Why Tony's Chocolonely Married Its Mission To Commercial Success

0:00What's the team's take on the girl dinner trend? what Congress is doing to support the plant-based farming community, a look into the sale of Alpha Foods, and why Tony's Chaka Lonely took legal steps to lock its mission into place.

0:25Hi everyone, I'm your host Carol Ortenberg. On the NOSH podcast, we go inside the business of natural, organic, sustainable, and healthy food. Today, we'll discuss the girl dinner trend before turning to how certain members of Congress are trying to give farmers a boost. Then in our featured interview, we'll hear how Tony's Chaka Lonely is keeping its mission at the forefront. Joining us today is reporter Adrienne DeLuca. Good morning, Carol, or good afternoon, I guess, by now. Either way, it all works. Doesn't matter. And editor-in-chief Jeff Kleinman. It's a nice, bright, and early 115. Thanks for clarifying, Jeff.

1:05I think he's trolling you, Adrian. Just a little bit. So have you guys seen this girl dinners trend? What's your take on this? You know, I'm a guy and I frequently have girl dinner and am looking forward to my children getting out of the house so I can go back to having girl dinner because it seems to involve a lot of raw vegetables and dips. And I'm very excited for these items. I think it's interesting though, like, are we going to see a flood of CPG geared toward girl dinner? I think it should be girl lunch because honestly, dinner's like the one meal I don't do girl dinner for, but every other meal of the day, that's how I eat.

1:50But unlike Jeff's observation, I've seen a lot of like snacks and like dips involved not necessarily just raw vegetables but like pretzels breads charcuterie dinner yeah meze plate dinner it's like rich girl dinner is is what you're saying I think so yeah for me it's more like food waste dinner it's like whatever I've got in the fridge that I don't want to throw out it's like okay I'll have like half a chicken breast, maybe some leftover spinach and corn salad that I think is probably okay. Maybe that's just my own eating habits. Because yeah, that's, Carol, how I approach every meal. But dinner I try to make as like the one thing that's like slightly normal.

2:37I'll agree with that. Like I follow some sort of parameters. It all ends up in one bowl, not like strewn across plates. See, I think, though, to qualify as a girl dinner doesn't have to be sort of nicely arranged and ordered on the plate. No, I've seen like jars of pickles opened and just like a fork and a jar of pickles and people calling it a girl dinner. As a girl, I'm going to fight that. Seems like an aesthetic requirement. I also find the gendering of the whole thing pretty obnoxious. I mean, it's, you know, leftovers. Like, leftovers have no gender. I didn't think like mealtimes had any gender either, or food for that matter.

3:23I thought it was weird because GoPuff had this category called girl dinners, and the selection was so weird. there was like single serve pickles in a bag, Uncrustables, strawberries, tuna salad. Like I've kind of seen some of these things, but Uncrustables, not so much tuna salad. I feel like definitely not girl dinner unless it's like bougie tuna salad. No, that sounds like a little girl's lunch bag. Yeah, you know how like everything's like a snack nowadays? I think this is just like all the snack companies being like, we're starting a new trend and we're calling it girl dinner. It's just a collection of snacks.

4:03And that you can lean in on the merchandising, especially if you have an infinitely digital shelf. I think it's great that we have some other tag that we can apply to this stuff. But man, I wish it was not girl dinner. It's funny, though, because I've to your point, Jeff, I've gotten lots of pitches that are like for your hot girl walks, bring this water. and hot girls always have multiple beverages on them. Have some probiotic soda. I don't think I ever get pitched like hot guy walks or hot guy lunches or anything along those lines. Well, how about dad bod dinner? Oh, I like that one. That's more what I eat.

4:48Got it trending. I'll make a reel later. Okay, Jeff, on that note, if you had to make hot girl dinner, dad bod dinner, what's one thing that's going to be in it? It's probably going to involve a lot of assorted carrot sticks and cucumbers, which I love, that have been salted, salted cucumbers, and probably a variety of Italian meats, just thinking about what's sitting in my fridge right now. Adrienne, what's in your dad bod dinner or hot girl dinner you can choose? It's definitely dad bought dinner. I like the ring to that way better. Thinking about what's in my fridge right now, I went a little crazy.

5:33A friend of mine, we went on like a farmer's market tour this weekend. So it's just all produce right now. It's going to be like grapes, some focaccia, probably some peppers and hummus, maybe a little tzatziki. Peeled strawberries. You guys, the picture of that. Why did we have to include that in our newsletter? The visual was terrifying. If you guys haven't seen this in the Nosh newsletter for our listeners, Jose Andres went on this like kick where he talked about how he loves to peel his strawberries. Apparently, he also said in the longer podcast that he likes to peel blueberries and that if you've never tried a peeled strawberry, this is like the pinnacle of strawberries.

6:21There's a very long quote. If you go to Instagram or TikTok, you can watch the whole thing. But yeah, apparently his dad bought dinner has peeled strawberries. I have very strong opposing feelings against that whole practice. Like, just leave it on. Leave it. We don't need that. I mean, it does keep the little seeds out of your teeth. He said it there more like, if I remember correctly, like luscious and silky that way. I don't care. that's not a strawberry anymore I suppose if you're peeling those like$30 single strawberries you know maybe it's worth it if I have a$30 strawberry I'm not peeling it I'm eating every last bite of that you're eating the green little top as well yeah it's roughage so I have started throwing just whole strawberries tops included into smoothies apparently you can do that I'm not dead yet so I think it works All right.

7:21Well, guys, this has been a revealing discussion into your eating habits. Let's move on. Sounds like there's a lot of plants on our plate. Adrienne, you wrote about the Plant Act. Tell us a little bit more about that. Massachusetts House Representative Jim McGovern introduced a new bill last week that he's hoping will be adopted alongside the Farm Bill reauthorization that aims to bring farmers and rural and small communities into the plant-based protein supply chain a bit more. So it's aiming to open up incentive programs, grant programs, technical assistance and loans, all of that support that the USDA already offers to a lot of different farmers, specifically a lot of meat and dairy industry, to people growing mushrooms, pulses, legumes, all those really hot ingredients in the plant-based protein space right now.

8:17So the idea is it'll create some more farming jobs. It'll support a lot of these rural farmers versus some of the more industrialized places and also create a more stable and domestically sourced supply chain for a lot of these products. Well, that's impressive for that son of Worcester, Massachusetts, to pull that together. I used to cover Jim McGovern back when I was at the Middlesex News more than 20 years ago. Did you ever expect he would come to care about America's plant-based farmers? Or team up with Tofurky? You know, the thing about Jim McGovern is he's one of the most caring people on the planet.

9:05And after one election that didn't have a good outcome for his team, he just walked around hugging people to try and bring everyone together, I recall. Oh, that's really sweet. I really like Jim McGovern now. Let's see. Jeff, I think government support has been a topic you've said is really necessary to help the plant-based industry stabilize and become a significant part of the U.S. diet. Yeah. I mean, if you look at the amount that's spent on preserving meat and dairy versus developing these kinds of diets and the environmental tradeoffs that come with them, there's just no comparison in terms of the amount that's spent.

9:57I'd also say that government support for any kind of shift in diet, it's frequently made fun of initially, but food pyramid, nutrition guidelines, the way that the Department of Ag supports things, the way the FDA approves things, the way the FTC allows them to be marketed, all of these things create gradual culture shifts. that can be very effective over the long term. You know, I think any sort of major advance in U.S. lifestyle frequently has a government component, be it DARPA or what Joe Biden's proposing around cancer right now. I mean, you can fund change as long as you get the bureaucratic support and maintain it.

10:57There's a lot of plant-based news this week, Adrienne. Right before we recorded this podcast on Tuesday, you were working on a story about Alpha Foods selling to live kindly. Who is Alpha Foods? What are the details of this deal? So Alpha Foods, California-based, plant-based meal solution type brand. They do sell alt chicken strips and nuggets and patties, but What they focus their main business on are finished products like burritos, tamales, wraps. So they've been around since 2015 and they just sold to the Live Kindly Collective, which was launched by venture firm Blue Horizons founder. And that collective hosts five other plant-based brands.

11:49So the idea is by bringing Alpha Foods in, they're just going to increase all of their manufacturing synergies. Live Kindly has a state-of-the-art manufacturing facility, it says, in the Netherlands, which focuses really on bringing HME or high moisture extrusion processes into the plant-based sector. So not something totally novel in food processing, but it's allowed a lot of these plant-based brands to clean up their ingredient lists a little bit. And it is novel to Alpha Foods, I think. So yeah, this HME technology is novel to Alpha. According to their founder and CEO, Cole Orobetz, they had been working on bringing HME proteins into Alpha's products for about three years now.

12:39So he said, you know, they really decided to take their time since a lot of incumbents are using this protein, but it can affect products in very different ways. So what they focused mainly on was, you know, cleaning up that ingredient list, increasing protein, lowering carbohydrates, really just creating like a next generation of the products that they had already been selling. So that's going to, you know, start to roll out across their chicken products and then eventually through all of their formats. Yeah, one of the things about Alpha Foods, and it looks like the other things in this collective, is that they almost had sort of a fast food quality to them.

13:18You know, they were actually really grubbing in that way. You know, they had that sort of, you know, microwave. Late night munchies. Yeah, microwavable kind of gas station deliciousness that one probably wouldn't include in a dad bod dinner, but might include on a roadside stop. And I mean that in the best possible way. But when you have that kind of, you know, sort of breading and, you know, the wrappers, to make them delicious, they often have a lot of extra stuff in them. The products did have a pretty long ingredient panel. So if they can cut that back, I think they get into the virtue side of things a little more.

14:13Certainly, that was one of the main goals and also helping their kind of next evolution. Talking to Cole, he said, looking to the next year or so in terms of distribution, they're focusing on kind of what he called micro markets, like corporate offices and hotels. And like you said, Jeff, kind of like those grab and go locations where you just might need to be snagging something delicious, hopefully less ingredients. Yeah, snagging something delicious, less ingredients, also snagging something that is in accordance with a particular dietary lifestyle, which, as we know, access is often the thing that keeps people out of these plant-based lifestyles.

15:00We've seen a couple brands, though, who make a better for you version of like a gas station munchies snack. And it's also seems like a little easier to win over the consumer compared to, say, an alt-meat steak that has to compare to a regular steak. Yeah, absolutely. Look, the consumer prizes convenience. And if, you know, one of the burdens of a plant-based lifestyle is that it is frequently an inconvenient one unless you want to go into subway and get a veggies and cheese sub you know that's pretty much your option your vegetarian option for a long time same thing if you're on a road trip and you roll up to an Exxon, there's not a lot for you there if you are a vegan.

15:53And making that choice much easier is obviously what Alpha Foods has tried to do. Okay, guys, well, we planted a lot of seeds in our listeners' minds about news this week. I think it's time to get to our featured interview. Adrienne, who are we going to hear from, and what did you chat with them about? I spoke with Anwill Dagstra, the former chief of operations, impact, people, and culture at Tony's Chocolonely, and rejoined the Tony's team after about a two-year hiatus. Now serves as one of their three mission guardians for the chocolate company's new corporate structure, which is known as the Mission Lock.

16:40So together with Seth Goldman, co-founder of Eat the Change, and Ikenna Azikwe, a lawyer turned broadcaster slash social activist, the trio all holds this like legally protected golden share of Tony's that allows them to fight pretty much any business decision they believe will compromise the company's mission to source 100 % child and slave labor free chocolate. it. So we got into how this structure came to be and kind of why Tony's founder required that the company went this route. She shared some tips on how some smaller impact-driven companies could protect their mission. And we also discussed what this indicates about the future of running an impact-driven food company.

17:28I can't wait to hear more. Let's get to it. Hi, Anne. Thank you for joining us today. Thank you for having me. I'm looking forward to our conversation. So to start, could you just give us an overview of exactly what a mission lock is and maybe tell us a bit about how and where it lives within Tony's business? Yes, of course. Tony's mission lock is actually a future-proof legal structure to protect the mission and Tony's way of working, which are captured in the five sourcing principles. so to protect the mission and the mission of Tonys is together will make 100 % slavery the norm in chocolate and it has been for the past over 15 years but it's growing and Henk-Jan Beltman who was always the main shareholder and there were more shareholders but he decreased his shareholding percentage so he said the percentage and he wanted to protect the mission so they come up with, together with Douglas, the current CEO, with a legal structure, how to do that.

18:37So the mission log is actually a foundation with three board members, which are the mission guardians, and they are independent and they have priority share, actually a golden share, as we call it, and they cannot be sold. So even if the shareholder structure in the future would change, these three members of these three mission guardians would still have the same rights as they have right now. So it's really a way to protect the reason for why Tonys is currently active. I'm glad you brought up growth because I know the company has raised some money in the past year and they've launched some big partnerships.

19:17In your view, was all of that growth kind of just made the timing right to do this? As you mentioned, the company has been working towards this mission for almost 15 years now, I guess, what made the timing of now really important? I think the timing is important because, as I said, so I was the Shoko co-captain for four and a half years, but Henk-Jan Belman was the chief chocolate officer. And together with the CFO, we were the three chiefs. And we worked extremely hard together with the team to reach our mission, but also to find out what different way of working would get the results. And now after, Jan, I think after 12 years, he decided that for the growth of the company, it would be good that there was another CEO.

20:04So that was Douglas and he comes from Innocent. He was a CEO of Innocent, which is, we are very happy with that. Tony's very happy with that. But at the same time, he decreased his percentage of shareholders. Tony's mission log is actually legally in the articles of association of the company. So if you want to change the articles of association, so there's the mission and the five sourcing plans are really locked there. But if you want to change it, you normally have to have like two thirds or 75 % of voting rights with the shareholders. And the mission lock, before we had the mission lock, or Tony said the mission lock, they could change it, but Hank Young could still prevent it.

20:49And I have no doubt that Douglas doesn't want to change it. But let's say in the future when it's sold again, maybe the shareholder structure changes again, then somebody could say, OK, I have now 100%. I could change the articles of association and I could change the mission. I could change the five sourcing principles or the obligation of the leadership to adhere to that. And at that point, you know, when Henk-Yang couldn't prevent that anymore and to make sure that in the future it would never change, Douglas implemented together with the supervisory board, of course, implemented the Tony's Mission Log.

21:24I'd love to hear a little bit more about, you know, how exactly you guys protect Tony's Mission. So as, you know, a guardian, what is within your authority and is there anything like out of bounds? Yeah, that's a very good question. As the, well, as the Tony's Mission Log and the three mission guardians, we have, of course, then the legal, let's say, veto that we can prevent any changes in the Articles Association regarding the mission and the five sourcing principles. But in addition, we also have like a toolbox of escalation, like an escalation toolbox. So Tony's mission log is also independent.

22:07So we have been selected by the current supervisory board. As with the three, I can explain later who is in it. but as from now on we have been installed since June 1st if somebody stops or the term is full then we select our own successor decision making should be unanimous I think it's quite an interesting legal structure to to protect the mission very inspiring and I'm very proud to be a part of it is there anything out of bounds so we are not that's a good question we are not the second supervisory board. So you have an executive board with Douglas as a CEO, and I know they work extremely hard to reach the mission and to implement and to change the system and inspire other organizations.

22:55And then you have the supervisory board, which also advises them, and they have all topics on the table there. Now, only for us, we have our scope very clear. it's mission and the five sourcing principles. And if there's any concern from the cooperatives or any other of the stakeholders, they can contact us directly. Or if we find something out and we say, hey, this is strange, we don't think we can also proactively start an investigation. Maybe just good to mention is that we cannot prevent shareholder change, change of shareholders. but the priority share is on yeah cannot be revoked so all the rights linked to it it's not there's no drag and tag along which a lot of people know it's just there so if there if the shares are sold to somebody else to another organization they get us they get the mission tony's mission look goes with it like a president like a it's like your family-in-law we need like uniforms or something from you guys you know picture you all rolling up together and you know, a little squad like superheroes.

24:06I want to kind of round back because knowing your background working at Tony's, I'm sure this really brought everything full circle. But I guess, what was it about this initiative that drew you back to the company? Yeah. So in the four and a half years, I was responsible for the impact in Africa, together with the team, of course, and the full operations and people and culture. And during that four and a half years, we learned so much and we've seen the results. The results were coming in it was i've stopped now since two years and i've i see now also in the annual fair report and i hear it from the team is that the way of working the five sourcing principles is really paying off tony's actively looks for child labor and illegal labor and they find with the cooperatives in the communities they work with for a longer time like around five percent i don't know the exact number is I can go as low as 4.4 percent so the standard average in the cocoa sector is like 30 percent of child labor and the poverty levels are dropping in the communities they work with so the five sourcing principle which is like a system change really works and at the time we saw the first results but we didn't know we had to adapt and change and the living income reference price so we I worked very hard for that and then two years I had to let it go and when they asked me to become a mission guardian I thought yes I because I fully believe that to change the way of working should be protected because it works so farmers can lift themselves out of poverty and poverty is the root cause for illegal and forced labor labor, including child labor.

25:51So I wanted to protect it and also to inspire other companies to protect their mission. And I even believe, it's my personal conviction that the five sourcing principles should not be limited to the cocoa sector. It could be implemented in the fashion industry. And as one of the roadmaps to inspire others, I was more than happy to be part of it. as you've mentioned especially with mission-driven brands a lot of the times down the road you don't know what can happen so it's very cool that you were able to come back and lock it in but i can imagine that a lot of you know managing directors or ceos of of impact companies they they are so passionate they they really want to make positive change a structural system change and they have a team that works with them and for them and for the mission.

26:45And they worry about if you are successful, which is great, because I believe that all companies should have a positive impact, is that at the point you think, okay, maybe we need, I have to stop because there's somebody else who can do it better. But how do I protect that, the vision I had, the vision of success I had. And I think that Tony's mission law could be an inspiration for those companies to implement it as well. And I know that Tony's will, well, always gives away everything almost as an open source, but they will give away the legal structure. And I think the clauses, you can just contact them and they will, yeah, give you the setup and how to just copy it more or less.

27:29I'm glad you brought up, you know, that kind of roadmap, the structure that they're willing to hand out. Because I guess for an early stage company, maybe one that particularly really has some limited resources, would you say this is something that they should do now? I guess, how does like growth and timing factor in to when another company should begin to look to, you know, lock their mission in? Yeah, I think that it is always, even if you're small, it would be good to investigate and to just to see. But that's the first step I always say that You have to be, even if a small company and you are mission driven, you have to be clear about what that mission is and what the vision is.

28:14What is your success? If you are successful, what does that look like? And that you put that on paper and you put that in your own articles association. As long as you are in control of changing that articles association, you are quite fine. Right. I mean, there's nothing. Yeah. If you are in control, you are in control and you can always make the decisions towards the mission, towards your vision of success. So the timing would be that if you are losing that control, if you are thinking, OK, now I need a new investor and something will change. I would put that also really in I would then implement that future proof legal structure and just copy it.

28:56And then it's not a cost are limited. I think I wouldn't do it if you are, I would think about it, but I wouldn't do it if you are too small. I mean, it's also really if you are growing and seeing in the near future that shareholder structure could change and different opinions, more opinions come around the table. Make sure that you protect what is your passion, right? Why you are there. Speaking of different opinions, is this something that I guess would be realistic for, say, like a large multinational that probably already has a lot of opinions around the table to put in place? Are there maybe, aside from varied viewpoints, I guess, what potential barriers could you see for a company that's really well-developed and mature for putting this in place?

29:50Of course, it's feasible, but it will be more of a challenge, I can imagine, because although a lot of multinational state, and it's not that they don't do it, that they have a multi-stakeholder approach, I know that the shareholder power is always quite dominant. and you should of course because the legal structure of Tony's mission log is is embedded in the articles of association you need to change your articles of association and for that you normally need 75 percent of voting rights and if the ownership is spread around the globe that could be is a challenge now let's let's face it that will be a challenge to change to implement it afterwards.

30:34So I would implement it before I go to the, for the listing or the IPO. But, but yeah, if you really have a good story and you really say that this is what you, that is the reason why you are there and you get your stakeholders behind you, it would be possible. I would love to see somebody do it. I would love to see somebody do that. That would make my day that would be very it would be such an interesting case study as well to see you know that would be great to see the storyline behind it and to say okay this is why we are here this is the positive impact we really want and this is we we we will make sure that nobody can change that in the future yeah picturing some sort of like mission driven version of like succession like that kind of intensity yeah exactly it would be great yeah and it's also because i think a lot of people think you have to choose between commercial success and impact positive impact and that's not true that's really not true you i mean if you look at tony's is by far the best example of that uh where uh commercial success is part of the strategy because we You need to sit at a table, both in West Africa with the governments as on the public opinion, as on the legislation side.

31:59So you need to be growth. You need to inspire others for that. You need to have a commercial successful business case. And it doesn't have to be or. I really believe that if you are commercially successful with positive impact, it's actually the same. It should be building blocks that help each other. And it's not that it costs money, right? Of course, it costs money, but money is a means to go towards your vision. And it's also not bad to have a profitable organization. That's what we need. We need the world with profitable organizations that have a positive impact. That's how we change the world for the better.

32:42So I don't believe very much in the difference between a normal company and a social enterprise. You have social and asocial enterprises. You have companies that have impact. Everybody has impact. Let's make it positive. And it's okay to have commercial success. I recommend it, by the way. It's better. Otherwise, it's too small to make an impact. If you want to make a system change, you have to be commercially very successful to reach your mission. I love that contrast that you just set up. It doesn't have to be one or the other. It should be both. And that's how we get that to happen. Yeah. To reach your mission, you need to be growing.