#239 - The New Non-UPF Verification with Megan Westgate

22:04Megan Westgate:It's all there to make everything tastes creamier and to keep the product from separating. That's an example of this hyper palatability where there's a mismatch between what the ingredients actually are and what the body thinks. So like creaminess registers as fat and nutrition, but if it's coming from xanthan gum, that's not actually the reality of what your body is getting. As we looked comprehensively at food integrity and looked at where are there gaps, what we saw is that when it comes to minimal processing and additives, which is a growing consumer concern, there really wasn't a standard that addressed it.

22:42Megan Westgate:And interestingly, we did some market research last summer, and 52 % of the respondents said that degree of processing was their primary concern. So more than said that they cared about non-GMO, more than cared about organic, what they care about is how processed is my food. But there wasn't any way before this program for them to be able to identify how processed was my food. You can't always tell by looking at an ingredient panel or a nutrition facts panel. You know, you can have, for example, rice flour in a product and it could be made any of several different ways with various degrees of the food matrix intact, depending on the type of processing, like it's stone ground, like your body's probably going to recognize it pretty similarly to how it recognized rice, but it can be highly refined to where it's going to spike your glucose and not be metabolically nourishing.

23:37Megan Westgate:And so that's the kind of thing that's in scope of the standard is we actually go through and look at different types of processing, like biological, mechanical, thermal, and we assess which ones are totally permissible, minimal processing, which ones are conditional so they can be used if at least 70 % of the rest of the product is minimally processed. There is space for the conditional ingredients. So this is where you might see something like starches or proteins where they are more refined ingredients, but they're still allowed in these verified products. And then we have a third category that's just completely prohibited process because they are ultra processed, like hexane extraction as an example is just not allowed.

24:22Megan Westgate:We'll be right back.

24:26Daniel Scharff:Friends, did you know that a party has been going on this whole time with 35 ,000 people and you're invited? It's our Startup CPG Slack. You hear about it all the time on here. And if you haven't yet joined in, this is your moment. Take out your phone, type in startupcpg.com and then click to join our community. You'll be at the party. You'll hear about all our events. You'll get in front of buyers, investors, brands, whatever's most important to you. We have such big plans ahead, but you got to be in the community to hear about all of it. See you on the Slack.

25:04Okay.

25:04Daniel Scharff:So when you were talking earlier about breakfast cereal, it was reminding me of this documentary they had on the history, a docudrama, I guess, on the history channel that they had called the food that built America. And I remember them going for some of those original, now huge CPG companies as they were just getting into those first serial games. And you're just seeing like, whoa, there's a lot of sugar. And that's just a takeaway when you're watching it. And so from there, I was just thinking like, okay, what is the impact of these certification programs? If you look at across all of it, like number one, consumers who are really aware of these kinds of standards have a much better tool, heuristic to go and find the kind of products that meet their standards.

25:44Daniel Scharff:Number two, retailers who are conscious of this have a really nice framework to figure out which products meet their standards without having to do all of the due diligence that your technical administrators and consultants are able to actually get into the weeds and really do. And then number three, I believe also there probably is a big impact on those large CPG companies as well, which I see with startups even because those big CPG companies, they're so massive. Are they going to be looking at these kind of standards as well? Do you feel like it can actually turn the tide on some of the products they are making because they're more aware of it or they see a lot of companies that are maybe more natural, more agile, really orienting themselves around these new standards?

26:29Daniel Scharff:Because that can be a huge impact, right? When you can actually move those huge companies towards better standards as well.

26:35Megan Westgate:Yes, and that absolutely is part of our ultimate aim. We sought to find a balance of meaningfulness and achievability with the standard where the fact is that the majority of packaged food is ultra processed. It's not like we just want to rubber stamp that all, but we also don't want to make it completely inaccessible. So we tried to find that middle ground where, yes, companies will have to reformulate, but it's feasible. There are alternatives and things they can do. So for example, they could replace cane sugar with coconut sugar. Like we tried to find pathways like that that would be accessible.

27:10Megan Westgate:what we've been hearing so far from bigger CPGs. And there's been tremendous response to this. We have over 300 brands that have expressed interest, signed up for our wait list. And so far, our first verified products are from brands who participated in our pilot, which I'm happy to talk more about. But we have 115 products verified so far, which is really exciting. And that's primarily from, it's entirely actually from brands that have always been committed to more whole food products. What we've heard anecdotally and off the record from the bigger companies is likely the way that more established larger brands will get into this is through new product launches.

27:54Megan Westgate:And so I do think there is a huge opportunity for startups to formulate from the beginning to meet these consumer expectations. Again, I mean, you look at the success of non-GMO project. And to be honest, when we started this, no one even knew what a GMO was. Like it would take me like 10 minutes to explain when I would just be meeting someone at a party. What do you do? Like the amount of backstory that I had to give for them to have any idea what it meant that I was doing this. Whereas now what we see with non-UPF is just this incredible demand where in the research we did last summer, 72 % of respondents that they're trying to avoid UPFs, but most of them don't know how to do that.

28:37Megan Westgate:I think we saw that 83 % are interested in knowing more about how to avoid it, but only 37 % considered themselves knowledgeable. And based on the further interviews we did with them, I don't know that we would agree that that 37 % was particularly knowledgeable. So there's a huge demand and interest from people to be able to easily identify these things. But yeah, I think for legacy brands, it's a bigger risk to reformulate long established products, but at the same time, they recognize that that is what their shoppers are increasingly looking for. So again, mostly what we're hearing is that they will be launching new products.

29:13Megan Westgate:Some companies are looking at a little bit of reformulation, but I think startups have a huge potential competitive edge here if they formulate from the beginning to keep their ingredients less processed.

29:26Daniel Scharff:That is very interesting to hear about. It also was making me think about how I would browse the aisles and see some of the products from the major legacy CPG companies that would have some kind of a health claim on it or ingredient claim like no artificial flavors. But that was the only thing it would say. And then you're like, well, it has artificial colors, though, and it has artificial preservers. But they're just like searching for the one thing that they could say that would give it a health halo. Like, come on, guys, that's pretty cheap. No artificial flavors manufactured in a full moon on the fourth day.

29:58Daniel Scharff:They just like, pick the one thing that they can really talk about. So I really do see the importance and beauty of just trying to hold everybody to a higher standard and helping people understand the stuff that fits that standard. One more question just on this kind of macro stuff and the cultural zeitgeist or whatever. We hear a lot right now about processed foods, RFK, all that stuff. What do you think is happening in the overall conversation that's going to affect how people are looking at this kind of a standard and certification and interest in it?

30:33Megan Westgate:Well, I think really unfortunately that the current reality is that almost everyone is affected by chronic disease driven by our poor diets and specifically ultra processed foods. So whether they themselves have an illness or a loved one does, almost everyone is increasingly affected by rising levels of dementia, obesity, heart disease, cancer, depression, other forms of cognitive decline. And the data is strikingly clear that there is a very strong correlation between what we're eating and this huge rise of illnesses, most of which were really rare only 50 years ago. And I think it's easy to work.

31:20Megan Westgate:We're adaptable creatures. It's easy to just think like, yeah, that's normal. I mean, my kids' school, I think close to a fifth of families since my son's in sixth grade, since he started grade school, close to a fifth of the kids' families in the class have been affected by cancer affecting their parents in the household. This is elementary school kids. You know, I live in a pretty health-conscious area, and that's just the sad reality. So I think that that's unfortunately what's making this now unavoidable is that there is a reckoning that's really happening that is personally and directly affecting people and leaving us asking like what can we possibly do to be more well and to protect ourselves and our loved ones from what's happening from our food so yeah i think it's unfortunate that it's politicized in some ways because i think it's really an issue that is beyond politics it's a bipartisan issue everyone wants to feel well everyone wants their loved ones to be healthy and happy.

32:22Megan Westgate:And a lot of people are also thinking about the effect on other living beings beyond humans as well. So when you take all of that into consideration, it's pretty clear that business as usual cannot continue in terms of having the focus of our food be on making it cheap and addictive. We need more from our food. We need more integrity.

32:44Daniel Scharff:Megan, it's very cool how much you care about this topic, how much you know about it. It's really clear how much you think about it and from so many different angles from the broader just say human condition down to just directly how it impacts people in your community and yes I do know that about Bellingham Washington area as well as like all the most health conscious people I know seem to post up there so it doesn't surprise me at all that you are the person who was able to dream this up and get it done for non-GMO so just really really excited to see where this goes and the impact that it will have.

33:19Daniel Scharff:Just a little bit more tactically, talk to me about what is it going to be like for brands who go on this journey, seek the non-UPF verification? What's it going to feel like? Where are they going to get started? What are the steps?

33:32Megan Westgate:Yeah. So they can work with any one of our four technical administrators. And for folks who are already doing non-GMO, that'll be even easier. One of the things that's been surprising to us is that close to half of the brands who have expressed interest in this new program are not non-Jumo project verified. So I think we were expecting to see more dual certification of the products verified so far. It mostly is non-Jumo project also, but there is a lot of interest beyond that. So if they aren't already in the program, they'll choose a TA. And this program, unlike non-Jumo project, there's no testing required and there are no on-site inspections required.

34:13Megan Westgate:So it's all a document-based review. The TAs can find out everything they need to by looking at documents. And just depending on the ingredients, that will affect how many different documents they ask for. We are in the process of creating standardized program documents. So it will be more consistent than it is with non-GMO, regardless of what technical administrator someone is working with. There's a straightforward suite of paperwork. It involves things like ingredient specification sheets. Again, if someone's already doing non-GMO or working with a TA, maybe on their organic certification or another certification, there will be information in existing paperwork that will provide some of what the TAs need, but there will likely be follow-up questions about different manufacturing methods.

35:01Megan Westgate:The simplest part of this is we do have a long list of prohibited ingredients. And so just scanning, you know, that's a simple matter of making sure that nothing on the ingredient panel is on that prohibited list. But then from there, it does get into actually looking at the way different ingredients are processed. And so sometimes that will require disclosure from suppliers, and we're designing that to be as painless as possible. And also we have a one pager that brands can give suppliers to explain why they're asking these questions, what the value is of being able to provide it. Obviously, there's a lot of sharing of ingredient supply.

35:37Megan Westgate:So we want to get ingredient suppliers really comfortable of having standard documents that they can give to any brand who's seeking this verification and hopefully make that quick and efficient. So yeah, I think it's a simpler process than some other certifications, again, because we don't need to do the testing or the on-site inspection. We can tell by looking at the paperwork, whether or not a product meets the standard.

36:02Daniel Scharff:That's super interesting. I do like the part where you said you don't necessarily have to do the on-site inspection. I will say I have been through a different certification before where that was required. And we're like, well, what? You want to come to our co-working office? You're going to fly someone here and we have to wait till they can do that to get this done. And it was, this is kind of like a sustainability related type certification too. Like that doesn't seem very sustainable for them to fly here to our little desks. You know, we don't have ingredients here. We don't have production here.

36:30Daniel Scharff:This is where we happen to work. You don't need to come here.

36:33Megan Westgate:Yeah, that's interesting. I mean, like, so for non-GMO verification, we obviously need to look and make sure that the equipment, when there's high-risk ingredients being processed, like, we need to inspect the clean-out process, all of that, you know, but that's just not relevant in the same way for this. And yeah, I can't imagine why someone would need to go to your office.

36:52Daniel Scharff:That was not my favorite part. And then you get a lot of anxiety like they're coming here I don't I need to tidy up and sweep under the rug I don't know and so I do like that it seems very thoughtfully done what are you hearing from some of the key stakeholders in the industry what are you hearing from retailers distributors investors some of the

37:11Megan Westgate:people that brands care a lot about we are hearing ubiquitous interest in this I think because it's It's starkly different, again, than when we started Non-GMO Project. Like, no one is asking, ultra-processing? What's that? Like, everyone is like, oh, ultra-processing, we know we need to be doing something about that. How are you thinking about it? How can we get involved? There's just, it's so clearly established that this is a health concern and also that shoppers are interested in avoiding it. It's really different than, with Non-GMO Project, for years I would go to Expo and just be in every half hour a new meeting, trying to explain this and convince brands why they should care about non-GMO.

37:52Megan Westgate:With this, I haven't had a single conversation with a brand where they're like, I don't know if this is that important. I don't know if people really care. Like everyone realizes that they need to do something about this. And so I think that this is maybe going to be unlike anything we've ever seen. And I'm pretty excited to see how it unfolds.

38:10Daniel Scharff:It's very exciting. And I think I remember seeing a data slide at one point that said non-GMO is actually the, historically, the last couple of years has been the biggest claim cited on packaging at any of the claims out there. So I know you know how to really just get these certifications to a place where they're high quality and people are really paying attention to them. So I'm sure it will go well for you. How do you talk to brands about how they're going to communicate this to consumers? Because probably, yeah, OK, we're starting at the beginning for this kind of a certification. Consumers don't know about it yet necessarily.

38:44Daniel Scharff:Brands have that opportunity to tell them about it and their standards and how they got this. What would you recommend to brands about how to talk about that to the shoppers?

38:53Megan Westgate:Well, interestingly, even though there's differences in how people define it, the term ultra processed is widely recognized already by shoppers. Again, in our research, more shoppers are saying that they care about avoiding ultra-processed foods than are saying they care about avoiding GMOs or that they're looking for organic, which was mind-blowing to us because those are obviously really valued and established certifications. so more what we're hearing from brands is that like some of our pilot brands like amy's and simple mills and spindrift what they're saying is that this label is helping them communicate more clearly what they have always stood for that they haven't had a really succinct way to convey to differentiate themselves and simple mills is playing with some romance copy that i think may be going on to some of their packages so that's something to check out to just see how they're describing what this commitment is.

39:47Megan Westgate:But what we're seeing from the early adopters is that it's important for them to communicate that this is something they've always cared about. It's how they've always been making their food. And this label is helping make it recognizable and simple for consumers, like a simple way to talk about their whole food formulation and their commitment to making food that's actually nourishing. And again, in the space where we still don't have a definition for natural it is also a signal for that like this is real food that will nourish you

40:16Daniel Scharff:i like hearing that as i am standing here drinking my spindrift blood orange which oh my gosh that's one of my favorites it's so spindrift is so good the blood orange tangerine my favorite is the no hito which is lime and mint oh my gosh it's good have you had the one that has passion fruit in it

40:36Megan Westgate:The passion fruit guava, the island punch. The tropical punch.

40:40Daniel Scharff:Yeah, I love the island punch. It's so good.

40:42Megan Westgate:So good.

40:43Daniel Scharff:Because I have parties at my house and half the people don't drink anymore. And so I just stock the fridge with different fun flavors of Spindrift. And people are quite excited.

40:54Megan Westgate:Totally. And my kids love them because obviously we don't drink soda in our house. So, you know, it's like I think Spindrift is a beautiful example of you don't need to put flavors and sugar. Wow, nature made some really good stuff. It's called fruit. Delicious.

41:09Daniel Scharff:I just imagine that your kids are growing up, if you've ever seen the movie Twins, where Arnold Schwarzenegger grows up in this perfect environment where it's just on an island with natural fruit and everything is perfect and natural and Danny DeVito grows up with just like trash, everything. I'm like, I think your kids are growing up with that perfect, idyllic picture of health kind of thing. So that'll be exciting to follow along. Okay, so Megan, as we wrap up here, What is a good way for brands just to really start orienting around this and product developers and everybody? I mean, you said before, I think really good for them to have a good look at that no-no list of ingredients that just are not going to be allowed in this new non-UPF world.

41:51Daniel Scharff:So starting to look at that, what are other good ways for them to get started with this, get in touch with you guys, get on their journey?

41:57Megan Westgate:Yeah, well, if you go to our website, nonultraprocessed.org, we have some really good resources there. So one, our custom market research that we did with Linkage last summer is available for free. So you can see all the consumer insights, some of which I've mentioned today. But you can just download that and just get a sense of what are shoppers saying right now about what they're looking for. We also have on that website an executive brief. So the standard is also available for download. Encourage people to look at that. We did try to make it pretty accessible. But if you're not going to read the whole standard, the executive brief is a good alternative that just gives kind of a high level of what is the scope of consideration and some of the key things to avoid.

42:42Megan Westgate:But I think taking a look at the standard could be useful because that's where you'll find the list of prohibited ingredients. That's where you'll find the annex that classifies different processing methods. So if you know anything about what your processing methods are, you could check that out and see how they're classified. And you can also see more about our approach to, for example, the refined added sugars, where our approach to that is that we have limits by category. So there is a different percentage limit, for example, for breakfast foods as compared to soups. soups or, you know, and we do have a higher threshold for confectionaries and chocolate.

43:20Megan Westgate:So our aim is to make it so that every area of the grocery store can have non-UPF verified products. And yeah, our website has good context and also, of course, a way to contact us because we are happy to answer questions and talk with people.

43:36Daniel Scharff:All right. Megan, thank you so much. I'm very inspired by the work you're doing as well as you as, I don't know if you'd say entrepreneur the same way when it's nonprofit, but as a nonprofit changemaker, entrepreneur.

43:49Megan Westgate:I'll take it.

43:51Daniel Scharff:Yeah, I mean, just I really, congratulations for all of the success that you've had with this and growing it and all of the impact that you've had in the industry. Really, this is a real treat for me to get to interview you today.

44:02Megan Westgate:Thank you so much, Daniel. I'm a big fan of what you do and I appreciate the chance to be here with you.

44:07Daniel Scharff:All right. Thank you again. Hope you guys enjoyed. Enjoyed.

44:40Daniel Scharff:So what are you waiting for? I will see you there or on our next episode. Bye-bye.