Designing for a More Sustainable Pet Industry with Pet Sustainability Coalition - BALCHEM CORP

Hello, everyone, and welcome to the Real Science Lecture Series. My name is Scott Sorrell, Director of Global Marketing for Balchem's Animal Nutrition and Health Division. Today, we welcome Allison Reeser-Hamburger of the Pet Sustainability Coalition to present Designing for a More Sustainable Pet Industry, Data-Backed Trends in Ingredients, Packaging, and Innovation. Sustainability continues to shape consumer trust, product innovation, regulatory readiness, supply chain resilience, and long-term business value in the pet industry. In this data-oriented session, the Pet Sustainability Coalition will share key takeaways from its recent report, State of Sustainability in the Pet Industry, including what the data reveals about pet parent expectations, sustainability maturity across the industry, and the biggest opportunities for companies to turn insight into action. Today, we'll leave with a clear view of where the pet industry stands today, what trends are likely to shape the next few years, and how brand suppliers and cross-functional teams can get involved in practical collaborative sustainability solutions. I'd now like to introduce Allison Reeser-Hamburger. As Director of Sustainability and Innovation for the Pet Sustainability Coalition, Allison leads initiatives in climate action, packaging, and responsible sourcing. Guided by her personal mention to serve collaborative well-being, she brings a decade of experience and a master's degree in sustainability management from Columbia University to her role. PSC members like Hill's Pet Nutrition, PetSmart, and Instinct rely on Allison's expertise to help achieve their sustainability goals. Allison, welcome to the Real Science Lecture Series. The floor is now yours. Thank you so much, Scott. I made you say the word sustainability like a thousand times in my intro, so thank you for bearing with that. That was a bit of a tongue twister. Yeah, it's a lot of syllables all at once, but thank you so mucho for having me, Scott, and Holbrook. Very welcome. Glad to have you. Very excited. Okay, let me get my screen going here. All right. Well, hi, everyone. I can't see you in this virtual world, but I know that you are there. Thank you for showing up today to talk about a more sustainable pet industry. This is what I get to think about every day in my job, but I'll share some of what we're seeing in terms of ingredients, packaging, innovation, and a lot about sustainability. Because we are going to be spending almost a full hour together, I wanted to share just a bit more about who I am. So first off, I love animals so much. The photo, the first photo that you see there is me and my cat Nova. Earlier this year, I celebrated our 10 year gotcha day. So she's been in my life for a while, but I just love animals so much. Second on the screen, you see a photo of me and My husband, we are in our wedding attire, but also on a ski slope. And to me, this photo represents just my love of nature, especially mountains and especially winter we made it a point to go to the mountains and hang out with the snow during our wedding because it's really important to us but I grew up in Colorado and so the mountains are just part of who I am and a deep love of all of the living beings that live there as well and then the third photo that you see on the screen is a beautiful photo of litter. I lived in New York City for about six years and litter is one of the things that you unfortunately get to know a lot about there. But to me, that represents that I just see the impact that people and companies have on ecosystems. And in a place like New York city, it's so obvious there are buildings everywhere. There's just human influence everywhere. And even in a place like New York City, there is still so much life, both human and animal and wildlife. So I really hold this belief that humans have a huge impact on the planet, but we also have a responsibility to protect it. And we can coexist in really beautiful ways. So knowing that about me, it's probably no surprise. I love animals. I think that companies and people have a Responsibility Protected, I ended up at the Pet Sustainability Coalition, where I get to combine all of these things. So let me tell you a little bit more about PSC, the Pet sustainability coalition. We are a nonprofit. We're based out of Boulder, Colorado, but we work worldwide because our vision is a sustainable future where every choice for pet supports a thriving planet. I love this vision. It really inspires me because imagine that if you are, if you have a pet or you are making pet products, just all of the choices for pet owners, it's a good one. Nobody has to do this mental calculation of, I want to make sure my pet is healthy, but I also want to make sure that I'm buying a sustainable product. No, we're working towards a vision where just every choice is a sustainable one. We are not quite there yet in the pet industry. And so the way that we advance that is through our mission, which is focused on collaboration, education, and innovation. We are a membership organization, and so the magic in those three things, collaboration, innovation, and education, really happen in our membership. We have about 200 member companies worldwide. Balchem is one of them. We love working with you. You see a few others on the screen here. But essentially, any company that has anything to do with making or selling a pet product is welcome to join the Pet Sustainability Coalition because it really takes that cross geography and cross supply chain collaboration to accomplish what we're out to do. Here is a little bit more about how we work. So we are trying to transform the whole industry. And so one that does take individual company action, each of our individual members and the each individual company in the whole industry does need to create a roadmap about how are they going to take accountability for their environmental and social impact. So we support companies with those individual goals. But then too, all of these little pockets of individual company action can't get us there. And so we support large scale and industry-wide issues, bringing companies together to solve those issues that no single company can solve on their own. And then the gears that you see on the screen as well are just some of the key ways that we see sustainability show up in the industry. Sustainability is such a big word. It means so many different things. But zooming in on the pet industry, we see it show up a lot in ingredients, packaging, and corporate responsibility. We're going to talk about all of those things later today, so I will keep us going. Here is what I am hoping to share with you today. So first, I'm going to be talking about market and innovation trends. Most of these come from the state of sustainability in the industry report that we published. So I'm gonna be talking about how pet owners are super passionate about sustainability, how sustainability actually drives business value, and how in our pet industry, some comments on maturity and where the focus is. It's foundational strategy and gathering baseline data. I will then move into strategic outlook, so not talking about so much what is happening right now, but looking forward and what will happen. I have some notes to share on ingredients, packaging, as well as regulation. And then I will wrap us up with some actionable next steps. So let's get into it. The market and innovation trends. This is so important because of course we're all running businesses. We're not, a lot of us are not doing this because of philanthropic reasons. And so knowing what the market forces are are super important in sustainability. So the first insight that we see again and again is that pet owners are particularly passionate about sustainable products. So first off, 84% of pet parents hold companies responsible to address climate change. 84 is a big number. That is a big majority. So there are a lot of people out there who have a pet who are saying, I would love for the companies that I'm purchasing from to take this seriously, because it's something that matters to me. And interestingly, when asked about if people should also be responsible to address climate exchange, so not the companies you're buying from, but personally themselves, Pet parents are 9% more likely to say that they are responsible for climate change than non-pet parents. We love comparing pet parents to non-vet parents because there there's some interesting correlation, not necessarily causation, but that parents just really seem to care about sustainability. So they hold companies accountable for it. They feel responsible for it We don't exactly know why that is, why pet parents care more about it or data like this comes up compared to non-pet parents. I think that there is a certain amount of compassion involved. You have to have an amount of passion if you are caring for a pet. And I imagine that that extends to the world around them. But that's just my theory. Another stat comparing pet parents to non pet parents is that 62 percent of pet parents bought an environmentally friendly product in the last month, which is 16 percentage points more than non-pet parents. So we do see data. This is one example that pet parents love buying sustainable products. I guess a little asterisk here is that in a survey like this, it is self-proclaimed what or self-determined what environmentally friendly means. So it's up to whoever's taking the survey to decide that. But the fact that they say, yeah, I purchased an environmentally friendly product, that matters. And that's interesting data for our market. And finally, I'm not going to go through this slide deck and tell you that sustainability is the most important thing that people are looking for when they're purchasing products, because no, I live in the same reality that you live in. Affordability continues to be, to dominate really most of purchasing decisions, myself included. But we like to look at when your affordability needs are met, what then are you also looking for? And so when sustainable attributes are embedded into a product benefit, we see that it becomes a leading purchase motivator. So you can see here that sustainable outperforms things like new or healthy or homemade as long as those cost needs are meant. This is really important because there's sort of a suite of benefits that pet owners seem to be looking for in the market. And of course, it's different for every customer, but sustainable just pops up again and again as one of these attributes that will not go away. And I'm glad it's not going away because it really matters. This is an interesting study from a group, Nextin, that surveyed over 2,400 cat and dog parents. And so what you see on screen are the top purchase drivers that they found in that study. So these cat and dog parents, they want recyclable packaging, sustainable protein and other ingredient sources, eco-friendly attributes and products that support the cause. So when I look at that list, I'm like, okay, these, some of them are very specific, recyclible packaging, very specific. Sustainable protein can mean a lot of things, but it's zeroed in on that protein aspect. and then especially products that support a cause. Yeah, that's a pretty specific ask. Eco-friendly attributes, a little big. I'm going through this because in my mind, as a sustainability professional, all four of those things absolutely fall under this umbrella of a sustainable product. They're all different options that could be considered sustainable. However, in the same survey, those same folks were asked if they would prioritize purchasing a more sustainable product. And only 5% of cat parents and 11% of dog parents said that it was a top consideration, which are quite low numbers. So what that shows is that there's this gap. So when these pet owners in this survey were given these specific choices, they were like, oh yeah, I really want to do that. But then when they just get the option of this sustainable umbrella, they like don't associate the same thing so we interpret that as an opportunity to educate we know that customers want this kind of thing they maybe are not calling it sustainability so how you describe it to customers really matters in this market all right so wrapping up this first insight that pet owners are super passionate about sustainable products what can you do with this information i think that this means that you have an opportunity to activate consumer trust. So what that means is really taking these sustainability initiatives that you have in your products and translating them into those attributes that your customers will really understand and want to purchase from. There's a lot of evidence that needs to be built to be able to back up those claims because we also see that transparency is desired. People don't want to just be told, this is an eco-friendly product. oh, they want to be able to follow the thread and know what that actually means. And that requires a lot of collaboration within the team. These claims and these stories that you want to tell pet parents, they can't just come from the marketing team. There has to be collaboration from marketing and R&D and regulatory and everybody getting on the same page about what is happening, what are the actual sustainable qualities of the product, and then how to tell that story in an effective way. Okay. So the second thing I wanted to talk about is that sustainability drives business value. And again, I just want to make the point too, that you can do, do in quotes, sustainability for any number of reasons on a spectrum of totally voluntary to totally regulated on the voluntary side. That's where I sit, you know, I'm really passionate about these things. And I wish that companies would be taking action just because it's the right thing to do. But again, I'm living in reality too. And so business value really, really matters. And again, we are very excited to see some of the data that like there is true business value to be gained from sustainability initiatives and actually risk if you are not looking into certain things. So I've already talked about how there is this demand side from pet owners. So perhaps that's why 54% of CEOs linked sustainability directly to business performance. So we saw data in 2025 that was up 34% from 2018. So in terms of a trend, it's definitely increasing over time. But it's not just about consumer demand that's driving it. There are a lot of other business value to be gained, such as operational excellence. So efficiencies in your cost can also be resource efficiencies for environmental sustainability. Innovation as an enabler, I feel like CEOs and business leaders know that when there is a challenge to be solved, the best innovation comes out and innovation usually leads to business benefits. Attracting and retaining talent is another really important one. We see data that employees really care about sustainability and there's a lot of momentum to work for values oriented companies. And so having these initiatives available to employees and getting them involved is a key attraction and retention strategy. And then finally, data driven decision making is really important. I mean, that can mean so many different things. And in this context, I wanted to share more about what that means in terms of risk, which is the next slide. So there is a lot of risk in the world right now. And I like to think about that of like how the world impacts a company and also how a company impacts the world. So there's this exchange happening of risk. So we have two example problems on screen here. The first one is about protein and ingredient volatility. So if you are involved with any amount of meat or fish sourcing, you are exposed to weather-related risk. And what that means is as extreme weather events continue to increase, fisheries have less fish to produce or a certain company that you're buying or farmer that you'RE buying meat from, like their cows are not surviving well because they are exposed to the weather- related risk. It's very tangible. The other example here is water stress. We know that pet food processing uses a lot of water. And so as water scarcity increases, and if that production is happening in a high stress area for water, water literally might not be available at some point, or either through a physical limitation or regulatory limitation. So in both of these examples, I think it's pretty easy to understand that there are serious financial implications for those outcomes. Like if your beef supply just disappears, that's going to have an impact on your operations. Or similarly, if you have a process that needs water and you no longer have the water, that is a financial risk. So what do we do about these problems? And that's where this mindset of impact, both what a company is doing to impact the world and what the world is doing to impact the company comes in. So there are some tactics that we like to call mitigation that is reducing the cause. So that is saying, okay, if I'm a company, I have certain emissions that are contributing to increased atmospheric greenhouse gases. That phenomenon is causing more extreme weather related risks. So I would like to do my part in reducing my greenhouse gases that I'm emitting. And if we all do that collectively, ultimately we could all experience less risk in this supply chain. There's also a strategy of adaptation. And so that is saying that like we're already experiencing the consequences. There was already a certain amount of risk happening in the world. So in addition to helping to reduce the amount of greenhouse gases I'm emitting, I need to do things to just deal with the existing risk. So that looks more like working with your supply chain to have backups and redundancies and collaborating with those beef suppliers who are also scrambling to find other options. So I think that that is where there's this big opportunity for cross-industry collaboration. So there's lots of ways to approach these risks to reduce that financial burden in the future. So it's no surprise then that we also see sustainability investment continuing to grow. So 62% of business leaders say they plan to increase sustainability investments in 2025. We'll hopefully get updated data to see if that actually happened, but I expect that it will because we saw a 10% jump from 2024. And then also 56% of businesses say that sustainability actions helped drive supply chain resiliency, which again is up from the previous year. So both of these points are just kind of explaining that business leaders are seeing that risk that I was describing on the previous slide and acting on it and increasing those investments, which means that they are understanding that there is a return on that or at least less risk. So what to do with this information? We have this key insight that sustainability drives business value, both from a demand side that I talked about in the key insight one, and then also reducing risk. So what does that mean for you, especially that risk side? We like to say that you can operationalize resilience. So take a look at those risks in your supply chain. What are those risks that you're exposed to? And then use that data to strengthen your supply-chain resilience by working with the supply chain and collaborating on the solution. We like also focus on win-win. So find solutions that improve both your environmental performance and business outcomes. You have more of those options if you look on a longer time scale, I will say as well. Okay, so our third insight here is that the sustainability focus in the pet industry is on foundational strategy and baseline data. I will explain more about what that means, but this is our assessment of maturity of sustainability in our industry. When we are asking ourselves, how advanced is sustainability in your industry? How close are we to our vision of a world where every single choice is a sustainable one in the pet industry? We're looking for things like a public commitment to advancing sustainability, strategic integration, so not having sustainability off as like a side hustle of one employee. No, it is really built into the business. Voluntary reporting, and I'll add voluntary action, climate action, alignment with global goals and frameworks, as well as risk management, which I just talked about. So these are some of the things that we are looking for in the industry to figure out how close are we? How are we doing? And one of the ways that we launched earlier or early in 2025 was what we call the benchmark. I am so excited and proud of the benchmark it's our way of asking our members in the industry to give us some of this data to help us know how are we doing how close are we to reaching sustainability. So I have some more details on here but the point here is that it's meant to be a rather quick assessment that companies can take every single year as a snapshot of where we are in terms of sustainability. So I have some initial results to share with you. We will be publishing newer results from 2026 pretty soon. So keep your eyes out. This is, I do want to kind of call attention to the fine print because while these numbers are really exciting, it is a very small sample size and it's just kind of an interesting snapshot of our mostly PSE membership right now, not necessarily the industry. However, we still get to learn a lot permit. So these were the results that had higher adoption. So more companies were saying yes to these questions. 79% have a formal sustainability role or team. 64% measure their operational scope one and two emissions. Scope one and three, if you're not familiar, are the emissions from your direct operations, not from your supply chain. And 56% integrate sustainability into business. So we see that, like, okay, there's some real momentum, especially in terms of really integrating it into the business and not having it as someone's side hustle. Here are some of the results that were on the lower adoption side of things. So less than half publish a formal sustainability report on a regular cadence. 36% reported that they do community volunteering and support as one of their sustainability actions. and 24% completed a formal materiality assessment. So these are some of the areas where we have to work on. I would love especially to see that number of the materiality adjustment increase. This is an initiative that is a great way to kickstart any sort of sustainability strategy because the materialty assessment engages a bunch of your key stakeholders and you come out of it with a list of the priorities that matter most, both for you as a business and for your stakeholders and the impact on the world. So it's really the foundation of how you set targets and work towards improving. So that is my goal, to see the industry take on more materiality assessments. So after looking at all of that data, we essentially say that in terms of maturity, the industry as a whole is early to mid-stage maturity for sustainability, which is okay. It means we have our work cut out for us. And I also want to say that this does not mean that every single company in the pet industry is early to mid-stage maturity. We have some amazing leaders that are advanced in terms of their maturity. And, I'm excited that we can work together as a coalition so that those leaders can also bring up the companies that are just getting started. So, I think, yeah, we have some notes here, too, about how scope three in particular, So those are the emissions from the supply chain that they are is another opportunity for the industry because most companies will have their largest emissions from scope three. OK, so from this snapshot of maturity in the pet industry from PSC's benchmark data, this means that you all in this webinar have the opportunity to become a leader. There's definitely an opportunity to join that pack of companies that is paving the way and really advancing sustainability beyond all of the signs of maturity that I've just talked about. So how to do that? Definitely know your biggest impacts before you jump to solutions. A materiality assessment is a great way to dothat. Really build your data workflows now before they are required by law. And many times just having a very savvy data management system is really important. And the third point here is also important because collecting data just for data's sake doesn't help sustainability initiatives. So make sure that the data is really guiding your improvement so that next time you collect the data, you see that you've done better. Okay, so those are my three key insights from the trends that we're seeing in the market today. So I wanted to transition next into the strategic outlook for the rest of this year and even beyond. So let's talk first about ingredients. I think and we think that ingredients will become a bigger and bigger innovation and resilience lever. The reason I say bigger is that there is this phenomenon where most pet owners and honestly, most consumers in most industries associate sustainability with packaging. And while packaging is incredibly, incredibly important for so many different reasons, we know that 70 to 90 percent of a product, especially a pet food product, impact comes from the ingredients, not the packaging. So that's why we say that like this is the key focus area if we want to actually improve our impact on the Earth's systems. So let's get into that a little bit. Why is it that ingredients are so important? Well, it's because agricultural systems that give us the ingredients that we need are influenced by and influence climate, water, biodiversity, animal welfare and supply resilience. Agriculture like really is an ecosystem. And so that means like we talked about earlier, it is really influenced by water systems, it has really influenced by weather systems, and climate systems, but then also the practices that we choose on farm influence those systems as well. So adding pesticides has an influence on water systems. The machines that we use on farm influence ecosystems. And so there's this really like direct link between agriculture and nature. So that's why ingredients are really where much of the impact and risk sit. So even zooming in further on ingredients, it's the proteins that we see is like the hot topic in this space right now, which makes sense because our pets need it and it has a huge environmental impact. The simplest way of saying that in case you haven't thought about a farm in a while is that if you're growing a plant that has an impact but then if you'RE growing an animal usually the animal eats the plant and so you have the impact of that plant plus the animal or the impact of the animal so that's why proteins are really a hot topic in sustainability. The other reason that this is a really key area to focus on is that if you are sitting at a brand or even a supplier level, there's often an amount of disconnect between you and the farm where your ingredients are coming. So that's why we say that the impact sits upstream. So it just takes a lot more collaboration to actually make a change in that space. And then I also wanted to talk about trade-offs here because my mission today is not to say, we all in the pet industry need to be using X protein because it's by far the best. As fun and easy as that would be, that's not how the world works. And the game of sustainability is really a game of trade-offs. And so there's no one single option for proteins or any ingredients that is inherently the best, it's really about what is going to work best for your customers, for your brand promise, for your health benefits. So there's just a big assessment that needs to be done to weigh the options. And I encourage the industry to just consider sustainability as one of those key considerations. So here are some ways that you can approach that ingredient sourcing to focus on resilience and lower impact. So the first is traceability. This just means that if you are at the brand level, you should know where the ingredients came from. Sometimes it's crazy to me that we don't know this. I think that like we are willing to feed our pets things that we're just like, it came from somewhere on the planet. That's fine. I mean, I think it's really important to that's why traceability is really important for pet owners as well. We've seen some data that that is something that they want to know about. But not only do you get to connect with your customers on that, it means that you are connected with those agricultural communities. So you can better assess risk and figure out solutions together. The second tip here is to measure your impacts and diversify strategically. So some of the ways that you can measure the impacts are a scope three greenhouse gas assessment or a life cycle assessment. But getting data on where your supply chain is creating impacts just means that you can identify hotspots and make decisions accordingly. The diversification is really important here because we have so many different protein options. We have muscle meat, we have byproducts, wehave regeneratively raised versions of both of those things. Wehave novel proteins, wehave invasive species, alternative proteins. upcycled proteins in some cases where they would have otherwise gone to landfill. So again, I think there's just so many different options that come with a whole host of different benefits or trade-offs. And so understanding what those are is really important. And then the third tip here is about verifying progress. I think, especially in the world where customers are looking for proof, making sure that what you're saying about your ingredient sourcing is important. So relying on credible standards and outcome data and disclosing that is very important. To wrap up this ingredient section, my wish for the industry is that we don't all transfer over to one single protein that's the best, but that we really explore the right mix of ingredients that have positive impacts on the planet, on animal welfare, on nutrition, all of that good stuff. So it's a big conversation to have, but one worth having. Okay, so we talked about ingredients, and I know I threw packaging under the bus a little bit, but I'm going to talk about it anyways, because again, it does still really matter, and people really care about it. So in the packaging space, we need to move from design only towards system level circularity. Let me unpack what I mean by that. There is an amazing amount of effort and focus on designing packaging to be recyclable right now. So in pet food, we are primarily putting stuff in flexible films because it does an amazing job preserving the product within it, and it's very light to ship around. There are some amazing benefits of flexible films. however all around the world it is not widely recyclable in a normal stream like you would put your glass or paper um and so i i do really want to commend the industry because transitioning to what we call recycle ready packaging has been happening um andso what i mean by recycle ready is that a lot of that film has multiple layers of different types of plastic that serve different purposes. And that makes it very, very difficult to recycle because you need to separate those plastics from each other. I don't know how to do that. So a recycle ready flexible film means it's made of just one type of plastic. So when it goes to a recycling center, it can be melted down and doesn't need to be separated. So congrats to the industry for really pushing this recycle ready packaging. Not everybody is there yet, and that is fine. The extended producer responsibility, which is the EPR acronym that you see on screen right now, is also causing this because there are now fees and fines in the U.S. Europe has been doing this for much longer, but we're catching up in the US. Fees and fines that incentivize a transition to more recyclable packaging. I'm really belaboring this point about the design part because, yes, we should celebrate that these options are available. EPR is making it at least financially more interesting. But the work cannot stop there. Because just because we have something that is recyclable does not mean that it is actually recycled. And even if it is recycled, that doesn't mean that is a truly circular system. So when I say a circular system, I mean that one thing can be used and then turn back into that same thing, or at least really not be downgraded in any way. Recycling is great, but it is not a true circular system. And so I think first, we do need to figure out how to get all of those flexible films and the recycle ready ones recycled. And then the work doesn't stop there, because let's figure out How to have a reuse model? Do we need to explore compostability? I think that there is a lot of innovation here that we can be doing to innovate more in packaging and make it more circular. So let's talk about how to do that. First, let's all remember that like protecting the product is the first priority because food waste is a true tragedy. So packaging needs to do its job. Let's not give that up. But we also need to make sure that we're asking it to do the right things and not more than it needs to be. Second, let us take a look at the life cycle impact and design a realistic recovery system. This is definitely one of those areas that no one company can do alone. We need to consider the retailers, the brands, the packaging suppliers, the recyclers, and design systems for realistic recovery. And we need to invest in the system. So that's number three here. Definitely keep investing in your own packaging innovation if that's part of your role or your company, but also consider how you can contribute to those recovery systems. So whatever you are selling out into the market, what are people supposed to be doing with that packaging? Are they supposed to be putting it in the landfill? Are they opposed to drive 15 miles to a store that might take it? What can we do to make this more convenient and keep stuff out of landfill? I'm really excited because within our coalition, we have brought some people together to start talking about these things and pooling resources to make it happen. And so it's just a really inspirational example of how we can work together to have a better impact. So to wrap this section up here, better packaging decisions just require that better design, but then also systems designed to make circularity more possible. okay so i've talked about some innovation that i'm hoping for in ingredients and proteins also in packaging but i also need to state that in the world of sustainability regulation is on the front of everybody's mind i'm not going to go too far into it but here are just some of the things to pay attention to there are rules about accountability and reporting for things like climate and waste, especially in the European Union. There are all sorts of regulations popping up all over the world for waste. There is other disclosure standards in Canada. Number five here is the sustainability claims regulations and six is labeling laws. That is what we were talking about before. There's laws about you have to prove what you are doing if you're going to say anything about it on PAC. I don't say this to intimidate you. I say this, it's like there are real regulatory reasons to get started with this work. And a lot of these regulations help you establish the foundational data that you need to then carry forward really meaningful, impactful work from there. A small plug here, we do have a PSE member only tool that we call the packaging legislation tracker. It's actually just the legislation tracker because we expanded it in the last round to beyond just packaging. So if there are any PSE members here on the call, definitely check that out. And if you are interested in seeing it, we can talk about membership afterwards. All right. I am ready to wrap it up a little bit here. I know I have talked about a lot of stuff. We talked about trends. We talking about a forward outlook, my wishes for innovation. So let's bring it home. What I want to focus on here is just that sustainability is so big. It is cross-functional within a company, and it is also cross-industry. So the pet industry needs to work with all sorts of other industries to really do it. Instead of feeling overwhelmed, if you do, that's okay. But I encourage you to bite off the small chunk of this puzzle that you can tackle in your role, because you alone are not going to solve it either. But every single person in every single role has a sustainability connection. So some of the examples I see, if you're in R&D, you have an influence on those formulation and material choices. If you are in quality or regulatory role, you Have an opportunity to really look at those regulations that are popping up. And how can you turn compliance into one strong claims, but then also the foundation for deeper sustainability strategy. If you're in marketing and sales, how can you get really savvy at that differentiation of explaining to your customer what you're doing with sustainability and how it meets their expectations and how they can feel really good about those purchase decisions that they're making? If you'RE in procurement or anything in supply chain, you have a role to play in traceability. You have a huge role to play in understanding your risks and ideating those levers for resilience. And then if you are in leadership, you have the biggest opportunity to build it into your business strategy. How can you get your teams excited about this work? How can you build KPIs into every single leader's position? How Can you work with other companies to get mutual benefit out of it? Those are just some of my ideas about how you might participate. But I hope that you do. And I think that there's plenty of reasons why you might consider it. To reinforce that you are not alone in this work, I have some series of resources to share. All of these are free and open to the public. So you do not need to be a PSC member to access these resources. But first, one of the takeaways I've just talked about is that sustainability is a business issue, not just a values issue. There is real business value to gain from it. And so I encourage you to check out our state of sustainability in the pet industry report that I drew a lot from for this presentation, but there's a lot more in the report as well. You can check out the consumer market industry data and start using that to build your internal case for sustainability. I'm also very excited. We are going to be releasing the next edition of this towards the end of the year. So keep your eye out for some updated data coming soon. The second takeaway here is that sustainability risks are real and they are serious and you should be incorporating them into business decisions now. So the first step in that is really to identify where those risks are happening because of climate change or other causes. And the resource I wanted to share here is a risk and resilience blog series. My wonderful colleague Hannah Hintz wrote those. There's three of them. And the link here takes you to the first one. And it's really a guide to like how to start thinking about climate risk and how to build it into your business. So I'm really proud of those, the blog series, so check that out. The third one here is that shared industry challenges really require shared solutions. I talked most about this in terms of packaging when I shared that we have assembled a group of people to start ideating some solutions to our packaging and collections problems. But this happens in so many other areas and there's opportunity to combine our brains and come up with solutions in many ways. So I would like to invite you all on this webinar. If you would like to come to Boulder, Colorado in November, please join us for Impact Unleashed. This is PSC's signature in-person event. And it's truly a great place where you can meet others, talk about solutions, learn some stuff, and feel inspired. So we're really excited about that event. So if you'd like to join us, please feel free to check out that link there. And then finally, if you're looking for something or you're feeling stuck in other ways that those three solutions can't help. This is why we're here. We are the industry's sustainability partner and you don't need to have already advanced your sustainability mission to join. We always say that progress is more important than perfection and you've got to start somewhere. So if PSC membership is interesting to you, please feel free to check us out there. That is it from me. Thank you so much. Allison, our first question is about protein and species. And can you talk a little bit about, are some of them more or less sustainable than others? Yes. So there is a famous graph I can see from even before my time in the pet industry that has beef at the very top as like the worst protein in terms of greenhouse gas emissions. and then it kind of is like chicken and fish and then all the plant proteins are below it and i think earlier in my career i was like beef is horrible but like wow has that graph been replaced with so much nuance in my time at psc because let's dive into beef the the cow itself has so many different things that can happen to it if it is regeneratively raised um there are actually opportunities that it could be, it could have a positive outcome on greenhouse gas emissions if it is actually helping the soil recover and there's carbon sequestration there. There's also the different parts of the animal. So in terms of greenhouse gas emissions, there's this concept of allocation. So there's the prime cuts of muscle meat, which are driving why this cow was raised in the first place. And then there are what we call the byproducts, which I feel like we need a rebrand because they're so important they're safe they're healthy um those byproducts get allocated less emissions than the prime cuts of muscle meat um so in term if you compare beef byproduct to chicken muscle meat the beef by product is actually better so i think to answer the question about just like which is better i think the question is what part of the animal are you using? How is that animal being raised? And like, go seek out that data instead of generalized data, because it's way more nuanced than that chart that informed my career inaccurately earlier. You know, kind of a follow up question to that. Can we do a better job at upcycling some of these proteins than we are today in the industry? Yeah. Well, I think the pet industry is already great at utilizing those parts that other industries don't use. I don't use the word upcycled just because there's an upcybled certification that has like very technical meanings about this ingredient had to otherwise gone to the landfill. And if it's going to human or pet consumption instead, it's considered upcycled i'm not i don't it's the fact is that the pet industry is preventing stuff from going to the landfill but it has been doing that for so long that it's almost mainstream now so i think yes let's continue doing that but then there's probably other scrappy ways that we can find waste streams going to landfill and see if there's opportunities for pet especially in the like plant ingredient space okay all right interesting uh you had mentioned regenerative agriculture before, got a question. Are there links between regenerative agricultural practices and pet nutrition sustainability? I don't have the data on that, so I don' t want to lead you astray. However, there are some really promising signs that yes, there is. PSC is involved with an initiative called the Growing Grass Initiative. It's a federal grant under the USDA. And essentially the whole point of that is to increase regeneratively raised beef and bison byproducts in various industries, including the pet industry. I'm bringing this up because one of the initiatives of that grant is to get that data. So what are their better macronutrients? Are there better micronutriENTS? Is there better nutrient density? As well as is there carbon sequestration? Are there environmental benefits? That initiative is really gathering that data that I know a lot of companies are asking for. So stay tuned on that. All right. Next question. What does meaningful cross-functional collaboration actually look like? And can you share some examples? I actually, I would love to talk more about this grass grant that we're a part of, because it's a perfect example of how, if our goal is to have regenerative beef and byproducts, beef and bison byproducts, excuse me, increased in the pet industry that truly like cannot happen from one company. Well, one, we need to find all of the supply chain connections to get it processed and not lumped together with conventional beef and Bison by-products. So how can we retain that traceability throughout the supply chaîne that requires collaboration? And then even once it's, once it hits a brand, um, how do we tell the right story? How do we tell the pet owners about what's happening. So we're approaching that in a pre-competitive way because we see that when companies get together and for example, they take a farm tour or they are in a meeting together and they're learning from the experiences of other companies, it's just so much more effective than having a one-on-one with one company. The inspiration that happens when companies come together on these things is really important. Yeah. Got a question here about greenwashing, right? Sustainability is so important, yet we have this phenomenon called greenwasing. And can you talk a little bit about the negative impacts it has on true sustainability initiatives? Oh, yes. Yes, I can talk about the negative impacts of greenwasging. Just in case this is a new term for anybody, it's essentially a misleading claim where a product appears to be more sustainable than it actually is. So that is harmful. It's been happening for years and years at this point because marketing teams are very smart and they're like, ooh, sustainability, people want it. So let's give it to them. The ways that that harms the industry is that, well, one, it's so confusing for people out there to understand what is actually sustainable. Consumers know about greenwashing and they are incredibly skeptical of claims that they are seeing on PAC and from companies. And so just there's a sense of mass confusion. And so it makes it so hard for the companies doing amazing work for sustainability operationally to actually cut through the noise of greenwashing and tell their story and connect with the customers. So it's just created a really challenging landscape. And then one other challenge of that is that it's actually swung the pendulum back on the other side. There are some companies that are so afraid of green washing, like they don't want to mislead anybody. They're afraid they're not going to follow the rules, that they do something called green hushing instead, which is saying like, we're doing amazing work, but we don't know how to talk about it. So we're just not goingto say anything about it at all. That's green husching. And that's also damaging because it contributes to that confusion still and really harms the momentum that we have in sustainability. Yeah. Yeah. So for those of us that want to buy more sustainable products, what kind of guidance can you give us to be able to determine whether it's greenwashing or whether it is real? Yeah. Well, I think the easiest thing to do is look for third-party certifications. So if you're looking at a package on the shelf, it should be some sort of well-informed logo or icon. It's even better if there is a link to learn more about it so that you can validate it. However, I don't want to say that that's the only way that companies can convey trust. So I think what I would say is like if you don't see any third party certifications, look for specific phrases. So instead of a company that just says we're eco friendly, look für clues about like, OK, no. Are they tackling ingredients? Do they have something to say about animal welfare or are they trying to reduce their greenhouse gas emissions? I would say take like 30 seconds and just see if you can find the specific aspect of sustainability that they're tackling and if that's interesting to you all right very well got another question here do we know which sustainability claims pet parents say they care about versus which claims that actually that actually drive purchasing decisions yes the what I say I'm going to do versus what I actually do those surveys always turn out differently um people always say that they are they care more about sustainability than they might when they actually purchase something um i don't have that data we might have some updated data to share in our next state of the industry report coming up um but i guess to me that gap is important because like yeah if you're trying to turn it into a direct roi that it's like i want to be able to charge more for my product you want that data about how much consumers are willing to pay. But the other data of what consumers say that they will do is also super valuable because that's tapping into their value, which usually leads to actions down the line. Yeah. Do we have data relative to maybe how much more they say it's important? How much more are they willing to perhaps pay for sustainable foods? Yeah. I mean, I've seen all sorts of different studies on this. Some show that like, yes, people are willing to pay more for sustainability and others are like, no, people are not willing to pay more for sustainability. So to me, I interpret those results as just like, it depends on so many different factors. And if that data is really important for a company listening today, honestly, I suggest surveying your own customers to figure out like what's going to work for your audience and what are they willing to play more for and what do they care about? Yeah. Yeah. Good point. Next question regarding the statistic that 84% of pet parents hold companies responsible for addressing climate change. Does that reflect a global audience or a U.S. pet parent specifically? And do we know how sustainability attitudes among pet parents differ across regions? Great question. Yeah, that is globe scan data and it's global. So we, I don't have the results on how it varies across different regions, but the number that you saw today was global. Yep. All right. Very well. Um, if a company is early in its sustainability journey, what mindset or first step matters most before they start choosing specific solutions? Um, starting something is always like so scary and intimidating. So I think the first thing I advise is just like, even just starting to think about it matters and just starting to ask the questions matter. And so I think the, the thing I see most commonly is that a company will jump straight to the like bright, shiny solution that they learned about first that inspired them to take action in this space. And they're like, Ooh, yes, let's I can't think of a good example, but like, let'S do something really specific and let's do it right now. What I encourage companies to do instead is to like, yes. Celebrate that momentum and excitement, but also take a step back to say, like, what is my company actually doing that impacts the world? What is the world doing that affects me? What are like the top three things that we would love to improve over time? So just a little bit of strategic thinking. If you have time to do something like a materiality assessment to structure that thinking, I definitely encourage it. All right. Very well. Allison, I see we've just crossed the top of the hour. I do want to ask one final question. I think this is a good one for that. What does a sustainable future and a thriving planet look like for the pet industry and how far off are we yes those two phrases from our mission and vision um we are pretty far off i kind of point back to the what i shared about maturity in the pet ministry we're kind of we're just we're getting started there are some companies that are leaders there are some companies that are just getting started overall we have a lot of work to do but i think the way i define those things of a sustainable future and a thriving planet. Two things come to mind. One is circularity. So making sure that like anything, any output that any company or anybody produces becomes an input later to something. So essentially it's not just preventing landfill, but it's thinking about like, what is happening with our water? What is happening сhapening with our emissions? So trying to act like an ecosystem and create circular systems is part of a thriving planet. And the other part is well-being or welfare. I think the word thriving really implies that people are happy and healthy, our pets are happy, and healthy wildlife is happy and healthy. So there's this lived experience that is really important to work towards as well. Yeah. Well, thank you, Allison. As I said before, I really appreciate your insights and your enthusiasm and your passion for sustainability. And I want to thank you for joining us today. And thank you everyone for attending today's webinar. If you have additional questions, please submit them to anh.marketing at balchem.com. The Real Science Lecture Series continues with educational topics each and every month. Be on the lookout for future programming. In the meantime, check out our library of on-demand content at balchem.com slash real science. There, you'll also find details on future webinars and register for upcoming events. Valchem's podcast series continues to offer a deeper dive into the industry topics. 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