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Host Dr. Darin Detwiler and returning guest Pedro Ferro discuss trust, technology, and leadership in the food industry. They discuss the importance of innovation, using technology to drive business growth, the need for personalization in the modern era, and the challenges and changes in the food industry landscape, including labor practices and ESG considerations.
This podcast is presented by My Trusted Source.
Produced by Joe Diaco Podcasting Support.
- (00:17) - Introduction and Guest Presentation
- (01:42) - Leadership and Technology in Business
- (03:39) - Balancing Innovation and Business Needs
- (06:34) - The Role of Data and Insights in Modern Business
- (13:32) - The Impact of ESG and Labor Issues on the Food Industry
- (16:35) - Conclusion and Future Discussions
This podcast is presented by My Trusted Source.
Produced by Joe Diaco Podcasting Support.
Creators & Guests
What is Trust Bites?
Hosted by food safety industry leader and consumer advocate Dr. Darin Detwiler, "Trust Bites" examines the challenges of ensuring food safety in a complex global marketplace and maintaining brand reputation.
With the rise of global food trade, consumers, retailers, and producers alike are increasingly concerned about the safety and quality of the food they buy. Many existing validation systems are outdated, bureaucratic, and expensive, creating inefficiency and allowing vital information to slip through the cracks.
"Trust Bites" delves into the validation process, discussing the challenges and limitations of current systems and exploring fair and equitable solutions.
Dr. Darin Detwiler: Hello. This is Trust Bites, presented by My Trusted Source, the solution to build trust throughout today's global food supply chain. I'm Dr. Darin Detwiler and in these next episodes, we'll be diving into deep conversations with our advisory board. One of our advisory board members is Pedro Ferro, and I'm really excited to be talking with him.
Welcome, Pedro.
Pedro Ferro: Thanks. Glad to be here, Darin. And thanks for inviting me again.
Dr. Darin Detwiler: I should be thanking you. Bringing in your perspective on leadership, I think, is a great focus of this episode. But you're not just someone who has some opinions on leadership. You've got some significant leadership experience. Will you share with our audience who may not know who you are a little bit about the leadership roles you've had in industry?
Pedro Ferro: Sure. Yeah, no, glad to do it. It wasn't the automotive industry, more of the commercial vehicle industry, but I have had many roles.
I was the president for Asia Pacific for a company called Meritor, makes axles and transmissions and all that. I was president of an electronics business unit for Cummings. And then my last job was CEO of a global brake products company that makes brake pads, brake linings for trucks. Pretty global business. So I have a little bit of experience with people in leadership in these roles.
Dr. Darin Detwiler: That's incredible. And again, thank you for talking with us here.
You know, I have been a part of many conversations around technology, from blockchain to iterative things, machine learnings, predictive analytics. And in these conversations, we talk about what's coming next. We talk about what is cutting edge.
And sometimes there are things that we talk about and it's like, yeah, we used to talk about this, but now we talk about that, because technology changes and in a world where we have changing technologies and changing needs with our technologies, I think we have to realize that sometimes. The people that have those leadership roles of the decision making purchasing power are not necessarily the ones that are actually going to be using the technology.
Has that been your experience?
Pedro Ferro: Yeah, I believe so. I always try to have some level of understanding of technology, coupled with management philosophy and I think those two things combined helped me tremendously throughout my career. And obviously, me dealing with people, learning to empathize, learning to listen. Those were the triumvirate of a good leader.
But technology was essentially my career without understanding the technology.
Dr. Darin Detwiler: When you say things like leveraging it to your advantage, you start to think of things like ROI, achieving goals and sometimes it takes a while, especially the new technologies, to realize that return on investment.
How do you balance the expense of new technologies, the cost of purchasing and adopting and training and then getting things? You know, you have to adjust, you have to calibrate, run practice and trials to make sure it's working. And that all costs money before you're starting to see, okay, here's where we're getting some return on investment. How does one even prepare for that?
Pedro Ferro: Sure.
First of all, I like to say that when I think about technology, I think of technology as part of innovation. Innovation, I think, is the fuel of life in business, the life source of a business.
And innovation is not just product innovation. It's not just, you know, computer innovation. Innovation could be business model innovation. It could be sales process, a manufacturing process. So, innovation is multifaceted. And I think innovation is critical, is at the center of everything. So, if your systems technology is not helping you innovate, move the ball forward, you can't ever justify paying it back. However, if that technology is helping you move the business model, move innovation forward, I think it's so easy to justify.
I'll give you some examples, I am a big believer in this 80/20 business methodology and in that methodology says treat your customers differently. Your vital customers, the vital few customers, you have to really nurture them, give them the best and so forth.
However, the trivial many, or the 20, if you will, you have to still take good care of them. You don't have the resources to send salespeople every day to their sites, but you can use technology to take good care of them online, for example. And it's just like Amazon treating all that long tail of little products. And, with technology, it's the only way you can really deal with that. It's the only way you can grow. So, I think there's a lot of ROI when you focus on technology as innovation to solve business problems. To deal with like I said, the business model.
Innovating the business model is extremely important. And I think companies that use technology for the sake of technology are doomed to fail. I see many examples of that. People that buy these huge MRP systems or ERP systems, they don't even know what to use them for. They just want to control things. That's not the right thing to do. The right thing to do is to focus on innovation and use technology as a part of that.
Dr. Darin Detwiler: Sure. Looking at that, I have long discussed the issue of food safety and saying that you have to have your priorities clear. You have to have your prioritization, your mission statement, you have to be very clear in your priorities and it's only after you're clear in terms of what your priorities are, that you can start to make those sound investments into what you're doing.
Because how do you know what is meeting your needs, what is achieving your goals unless you have a clear priority? Once you have the priority, then you can look at how, in this case, technology helps you achieve those goals. But if you don't have those goals clear, then you're just buying technology because it looks good.
Pedro Ferro: Exactly right. We're living in a different era.
I think of myself in three areas of information technology. The first was sort of the era of data. You know, we started to accumulate data for the sake of data.
Then came the era of analysis, you know, analytics. We start doing charts. And now we're living in the era of insight.
In the era insight, every business person, I think, needs to realize that there's a lot more going on around them than they know, so they need help to get insights. For example, social networks, or there could be people talking about you or doing things related to your business out there in the social network that you don't know.
The only way is to go out there and scour for that information and collect that information, you need to use some tools. The world is not like the world of the past when the only news coming from one source is coming from everywhere. So, if you don't really have a broader net to gather all the insight, and maybe the future is about predicting things with AI, I just think that nowadays we give into the era of insight and insight is, it takes a lot of work because if you just focus on you, on where you are in your little world, you're not going to be able to make good decisions because there's a lot more happening out there. Nowadays information is coming from everywhere, so you need help to put that together.
Dr. Darin Detwiler: And I would imagine that we're also looking at different buckets, right? We have information and data and analysis and insights pertaining to quality, pertaining to safety, pertaining to sustainability. Now we're talking about, ESG, environmental sustainable development and governance.
We're looking at profit margins. We're looking at being competitive, so sometimes some information may conflict with each other and we have to be able to be agile enough to say that, "Okay, I know these are all priorities, but this is the higher priority," or, "Right now we have to focus on this priority."
Pedro Ferro: Right. I think it's back to your point to say, you know, you need to define your vision, where you want to go, what are your strategic ambitions in order to go there.
I can give you an example. I think in the food industry, we've probably never seen so many niches, diets, you know, like keto or whatever. So many niches now, with different types of foods and specialty foods and all that. If you really want to, let's say, seize the moment in those things, you really have to do your marketing homework with insights and data and analysis, as you said, to understand: who are your customers.
If you don't really understand who the audience is, you're going to waste money, bullets, effort, you know, working on the wrong audience to sell, I don't know, niche products that are out there these days. Right? So I think it's becoming very complicated. And if you are in the commodity world in food, you're probably looking at thin margins. People are trying to get out of the commodity and go more into niches, into the golden segments of the market. But you need to be weaponized, if you will, with data and insights to know which markets to pursue. My experience is this. If you are working on a segment that is not very profitable, that's not very good.
There's this book called Blue Ocean, Red Ocean. If you select the Red Ocean, it could be a huge ocean, but no matter how much effort you do, you're not going to go anywhere. So you really need to be selective about the Blue Oceans. It's better to pick segments than to do a lot of work on market share. Pick the best segments to grow and focus on that. And for that, you need a lot of technology, a lot of data. You need to modernize your decision making.
Dr. Darin Detwiler: And to flip the script, if you will, the modern consumer, the modern customer, the modern era person who's going to be making these purchasing decisions, there's an expectation that all these technologies are being used.
Pedro Ferro: You're absolutely right. There's an expectation. There is also an expectation of personalization nowadays. So, if you're a large customer of mine, I expect to be treated differently. You're expecting me to give you personalized pricing.
It's not going to be the run-of-the-mill pricing, personalized logistics or information or whatever it is, the world is going to an ultra personalized, niche, segmented view from a business standpoint. And I think that to do that, to play in that profitable segment, you have to have savvy in terms of data and insights.
Dr. Darin Detwiler: I know it sounds like, "Oh, so what?"
I might say I want this kind of vehicle for this many people, to have these characteristics and these options and all that kind of stuff and almost, like, put together a shopping list that I could give to an automaker. And then all of a sudden, well, here is an option. Here's a vehicle that meets all your needs.
"Well, we don't do that in the food industry." I'm seeing that in the food industry! I actually recently met with a senior leader at a grocery store chain where they're talking about people go in on the app or on the website. And they're like, "I avoid these foods. These are my allergens. These are my preferences." And it'll pinpoint, it'll say at this location on this shelf is where you can find it. These products that will meet all of your requirements and fit your dietary health needs.
Pedro Ferro: I think that's where we're going. That micro-segmentation is the future of business, you know. In the car industry, they found a way to put these things in packages, right? So they standardized that. We could have done that in the food industry already. You have some packages for keto people, packages for, I mean, I don't know. There are such things. If you go out online, I'm sure you can find them, but there's so many micro segments and we're going to have to learn to deal with that. That's absolutely right.
Dr. Darin Detwiler: There are things we talk about, whether it's like GMOs, gluten or certain allergies that we did not talk about these 20, 30 years ago. We've already seen, even within the last year, new allergens are required to be labeled. There are states that have banned certain ingredients.
So there is an evolving landscape, in terms of the very specific requirements for ingredients: what has to be labeled, what is prevented or prohibited and if you look at the landscape in terms of the challenges and changes ahead of us, we have to assume that the only way we can remain not only agile, but even just responsible and to meet these needs, is to adopt the right technology, the right digital solutions to have that transparency and that traceability and to have that insight in terms of where various pieces of parts have come from and where they're going.
Pedro Ferro: And you mentioned ESG as well. I think there's a big elephant in the room in the food industry, which is sort of the labor issues, right? I mean, you have in a lot of farms, you have informal labor and a lot of that. And, used to be that way in the automotive industry, but nowadays you can't afford to have your parts sourced from supplier that has slave labor or ESG conditions. That goes straight to the stakeholders, the channels are all open. I'm not sure if that is the case in the food industry still, I still think more work to be done on that front, right?
Dr. Darin Detwiler: Yeah, I mean, we have seen a good amount of headlines within the very recent past about you know, entire meat industry being impacted, not just one, but multiple major meat companies that have used outsourced workforces for their sanitation efforts. Department of Labor has found that they're using minors, they're using, kids as young as 14, 15 years old, working at one o'clock in the morning around hazardous equipment, using hazardous chemicals.
And the amount of fines that have been put out there for these companies, so it's not just about, like, slave labor in some other country, in some other part of the world. It's also about the conditions of the labor practices. And I'm glad you tied this to ESG because when we look at what we can collect and analyze with data, if we're only looking for food safety red flags, if you will, then that's all we're going to find. But with ESG, we're finding a larger brushstroke, if you will, in terms of the different types of red flags that we could be dealing with. There are people that are making decisions today in terms of why they buy from this company or this brand or whatever.
I work in the world of food safety. There are issues that have nothing to do with food safety or quality. It's about politics. It's about, you know, discrimination or labor issues that don't necessarily come up as red flags when it comes to food safety. But they do come up as red flags in the bigger category of ESG.
And I think that this is something we have to think about in terms of being able to adapt to stay competitive in an evolving landscape. There's a lot more things that are expected today.
Pedro Ferro: Just like the people buying cars. And a lot of people buy cars, not just because they believe in the technology, but they think it's better for the environment. Being better or not, it's not the point, but there's a lot of loyalists to clean technologies. And we see, you know, the issues with water, the issues, you know. I like to think that a lot of the automotive guys ahead, by force or by its own wheel, adapt to these things.
And I can think of several improvements that have been made over the years, even on gasoline. If you think about it, gasoline used to be dirty with sulfur and lead. Los Angeles used to be smoggy. Not anymore. The gasoline changed and, well, cars got cleaner and all that.
So, you know, we can change things. It's just the fact that I think the food industry is so complex that it's hard.
Dr. Darin Detwiler: I think that this is one of many conversations around this topic, and I think it's important to evaluate technology from different perspectives. And I really appreciate your very open conversation about your experiences with the automobile industry, because I think that this is exactly how we're going to figure out these things in the future.
So, thank you very much.
Pedro Ferro: Oh, great. Thank you very much, Darin.
Dr. Darin Detwiler: I hope you found this discussion on trust and validation in the food supply chain enlightening and invite you to future episodes where we hear from our My Trusted Source advisory board members, who will share their insights and experiences related to trust, communication and validation in the food supply chain.
Until next time, I'm Dr. Darin Detwiler for Trust Bites, presented by My Trusted Source. Thank you very much.