#255 - Mini episode: Non-UPF Verified Update

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1:16Hello, Startup CPG. Today we've got a mini episode for you. It's an update from one of our sponsors. It's the team at Non-UPF Verified. There's so much attention around this area of ultra-processed foods. So today they're checking in and giving us their latest. You're about to hear from Hans Eisenweiss. He's the Director of Mission and Messaging for Non-UPF Verified. All right, here we go. All right, Hans, good to see you again. I am really interested because it's been a little bit since we did a deep dive episode on non-ultra-processed foods and the non-UPF verification that you guys have. And I know things are progressing so fast here.

1:56So I thought we could check back in with a little bit of an industry update. So I wondered if you could first give me an update. What's been happening in the last 6 to 12 months around this whole ultra-processed foods movement? Yeah, well, we've been really excited to roll this out to the industry. Any of your listeners who are at Expo West this spring would have seen quite a big rollout and quite a lot of excitement, especially from a number of brands that we think of as being kind of pioneers and leaders in this space, wanting to participate in the program. And so a tremendous amount of excitement.

2:32And early on, I think what we're seeing is a little bit of separation from those brands that have always been about simple ingredients and minimal processing from those that have been around the natural products industry for a long time that are maybe feeling a little anxious about engaging with processing levels because we know it's something that transcends the normal boundaries that we think of between natural products versus conventional products. Although in the natural products industry, what we've learned in researching at the product level is that UPFs have a presence, but it's not nearly the presence that we see in the conventional space.

3:10So about 70 % of all groceries at any typical grocery store contain at least one ultra-processed ingredient. If you're specifically looking at natural products, that number is about half. So about 38 % of products that are positioned as natural have an issue with ultraprocessing. And that's, I should say, as a caveat, that's just looking at the ingredient level. Right now, the research tools that we have and everybody that's working in this space is kind of taking that shortcut. They're looking at ingredients that are typically ultraprocessed. But I can give you an example of an ingredient that might be ultra-processed or it might not, right?

3:48So think of peanut butter as a category. One of the challenges in the peanut butter category is that peanuts will separate from the oil. And so even with natural products where there's only two or three ingredients, palm oil is oftentimes added. Now, palm oil isn't a bad thing in and of itself, but there are some very industrial ultra-processing methods for hydrogenating palm oil in particular. And so your product might contain palm oil and it might feel or look not ultra processed, but this is the key of getting further back into the manufacturing methods to understand how was that palm oil created?

4:28Because there's plenty of science and nutritional science and studies looking at what hydrogenation does to oils. And one of the things it does is increases trans fats, which aren't good for us, right? So just a really good example where the ingredient list might not tell you whether that ingredient was highly processed or minimally processed. There are methods of creating palm oil that aren't ultra-processing, whether it's cold-pressing. I'm not a food scientist, so that's a caveat that I'll throw out there. So that's one thing that's changed. The other thing that's changed is we have seen other certification programs launching and coming online.

5:04And in a sense, that's great because it raises awareness across the board. we often say, those of us who work in the nonprofit space oftentimes say, well, our mission is ultimately to put ourselves out of a job. We want to be so successful that our work is no longer necessary. So it's great to see awareness across the industry and in public sensitivity around UPFs and this awareness that they're all too common in our current diets. So what do you think the differences are then between the certifications? Obviously, you guys have a lot of experience in this area with all of the success of non-GMO project.

5:40I'm drinking myself a non-GMO project verified spin drift actually right now. And then obviously taking that methodology to non-UPF verified. In your all's opinion, what are the big differences across the certifications? Yeah, the main difference that we see is other certifiers looking at this and working in this space are not actually going deep enough into the actual processing levels. As I say, they're really relying on ingredient lists, which are acting as proxies for ultra-processed ingredients. And as I say, the example I use with palm oil, the ingredient itself won't necessarily speak to how it was processed.

6:18So we're the only certification that we're aware of right now that is actually conducting those kinds of audits and asking manufacturers about the actual processes that they're using in manufacturing ingredients in the product and in the formulation. The other thing I'll say, a couple other distinctions. So we've created a framework for evaluating the actual processing level. So we have prohibited processes like hydrogenation. We have conditional processes like extrusion. High heat extrusion we're not really allowing. High moisture extrusion is allowed. High heat extrusion is what we're calling a conditional processing method where up to 30 % of the weight of the product can be produced through high heat extrusion.

7:07And there are several examples of those conditional methods where it's allowed, but we want to put a limit on how much of it is allowed. The other two areas I'll say that we're looking at that we're not aware other organizations looking at is added sugar. So oftentimes, we all know that added sugar is a problem in Western diets. There's just far too much sugar in most of the processed foods that we're eating. And most, nine times out of 10, that added sugar is highly refined white sugar, oftentimes from genetically modified beets. So there's a nice sort of internal bridge between the work that we've done on non-GMO and now in non-UPF.

7:43So what we've done is we've set limits by food category on added sugar. And the reason we do that category by category is it just doesn't make sense to set a universal limit, say, for ice cream or creamers or things that are typically you expect them to be sweet versus things that you don't expect to be sweet, whether that would be, say, peanut butter or cheese, right? So category by category, what we did is deep research in each food category in the grocery store to establish what are the averages in this category. And we basically wanted to set limits that would be a passing grade. So I would say if you call average added sugar by category out of straight C, we want to see brands coming into our program at a B plus or better, right, in terms of added sugar.

8:29And I will say, I mean, all the market data that I'm seeing is suggestive that shoppers are already trying to avoid UPFs and they're trying to avoid too much added sugar. And you see this dramatic deceleration in purchase of products that are overly sweetened or that are overwhelmed with ingredients that people can't pronounce. That's the two primary areas that we're looking at is added sugar levels, prohibited ingredients is the other one. We do have a pretty extensive prohibited ingredient list. And then on top of that, there's this framework for evaluating the level of processing. So Hans, let me ask you, what categories is this actually going to hit the hardest?

9:10Where are you seeing the most interest? You mentioned all of the interest from brands around Expo and following. Who are really going to be the people who are the earliest adopters of this, where it's going to impact the store the most? Yeah, well, as I say, the early adapters are those that are kind of already bought into this idea that we want to use optimal ingredients, And we don't want to erase the value of those optimal ingredients by overly processing them, right? So for a long time, the natural products industry has really focused on sourcing. What are the ingredients? How are they grown?

9:43Are they organic? Is it regenerative? Is it non-GMO? And now with rising awareness about processing levels, scrutiny has really shifted to the manufacturers and the brands themselves. And so the brands that have from the outset been committed to minimal processing are easy in, right? And so you held up your can of Spindrift. They were an early adapter. They've always been about very simple, real ingredients. And so for them, coming into the program was a little bit of a no-brainer, I would say, as Amy's. Amy's has always been about creating home-style foods ready to eat in the freezer. I'm especially excited about both of those brands because there's a lot of UPFs in the beverage space, and there's a lot of UPFs in those sort of ready-to-heat-and-eat or thaw-heat-and-eat foods.

10:29So the beverage space is big, and the freezer aisle is big. One of the areas that we know people are really trying to avoid UPFs is in frozen meat and poultry. And that may sound like, those sound like empty words, but if you just think to yourself, fish sticks or chicken nuggets, you know, basically take it out of your freezer and throw it in the oven. Those kinds of foods folks are really scrutinizing closely. And then I would say, unfortunately, plant-based is a space where there's a lot of scrutiny and people are really curious. Okay, how do you make a veggie burger taste like a real hamburger?

11:02I'm thinking that there's some manufacturing hocus pocus going on there. And folks aren't wrong. There is quite a lot of processing, but we're hoping that we can create a safe space for those brands that are really all about great ingredients and minimal processing in the sort of meat and dairy alternative space. We know that a lot of the non-dairy creamers, whether it be soy milk or almond milk, oat milk, they may have some challenges in meeting a non-ultra-processed standard because there are some pretty intense processing methods that go into creating those products. And we love plant-based products.

11:36So one of the things that we're doing is really reaching out to and having great conversations with folks that are pioneers and leaders in that space to see what can be done and how manufacturing could potentially be changed, where ingredients could be changed out for more wholesome, less highly processed ingredients. So those are some of the main areas where we're seeing quite a lot of action, quite a lot of interest, and in some cases, quite a lot of fear about engaging in ultra-processing. I gotcha. Okay. Well, sounds like you guys are really learning a lot along the way, as I'm sure everybody is.

12:09We certainly are. It's a collaboration for sure with all of our friends, especially in the natural products industry. We love hearing from them. We love getting feedback. Our intention is to pretty regularly revise our standard so that we're responsive to the industry and to the community and that the community feels like it has input. That's really important to us that it's a co-created collaborative effort to do better together. All right. Hans, well, I really want to thank you for coming on and giving us this update. We'll be excited to stay tuned and keep learning what you all are learning.

12:42So thank you so much. Awesome. Thank you, Daniel. Well, my friends, we've now arrived together at the end of another episode of the Startup CPG podcast, the top globally ranked podcast in CPG. As you may know, we're not just a podcast. We're a community of brands and experts, and you should join. You can sign up at startupcpg.com. You'll then get an invite to our online Slack community. You're going to hear about amazing events near you, all of our special opportunities to get you in front of buyers, investors, brands, and more. It's a free community. So what are you waiting for? I will see you there or on our next episode.

13:19Bye-bye.

13:37Thank you.