over people and the environment. Delivery vehicle emissions contribute to the largest source of air pollution in the United States with 1,500 miles being the national average distance they travel from farms. And those farms receive less than 10% of the profit from the food bought. Niiro knew a radical distribution system had to be created, which brought her to founding MilkRun, a website (app coming soon) where customers fill up their virtual basket shopping locally-sourced, quality groceries coming directly from farms in the area.  The farmers receive 70% profit and that 1,500-mile driving distance is cut down to 35 miles—a 97.7% decrease in delivery vehicle emissions if every major city participated. Since starting up less than two years ago, Niiro has grown a full distribution system catering to more than 3,000 customers in Portland, Oregon, and is now expanding to other cities. She believes that “local food should be readily available to everybody,” and she only works with small farms who follow natural, sustainable practices with Animal Welfare approval and Global Animal Partners (GAP) certification. The MilkRun model is pairing today’s technology with the milk man days of the past when households were supplied directly by their food producers.

It sounds like it takes a lot of precise coordination to make this work. Can you describe the process of getting an order from website to doorstep?

Customers can fill up a virtual “basket” on the MilkRun webpage (we’re working on an app), then select delivery for Tuesday or Thursday. Once the order window closes, our farmers, bakers and butchers bring their goods to a micro-depot. From there, MilkRun staff aggregates the products to fulfill customer orders. It takes precise coordination on our end, but for MilkRun customers it’s a very simple process. You shop the aisles of our online grocery store then the food arrives at your house.

How are you managing this without delivery or subscription fees?

Because we’re able to cut out the middleman driving food 1,500 miles across the country, we’re able to pay farmers more for their labor and take a much smaller cut than distribution companies traditionally do. We have less people in the supply chain taking a cut of profits as the food passes through their hands on the way to your grocery store. Today, less than 10% of the price of the food you buy in a grocery store actually goes back to the farmer who grew it. We developed a system where our farmers get 70% to our 30%. Without the burden of an unnecessarily complex supply-chain bogging us down, we can cut out delivery and subscription fees. Local food should be readily available to everybody.

The farthest your food goes from the farm is thirty-five miles. The national average is 1,500 miles. Why is local more environmentally-friendly?

Locally grown food creates important economic opportunities, provides health benefits, and helps to reduce environmental impact. It also brings the community together and gives people an opportunity to make a difference.

Pollution from vehicles is the single largest contributor to air pollution in the United States, and cars and trucks combined emit one-fifth of the country’s total air pollution. Imagine the positive environmental impact if every major city cut down 1,500 miles of food delivery to 35! That would be a 97.7% decrease in delivery vehicle emissions. It’s hard to imagine but it’s totally possible. In fact, the name MilkRun is a logistics terms and its very definition is the most effective way to most goods, with the least handling and cost. It turns out the milk man had it right for a long time. 

What’s most rewarding about this work?

It’s rewarding to have the ability to solve a problem that directly affects people I know. It’s my community, my neighbors, my business, the people I admire. This was an idea built from within, born out of solving a problem faced by myself and my community. It’s pretty amazing to see people I admire use MilkRun, people who inspired me to work on this project in the first place. Mark Payne, a fifth generation hog farmer, who is just doing the most amazing work, shook my hand and said, “Thank you for helping me put food on peoples’ plates.” He’d only been able to sell his pork to restaurants before and MilkRun made it possible for him to put local pork directly in the hands of people who wanted it, but didn’t have access before. Helping people like Mark, and the rest of my community is what’s rewarding about this work.

Do you see this as a way to do away with the mega-industrialized farms?

It’s hard to say if we’ll see mega-industrialized farms disappear completely within our lifetime, but if we don’t change the way food is currently distributed, locally grown food will disappear. 90% of the small farms in America right now are facing extinction, and farmers who care about their soil, their land and their communities are often at the mercy of huge corporations pushing them down and paying less-than-adequate wages for their labor. If mega-industrialized farming becomes our only option for food, we’ll have no more farmer’s markets, no more CSAs, no more farmers who are stewards to the land. Without radical new systems like MilkRun, the only options for food will be from huge corporations pushing profit over people, and we just don’t want to live in that kind of a world.

What sort of response are you having?

It’s been a hugely positive response! There are two perspectives that really matter to us—the producers and the customers. For producers, they’re excited that we’re able to offer them not only a fair wage but another marketplace from which to sell what they make (people like Mark at Payne Family Farms). From the customer side, the feedback has been nothing but encouraging. We’ve heard from so many households that now have access to the amazing food growing around Portland about how much it means to them. We live in an area with abundant food resources that haven’t always been available to everybody, but now they are. As for hard numbers, they speak to the enthusiasm people have for MilkRun’s concept—our total monthly order count since coming out of beta in December 2018 (until April 2019) is up 300%. Monthly sign ups in the same time frame are up 500%. It has been incredible thus far.

I just returned from a trip to Detroit where we are discussing launching MilkRun. To hear of the need from a city like Detroit and the farmers of Michigan was incredibly validating. They are in even greater need with less access to markets than a city like Portland. To hear their food waste and farm income issues was staggering, but hearing their need and openness to our platform was exhilarating to say the least.

How are the animals treated on the farms you work with?

MilkRun has a close relationship with our sister company Revel Meat Co and all of our meat comes from their facility, which is one of only two remaining USDA meat processing facilities in the state that works with independent ranchers. It’s both Animal Welfare-approved and Global Animal Partners-certified (GAP), which is an international certification that ensures animal welfare from ranch to processor. 100% of the small farms that support MilkRun use natural and sustainable practices when raising their animals like pasture rotation and regenerative processes, and focus on animal welfare. Everybody at the Revel facility has been trained and tested to provide as little discomfort as possible in their practice. They never use electric prods or any tools for moving animals other than naturally herding them at their own preferred (usually walking) pace. Revel is a low-stress, low-anxiety facility that works with MilkRun because they support over 60 regional producers that are extremely value-aligned and earnest in their practices. This is the alternative to factory-farmed meat. And we feel good about it! It’s part of why I started MilkRun, by seeing the demand and need for more humanely treated and sustainably raised meat in the market. There was a lack of access to meat from these sustainable facilities and farmers, so we had to find a way to make it work.

Do you have plans to roll this out in every state?

Though it’s only available in Portland for now, we hope to be piloting MilkRun in Seattle by the end of this year before eventually expanding into Austin and Denver. This is a new model for food distribution, but it really does work in favor of both farmers and customers. We don’t have the whole country mapped out quite yet, of course, but if we can assist small farms countrywide the way we’re able to do here in Portland, there’s no reason it wouldn’t work. This model is designed to work in any community that has local farms nearby, which we all have.

So many of these sorts of food delivery companies are struggling. What makes MilkRun different?

The simple answer is that MilkRun is not a tech approach food delivery company, so we don’t face the same struggles that those companies face. We are designing a new model for local food systems enabled by technology and yes, part of that process is the home delivery of your goods, but the overall function is fundamentally different. While current food delivery companies are adding additional layers to an already bloated supply chain, we’re removing them. Food delivery companies are simply paying someone else to go to a grocery store (or dark store) to pick up your order and deliver it to your house. With that model, you still have the entire industrial food distribution system in place—you’re just adding one more step before the food gets to your door.

We built MilkRun to extend the original home delivery model used by farmers to supply their local communities before the 1970’s USDA secretary pushed a “get big or get out” policy that fundamentally affected local farming. Before then, food wasn’t priced based on global markets and the costs of shipping 1,500 miles by brokers and distributors, who have no interest in the value chain. We’re trying to help small farmers get back to their roots—growing food and getting paid a livable wage to do it. Goodness knows they deserve that.

Today, the only way to buy food direct from a local farmer is at a farmer’s market or CSA, and that’s one of the key contributing factors to America’s small farms going out of business. They no longer have a viable business model that can compete with major retail chains. We asked ourselves, “What if they could simply list their goods online, see local pricing data, and then deliver their goods to conveniently located small aggregation hubs on their way into the city each week?” We would handle order assembly and last-mile delivery.

The answer to that question is this: we can save small farms. This model allows 70% of the purchase price to go to the farmers (30% goes to MilkRun). In some cases, we’re even able to pay farmers to deliver directly to customers which means they make an additional income as a driver, doing the sort of rounds they would already do. MilkRun is the only platform handling the end-to-end management in this way, and its positive effect on our local farms is already visible.

Real revolutions and innovations, especially in something so powerful as the industrial food complex, can only be disrupted from the inside. And that’s what we’re doing. We’re farmers who live in a community suffering from distribution and logistics problems every day. We wanted to make things better for ourselves and everybody around us, and chose tech to help us solve this problem. To even know what problem you’re trying to solve with food distribution, you have to have the community support you. It’s not easy to earn a community’s trust but we did because that community is already our community.

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Susan Rockefeller