Meet the green innovators carving a sustainable path to the future
In today’s business landscape, ESG-focused brands are no longer a trend, but a necessity. Consumers are starting to become more environmentally and socially conscious, which means that businesses need to adapt and stay relevant.
In this episode of The CMO Show, we’re chatting to Maria Loyez, Chief Customer Officer at Australian Ethical and Alistair Tod, Head of Marketing at Single O Coffee.
The similarities between ethical investing and coffee beans might seem far and few but listen in and you might find yourself pleasantly surprised.
It’s no secret that the challenges faced by green brands are incredibly multifaceted. From consumer scepticism to supply chain complexities, marketers find themselves having to grapple with unique tensions.
How do you show consumers that your brand is authentic and trustworthy? How can you continue to balance your profitability with your purpose?
For Maria Loyez, Chief Customer Officer at Australian Ethical, she is determined to show how investing ethically doesn’t mean a compromise on return.
"From a consumer perspective, there’s a real misconception out there that you can’t invest ethically or even run a business led by ethical principles and generate really strong returns. We’re living proof that’s not the case”, said Maria.
"Our customers are here for us because we are making a difference. But we’re still a business. It’s a really good example of where profit meets purpose and how we make sure that they can co-exist.”
For Alistair Tod, Head of Marketing at Single O Coffee, he highlights how sustainability is baked into the very core of the organisation.
"We have been founded on sustainability from the very get go. So most of what we do in terms of marketing is quite literally marketing what we do”, said Alistair.
“When we’re talking about sustainability, we’re seeing challenges, and we’re going and tackling them. We’re finding a solution, and then the marketing becomes simply talking about that solution.”
Working towards carving out a path to a greener, more eco-conscious future is no easy challenge, but a challenge that Maria and Alistair are up for nonetheless.
Tune in now!
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Credits
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The CMO Show production team
Producers – Rian Newman & Pamela Obeid
Audio Engineers – Ed Cheng & Daniel Marr
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Transcript:
Mark Jones
Hello, Mark Jones here and you’re listening to The CMO Show, a podcast made for and made by marketing professionals, brought to you today by ImpactInstitute in partnership with Adobe.
It’s no secret that the challenges faced by eco-friendly brands are incredibly multifaceted. From consumer scepticism to supply chain complexities, marketers find themselves having to grapple with unique tensions.
How do you show customers that your product is genuinely green? How can you continue to balance your profitability with your purpose?
So on today’s episode, we’re taking a look at the innovators carving a sustainable path to the future.
In today’s business landscape, eco-friendly brands aren’t just a trend, but a necessity. Consumers are starting to become more environmentally conscious, which means that businesses need to adapt and stay relevant.
I’m thrilled to introduce you to two very special guests. We have Maria Loyez, Chief Customer Officer at Australian Ethical, and Alistair Tod, Head of Marketing at Single O Coffee. The similarities between ethical investing and coffee beans might seem far and few, but listen in and you might find yourself pleasantly surprised.
Let’s jump right into it! Thanks both for joining us.
Maria Loyez
Oh, it's great to be here. Nice to meet you, Mark and Alistair.
Alistair Tod
Thanks for having us on Yeah, nice to meet you too, Maria.
Mark Jones
I am really looking forward to our conversation primarily because I feel like together, we've got a really interesting set of perspectives that who knows, right? It's a bit of an adventure, what we'll come up with in terms of insights. But to kick things off, a question without notice for both of you, tell me what's the inspiration or the driver behind the environmental consciousness that you bring to work every day? And starting with you, Maria.
Maria Loyez
Personally, it's something that's always been top of mind for me. So I've worked in other organisations and other financial services and most of them have, when I took this job went, "Oh, finally you're actually working in what you've really believed in all that time." So I'm just really passionate about how we might be able to create a better future for people, both in terms of their financial future, but also in terms of the sustainable future around them.
Mark Jones
How about you, Alistair?
Alistair Tod
So I mean sustainability, as we'll talk about, is something that really drew me to Single O, passionate about sustainability. Personally, yeah, I think it's pretty hard to not be passionate about it at this point. So yeah, joining an organisation where you can make a change was definitely a driver for coming here. And yeah, I think it's super exciting stuff because there's inherently massive problems here and I like being part of that problem solving equation, and so it's a good opportunity to be creative and tackle some things.
Mark Jones
Yeah, it's almost like a no-brainer for both of you in terms of alignment with your passion, and I think that's what draws a lot of people into this type of work.
To get things going, I'm really interested in your take on the sustainability journey from a customer or a consumer perspective. This has been, in my view in the last five years, one of the biggest shifts in consumer mindset, which is an active choice that's made around the ethics, the sustainability, the environmental and social credentials of the brands that they choose to buy from. So from your point of view, how do you think about this? What are the challenges that you've found thinking this through?
Maria Loyez
So I mean maybe just for those who don't know, I might explain about who Australian Ethical is and what we do. So we're an ethical investment fund manager. So we offer superannuation and manage funds, but we are guided by an ethical charter and that provides a framework for how we make decisions about what we invest in. And it's really kind of a blueprint for a sustainable future.
But I think there's probably two key challenges for us. I think there's firstly helping customers to assess the values alignment, so without us being negative about the competition, and then there's providing contextual information about the areas of sustainability that they're interested in. So looking at the first one, there's lots of companies that have jumped on the ESG bandwagon, the Environmental, Social and Governance bandwagon, and it's a really broad spectrum, but lots of investment companies consider those factors but then invest in those sort of sin stocks anyway.
And many investors have become disappointed to find out what's in their portfolio, but we're quite different. So we're not just avoiding bad companies, we're actually experts in investing in future-focused companies and companies that offer really long-term growth.
But I think a whole different challenge for us is understanding which areas of sustainability customers are interested in. And that same research showed that actually it's a smorgasbord for Australians. And animal cruelty actually came up top of the list, followed by human rights, then gambling, tobacco, weapons and firearms.
And so that's the top five. And environmental factors still come in strong, but beyond the top five. So pitching our message at the right level for the right audience and where they're at on that sustainability journey can be really challenging. So we're starting to develop our first party data much more. I think most superannuation companies, we've all been a little bit behind on that because some of the foundational elements of how super has been created, but we are really focusing on that so that we can try to provide that contextual content much more easily to our customers.
Mark Jones
In general, would you say, or how would you describe the last five years or so in terms of the number of people with an appetite for what is actually quite a complex decision? The sort of customer that you're describing there can connect the dots between a whole bunch of issues. They want to make great returns. And they're thinking about this make-up of investment options to achieve their outcomes against a value set. So that's a very complex environment for a consumer. I'm just wondering in general, what's that percentage of your addressable audience that's thinking about that?
Maria Loyez
Yeah, it's a really interesting one because when we saw this research and this research is done every year, so we're seeing a shift every year in the number of Australians who want to invest in line with their values and in fact expect their super and their banking to be invested in line with their values and would switch if they found out that it wasn't.
So we're seeing that increase every year. I think the big difference probably was 2019, 2020 when we Australians saw first-hand some of the effects of climate change, particularly with bushfires. And now we're seeing floods. I mean, just yesterday Dubai had 100 millimetres of rain in 24 hours. It's crazy. So I think people are really starting to see the impacts and wanting to make a difference. Again, this research we saw that nearly two-thirds of Australians see shifting their investments as one of the primary ways that they can combat climate change.
Mark Jones
Alistair, first up, just to share a crisis on the personal level with me. My home coffee machine broke down this week. It's been a real issue.
Alistair Tod
Devastating.
Mark Jones
Yeah, the machine is getting serviced as we speak, but that drama aside, I'm one of the people out there who thinks very seriously about the coffee that I put through that machine. You've just been hearing Maria's comments there about some of the changes that are going on. It's not as complex a sale, I don't think, when it comes to... I like the flavour of coffee, I am looking for that ethical lens. But then again, I also might be missing a trick. How are you reflecting on this in terms of the type of customers that you tend to attract at Single O?
Alistair Tod
What you're talking about when you talk about flavour is the quality of coffee. And at Single O, we're a specialty coffee roaster. So quality is first and foremost for us, and so is the specialty coffee market.
So what we see is that people are tasting it in the cup, and they don't necessarily see some of the sustainability stuff that impacts the cup, but we're taking much further outlands looking at what's going on in terms of coffee-growing regions and areas like that and what's coming down the pike. So I think it was 2018, we launched what would eventually become our sustainability platform, No Death to Coffee. And this really came off the back of a piece of research that got put out by the Climate Institute. And what we're looking at is half the available land for growing coffee will half by 2050.
So that'll really impact people and the consumers, but it's quite far outlands at the moment to 2050. So that whole campaign around No Death to Coffee was really about raising awareness of that, that that is coming. And the good news is that there's people working on it right now to address that. We were the first member for World Coffee Research, a body that's working on creating more sustainable climate resistant varieties. So that will then in the future really protect... They're looking to protect that quality and that cup.
So these are the things we wrestle with at the moment. People are tasting it in their cup, it will be impacted over time. And we're doing the work now with amazing organisations like World Coffee Research to ensure the quality, I guess Mark, that you're experiencing in your cup of coffee in the morning kind of maintains through with the challenges that we see coming in coffee.
Mark Jones
Well, it sounds like I've got to be concerned about actually not being able to have that cup of coffee if things don't go as well as we hope, which is maybe there's another story there as well. But I am hearing that there's a tension there, which is that we need to grow our organisation, and there's a story to be told around the work that we're actually doing.
And I think for both of you, that's an interesting dynamic where you want to be talking about the impact that you're making and that's part of the story that you're putting to market. I just wonder what percentage of your marketing is focused on, "Look at the work we're doing," versus "You need to be with us because we're the most ethical or environmentally-conscious brand"? How do you think about that from a strategy point of view, Alistair?
Alistair Tod
It's baked in for us, it always has been. So right from the very get-go, Single O has been founded on sustainability
So most of what we do, and I guess what you're saying is what we market, is we just market what we do. So when we're talking about sustainability, we're seeing issues, we're seeing problems and challenges in our industry, and we're going and tackling them.
We try and find a solution, and then the marketing is really just simply talking about that solution. And I can tell you now, our biggest engagement and our biggest benefit from a brand perspective, a market perspective, is always when we're doing this, Those campaigns we do are the ones that really shift the needle for us.
Mark Jones
What about for you, Maria?
Maria Loyez
I mean, what we do is baked into who we are as well. So I think similar to Alistair in that respect, I think there's probably a few barriers for us as marketers telling our story. One of them is that super and investments probably aren't always top of mind.
But I think one of the biggest challenges that we've got probably is creating awareness. We track brand awareness and consideration really closely, and we see that our percentage consideration is really high, much higher than our competitors, for those that are aware of us, because of once they find out what we do and how we go about it, it's really compelling.
But we're against some really big giants in terms of spend. So that's challenging for us. But we do have a broader theory of change as a business. So our vision is to see a tipping point where enough money is invested responsibly, not necessarily with us, but that money then becomes a force for good.
So the idea is that as we start to show success in long-term growth, we attract more capital to our approach. And that then starts to align financial markets with environmental and social considerations. And then it becomes a virtuous circle where more and more people start investing responsibly.
So we've aimed to bring that whole kind of virtuous cycle to life in our recent brand campaign. And we've simplified that down to a tagline of "When you prosper, we all thrive."
Mark Jones
Well, maybe what I'm hearing is normalising this experience. Was there a particular element of the tone or the brand or the perspective that you bring to that campaign that you were speaking about that actually is cutting through, particularly in reference to those bigger brands in the marketplace?
Maria Loyez
We've won a lot of accolades over the years, so we talked briefly about B Corp before we first started here, but we're the highest-scoring B Corp that we know of in Australia.
Mark Jones
Oh, congrats.
Maria Loyez
Yeah. Which is pretty cool. But we know RIA, Responsible Investing Australia has named us responsible leader for a number of years running. And then Morningstar, who's another big name in the investment world, has named us only one of eight asset managers globally to achieve a ESG, and to be an ESG leader.
So I think people look to some of those things and see that there's something different about us, but I think once they get under the covers and understand how we invest and what our ethos is, they can see that there's something really different there. I think that's why once we've got awareness, people have really a strong consideration for our brand.
Mark Jones
So Alistair, one thing I just heard there was awards, and I know in coffee that's a big deal, too. And actually in wine too, by the way. I love those wine bottles where there's like 100 stars on them because, "Look how amazing we are." There tends to be an inverse correlation in my view, between flavour and stickers on a bottle. But anyway, what's your take on either awards or what other elements are really critical to standing out? Because when we talk about competition, my gosh, you've got to... I don't know if anyone's keeping a track of how many brands there are now in your sector, but we're not lacking them.
Alistair Tod
Yeah. Look, awards, it's not something we go after per se. Yeah, I think in terms of what we focus on, it really is just the real issues in our industry.
We actually just don't advertise. So we, as a business, we don't advertise, so we don't do advertising. We really rely on grassroots level stuff. So activations that rally our base and that base then rallies and creates the noise we need in order to get the message out there.
So it starts like it can't be fake. It has to be really grounded on a central issue. And if I think about some of the things we've done recently, the most obvious always is cups, right? So cups is a big thing that people talk about with sustainability and coffee. We've actually never offered our wholesale customers a branded Single O cup. That's a philosophical decision we've made. And then within our own cafes, we've really tried to push the use for reusables. So we did a war on waste campaign back in 2018 where we made it an ambition to try to get to... We rallied as much as we could everyone in our base to try to get our cafes up to 50% reusables. So we're able to achieve that target. Admittedly took a bit of a hit during COVID, but we're on the way back there.
So that's one example. And then a more recent example which we're tackling is coffee grounds. So it's huge. And this in terms of compared to coffee cups, this is just a fraction talking about rounding errors, this is a real fraction on the environmental stuff.
And so all of our cafes have always had our grounds responsibly disposed of into compost. But there's this epic company that we're working with in Melbourne called Reground, started by a lady called Ninna Larsen, and she's created a circular system for coffee waste. She was a barista, I believe. I think it was at Padre. And she started taking these coffee grounds and disposing of them.
And so we've started to do it as part of our service offering. So what that means is if you buy coffee from us, Reground as part of Single O's service to you, will come and collect the grounds and Reground will collect it on Single O's behalf. And so what we end up with is huge amounts of carbon that's saved. So to date, we've had 21,000 kilos worth of grounds collected, which is offset or diverted for us 40,000 kilos of emissions. And that's huge. And I guess to put it into consumer language, that's over half a million lattes. So it's quite considerable.
Mark Jones
Where do they go? What do you do with them?
Alistair Tod
Yeah, so good question. So we don't do anything, Reground do it. And that's really important. I think that's another important note that we found on sustainability, is this ability to be collaborative with other companies out there that are doing really important and interesting work. So we know a little bit about waste disposal, but not nearly enough to be a waste disposal company. We re-roast coffee, we’re not that.
So that Reground are really the experts, and so they do it to home gardens, community gardens, and also they've got a partnership with Melbourne Zoo. So they take this, it's actually really interesting because although it's a waste product for us, for community gardens, an extremely valuable resource. So we're really creating this circular system and they obviously grow food from that within those community gardens. And so yeah, really creating this kind of circular solution.
[STING]
Mark Jones
There is a cost to all of this. And I wanted to talk about the profitability side of things. So... And by the way, what I like about it is that you're going after the issues in both contexts, or both organisations. You've thought about the problem areas, what are the issues that we're facing or our customers are facing and how we can address them in environmental ways.
So there's a connection point there, but there's also a cost to doing all of this work. So there's costs, there's resources, there's vision, there's executive alignment, there's a whole bunch of barriers to go from being effectively a mindset of profit only, and "I'm going to avoid all costs wherever possible if it relates to the environment." I'm sort of playing devil's advocate here, but how do you think through, and what would you say to people that are saying, "You know what, there's going to hit the bottom line here"? What do you say to people who come from or work in that space?
Maria Loyez
I think it's a really interesting question. I think you can answer that on a few different levels actually. So from a consumer perspective, there's a real misconception out there that you can't invest ethically or even run a business led by ethical principles and generate really strong returns. And I think we're living proof that it's just not the case. We've got really great long-term returns and over a really long period.
So ethical investing isn't philanthropy. You don't have to sacrifice returns by investing ethically. And it kind of stands to reason that if you're investing in future-focused companies that are sustainable, they're actually going to do better over the long term.
And I think we're delivering to all stakeholders, and that includes people and planet, but we're also delivering to our shareholders as well. And our shareholders are really important and we've done well by them, I think.
But our customers are here for us because we are making a difference. And we have an ethics research team that are really focused on some really core areas and our customers love that. That's why they're with us. But we're still a business, and I think we're a good example of where profit meets purpose and that they can co-exist.
Mark Jones
It works. Yeah. So in other words, there's more research to be done if that's your issue. In other words, find more examples of how people have worked through the complexities to arrive at that sort of view. I think that's a really interesting one.
Alistair, what's your perspective? it's kind of captain obvious to you, but going back to some of the stories you were telling earlier, there are costs involved in, for example, bringing on the Reground people. You've got to factor that into your business.
Alistair Tod
Yeah, absolutely. And yeah, I mean, not to mistake, we are a for-profit company at Single O. We are however independently-owned. So we still are an independent company owned by the two founders, Emma and Dion Cohen who are passionate about the environment themselves. So there have been years where we've invested behind things that we're passionate about and that has come at the cost of profit, for sure, but then there's other years that we haven't.
But generally speaking, our North Star is quality and its specialty. And then a key proposition for sure for Single O is sustainability. We do small amounts of consumer research and through the company called Tracksuit and sustainability is the feedback from our customers is sustainability is the chief reason as to why they're building into it. So that's not the goal, that's not why we're doing it, but it's kind of validation as to this little path that we're on with our business is something that's of value to our customers.
Mark Jones
If there's a word that stands out to me as I reflect on both your stories, it's actually creativity. But from a marketing and a storytelling perspective, it seems that there's a culture in both your organisations where you think creatively about how we work, the way that we can position our story, and even the extent to which both of you have influence can shape the types of activities that are being done at a ground level.
And I wonder what experiences or suggestions you might have to share around how to, I think, consistently stay in that space. there's sort of a spirit and an energy here to be creative that allows you to balance a lot of the conflicting pressures that we've been talking about, profit and purpose, the environment, and the way that our systems work. So firstly, Maria, what's your take on all of that?
Maria Loyez
Yeah. Look, I mean, customer-centric thinking is really important to us. So we spend quite a bit of time and effort understanding what consumers are thinking about, how they're feeling. And that really kind of drives innovation from the perspective of improving the customer experience, but also where we're thinking about product development and where we head next, because we've got to keep pushing the boundaries here. We've got to be driving for more and more impact and understanding where that consumer demand is.
We bring that understanding and that thinking, and that's where it meets product and where it meets investment management. And that's where we can start to create ideas of where we take the business next.
I think in terms of staying ahead of the curve, we do have a sort of inbuilt advantage to some degree in that we're values-based because I think it helps us to, in a lot of cases, be ahead of customer sentiment.
Mark Jones
Interesting. Alistair?
Alistair Tod
Yeah. No, you used the word creativity. I think it's often associated with Single O. But really at the core of it is the spirit and the business to challenge the status quo. So that's really where it comes from.
So we like to think differently. We see something, see it as it is, and doesn't necessarily have to be that way. And so we call them nudges, but rarely we nudge against those things and come up with creative solutions to them. So some of our biggest innovations, if we're talking innovations, have come off the back of that. Back in 2010, we co-created a thing called the Juggler with a company called Six Simple Machines. So Ross, the guy that founded that company, he was working for us at the time two days a week, and we had this massive issue, it was there was milk bottles.
So every time you fill the jug, it was two litre milk bottles. And that's just how everybody did it. Everybody had two litre milk bottles, that was it. And these things create huge amounts of waste, obviously getting these, but then even more so where do you put these things?
So off the back of that, there was a little bit of ideation that went on, a lot of creativity. And out came this, what's now today called the Juggler, which is essentially a barista tap for milk. So it dispenses dosed amounts.
You might've seen them in your local cafe now, but it dispenses dosed amounts of milk and it uses a 10 litre bladder as opposed to that. So we found that the military had these things and they were supplying them and so away it went.
Mark Jones
Yeah, it's such a great story because it's milk on tap, right? Which is obvious in the sense that you've seen other beverages on tap for the longest time. But also what I like about that story is not allowing a status quo to exist, but going after it and not really knowing where it's going to go, but just being like, "This is not okay. I can't walk past this anymore."
There's actually a mentality that starts before the creativity, what I'm hearing from both your stories, which is like, "What are the things that we allow or don't allow?" And then that ethical framework really shapes the way that you attack and tackle these problems, right? It's creativity, but it's also there's a real energy there around, "That's not okay, or this is okay, how can we make it better?"
Maria Loyez
Yeah, for sure. And one of the things that we saw was that actually there's a real role for philanthropic dollar actually to solve issues as well. And so we give 10 percent of our profits to a foundation, and then the foundation's mission is unearthing the most effective ways to combat climate change.
So every year, we give $500,000 to these Visionary Grant programmes, which are not-for-profits that have got really crazy or really early stage ideas to combat climate change. And then we also have a series of strategic grants, which are multi-year grants as well.
Mark Jones
That's fantastic. Interested to get a sense of what's on your radar in terms of the traditional marketing calendar, but also what are some of the challenges that you are looking to overcome in the next 12 months? Start with you, Alistair.
Alistair Tod
Yeah. So look, I think the thing that I talked about from the top is going to be the big focus of coffee, not for only this year, but for the next bunch of years, which is that existential threat currently to coffee and the important work that's been done on it by World Coffee Research. So really excited that that work that they're doing is progressing really well.
This company, they're creating these new hybrids that will be more sustainable And it's a long-term trajectory. It takes years, decades to do that. So really exciting. They've moved to pre-commercial trials on some of those hybrids. There's been four approved, and I think it's next month we'll receive them in Australia. And we'll be holding a small cupping down at our Surry Hills Cafe to really share with the industry what the latest on world coffee research and what's happening there, and just keep the noise up around the important work that they're doing to ensure that specialty coffee and the communities that it supports are sustainable.
Mark Jones
Awesome. Maria?
Maria Loyez
Look, I think that now it's pretty clear that Australia and the world has got to transition to a net-zero future. I think there are a few that would now argue with that. And it's going to mean that many functions and systems in everyday life are going to need to drastically change. And we shouldn't be scared by that. It's actually a really amazing opportunity. But it does mean that we're going to need to change potentially how we grow our food, the type of food that we eat, hopefully not the coffee that we drink, that's scary, but how we generate energy, how we fuel our transport. And that's going to take innovation, as we talked about, but it's also going to take really huge investment.
And to reach net-zero by 2050, the annual clean energy investment worldwide, the estimate from the International Energy Authority is that we're going to need to triple that by 2030 to $4 trillion a year.
So I think that there's lots of opportunity there for all of us to be innovative, to create new solutions, to be the people that invest in them and that provide great returns for investors that put their money there and invest in them too. And so I think we're really well-placed in that we've been in this place for a long time and we've got lots of experience. And so I think that we are well-positioned, but I think that we've got to accelerate and I think it's really exciting, actually.
Mark Jones
Fantastic. So listener, I encourage you to connect and follow both Maria Loyez and Australian Ethical and Alistair Tod from Single O. You guys have been very generous with your time and your ideas, and I'm so inspired by the work that you and your organisations are doing. Thank you so much for being my guest on the CMO Show today.
Maria Loyez
It's great to meet you, and lovely to hear what you're doing, Alistair.
Alistair Tod
Yeah, nice to meet you, Maria. And thanks, Mark. Really appreciate it.
Mark Jones
It's a pleasure. That was Maria Loyez, Chief Customer Officer at Australian Ethical, and Alistair Tod, Head of Marketing at Single O Coffee.
I particularly enjoyed delving into the many different strategies employed by both of these impact-driven companies, and how they’re effectively working to navigate challenges and in turn, inspire change.
As we work towards carving out a path that takes us to a greener, more eco-conscious future, I’m glad to chat to people like Maria and Alistair who are confident they can play a role in getting us there.
A huge thank you to both Maria and Alistair for joining me today, and to you for taking the time to listen. I’m Mark Jones, and you’ve been listening to The CMO Show, brought to you by ImpactInstitute in partnership with Adobe. We’ll see you next time!