On this episode, we have John Strohfus who is the Founder and CEO of Field Theory and Minnesota Hemp Farms Incorporated.
John is supporting regenerative agriculture as a row crop farmer managing 1,000 acres in Minnesota, by working as a broker and supply chain builder with multiple brands, and by selling CPG products in the Field Theory brand that contain regeneratively grown ingredients.
In this episode, John educates us on what really matters to farmers, gives his take on conventional regenerative versus regenerative organic, and breaks down what it takes to find, aggregate, and broker regenerative ingredients for other brands.
This was a super fascinating conversation and a great one to start of the new year. John’s three-pronged perspective as a farmer, broker, and brand builder really unlocked some amazing insights. We were pumped to have him join us and hope you learn as much as we did.
Episode Highlights:
🔥 Perspective from a farmer, broker, and brand builder
🌱 Bringing hemp back to Minnesota in 2016
🚜 What’s holding farmers back from going regen?
🎯 Why we need more demand for “conventional regenerative”
👏 The lasting impact of Simple Mills’ direct trade sunflower program
🏆 What John likes about the Soil & Climate Initiative verification
⚙️ Building new direct trade regenerative supply chains
😯 Why linking regen practices to nutrient density might not work
🤔 Is CPG harder than farming?
🚀 How private label demand could help boost regen adoption
Links:
Minnesota Hemp Farms Incorporated
Regenerative Organic Certified
Follow ReGen Brands on LinkedIn
Subscribe to the ReGen Brands Weekly newsletter
Episode Recap:
ReGen Brands Recap #90 - Why We Need More Demand For “Conventional Regenerative” - (RECAP LINK)
Episode Transcript:
Disclaimer: This transcript was generated with AI and is not 100% accurate.
Kyle Krull - 00:00:13
Welcome to the ReGen Brands Podcast. This is a place for brands, retailers, investors, and other food system stakeholders to learn about the consumer brand supporting regenerative agriculture and how they're changing the world. This is your host, Kyle, joined by my cohost AC, who's gonna take us into the
Anthony Corsaro - 00:00:32
episode. On this episode, we have John Strohfus, who is the founder and CEO of Field Theory and Minnesota Hemp Farms Incorporated. John is supporting regenerative agriculture as a row crop farmer, managing 1,000 acres in Minnesota by working as a broker and supply chain builder with multiple brands and by selling CPG products in the Field Theory brand that contain regeneratively grown ingredients. In this episode, John educates us on what really matters to farmers. He gives his take on conventional regenerative versus regenerative organic, and he breaks down what it takes to find, aggregate, and broker regenerative ingredients for other brands. This was a super fascinating conversation and a great one to start the New Year. John's 3 pronged perspective as a farmer, broker, and brand builder really unlocked some amazing insights, and we're pumped to have him join us and hope you learn as much as we did. Let's go. What's up, everybody? Welcome back to another episode of the ReGen Brands Podcast.
Anthony Corsaro - 00:01:28
Very excited today to kick off the new year with our first recording of the new year with John from Field Theory. So welcome, John.
John Strohfus - 00:01:43
Hey. Thanks thanks for having me, guys. Great way to start the year.
Kyle Krull - 00:01:47
Yeah. We're super excited, and I'm particularly excited because I ask the same question every single episode. And this time, I get to do it a little bit differently. So this is, like, this is totally novel for me, so I'm super pumped. So, John, you are both I guess, you're you're many things, but you are representing a brand today, an ingredient supplier, and, you know, a farmer. So most of the listeners are gonna be unfamiliar with all three of those entities. So if you can, give us a quick lay of the land of each one. You know, what is Field Theory the brand? What sort of products do you have? Where can people find you today?
Kyle Krull - 00:02:14
What sort of ingredients do you supply to other businesses, and what do you actually grow on the farm?
John Strohfus - 00:02:24
Okay. Lots of questions. I can do everything but your taxes. How about that?
Kyle Krull - 00:02:31
Okay. Well, I mean, these tax seasons, I I could use the help, But if you wanna start with the other things, that's that's why you're here.
John Strohfus - 00:02:37
Yeah. So, you know, from a traditional CPG perspective, field theory has, some baking mixes, and then we have some hemp products. And those baking mixes are made, with hemp. They're also made with upcycled, food ingredients, spent grain, number 1. And those lines along with the hemp part lines are really our 3 and 4, hero products. And we're in about, 5 to 600 stores right now. We just gotta add with, a grouping of Kroger stores. So they'll be adding about 350, stores, just after the, 1st of the year here. We're making product actually right now.
John Strohfus - 00:03:13
So that's kind of a a great way to start 2025. Yeah. Thank you. On the ingredient side, you know, we're we're serving up buckwheat, sunflower kernel. We're doing, some wheat. We're working with some sorghum. Pretty much, you know, anything that comes my way, we're opportunistically, you know, we're taking a serious look at.
John Strohfus - 00:03:36
And and really that's the the focus of that. As a food ingredient company, Field Theory is helping brands connect with, an more intimate supply chain and one that's focused on regenerative, sourcing. Not all of our, ingredients are regenerative source because we have, you know, mass commodity plays that come our way as well. But for brands that are looking for value add, purposeful sourcing, that's why they're coming to Field Theory versus other suppliers.
Kyle Krull - 00:04:19
Mhmm. Totally makes sense. Love that you're doing that work and excited to dig into that a little bit more. I think that covers the the relatively of a, like, doozy first question I threw your way. So I mean, it's great at bat, and I appreciate that. Yeah. I'm curious. You mentioned spent grains for the baking mixes. Correct?
John Strohfus - 00:04:38
Correct.
Kyle Krull - 00:04:39
Can you elaborate a little bit more about what what does it mean to be a spent grain?
John Strohfus - 00:04:42
Yeah. So, so, basically, you know, breweries are taking, wheat and, which I know you guys are connected in with a bunch of information on, Kernza, which is a great regenerative grain. Those are being used in, the manufacturers, manufacturing of beer and spirits. And that mash is essentially usually discarded after the fermentation process, and it it might go into livestock feed. It might just go to landfill. And we are working with a a great company that I actually invested in about, 4 years ago called Net Zero. Sue Marshall. Minnesota connection here.
John Strohfus - 00:05:13
Great company with Net Zero. They built, some proprietary technology to, recapture not only spent grain, but other, products too, like, collagen from eggshells and things like that. So really in the food waste reduction upcycling movement, but with respect to our products and the spent grain, so the spent grain goes in as a as a wet, mash, essentially, and it gets dried, and there's a kill log, 5, step kill log process. Five log kill step process. Sorry. And, that comes out, and then we mill that in with our wheat and then blend it with our other products.
John Strohfus - 00:05:56
And that goes into, the upcycle baking mixes. And, one of the benefits of not only food food waste reduction, but it's a water reduction because we're using less wheat. We are, you know, subigating or avoiding the water consumption used to grow those acres of wheat.
Kyle Krull - 00:06:28
Totally. And I guess from, like, a a total food utilization perspective as well, you know, we talked about we had to be able to grow as much food and and caloric capacity to feed the world, Where if you can take a food that's used once a second time for the same caloric benefit, like, that's another awesome reason to do this, you know, spend grain upcycle food movement.
John Strohfus - 00:06:46
Right. Absolutely. Yeah. Hell, yeah.
Anthony Corsaro - 00:06:49
I love it. One of many, many things we're excited to dive into today. And I'm pumped to have you on, John. We've been connected for a while following each other on LinkedIn, and been kinda long awaiting this conversation. You know, John is a farmer himself. Like Kyle mentioned, he helps brands with supply chain and ingredient sourcing, and he has his own brand. So we really feel like you have a super unique perspective, like, the exact kind of perspective we wanna be uplifting on the show. But, John, take us back. Like, how did this all get started? Did you start farming first originally? For those that don't know, John's in Minnesota, so just to throw that out there.
Anthony Corsaro - 00:07:14
Did you start the brand and then the farm and then the ingredient sourcing? Like, what was the, chronology of all this, and and what's the origin story?
John Strohfus - 00:07:29
Yeah. Well, I just had my 50th birthday a couple months ago.
Kyle Krull - 00:07:33
Hey. Happy birthday.
John Strohfus - 00:07:34
Yeah. Thank you. Still alive and kicking. And someday, I'll let you know what I wanna be when I grow up. So, you know, I say that kinda jokingly, but, I have always been, you know, entrepreneurial ever since I was a kid. You know, I I remember being 10 years old and started a very, very, very small driveway seal coating business. So, you know, seal coat on the neighbor's driveway, and I think I got paid $15 and they supplied the the stuff. So, you know, that's sort of how I was always wired, but, you know, our farm when I was growing up as a kid, my dad worked full time off farm. He was the executive at Coca Cola. We kinda joke about, Coca Cola built our farm, And it's about a 100 acre farm, and we've had horses.
John Strohfus - 00:08:17
So we had horses our whole life. And, you know, agriculture is very central around us. And, you know, we grew hay for our own horses, but we didn't row crop farm. My dad was a farm kid, so I feel like I'm 2nd, 3rd generation farmer depending how you, you know, count. But my neighbors up until a couple years ago, they would say, John's not a farmer. Yeah. So that's sort of how I was I was brought up.
John Strohfus - 00:08:48
I never thought I would be in agriculture. I definitely never thought I'd be in the food industry. Yeah. I I was a sales guy, an entrepreneur. Right? So I went I went off to school, and I was a a marketing major and a microcomputer minor. And then I graduated.
John Strohfus - 00:09:07
I spent about 19 years in the IT industry working for Accenture, the global company. Mhmm. Got to see, you know, a lot of things, lead a lot of teams, do a lot of different cool things, and also learn about business. But I never thought that those things would be part of what I'm doing, today. And, like a lot of things, you know, we had my dad passed, and I had to figure out what are we gonna do with the family farm. And I was growing less and less interested in, my IT career. And about that time, we had the opportunity, to grow hemp in 2016. So my dad passed 2008.
John Strohfus - 00:09:41
I took over the farm in 2010. And then I started looking at our farm and, you know, how can we do things differently? We had a bunch of horse boarding still. We have 60 horses that we board to this day. You know, that's a full time job for most. My wife kinda runs that business now.
John Strohfus - 00:10:12
And, you know, it was just, like, looking at it, like, as a new business, something that, you know, your dad used to own and now you own it. What are you gonna do? How are you gonna make it better? And I started that entrepreneurial process. Right? So we we had friends that bought beef cattle, and we go in on that.
John Strohfus - 00:10:28
And then they said, well, why don't you just have the 5 head of beef on your own farm? Yeah. Well, that made sense. So we started doing that. And now, you know, we sell beef to about, 40 customers, direct sourced. Well, things just kinda evolved.
John Strohfus - 00:10:39
And then in 2016, I was looking for, you know, I took all our rented land back, so we started operating that ourselves. And then hemp came along in 2016 as a first opportunity to do that in Minnesota.
Kyle Krull - 00:11:00
Right.
John Strohfus - 00:11:00
I knew nothing about hemp. Absolutely. Totally. Totally ignorant. I I really am not ashamed to admit that, I didn't know anything.
Anthony Corsaro - 00:11:11
Typical IT guy, you wanted to do something that was new and cutting edge, John.
John Strohfus - 00:11:14
You know? Yeah. Right. And, you know, I just said I wanna be the first person to do it. And, you know, I don't know if that was a little bit of ego or just younger energy or or what, but I just knew that people, some really great things happen when you, are the first to to do them. And, certainly, I wasn't the first to grow hemp ever, but since 19 fifties, yes. And so I just said, you know, let's grow hemp. Let's see if we can market it. Let's see if we can get some processors online to process it for us and take the Canadian model, and sell bulk hemp food, a 100% food focused. Never had any CBD, you know, things in, you know, of interest at the time, and CBD really wasn't big.
John Strohfus - 00:11:56
Certainly, you know, not where we're at with cannabis at large right now. And then I said, so we created Minnesota Hemp Farms Incorporated. And I said, I wanna have a brand also and put this on the shelf. You know? So and in that first, 12 months, you know, we created the brand field theory. We did all the logo work, and really just a real small team of people I knew or got introduced to. And, we did it.
John Strohfus - 00:12:26
So we put you know, we grew it. We put it in a bulk bag and offered it for sale, to, you know, brands if they wanted it. And we put it in our own brand. And, you know, I wasn't in a lot of stores, but I had the product and I could sell it. And, you know, then we started knocking down doors. And again, I didn't know anything about the food industry.
John Strohfus - 00:12:50
So I learned all about food safety and and all the hard knocks, essentially in that 1st year. Obviously, still learn more every day about those sorts of things. But that was the genesis was hemp. And and then now, you know, 2 things happened. 1, we, started being asked to grow other crops. You know, John, can you grow this on your own farm? And I said yes to that.
John Strohfus - 00:13:19
The other thing that happened was I started working with a good friend of mine, to, farm more land, and we rented more land. And now, as of today, we're farming about a 1000 acres. Wow. About a 100 of that is organic. And that's on my own farm here. Most of the the land that we operate is rented.
John Strohfus - 00:13:40
And so we grow, you know, corn, soybeans, alfalfa, and then in organic, we're growing, sunflowers, red beans, buckwheat, sorghum as I mentioned. Anyway, I'm getting a little off track, but we started growing we started operating a farm, you know, at bigger scale. And then in the food business, customers started asking more about, what we could grow and be in that direct trade supply chain for them. And then they also it's totally backwards. Not ashamed to say, you know, our customers started asking us about regenerative. And I was like, what's regenerative? Right?
John Strohfus - 00:14:14
I mean, I I know what sustainability is, and we heard, you know, sustainability and and and that for a long time, but, you know, that term was actually really new to me, and I was farming. So
Kyle Krull - 00:14:39
About about when when did people start to ask you about regenerative? Like, what give us a year if you can.
John Strohfus - 00:14:44
I would say, well, a lot of it stem from our work with the Simple Mills Sunflower Program. So organic regenerative, direct trade, Simple Mills program was the first, and we're coming up on I think it's year 5 of that, is our next production. 5 or 6, actually. No. So
Kyle Krull - 00:15:05
So circa 2019, 2020 is when you started to get some inquiries about regen.
John Strohfus - 00:15:10
Yeah. Exactly. And, you know, I I love it. You know, I'm like, oh, okay. I get this. It's, you know, sustainability, applied essentially more directly at the farm level. That's kinda how I interpret it. And I said, yeah. We can we can do these things. And, you know, some of those things were we had done some of those things already, like, with cover cropping. But we looked at it and started to do more, and then I said, This is how Field 3 Foods is going to be able to get their foot in the door and differentiate ourselves from, I'll call them the bigs. You know, if you want, you know, wheat flour or whatever, you go to, an Ardent Mills or a Bay State or something like that.
John Strohfus - 00:15:46
If you want something that's really special, unique, with transparency to it, you come to us.
Kyle Krull - 00:15:59
Mhmm.
John Strohfus - 00:16:00
And and so that was sort of the model that, and and nothing against those companies, by the way. They're they're great companies, and I hope they buy some product from us on the wholesale side. You know, that was the difference. You know, how are we gonna be we're not gonna be always the cheap commodity play, and there's no money to be made really in that unless you're moving 1,000,000 and 1,000,000 of pounds. So how can you, offer something that's a higher value? Oh, yeah. Did I answer that? Was that one question?
Anthony Corsaro - 00:16:32
No, man. That was great. I mean, you're doing a lot, so it was gonna be a long answer, and I think you tied it all together really well and made made a ton of sense to me. I mean, you're clearly wearing a lot of hats. But as we've seen, like, over and over again in all of this work, like, the interconnectedness, whether it's the same person or different people of these various stakeholders where we're trying to build these return of supply chains, like, they have to be way more connected and way more aligned. And I think you're you're a great example of that. And, you know, it's so cool. Like, we gotta get some of the mills on the pod.
Anthony Corsaro - 00:16:56
We haven't had them on yet, but they're definitely on the list and we will. But even though they have very few regenerative products with, like, actual regenerative claims, they've done some really amazing work with people like yourself and really standing up regenerative supply sheds, like, especially up in your neck of the woods in Minnesota. And for those that have listened to the pacha bread episode, John is the farmer that helped them stand up that buckwheat supply chain that we talked about in that episode. So, yeah, man. Really cool. Made a ton of sense and just love love what you're doing.
John Strohfus - 00:17:30
Yeah. Pacha is huge. Right? That that was a game changer getting us into buckwheat, and, you know, hats off to those guys because that was just a whole new opportunity for us to bring in, other growers in our network as well.
Kyle Krull - 00:17:45
Well, John, I'm really curious to get your take on I mean, you you obviously farm literally a variety of different plants. You're playing in both commoditized conventional spaces and regenerative and organic and all those different cross sections. So number 1, how do you manage that from an on farm perspective? How do you feel about it? I we'll start there. We'll just start there before I ask you, like, a 9 pronged question. So, like, what is it like managing that on farm, and how do those practices differ, and how do you keep it all segregated in your identity preserved?
John Strohfus - 00:18:16
Yeah. So, from an on farm perspective, you know, you have to think about we didn't we didn't row crop farm until about 7 years ago. So, literally, the plight of the farmer I I consider myself, you know, I I can easily put myself in the shoes of a young and emerging farmer. If you're 18 to 25 years old and you're sitting there going, what do I wanna do when I grow up? And you go, I wanna be a farmer. Right? That's almost at the level, like, that we were at because, yes, we had some infrastructure. We had some tractors and equipment.
John Strohfus - 00:18:47
It was all small and it wasn't, you know, purpose built for row crop, corn, and soybeans. So that's a whole maybe different podcast, about, some challenges that we have in the ag industry and how, you know, I just said I turned 50, how people younger than me are going to survive. Mhmm. I think regenerative is a great, swim lane for that. But our farm didn't really have the infrastructure, so we actually rent, you know, storage space from a neighbor, retired farmer. I send a lot of our specialty stuff, you know, from the organic side that goes straight to the processor as fast as we can.
John Strohfus - 00:19:26
They they maintain that identity preservation and segregation for us. And then, honestly, you know, we we're a lot of mostly conventional on the the traditional farming side, and there's not a lot of food ingredients that's coming from the the conventional side right now. So that's you know, what I like to do is talk a lot about this organic versus conventional, because we only have so much organic land. I would move almost all of our corn and soybeans, into the specialty crops if I had direct trade buyers for those, commodity. So the short answer is we don't have to do a lot of separation on farm because we don't have a lot of these specialty products. We have, most of them in the organic system, which is a smaller footprint. It's easier to manage.
John Strohfus - 00:20:18
And then, you know, we're all contracting and working with our farmer friends who I've known a long time and get to know more every day. So that's the source. And and then we're working in the identity preservation from each of those farms.
Anthony Corsaro - 00:20:38
And, John, just the just the organic premium even on the commodity side isn't enough for you to transition the the 900 acres of, like, conventional to to organic even if it's just not food grade, like, commodity corn and soy?
John Strohfus - 00:20:52
So every farm is different and unique, and we farm 20 miles outside of Minneapolis. So we we're urban farmers. So we have you know, we're we've got fields that are, you know, 8 acres, 5 acres, 15 acres, and there's 2 or 3 houses that we have to contour farm around. A huge pain, frankly. So I people say, you know, how much do you farm? I said, not a lot of acres, lots and lots of fields. Like, I think
Kyle Krull - 00:21:22
But your acres to field ratio could be could be improved.
John Strohfus - 00:21:26
Yeah. Like, so, yeah. So, like, in a 1000 acres, you know, we probably have 40 to 45 fields. Our our large field is a 120 acres, and it's split between water runs and tree grows and creeks. So it's still not a to track land. Unlike, further south in the state, north in the state, west in the state, out of the metro area where, you know, you can drive a tractor in a straight line for a half mile or a mile, turn around, come back. Yeah. So the efficiency level much higher.
Anthony Corsaro - 00:21:59
Yeah. Yeah. Yep.
John Strohfus - 00:22:01
So, and and also it's it's rented ground. So, trying to, you know, talk about cover cropping and regenerating, soils that, you have a 1 year lease or even a 3 year lease is really, really hard. So, we would still love to do, more of this, but it comes back to the customer who wants to buy, you know, whether it be sunflower or wheat or buckwheat or sorghum from a conventional farm Mhmm. Grown in a regenerative manner. Then as soon as I get that, yes, then we're converting acres over. But it's also access to markets, and, you know, we live right on the Mississippi River. So our corn and soybeans go on the river down south in New Orleans.
John Strohfus - 00:22:39
Most of them. Yeah.
Kyle Krull - 00:22:51
I'm really curious to get your take on this, you know, as both a brand and a supplier and a farmer. You mentioned you you were hoping to see more demand for conventional non organic regenerative product. When customers are coming to you and asking for something like this, are they attaching any sort of a certification to that ask? Or is it just, you know, hey. Can you can you implement these regenerative systems? Are they relying on you to tell them what is and isn't regenerative? Like, what what does all of that look like?
John Strohfus - 00:23:19
Kyle, are you ready for the long answer again?
Anthony Corsaro - 00:23:22
It sounds like not enough people are asking them for that in general is is the first problem.
John Strohfus - 00:23:26
That's the first problem. People aren't asking for that because their, program now, I think, with, regenerative organic certified. You know, that's that's, like, what has from the buyer's perspective in these brand, companies larger or small, you know, regenerative is better, and I want it certified so then it's ROC. I just go back to you know, you can have philosophical differences about, what's best for the planet, what's best for our soil, but this is what I like to have people keep in perspective. Organic is 1 to 2% of the world's farming production. The rest of it is done in the conventional manner. So do you wanna make the 1 if you think organic is the best, do you wanna make sorry. Regenerative organic would be the best.
John Strohfus - 00:24:12
If you think organic is 2nd best, wouldn't you rather focus on 98% of the world's soils and make them a little bit better than taking 2% of a good practice and making it better. I mean, you can make it really simple. Right? A plus is you use a cover crop. A negative is you use a chemical. So are you doing less tillage?
John Strohfus - 00:24:38
That's a plus. Are you using cover crops? That's a plus. Do you have a new customer so you can grow another crop? That's a plus. Well, you you're still using a chemical? Yes. Okay. That's a negative.
John Strohfus - 00:24:56
But are you using less of that chemical than you did because you're able to do this other stuff? Bam. You got another plus. So that's 4 pluses and one minus in conventional. If you go into the organic system and it's actually not that significant because a lot of these practices are being done already, and the scale is just so much much larger. Mhmm. Yeah. So that was maybe 1 or 2 answers. And then, you know, what what certification, you know, again, I I mentioned ROC.
John Strohfus - 00:25:23
Nothing wrong with ROC, but it's regenerative, focused only. And the one that we have sort of worked more closely with is a soil climate initiative. Number 1, because they were created with a lot of farmer input, for the framework. So, and and then they're open to conventional certifications as well as organic. And probably the most important thing as a farmer, it doesn't cost me anything to get into that program like some of the other programs that have, like, a 3 or $4,000 cost of entry. Mhmm. Also, the paperwork and so forth. And it's also, it's it's aspirational.
John Strohfus - 00:26:10
So it's saying, I'm gonna baseline you where you're at today, and then I'm gonna measure you and you're making a commitment to do these things. We're gonna measure and make sure that you are doing those things, but it's not like some of the others where they're saying, you have to do this or you're not regenerative. That, you know, that turns a lot of farmers off. So, I think SCI in that sense is much more open. I'll say it that way. And then, you know, Regenerif is out there too, and and I think they're got more of the soil climate, type of mindset, than ROC.
John Strohfus - 00:26:46
But there's a lot of them out there right now, and, you know, it's not that one's better than the other. It's how do we kinda make sense of this. And when a customer comes to us looking for regenerified or ROC, you know, can we talk to them when we have so climate initiative verified and convince them that, you know, these are very similar. So on you know, what is their point of, differentiation, and is that really important to the brand and that buyer? Mhmm. Mhmm.
Anthony Corsaro - 00:27:27
Yeah. Tons of tons of good stuff for us to unpack. And just a audience note, we've talked about the soil and climate initiative before, and we've often abbreviated as SCI, and it actually used to be called the soil carbon initiative, but they've updated the name. Right. And the actual, like, seal on pack is the soil and climate health initiative verified seal, which there's not a ton out there yet in the marketplace, but there is some of the brands that we've had on, like pacha and roots potato chips, and and I know more on the way. And we love love the work that the SCI crew is doing. And like you said, John, they're really going after, you know, being inclusive and aspirational, which we feel like we need. And it's not an either or conversation.
Anthony Corsaro - 00:27:57
It's like everyone we just talked about, we need all of them to do good work and to succeed, and we need to make sure there's a pathway for all of them and that the market can, you know, activate different pathways. Right? Yep. I'm still not super convinced that the consumer is gonna be able to fully understand and articulate all of those pathways, but if we could get the consumer to understand just the umbrella of regenerative and let those all sit underneath that umbrella, I think that's possible. But it's super interesting to hear you kind of speak to it with all your different perspectives. And, you know, it's almost like I'm hearing you say, it really is the brand and the customer demand. Right?
Anthony Corsaro - 00:28:38
Having that customer, that is the the initial impetus of what can you do overall, which, you know, is is confirmation bias for us, but it's very validating because it's like that's why we started this whole podcast was we can talk to our blue and face about farmers adopting practices, but if no one's gonna pay them for it and if they can't send the product anywhere, like, it doesn't it doesn't matter. And you're another good example of, like, there's a reason why you're farming a 1000 acres and only a 100 of it is organic with return of practices and 900 of it is conventional return of with return of practices because
John Strohfus - 00:29:16
Yeah. And I and I and I live it. Right? So if anybody be doing more of it, it would be me. And so I think that, hopefully, for the listeners, you know, that raises some eyebrows because, you know, the farmers want to do this. They I mean, I was just said, I was also I'm doing one other thing. I'm I was elected to the Minnesota Soil Health, Coalition of, board of directors. And we just had, the the the big soil health event couple months ago. And I was telling some of my brand friends. I said, can you focus, some on the next 2 years on conventional regenerative sourcing?
John Strohfus - 00:29:54
Because I'm in a room with, like, 500 farmers, and there's not one of them here that really wants to continue growing standard conventional corn and soybeans. None of them. And it's
Kyle Krull - 00:30:13
Why? Why is that? Why don't farmers wanna continue to grow those things?
John Strohfus - 00:30:17
Because we're going broke. You know, I'm I don't know what the specific number is. We're we're talking a 100 100 of 1,000 of dollars of loss, in the 24 crop year. High inputs, low, prices, and unless you're a marketing whiz who's smarter than me, you're you're gonna get sandwiched in that and you're gonna lose money. So the farmer, you know, has talked about, you know, makes money in 2 out of a 5 year cycle. I don't know how many people are that disciplined with their own bank accounts to lose money for 3 years and then save it all in the 2 when they hit the lotto. So there's a lot of problems in the farm production, and they wanna grow. They don't want government payments.
John Strohfus - 00:30:58
They, you know, they wanna grow a crop whether it's corn, soybeans, or any specialty crop for a market price that that pays them a decent rate of return for what they're doing. All the food brands, you know, you can relate to cost of goods. The farmer, you know, what we do. Right? In food brands, we say, hey. What's all the stuff to make my stuff? And, yeah, I'm gonna shave a few pennies here and whatever, and I get to buy, you know, $2 a unit.
John Strohfus - 00:31:23
And then, let's see. I wanna make, 50% margin and then because I got a discos, promos, etcetera, etcetera. But I know I need to make at least 25%. I can't. The farmer's like, okay. I need to buy all this stuff. I go buy it. I plant it.
John Strohfus - 00:31:40
And now I harvested it, and I know how much I have, which I had lot not a lot of control on how much I have, what my yield is, and my product I made. And then, hey. You know, what day is it? And now how much are you willing to pay for it? And that might be totally upside down from when you started the growing process.
Anthony Corsaro - 00:32:06
Mhmm.
John Strohfus - 00:32:07
And so, you know, most people don't understand, how sandwich the the farmer is in that life cycle. And so anything that they can do to diversify even if it's only, 10% of their production, you know, they're they're looking to try it. They just they want the market. And so that's another huge thing that we do is we bring markets to these farms that don't have those markets today. Best example, 100 miles south of me, there's 3 growers that are growing, sunflowers. They're growing some for the most program. They're growing, some more for the 7 Sunday, program, which is another huge brand committed, to regenerative. And they have absolutely no market.
John Strohfus - 00:32:42
There's nobody in the 5 adjacent counties that are growing sunflower. So we brought that market to them, and the reason we did it is because they're doing the practices in a regenerative manner, and our brands wanted to meet and talk to and go on those farms and see how their stuff is made, and that's why we're sourcing from them. And they're also getting a little bit of a premium for that too.
Kyle Krull - 00:33:19
That'll totally make sense. I wanna kinda double back to the original question. You mentioned farmers are going broke, so they don't wanna continue to to grow these super commoditized crops because they're stuck in that sandwich you described. Have you noticed in your own farming when you start to adopt regenerative principles on conventional land, do you does that eventually lead to, like, a reduction in inputs? Like, does the does the soil actually rebound and require less input to make it a little bit more profitable?
John Strohfus - 00:33:47
I'm gonna give you the honest answer to that. I think because there you know, there's a lot of I could give you the rah rah answer. Yeah. The the the truth is that I don't think we have enough data around that. I can tell you anecdotally what I believed before when we just had hay acres that were in hay production for 5 or 6 years, and then my neighbor who rented from us, my dad, put it back in corn and soybeans. That corn is always the best after alfalfa. And so, you know, that's crop rotation, crop diversity, that that's a tenant from farming from yesteryear. That is still true today. Why is it true? Okay. This diversity, aspect of it. So, you know, crop rotation is almost like a regenerative principle now, you know, akin to cover cropping.
John Strohfus - 00:34:30
But I asked some other farmers in the neighborhood who are using rye as cover crops in the corn and bean, rotation. And I said, tell me how much I can save and convince my farmer partner that if we just started cover cropping with rye, we can use less nitrogen on our corn. And he said, well, I don't really think so. He said, you know, because the rye takes some nitrogen, so you're gonna have to actually maybe put more synthetics in, but you're getting the organic matter. So you're getting that nutrient cycling is happening. So if you take a longer term view, your soil is gonna be overall more healthy and be able to do more with less inputs and more for itself.
John Strohfus - 00:35:18
The other huge thing that I want people to know is that farmers are always going to chase yield. Mhmm. You always, as a brand, want the highest gross sales, the most stores. You're always gonna chase that. And, you know, people know that now, you know, it's not all about the store number. It's about how much money you made in those stores versus how much money you lost in those stores. The same is true with yield.
John Strohfus - 00:35:52
So we're always chasing 200 bushel, maybe even 300 bushel corn in certain areas, but we actually might make more money at a 180 bushel corn with less inputs. Mhmm. But farmers that are, you know, in it to win it, so to speak, they might start to do all these cover crop things, and they might still put on as much synthetic fertilizer or more because it's exponentially boosting yield. So companies and brands that are interested in measuring from an input reduction perspective, I think they might be disappointed in that story because farmers are gonna do what they do to make more money. It's not to say that we're doing worse for the soil. We're still doing better for the soil.
John Strohfus - 00:36:41
But inputs in a conventional system could could, still be at a plateau or increase a little bit.
Kyle Krull - 00:36:54
Man, I super appreciate the response because it's not at all what I was anticipating to hear. And it was so informative. Like, it just it's so eye opening to hear, like, the realities of what's actually taking place on farms. So I just appreciate you educating us. You know?
John Strohfus - 00:37:07
Yeah. I do think, though, to put the happy face on it for the others that are listening or disappointed maybe with the more direct answer. In a lot of cases, I do think that those inputs will go down because the in certain areas, the soils can only produce certain, height of yields, and they're just gonna overall be doing their work with nutrient cycling better. So if we have those covers, we have new crops that we're rotating in and out. Yes. You could get if you wanted the same yield, I believe in using those practices, you, over time, would be able to reduce your inputs. One of the hugest input reductions I I see in the conventional side is in the chemical side. Because, the fungicides, pesticides, you know, herbicides, those are gonna be different different needs.
John Strohfus - 00:37:53
And in some cases, fungicide actually problems might increase because we're introducing, early on a bunch of new bugs and things like that in the soil. So some of our corn that we grow might be actually more susceptible early on to some of those things. So there's a little bit of balance back and forth, but I think, generally speaking, chemical usage will go down significantly with these practices.
Anthony Corsaro - 00:38:27
Yeah. I mean, it's fascinating and it's super nuanced. I guess if I if I tried to summarize it into as short as possible, it's like, we have early data that isn't super robust that long term regenerative systems make input reductions happen and increase farm profitability, but it's obviously not convincing enough data or robust enough data to where we have every farmer out there adopting it. Right? But that's almost separate from the annual decision that you will have to make as a farmer, which is I still have to go somewhere with this crop. So if I'm gonna no till, if I'm gonna cover crop, if I'm gonna reduce inputs, if I'm gonna do whatever, I still have to sell this for a number that doesn't completely lose my ass or I can make some money on. So there there's it sounds like there's times where that decision is linked, and there's times where that decision is, like, not really linked. Right?
Anthony Corsaro - 00:39:07
And in the shorter term, it's probably less linked, and then over the longer term, it's it's more linked. But I'm sure
John Strohfus - 00:39:21
I think I think in a lot of ways, we as people, I'm a data guy too. Like, I would love to know way more about what's going on than I do, and I'd like, you know, to see the report and drill into it. Right? And draw anecdotal, you know, you know, relationships. I think though as people, we seek too much data sometimes. You know, it it is a lot of you know, we're working with nature. It is a lot of art. It's like informed informed science, right, or informed art.
John Strohfus - 00:39:44
And their Facebook groups across, you know, the country and the world, one of them is Tillage Kings. And I can tell you that, the folks in Tillage Kings, you know, there's no tillers in there. There's guys with the moldboard plow still. There's hard corporate generative cover croppers in there. I'm in there. And and and we're all trying to learn.
John Strohfus - 00:40:10
So they're asking these questions and and, you know, there's farmers that are, you know, 75 years old in there, and there's farmers that are 20 years old in there. And they're they're saying the opposite information. So how can that be true? How can they both be saying something and it's completely opposite? Like, the sky is blue. No.
John Strohfus - 00:40:24
It's not. It's it's white or it's brown or whatever. So each farm's different. Each practice is different. If you no till for 3 years, you might have more compaction than you did when you started no till. Okay? We don't like to talk about that.
John Strohfus - 00:40:43
So then do we plow it up, or do we use more covers to get rid of the compaction? Those are both choices to make at year 3 if you're no telling and you have compaction. And one is a faster fix, and you might have to do that on your farm for the economics of it, and then you get back to no till. Or or you can take a longer view with the cover crop because you've got the ability to graze cattle. You know, so some people have those options, some people don't, and we shouldn't get so prescriptive, I guess, as a summary. Like, you need to do it this way.
John Strohfus - 00:41:15
And I've heard, leaders of large brands before a group of farmers say we're not gonna tolerate the farmer not doing it the right way. And I was really off put by that, and I think they made a huge mistake because there is no one right way.
Anthony Corsaro - 00:41:39
Right. Yeah. Well, it's an interesting segue into something I'm super curious about, and I think we haven't really talked about on on an episode, John, and I'd I'd love for you to shed some light on it, which is the ingredient sourcing and supply chain development side. Like, maybe not every single detail, but could you walk us through, like you get the call from Pacha, and they're like, hey. We need an organic buckwheat supply chain that also has a regenerative certification. Then what happens? Do you start growing some? Do you call farmers?
Anthony Corsaro - 00:42:01
Do you have your own processing facility? Do you have to find a facility? You know, how how does it work from a timeline perspective? Like, just give give the listeners a peek into, like, how these how these transactions and supply chains, like, actually come together. I think that'd be super unique perspective to share, if you don't mind.
John Strohfus - 00:42:24
Yeah. I I think let me give you 2 examples. So help help me remember the second one. I'm a I'll start with Patrick because you brought it up, and then I'm gonna give you, I'm just gonna say a super large retailer who does a lot of private label.
Anthony Corsaro - 00:42:38
Okay. Okay. To remain nameless.
John Strohfus - 00:42:41
Yes. Gotta gotta cover those NDAs. You know, Pasha was great. Right? So so they called and they they said, hey. You know, we got, you know, connected to you and, you know, we are doing this. We're sourcing, you know, buckwheat bread, and we want this to be regenerative certified. And so the good news is I had grown buckwheat on my own farm a couple years ago versus, like, when Simple Mills called, originally about sunflower. I was like, yeah. I wanna do it, and we can do it, but I had never done it. So it was Yeah. A little bit more stressed.
John Strohfus - 00:43:10
So I'm like, yeah. I I know how buckwheat's grown. And then, also, because we have been doing that work for 4 years or so at the time, 5 years, I had the grower network now to reach out to. And I I said, you know, and they're like, yeah. I grow buckwheat. Or do you wanna grow buckwheat? And and so I said they said yes.
John Strohfus - 00:43:27
And I said, here's the catch. You have to get certified, regenerative certified. And so, I knew their practices and what they were doing in, you know, organically anyway. And I said, you know, we we gotta get connected to the soil climate initiative and get you signed up. And they're like, well, yeah. But, you know, it's gonna take me a couple years to get certified. And I said, no.
John Strohfus - 00:43:54
I said, you can get in this year 1 because your farm is gonna be baseline. And I said, you're doing all those tentative things, that are important. So you just have to, essentially attest your commitment and then they're gonna check-in. Right? So that is, you know, for Pacha, I said, yeah. I can do this fast.
John Strohfus - 00:44:06
You know, we can do this fast because I have the the growers who are authentically doing this. I selected the certification program that was best suited to get the immediacy of it. Mhmm. And then, the processor, to answer that, I worked with the same processor we did for our sunflowers. So that was all in place. The catch was they had never done buckwheat, dehull.
John Strohfus - 00:44:40
And so then I worked with another, processor for short term, up in Canada that had worked with us on hemp seed, and they were dehulling some buckwheat. So we did it up there first, and then we moved it back here, into North Dakota at the the primary facility. So that was really kind of a a real fast, you know, accelerate to a lot of acres. You know? So we went from my kinda my my home farm to a couple 1,000 acres, very quickly. Concerning though, because we have created a problem for ourselves, Because, Pacha is just using the buckwheat groat, and there's a lot of, lot of waste of the small particles and so forth.
John Strohfus - 00:45:17
And we can make that into an awesome buckwheat flour. But, hopefully, someone's listening out there in procurement for some big brand. You know, we don't we don't have the person calling right now saying, I need, you know, 5 truckloads a year of buckwheat flour. If they did, that solves for me the other part of the revenue side to make us whole. Because actually, right now, we're doing this and we're actually losing money having that amazing customer and, be generating, you know, a couple 1,000 acres of buckwheat, and we're kinda losing money. We got things in the works. We've got some sales that are starting in this area. But, you know, it it's not easy.
John Strohfus - 00:46:04
And there's for us in the middleman and whether it's me or another processor, aggregator, or supplier, they are taking risk too. I'm more willing to do that because our whole business is being built around it, that risk, and this idea of regenerative. But that also might explain why the adoption isn't huge right now because the suppliers and the processors and the ingredient sellers today, you know, they they don't know if they can really do this because of the risk side.
Kyle Krull - 00:46:48
Mhmm. Alright. It's almost like the supply chain infrastructure is not set up for this new I don't even I don't even wanna call it decommoditized, but this, more niche market that is developing. Yeah. These are, like, side offshoot businesses. Like like you said, you you gotta buck regrow business opportunity, but now you gotta figure out what to do with the flour. Yeah.
Anthony Corsaro - 00:47:07
Yep. 100%. So p PSA, anyone who needs certified organic and certified SCI buckwheat flour, call John. You can Yeah. Contact him directly or ask us for his contact info.
Kyle Krull - 00:47:18
Right. We gotta call Bob's Red Mill, man. I mean, they do they got tons of buckwheat. Right? They sell all sorts of buckwheat stuff.
John Strohfus - 00:47:24
They do. They would be fantastic as a as a customer.
Anthony Corsaro - 00:47:28
I think we'd work very well together. Before before you talk about the retail, I wanna ask one follow-up question to what you just laid down. And by no means do you need to reveal the actual unit economics? I'm just trying to ask a dumb question so I can understand kind of the the algebra of putting this together. Do you talk to Pacha upfront about, like, a a unit price and say, like, hey. We're gonna buy £50 bags, and we need the we need the £50 bags to show up at x y z dollars a pound or something. And then you know you have to backtrack with your your growing operation, the other farmers in the processor to just make those unit economics work, and it's just, like, kinda basic backtracking algebra, or is the pricing in unit economics, like, development different than that?
John Strohfus - 00:48:11
It's I think it's a hybrid and it's a conversation. So, this is really a great question, and it's a great for me, it's critically important to have a dialogue. So, you know, especially with the big customers, if I am lucky enough to get, to the right procurement person who might buy buckwheat flour, and they say, okay. Well, send me your spec and, what's your full truckload pricing? If I send that to, cold like that, and I do it where I really want and should be to not lose as much money or actually, you know, break even or
Kyle Krull - 00:48:47
Yeah.
John Strohfus - 00:48:47
After bid make money, I know that I'm gonna be 25 to 50% auto market. Mhmm. And it's an immediate I pay 5¢ less. See you later. Yeah. That's not a good fit because that's a commodity buyer who isn't appreciating the value of it. Mhmm. The right conversation is, you know, here's where we think market is, or you tell me where the market is because you've been buying from a non regen source. Okay. It's a dollar 20, and I wanna be at a dollar 75 to be whole. And, oh my gosh, that's gonna kill our cost of goods if we can't get into these retailers because of it and, you know, we have investors, etcetera.
John Strohfus - 00:49:22
So then it's, you know, where is that? And then maybe you land at a dollar 50. Right? So that's the dialogue. And then it's to say, that's because I think I can sell the other parts of the co product business.
Kyle Krull - 00:49:43
Right.
John Strohfus - 00:49:44
But these things need to be in balance. Same with sunflower, kernel versus oil, whole seed versus oil, meal versus oil. It all has to be, in balance. And people that are, you know, on the brand side, they don't really understand all of that nuance, unless they're in that that processor silo.
Kyle Krull - 00:50:07
It really makes a lot of sense. I'm curious to get your take on, you know, the the buyers who might be looking at a conventional regenerative crop. Right? Are they are you really looking to sell based on, like, the altruistic benefits of this is a more sustainable crop? It's helping to mitigate climate change. It's utilizing less water. Or has there been any specific nutrient density testing on this conventional regen ag product? And if so, is there a significant difference that can also be used to help to sell this product into these potential market sorry, potential marketplaces?
John Strohfus - 00:50:36
Yeah. Let me cover one last thing on that point because it ties into this. The other point, that I make to some of these larger customers who are interested in the regenerative side and they get price shock, You know, maybe it's just, you know, maybe it's just even commodity side where, they wanna support field theory because of the the aspirational goal around supply chain being regenerative, but they don't really care about it. They don't have a market use for it right now to do on label, but they just like to buy from us, and then the price is too high. You know, pure commodity wheat. I'll make that one up. Yeah. We can go find you wheat from guys we know, but, you know, it's no one's gonna make any money at that.
John Strohfus - 00:51:19
And, you know, just keep buying from your weak guy. The difference is, though, if we have a high value product that we offer and they want or that that we don't offer right now, but we can do for them. That's probably a better discussion because we've done it 2 times now. Sunflowers and buckwheat, didn't do it and then delivered. I say, can you give me some of your commodity business and pay a penny more a pound? Because you use £10,000,000 of this flower.
John Strohfus - 00:51:49
So if I'm involved in the brokerage side or commodity sourcing side, and and I can make a penny a pound. They're not gonna miss it. They're making a commitment to me, but that might be, you know, on an annual basis, that might be $20,000 of revenue that I can then subsidize the high value regenerative thing and bring that dollar 50 price down to a dollar 30. Mhmm. So now we're within 10¢ of what their commodity play is because they gave me revenue opportunity on the other thing. So I lose money all the time.
John Strohfus - 00:52:24
I'm looking at the aggregate. You know, what is the company making across all this? You know, can we make a penny here? Maybe we can make 10¢ over there, and then maybe we're gonna lose some money over here. But if we take this altogether, does it help us accomplish our goal, and get to a product that is sought after in market?
Kyle Krull - 00:52:54
I think it's a beautiful way because everybody constantly talks about the razor thin margins in farming, and you're literally advocating for 1 penny. You can't you couldn't ask for a smaller figure to be paid in cash. You know, so that's pretty astounding, and and you painted a really good picture of, like, why that 1 penny can be so, monumental. Right? Because you're dealing with such huge quantities.
John Strohfus - 00:53:16
And I'll give you the facts. You know, I had learned this the hard way. You know, but a lot of this stuff is straight up traded. You know, we're we're we're sourcing from known sources now, and we're selling to long term customers. Right? So it's not like, hey. I need 10 truckloads of this, and it's transactional. We're done. But the average margin for a broker is around 3%, maybe 5%. Mhmm.
John Strohfus - 00:53:30
And also that might be a penny. It might be 5¢. Sometimes it's 10 depending on the price of the unit. But the point is it's really super slim margin. Mhmm. And, you know, most brands, if you guys said you're gonna make 5% in your company, that's your margin. They're like, click. No way. I mean, can't do it.
John Strohfus - 00:53:50
I mean, what kind of horrible business model is that? Mhmm. So now I say, you know, if your broker is just supplying you with this anyway and they have no connection to the ingredient, you know, we at least give a a continuing guarantee and a value add, and we take ownership of it, pay for it, and then we sell it. So if we broker something, we're actually owning it and reselling it. And and they don't do it because they don't take possession. That 3% or in a good day, 5% that would come to us, you know, what's what's the benefit that we're doing with that versus your standard broker that you might, you know, love and is a great guy to take you out to dinner every once in a while, but it doesn't help you in other if you have aspirational things in the regenerative space.
John Strohfus - 00:54:25
Mhmm. And there there are, you know, some regenerative brokers out there now, so I'm not not diminishing that. The industry needs brokers. They're hugely important. I'm just saying, you know, when we say no over here, you know, let's look at the macro. We you buy 15 other things, you know, give us a little piece of this pie, and maybe we can actually make this happen at a good commercial.
Anthony Corsaro - 00:55:07
John, what's the look into your crystal ball and say like, what's the highest leverage, most transformational single thing that could happen to further develop these conventional return of markets? Is it that time in nutrient density that Kyle mentioned? Is it labels like SCI and Regenify just being able to create a premium like what organic and rock has, and rock really just hasn't because it's organic? Right? Like, what's what's the thing that if the market decided it was gonna happen, it was gonna work? Because I think we largely see 2 paths. We see people making regenerative products that are premium, and they're realizing the unit economics and the fact that they're selling a premium product, or we see see mainly big multinational brands making regenerative commitments and trying to get farmers to adopt praxis, but they're saying, we're gonna sell the same products at the same prices.
Anthony Corsaro - 00:55:40
So this additional, you know, cost to the farmer is not gonna end up in our unit economics. Right? It's like, what's what's the rub there, I guess? Like, what's the one thing that might break that down?
John Strohfus - 00:56:07
Well, Kyle actually asked a question last time you brought up here again nutrient density. I'm fascinated by nutrient density. I, you know, the nutrient density alliance and, you know, I wanna if I could spend all day and just focus on that stuff, I would do it. I think probably this and, you know, Tina Owens, she she's helped with that white paper and, you know
Kyle Krull - 00:56:33
She's the nutrition rock star of the world.
John Strohfus - 00:56:35
Yeah. I mean, she's one she might be the smartest person I know. But, so hats off to Tina Yeah. If you're listening somewhere. You know? But she makes this point really well in the in the study that or the outcome of that white paper. I think the summation point was, look, for we shouldn't be talking about regenerative. We should be talking about nutrient density because to be nutrient dense, you're probably gonna be regenerative. So I think that is probably right. I would I'm not gonna dispute the findings of that paper because I know a lot of work went into it, a lot of good discussion. I am fascinated about this though as a farmer because I know every farm is different and you're starting with different levels of fertility.
John Strohfus - 00:57:13
God has blessed certain areas better than others. There heavy metals in some areas and not in others. There's environmentals. And so the question that I don't understand is, you know, around nutrient density is if you talk about wheat, we're talking about usually protein. That's the measure of quality. Is it high protein wheat? And then what are the the falling numbers of the wheat? Rye would be similar. Oh, it's possibly to, our our typical grains.
John Strohfus - 00:57:41
That's how they're graded, and protein is the measure. So if I was doing everything right for 10 years, cover cropping the hell out of all this stuff and I grade crop rotation, and then I grew wheat, would my protein level that year be the highest, or would it possibly be lower, just because it was too warm? It wasn't cold enough for wheat, and I got a low protein number. So I might have what I'm saying is we might have poor soils farmed in a terrible way that no one would like, and the protein that you're as a quality beer might be better than the best organic or nonorganic cover cropping, you know, superstar. Yeah. So what are we measuring? You know, is it all the other stuff that, you know, is outside of protein?
John Strohfus - 00:58:36
You know, the the the vitamins, the minerals, you know, the amino acid profiles, and all these other things that make that up. But, you know, we have to get a lot more data in my opinion. And then what I fear is that we'll be marketing nutrient dense crops from soils that, you know, aren't that good, but they're, for whatever reason, hitting nutrient dense profiles. And then then there's a lot of really great farmers doing things in a great way, and then the measurement of their crop actually might not be what we would consider more nutrient dense. Yeah. I I think, generally, you know, if he he had to make anecdotal and general, statement, the farming practices should support higher nutrient density.
John Strohfus - 00:59:23
I'd I've emphatically believe that, but how the data comes about, I think, is decades to us. Mhmm.
Kyle Krull - 00:59:42
John, I love and hate everything you just said for so many reasons. But in particular and this is what I'm so grateful about to be, you know, included in in a podcast like this is I get to learn so much. And as I've, you know, what what episode are we on? This is episode 90.
John Strohfus - 00:59:58
Mhmm.
Kyle Krull - 00:59:58
You know, in the 90 episodes of doing this, I keep realizing how complicated our food system is.
John Strohfus - 01:00:04
Yeah.
Kyle Krull - 01:00:04
And the way you spell that out because, you know, let's let's take General Mills, for example, who sources oats from, I don't even know how many thousands of acres, hundreds of thousands of acres across probably the planet. So to your point, if they're focused on nutrient density, you know, are all of those different systems, even if they're using the exact same regenerative practices, going to yield the same, quote, level of superior nutrient density across the board? And the answer is obviously no. Just because of different soil types, different climate systems, different, you know, heat waves, oversea, different genetics. Yeah. I mean, it's so so so complicated. So as much as, like, in my mind, my simple mind, I'm like, hey.
Kyle Krull - 01:00:37
Just optimize for nutrient density and it solves the problem. But you just blew a hole in in that theory, which is a very valid you know, you you poked a good hole.
John Strohfus - 01:00:51
Well, I think so, yes, you have summarized. It's a it's a big problem when we talk about scale because it's it's really easy to, you know, go in your garden, do everything amazingly awesome, and then you do it for 2 years. You got your soil, everything perfect, then you grow a tomato, and you go take a tomato to the lab, and it's the most amazing tomato ever. But is it gonna feed, you know, 2, 300,000 people that way? You know? So we have to have scale, in mind. But, yeah, I mean, things are are complicated.
Kyle Krull - 01:01:27
Okay. So we've spent a ton of time talking supply chain, farming practices, different markets, developing markets, and, really got another rabbit hole. We are regen brands podcast. So let's bring it back to the brand. Tell us a little bit about your experience launching the brand field theory and what those retailer conversations have looked like. What have you learned in some of that process?
John Strohfus - 01:01:47
I'm gonna I'm gonna probably upset a lot of people again. Yes, John. We like
Anthony Corsaro - 01:01:54
that on the show, John. Don't worry about it. We got your back.
John Strohfus - 01:01:57
And, I should, I should have my wife on on the podcast to talk about this. You know, the CPG business, it's a horrible business. It is so horrible in a couple of different ways. It it costs so much money. It's so hypercompetitive. And, you know, then you get into distribution, and you guys could have, you know, what you're on 90 what? You could have probably a 100, podcasts about the horrors of, you know, brand distribution and all the the the challenges there.
Kyle Krull - 01:02:29
John, I hate to interrupt you, but I just I need you to know just in in one word, what's harder to be a farmer or a CPG brand?
John Strohfus - 01:02:39
Equally, you probably lose more money in CPG, and you can lose a lot of money in farming really quick.
Kyle Krull - 01:02:45
Oh, okay. Sorry to derail you. I just need to get a a hot take there. So
John Strohfus - 01:02:49
continue on. I would say the the silver lining in the farming side, which supports it, is that you generally have assets. Well, most people talk about, you know, farmers become rich when they stop farming and sell their assets. Otherwise, they're Yeah. You know, losing money along the way. But, you know, I'm self funded, with everything we've done. Right? And, and that and that's not really true.
John Strohfus - 01:03:07
Like, you know, my my dad left me some money when he passed, unfortunately, and, you know, hopefully, I've used that for good purpose with my family and doing what we're doing here. But, you know, at scale, it's me, and it's my wife and our bank account, trying to do this. I never wanted to go, you know, people ask me a lot. Like, you know, well, are you funded? You know, how do we invest and things like that? I've never wanted to take on all that money, although I would like to pay myself a nice salary. That would be great.
John Strohfus - 01:03:39
And I live out with some savings, but, I didn't wanna be beholden to people dictating what we're doing because this is so fast moving. I mean, when I started in 2016, 8 year 8 years ago, I think. Yeah. You know, it was all hemp, and I didn't know anything about anything of these other commodities that we're working with and specialty regenerative stuff. And, you know, the term pivot I don't know how many times I would pivot. We would have done quite a few for sure in that time.
John Strohfus - 01:04:10
So, you know, that's helped us be nimble and be immediately responsive to new opportunities. But, you know, CPG is hard. Right? You gotta Yeah. You're getting getting the product and then, you know, hopefully, you know, it's a good product that you're making. It's differentiated and unique.
John Strohfus - 01:04:28
And then you get, you know, branding and packaging and all that. But then at the end of the day, you have to go in this horrible process of, retailer by retailer and, you know, whether you have a sales management team in house or brokers, and you're knocking on doors, and you're saying and then it's like, yeah. Send me samples. And then I had this vision of an office filled with hundreds of boxes. And did they even open the box? Am I saying or did they do?
Kyle Krull - 01:05:04
Right.
John Strohfus - 01:05:05
And then, you know, again, probably topics for many other, podcasts. You you get in the door, and then, you know, what's the sell through? What's the velocity? And so, you know, we went from one product, hemp parts to okay. We need the oil and the protein is everything we had in bulk. We can just put it in the CPG bag, and there it is. And so now at least we can go to a food show, and we can have 5 SKUs, and we have organic and nonorganic. But guess what? You know, hemp protein doesn't really turn in a bag, you know, because there's all these blended proteins that you can put in your smoothie.
John Strohfus - 01:05:35
Hemp seed oil, which I marketed, through field theory as a culinary oil, specialty oil, like an avocado or, you know, something like that instead of how it had been marketed as, you know, in the health and wellness section in the refrigerated cooler with a really ugly brown, bottle. That's what? That didn't work really either because Yeah. Not a lot of people know about hemp seed oil.
Anthony Corsaro - 01:06:09
Mhmm.
John Strohfus - 01:06:10
So in the hemp skews of CPG, you know, we were pushing hemp is good for you. Hemp is good for you. Hemp is good for you. And it's the same thing we were saying in the bulk side of the business. And a lot of people know that, and they buy bulk hemp from us, and they put it in their formulas. And then I always try to introduce new innovative ways. Like, you have a pancake, Why don't you put some hemp protein in there? You can do it. It doesn't have to taste gross. It doesn't it can give you this protein bump. And then I said to myself, why aren't we demonstrating that in other products?
John Strohfus - 01:06:35
So that how the upcycled, baking line started. I said, I wanted to have upcycling in there. I wanna have hemp in there because it's demonstrative of the value of the hemp ingredient, and that was core to our business. And then I wanted to taste really good and be different. And so that was, you know, the pancake and then the chocolate muffin. And then I made a huge mistake because, again, I don't know anything about food, guys.
John Strohfus - 01:07:06
I'm a, you know
Kyle Krull - 01:07:14
You're just a former supplier brand, but, you know
John Strohfus - 01:07:17
Yeah. You
Kyle Krull - 01:07:17
must know anything about food. That's why I keep learning.
John Strohfus - 01:07:20
I'm I'm just, like, an IT guy and you know? Yeah. Anyway, little to me, you know, pancakes and muffins, while you can bake them both, they sit in different categories. Okay. So now I have the brokers out there doing pitches on pancakes, pitches on muffins, and then they're like, oh, this is awesome. You know? Tastes good. You know?
John Strohfus - 01:07:35
It's a great story. You know? We wanna support this. Yeah. Guess what? Well, what's what other skews do you have for pancakes? Right. What's your line extension? Mhmm.
John Strohfus - 01:07:43
And after 2 years of that, you know, I kinda went back to because our velocity wasn't very good in some of these areas. Pulling the stuff back, SKU rationalizations. Now we have pancakes, muffins, and then the hemp hearts and conventional and organic. So those are the 4 that we're really going to market with right now. You know, as I said, we we got the Kroger subsidiaries, the Kroger specialty, brands. You know, it's picking us up about 300 50 stores. That's for pancake and muffin.
John Strohfus - 01:08:16
And then the thing is so what's next? How do we do the line extensions? And so now we wanna build out hopefully, after the success there, we get that flywheel moving, and then we can build out the line extensions there. But not necessarily everything will have hemp in it. Not everything will be upcycled. You know?
John Strohfus - 01:08:41
The the daunting task of being another tortilla chip on the aisle, you know, haunts me, but I eat a lot of tortilla chips, and I would love to have that, you know, in our brand. And there's there's things that you wanna do and then things that you should do. But, basically, the other thing that we I really wanted to do is, you know, you hear retailers talking about their sustainability, regenerative, carbon reduction goals, all this kind of stuff. Right? Mhmm. So I want them to have our attention somehow and know what we're doing in the middle to support all these brands that are on their shelves that they love, and they love what they're doing and how they're sourcing it.
John Strohfus - 01:09:18
Well, guess what? They're sourcing it from us. And I would love for them to have knowledge of that and then say, okay. Let's bring this brand in because they're so important to all the other brands that are on the shelf. And then more importantly, back to that dialogue, if if these sustainability, regenerative goals, carbon reduction, whatever you call them, are important to them, let's partner and say, look. We only have 1 pancake mix. We only have 1 muffin mix.
John Strohfus - 01:09:56
You know, we probably shouldn't do blueberry because I am I'm not that smart, but I know that there's in most stores, there's, like, 4 brands of blueberry muffins. So what kind of muffin number 2 do you want? And we'll go create it, and we are so small that we can create this stuff and have it to market in, like, 3 to 5 months. I mean, super, super fast. So if we get the right retailers who wanna support this stuff, you know, that's how I wanna build out our line extensions, for those initial products.
Kyle Krull - 01:10:34
I think it's a great call. The collaborative innovation route, you know, start small with a handful of close retailers who believe in the mission, get some input, and develop what they wanna see to differentiate themselves to have success in that initial marketplace, and then you've got some sort of tried and tested unit you can take elsewhere. Right? So I think that's a brilliant model and move. So just commend you for that idea.
Anthony Corsaro - 01:10:59
Yeah. That I I can't even understand your frustration, John. I I don't wanna speak for you, so feel free to correct me if you feel differently. But, like, my my perspective as the person listening to all these people and kinda aggregating the opinion or the the, you know, assessment or whatever is, like, regenerative today economically has been a good win. Like, it's made the rich richer. Like, the rich that were already regenerative, and we could easily slap the label on and Whole Foods could make the claim. Like, it was great for them because there really wasn't any change and there was no real cost and there's no real building that occurred. But people at the Vanguard that are really building and really have skin in the game and maybe haven't made a ton of money or aren't super profitable from it yet have yet to really see the multi stakeholder buy in from retailers, distributors, processors, whoever, depending on what stakeholder they are, that they deserve. And, look, that's just free market capitalistic society, like, that's what we live in. There's a degree of that that there that we can't control.
Anthony Corsaro - 01:11:48
And I think one thing we're always trying to ask ourselves is, like, what's the proper way for us to advocate for that without really asking for charity and then get specific enough with, like, whatever the advocacy or requests are so we actually can change some stuff. Like, instead of saying we need to have these more conversations, it's like, retailers should take 3% less margin on regenerative products. Like, we we need to codify it and make it programmatic, and we just we we still are not anywhere near doing that. So
John Strohfus - 01:12:22
Well, one of the biggest challenges that I see again sitting from, you know, the brand size one thing that's a broker calling, sampling, and buyers. Right? Mhmm. Or brand curators. And then there's, the whole private label business, which is more, aligned with our sourcing side. And, you know, we work with some, coal packers. Right? And so we'll get calls. This really large retailer that does a lot of private label, they want, 20,000 bushels worth of ROC certified oats, and they wanna do a packing run-in 3 months.
John Strohfus - 01:12:48
Can you do it? And I'm like, doing math. Right? And then I'm like and this is a couple years ago. Yeah. I'm like, yeah. I can do it.
John Strohfus - 01:13:01
I can you know, I know where half of that is, and then I can probably find the other. But I don't really think there's a lot more. And then they say, oh, yeah. By the way, this is just like in the oat flake, and then they want quick oats and still cut and, you know, a couple more oat oat. And they all want to be And I said, well, what's the volume in that? Well, 20,000 each. I was like, okay.
John Strohfus - 01:13:26
So now we're talking about over a 100,000 bushels of ROC oats. And I said, I guarantee you that that does not exist in the world. And so to my point earlier about the adoption of ROC, great job in their marketing branding people. And so now this particular retailer who's doing private label, they they're all in on it. They're like, I wanna buy everything, and I want everything to be. But that just illustrates that they don't understand the practicality of the supply chain. Mhmm. And so then I think about the other labels.
John Strohfus - 01:14:00
So, well, maybe if they weren't so fixated on organic, they could look at every single one of their screens being regenerative certified Mhmm. In that private label brand. And that
Anthony Corsaro - 01:14:23
would
John Strohfus - 01:14:23
be 100 and 100 and thousands of acres of different crops and commodities that could be, tooled, change the farming practice, get the certification, and do it. And we can't do it in 1 year, but we could probably do a lot of it in 2. Mhmm. And so that's sort of the education side up the stack. And then, you know, the last thing on that point is the privately will buyer, they don't know anything about the shelf, brand sourcing people. So if they're talking to us through an intermediary a mediator of a a co pack or something like that, but if we're in the discussion and they're saying, you know, hey. Oh, this is great. We can get regenerative oats in our, private label brand.
John Strohfus - 01:15:09
And then the buyer, when we come along and let's say we put oats in a bag, on the shelf, you know, because they wanna Branded. Branded. Mhmm. You know, we could give them a hell of a deal. Right? Because Right.
John Strohfus - 01:15:25
I'm making all this money supplying the commodity for the private label, and then I'll put it on the shelf almost for free, basically. And and our brand should have more value because they know that that's also a regenerative play. But, no, there are other established players there. And the main point is in those big companies, they don't talk to each other.
Anthony Corsaro - 01:15:50
Right.
John Strohfus - 01:15:50
You know, the this buyer is segregated from this buyer and that buyer. Mhmm. And then the sustainability people, they're probably, like, in 52, off down the hall, and they're not in the important buying meetings.
Kyle Krull - 01:16:04
Yeah. Yeah. Absolutely. I I wanna reiterate something that you've mentioned twice now and just about the scale of, you know, 1.5, you know, roughly 1 to 2 percent of all arable land in the world is organic. Right? And to your point, making that 1 to 2% 50% better by making it regenerative organic or providing some level of market validation for conventional regenerative products and making that other 98.5 or 98% of all arable land maybe 10 to 20% better.
John Strohfus - 01:16:35
That's right.
Kyle Krull - 01:16:35
And the potential positive benefits that can have both from a human nutrition perspective, a mitigating climate change perspective, a water utilization perspective is tremendous. So, just wanted to zoom out and hone in on at the same time.
John Strohfus - 01:16:48
And Kyle.
Kyle Krull - 01:16:49
One of those things.
John Strohfus - 01:16:50
Kyle, you left out the most important thing. The impact that that would be to the guys and gals who are producing the food, the farmer. You know? Yeah. We we're gonna get another check. Well, that's great that we're getting a check, and it's gonna help us lose less money this year. But I'd rather sell a specialty crop that's regenerative verified in my conventional system and not need that check. Mhmm. So, that is another just hugely critical thing. The farmers want other things to grow. How is the food industry at large going to give them other things to grow?
John Strohfus - 01:17:21
And then another huge point that came up, in my mind when you were talking about some other things is, the importance of in this commodity play where we might make a penny, but we get the business. You know? So then it's a shift of, you know, where is that supply coming from? And how important is I like to talk about North American krone because Canada's so hooked in in such a awesome, you know, value trading partner in Mexico too. So if you think of North America versus foreign. Right? Mhmm.
John Strohfus - 01:17:58
You know, we have a huge patriotic energy in this country no matter what political side of the aisle you're on right now. And, you know, why aren't we using more food grown in our own country? Farmers, you know, ethanol system got built the way it is. You can have a mix of clean energy, green energy, ethanol is part of it, nuclear is part of it, all that. But if we start taking that away and we start moving away from ethanol, you know, what are the farmers gonna do? They're growing corn, and they're gonna grow, you know, stupidly.
John Strohfus - 01:18:38
Myself included, we're gonna grow corn every year no matter how much money we're gonna lose on it in some way. So we need to give them something else to grow. And there's a lot of things grown along around the world, and there's a lot of companies that are using foreign sourced ingredients. And they're doing it for a lot of different reasons. Either they can't get it reliably here or they need to meet a cost of goods. But let's work with them and start blending that. So if they're buying 90% of something from over there, we can grow it here.
John Strohfus - 01:19:10
We can grow anything here pretty much. So let's start having a conversation with them around a certain percentage as North American grown.
Anthony Corsaro - 01:19:26
Mhmm. Well, I think I think you just answered the final question there, John. And like most episodes, the whole episode is probably an answer to the question. But my summary of what you just said there is, like, the food industry and the government need to create a pathway for farmers to grow food and grow it generatively. Right? Like, there's a there's a lot of people and linked impetus there. 100%. But super informative conversation, man. This has been awesome.
Anthony Corsaro - 01:19:45
I will take us home with the final question, which you're happy to to, you know, expound whatever else is left that we haven't covered yet. How do we get ReGen Brands to have 50% market share by 2050?
John Strohfus - 01:20:08
Just get started. Every brand owner has ingredients that they buy Mhmm. And just get started. That's what I'd say to my farming friends too. I I would talk I talk to them about organic, and I say, you don't have to convert your whole farm. It's probably impossible from a physical labor perspective. Start with 1% of your 1,000 acre farm.
Anthony Corsaro - 01:20:32
Mhmm.
John Strohfus - 01:20:32
Then move it to 10. Maybe you never go over 10, but get started. Capture some additional value. Diversify it. We talk about diversity in investing. Talk about diversity in cultures and people. Why are we not being diverse in our sourcing models? And they it's hard work. It's paradigm shifting. Sometimes it's more expensive in the short term, but not the long term. And there's companies out there now to help them do that. So let's get started.
Kyle Krull - 01:21:07
John raised his hand. Yeah. He put his hand in here. That guy. Yeah. We're here. John, I love that answer. And it actually
John Strohfus - 01:21:14
can't do that. Okay.
Kyle Krull - 01:21:16
Yeah. It reminds me of
Anthony Corsaro - 01:21:17
on YouTube, which is some people. Sorry, John.
Kyle Krull - 01:21:19
Some people do that. You know, who's got time to watch? I mean, no. For for those who do it, awesome. Great. I just, you know, I look terrible, in front of my screen all the time. Anyway, I really like that answer, just start, You know? And I think it actually reminds me of something Christy Lewis said who AC was that episode 1 or
Anthony Corsaro - 01:21:37
Episode 1. So 190 linkage.
Kyle Krull - 01:21:40
Yeah. We're going, like, full circle here literally. And if memory serves correct, what Christy talked about is, like, look at the LOI. And if you can't afford to go full regen on your primary ingredient, find something else down the list and reach out and and work with that supply chain and just go 1 by 1. So I think it's a great great concept, and it doesn't have to be, you know, AC mentioned this to me when we first met. It's like progress over perfection. You know, you don't have to be 100% rock today. You know? Can you get one ingredient to be conventional regenerified? Or, sorry, conventional regenerative?
Kyle Krull - 01:22:03
So it it's a great answer, and I really think that's what will move the needle. You know? It's just starting to transition.
John Strohfus - 01:22:19
Yep. 100%.
Anthony Corsaro - 01:22:21
This has been amazing, man. Thanks so much for joining us. A great way to kick off the year. Really appreciate you.
John Strohfus - 01:22:25
Thank you. Thank you guys so much. I appreciate everything you do. I love all the brands that are plugging into you and getting voices on your platform, and, just so appreciative. Thanks again.
Kyle Krull - 01:22:37
Appreciate you, John. Thanks, man.
Anthony Corsaro - 01:22:41
For transcripts, show notes, and more information on this episode, check out our website, regen-brands.com. That is regen-brands.com. You can also check out our YouTube channel, ReGen Brands, for all of our episodes with both video and audio. The best way to support our work is to give us a 5 star rating on your favorite podcast platform and subscribe to future episodes on Apple Podcasts, Spotify, and YouTube. You can also subscribe to our newsletter, the ReGen Brands Weekly, and follow our ReGen Brands LinkedIn page to stay in the know of all the latest news, insights, and perspectives from the world of regenerative CPG. Thanks so much for tuning in to the ReGen Brands Podcast. We hope you learned something new in this episode, and it empowers you to use your voice, your time, your talent, and your dollars to help us build a better and more regenerative food system. Love you, guys.