Doing Well by Doing Good: Manufacturing and Packaging Are Making Big Changes For The Future

Michael Okoroafor, PhD

Vice President, Global Sustainability and Packaging Innovation at McCormick

Learning Objectives

Packaging Hall of Famer Dr. Michael Okoroafor sits down to chat about the current state of the manufacturing industry and what we need to consider moving forward. Prior to COVID, the trend in the manufacturing industry was how big could you get with your manufacturing infrastructure. Now as we learn to adapt, it's important to have a nimble and flexible agile manufacturing structure and a digital platform to align processes.


Key Takeaways:



  • What are the key external forces impacting industry in these COVID times?

  • What current consumer trends will impact the CPG industry in the future?

  • How to balance delivering industry-leading financial performance against ESG imperatives?


Transcript

Hello, everyone, and welcome to the impact smart manufacturing and r&d virtual summit. My name is Brittany Taylor q1 Executive correspondent, thank you so much for joining us. I would like to introduce our guest speaker here with us today, Michael Acorah for VP of global sustainability and packaging innovation with McCormick and Co. Welcome. Thank you so much for being here. You’re welcome. I am very excited to dive into the conversation today. But before we get started, if you wouldn’t mind giving us a little background about yourself and your current role.


Absolutely. So I, as you indicated earlier, I am the Vice President for global sustainability, and packaging innovation for my company. That means that all ours global sustainability imperatives and the global packaging organization as well reporting to me, and in that role, I’m responsible for both strategic set of directions, as well as execution of both sustainability and packaging initiatives within the company. Those global activities require also being responsible for the development and you know, met I mean, talent development for our function functions, and as well as making sure that our employees are trained in the proper ways to really align with the trends we’re seeing in the industry. Fantastic. And let’s go ahead. And one thing, one thing I would add also, I am our I am also, I was also inducted into the packaging Hall of Fame in 2018. So that might be something you might wish to


know. Absolutely, very proud. And congratulations. Thank you, of course, and let’s talk about that. Let’s talk more about your experience and what you’ve seen within the industry. Of course, there’s been a lot of shifts a lot of changes this year. What are some of the key factors externally that you have seen that are impacting the manufacturing industry right now?


One of the big things because of COVID? is this idea of Agile manufacturing. Prior to COVID, it was a matter of scale, How big can you get your manufacturing infrastructure? Now with COVID, that didn’t work very well. And the companies that did well, like McCormick were people that were able to adapt in a very short time, that means you have to have a nimble, agile manufacturing infrastructure that can move from place to place. So it is not an issue of adjusting time, like we used to do, it is not an issue of having an enduring supply chain that can adapt to any changing environmental impacts that you see. And COVID was a good example that what used to work may not work going forward. And so as companies think about what they need to do, they need to think about adaptability. How do you ensure that your supply chain can adapt when things don’t look like they used to be? And I don’t think we’re going back to ever where we are. That’s one thing. The second thing is this idea of ensuring that you have the digital platform that syncs with ecommerce. So I think supply chain operations have to align with making sure that the consumer demand which varies from place to place, that your supply chain can respond accordingly.


Of course, and in terms of that process, in terms of these key things that we are seeing this year, how has your team managed to stay aligned virtually? Or is everyone still working from home? Or are you slowly trickling back into the office?


So of course, you have to know that we are essential, essential services, our companies consider an essential service because it’s food people have to eat. And when people say there is a recession, yeah, there might be an economic recession, but there is no recession in eating. So people have to really eat they have to find new ways of eating. For the most part, we’ve been fortunate that our operations have remained functional. And the essential workers, people that are in the manufacturing operations have really been hardware could have been been designed in such a way that they can operate without really exposing themselves. So far, our company one of the key principles that started early at the onset of this COVID was really what were our principles. One is the health and safety of our employees, and the quality and food safety of our product. That’s one two is ensuring that we can manufacture and move deadline. So basically agility in our manufacturing was very, very important. And thirdly is as we do distance learning on how we can emerge from this pandemic in a better place, meaning Our company has to develop positions to resist shock in the future. And that’s exactly what is allowing us to do things in terms of our operations. Most people who cannot afford to work from when we are fortunate to have a company that is people centric, were encouraged to work remotely, we still work remotely up to this point. But now people can go back as they need to go into the office, they do our manufacturing operations, we have to stagger it in such a way that you don’t expose our employees, unfortunately, that has worked very well and met some of the needs that our consumers have required.


Absolutely. And I think a lot of companies, you know, are in the same place. But it is a difficult balance when you have some people working in office and some people working from home. But sounds like you guys have managed to do so very well. Let’s jump in and talk about consumer trends. You know, what consumer trends Do you believe are going to impact the CPG industry right now and also moving forward in the future.


So one of the things that you’re going to see is a deep consumer trend, this idea of e commerce and direct to consumer, because people are now buying things sitting on at home, and having it delivered. So really, enabling ecommerce is going to be a key thing going forward. That’s one thing. The second thing is what I will turn environmental considerations, if COVID has taught us anything is that that’s an area that we need to do more. Initially, people thought that will be important, it is still important because you find consumers willing to pay more for things that are environmentally friendly, or things that are sourced in an environmentally friendly way. So sustainability factors are big considerations. And so let me put it this way, make no mistake about it. The era of made us dispose is over, we’re now entered fully into a circular economy. This idea of making use reuse is a mindset that will put across everything you’re going to see going forward. And I believe it will persist as we emerge from this pandemic, and going to our traditional way of driving business. But for most brand that is very, very important. The last one is really when it comes to packaging, making sure that your packaging is either reused, recycled or repurposed, meaning incorporating recycled materials into the package is going to be important, because the era of using purely virgin plastics is perfect. So you got to think about incorporating recycled content. That way we can preserve our planet that we share. And finally, climate change is real. And really looking at things that will impact your carbon footprint or your greenhouse gas emission is going to be important for manufacturing operations, it’s going to be critical that you consider all those as you go forward. And I think that’s bound to stay and be a differentiator for people that can adapt.


Absolutely. And I want to take it back to the environmental factor that you mentioned, especially how do you manage to balance having industry leading financial performance against these ESG imperatives?


Now one of the things that we’ve done is we’ve we about four years ago, we we set ourselves on a journey. And it’s not just about sustainability is doing things the right way. I call it doing well by doing good. So at McCormick, we call it our Coco’s lead performance. And that is the idea that you can deliver top tier financial performance while doing the right thing for our people, our communities where we live, where we work, and where we source and the planet that we all share. So those two things can go hand in hand. And when it comes to ESG factors, the key things are really the people communities and planning. And that’s already been embedded in our journey on what we call properly. This is doing business with purpose, which I call doing well, by doing good. So the way we’ve really addressed this is to make sure that we’re taking care of our people and equipping them to do their job. One example, as you will know, is that we’ve made some audacious commitments for 2025 on the people front, ensuring that 50% of our executive leadership will be women, and making sure that our employees even at the factory level have what I call development plans embedded in the system so that they are developed as much as the so called exempt population. That’s to since we might come is a typical case of from from the devil. We source our things from almost in so many countries, over 80 different countries around the globe, from Madagascar to Vietnam, from Brazil to India, from Nigeria to to Indonesia. So I say that to tell you the complexity of our supply chain, but we’ve perfected those, because of our experience, it is therefore imperative that those communities that will consider them as part of our community give you an example, a farmer in Madagascar should be considered as part of our community, just like we’re headquartered in Maryland, somebody lives in in Maryland, you could consider that as part of our community. So making sure we’re doing things that enable those farmers to building resilience in their operations, meaning, assisting them by providing capacity and capability building support, that’s one, ensuring that we empower women ownership in those agricultural supply chain, which is what we do is healthy, and more importantly, ensuring that we have what I call no forced level in our system. That’s one good work doing this. And the third piece is really ensuring that our products are sourced or grown in such a way that they are sustainable. So because of that we’ve created what we call grown for good, which means not just what I call farm level certification, that what I’ve just articulated with resilience, community resilience, women empowerment, and ethical supply chain, all these, when you combine it with what we’re doing is really making us a preferred company, for investors and for people to come and work. So our purpose led performance, which is goes beyond traditional sustainability as traditional CSR embedded in our business has become a key differentiator for us. And that’s why you see our delivering top financial performance while doing good for our people, our communities and our planet.


Fantastic. That is all incredible. And not many companies are doing that. So kudos to you. That’s amazing. And I’m really interested in this topic. I actually was reading up on it over the weekend, and I was reading that global pandemics tend to accelerate these ESG imperatives. Have you found that to be true? And if so, is it impacting your business right now or something you see it? Well,


I think that what you see, can be classified into two things. One is what I call cross cultural shifts, they are not necessarily trends. So I’m going to make sure you draw that distinction, the controversy that the things you can do on an ephemeral basis doesn’t, doesn’t last, but the actual trend does less than the trend is this. The pandemics allow leading companies to build in shock resistant practices in their supply chain, or in the value chain demand, depending on how you view it. And that’s how you determine those that are leaders and those that will be laggards. It’s already been proven that sustainable practices, sustainable companies that have embedded sustainable practices in their business, do better than those that don’t. And so what I’m seeing is going forward, you can use the fact that you have some challenges not to build in things that are enduring, and sustainability and circular economy is going to be the MDR. And factor, because at the end of the day, we share one planet, and we have to be responsible for preserving it. And Dr. nondairy.


I couldn’t agree more. And I want to go back to the point you made about all of the policies and things that you are doing to make sure you’re meeting the standards, how do you ensure that all of your teams worldwide are aligned with what you’re trying to do?


So that’s a very important thing, you have to think about our company and dependents of the company. This is a people centric company. Meaning there is something we call the power of people. Our long term CEOs up my comment, wrote a book on dad the power of people. So at the core of everything we do is our people. So you can think of for us globally, I say my comic family, and how do you treat your families you check in on them, you make sure they know what you’re doing, and you drive to the same outcome. So if you have in a family reunion, for instance, everybody got that? So that’s like a town hall for us as a company. So it is in our DNA. So this is not something we have to reinvent. But when you have challenges we had in the pandemic, this idea of being as people centric, you know what I call the power people now reign supreme because you can relate to one No, there’s like one family. And that for us have been a competitive advantage.


Of course, and I think that’s something every company to strive for right now, because it has become difficult, working virtually, and being able to stay connected that way when you’re not seeing people face to face. But it sounds like you guys have found really effective ways to stay connected with everyone worldwide. Now, before I let you go, Michael, any pieces of advice that you have for other leaders like yourself within the manufacturing and supply chain industry?


Yes. And it’s it’s simple. You have to be honest, you have to be transparent. And you have to be ethical in everything you’re doing. See, one of the things that you see the underlying thing of building trust in the consumer, with consumer trust with the customer trust with your suppliers, and trust with your shareholders is very, very important. So that, to me, is the enduring legacy of any viable company.


I completely agree that is fantastic advice that I think all companies could live by. And you’ve provided us with some incredible insights today that I think other companies, other leaders within your same role will be able to utilize and start implementing. So thank you so much, again, for being here. And thank you to everyone who has joined us if you do have any questions or comments from Michael, please do not forget to make notes in the discussion forum below. I hope that everyone enjoys the rest of the summit. Please stay safe and have a great rest of your week. Thank you so much. Thank you and have a wonderful day. Thanks, Michael. Bye bye.


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