Sarah is joined by Jason Pelz, VP Sustainability Americas at Tetra Pak, and Sasha Ilyukhin, VP Services Solutions at Tetra Pak for a discussion around the company’s leadership position in its own sustainability efforts as well as the opportunity it sees for growth in offering services related to sustainability.
Sarah Nicastro: Welcome to the Future of Field Service podcast. I’m your host, Sarah Nicastro. Today, we are going to be talking with Tetra Pak and discussing their view on sustainability, both internally and in the services potential that it provides the company. Super interesting conversation and thrilled to be joined today by Jason Pelz, who is the Vice President of Sustainability at Tetra Pak in the Americas and Sasha Ilyukhin, who is the Vice President of Services Solutions for the Americas at Tetra Pak. That’s a mouthful, gentlemen. But welcome to the podcast. Thanks for being here.
Jason Pelz: Thanks for having us.
Sasha Ilyukhin: Thank you, Sarah. Glad to be here.
Sarah Nicastro: Yeah, absolutely. Good. So before we get into the meat of the conversation, let’s just go through some intros. So Jason, can you start and just tell our listeners a little bit about your background, your role, whatever you want to share?
Jason Pelz: Sure. So as you all now know, I’m Jason Pelz. I’m the VP of Sustainability for Tetra Pak Americas. My background, actually, I grew up in a family that had a recycling collection, sorting, and bailing corporation, so I’ve been around part of the space for a long time, and I’ve worked for a few companies. And since I’ve been at Tetra Pak, myself and my team have really been out fighting the good fight for Tetra Pak, pushing our sustainability agenda, most recently across the Americas.
Sarah Nicastro: Very cool. It’s really interesting you have a background in all of this. I didn’t know that part. Good.
Jason Pelz: Yeah, you can’t leave it.
Sarah Nicastro: Yeah. Yeah, for sure. All right, Sasha. Sasha, you’ve actually been on the podcast before.
Sasha Ilyukhin: I have.
Sarah Nicastro: I didn’t look and see what episode it was, but it’s been a while.
Sasha Ilyukhin: I don’t remember the number either. That’s okay.
Sarah Nicastro: Go ahead and tell folks about yourself.
Sasha Ilyukhin: Absolutely. So my name is Sasha Ilyukhin. I’m VP of Services Solutions for Tetra Pak Americas. My background is I am from Russia, so I was born in Russia, and then I came to the US to study and then ended up starting my work adventures here in the US. So I’m in the food industry for more than 20 years, most of that time is with Tetra Pak in a variety of different roles in the US and in Europe as well. I am also responsible for the services solutions. So my entire career has been in services and customer services. And I am currently leading the team that is growing the business of services solutions for our customers. And sustainability is a pretty big theme these days. So we’re doing some interesting work with sustainability and services.
Sarah Nicastro: Awesome. Okay. And so this is going to be sort of in some ways a two-part conversation. Because we’re going to talk with Jason a bit about some of Tetra Pak’s sustainability initiatives and objectives, and then talk with Sasha about how that translates into potential for the services business. I feel like I’ve said this on a string of podcasts lately, but I do have kitchen renovations underway. So if you guys hear any crazy noises in the background, I apologize and just bear with me. Okay. So, Jason, I’m going to start with you. Maybe give folks a little bit of context on, I guess, the Tetra Pak business, but specifically how the company has gotten to the point of being seen as really a leader when it comes to sustainability and sort of the passion the company has around really focusing on that leadership position and being as involved as it is in its own sustainability initiatives and also encouraging its partners and its customers and the world to focus more on this area as well.
Jason Pelz: That’s a very broad way to start, but I’ll give it a shot. I think the most important thing to say is this, it’s not new for us. Sustainability has really been part of Tetra Pak’s DNA since Dr. Rausing started the company. He said, “A package should save more than it costs.” And I think when you immediately do that, you’ve already got in mind something tied to sustainability. As I said, you’ve gone in a bunch of different directions, but really, since our beginning, if you think about the package we created, an aseptic package which allows for products to be safely held within a package, not needing refrigeration, long shelf life, you’re talking about things like not needing electricity, excuse me, not needing refrigeration, food waste can be minimized, things like that. Again, to go back, for Tetra Pak, it’s been a journey. This hasn’t been something that is new in five or 10 years. It’s really been since the beginning.
Jason Pelz: The company, I would say, because of that initial DNA, I would say, we’ve always looked at things that we need to be out there driving and pushing the envelope to make things better. So whether it is in our processing solutions, how can we have more efficient equipment? In our packaging, how we make a more sustainable package, how we better protect food. How, at our own factories, at our own sites, what can we do to reduce the footprint we have on the local environment? I could talk for an hour on this one thing. We look at things from a holistic standpoint. Every part of what we do contributes, in the end, to how we want to make sure that as a leader, we have the least footprint on the environment as possible, yet at the same time, be able to provide people with an exceptional package that can handle these products.
Jason Pelz: If I go into certain details, for example, we’ve made commitments. In 2010, we set a goal to cap our CO2 emissions at 2010 levels at the time we reached 2020. And not only did we cap them, we reduced emissions by 19% and we grew our packaging by 16%. So there’s something to said about what we achieved. We’ve made other commitments. We engage and do things based on the sustainable development goals set by the UN. Again, Sarah, I could go on for a long time about all this stuff. But really, what maybe is the best thing to say is because it’s so much part of our culture and because it is so much ingrained in what we’re trying to do, not that it’s easy to accomplish, but the company believes in it, and therefore, we’re given this power to move forward. And that’s why we’re doing so many of these things.
Sarah Nicastro: Yeah. So, Jason, one of the words you said, holistic, I really liked. Because that was one thing that struck me when we talked in preparation for this discussion is… And it’s both because of how Tetra Pak’s business is structured, right? You have the packaging itself. You have the packaging equipment. You have the services function. There are these different areas of this life cycle that you touch. But I think it’s also in culture, to not overlook opportunities of impact. So the word holistic, I think, is a really good adjective for the way it seems Tetra Pak approaches its sustainability objectives. Because you’re looking across the business, across those different areas of impact, not having a narrow view on, “Okay, let’s just pick more sustainable materials for our packaging.” That would be maybe a more obvious aspect to focus on. But there’s all these other components that you all are working on as well to really drive the most positive change that you can. So I think holistic is a super good word for that. I was wondering if you could talk a little bit about your sustainability mission statement is broken down into sort of three pillars. Can you talk a little bit about why it’s structured that way and what those three areas are?
Jason Pelz: Yeah. Basically, our brand promise is to protect what’s good. And then if you take that a step further and you look at the three, what you’re talking about, you’ve got food, people, and planet. So what we want to do is when it comes to the food, we want to make sure that we protect and make food available everywhere to anyone. So to us, that is part of our mission, and from a sustainability standpoint, that is key. We need to feed a growing population and we believe that we have a great way in our whole process, processing, technical services, the filling equipment, and the packaging, to do that.
Jason Pelz: When it comes to the people, for us, it’s our people who obviously at Tetra Pak that we want to protect, but it’s also the communities that we work in. We want to make sure that we’re good stewards to the communities that we work in. And then it’s to the greater world. Again, I talked about food safety and food availability, we want to make sure we do that. We take diversity and inclusion very seriously. We want to have a very well-structured and open environment at our company. Again, which is all key to making sure holistically we’re driving sustainability.
Jason Pelz: And then finally, when it comes to planet, this is the buzzword of all, which is the environment. Everybody is very in tune with the environment. And for us, we want to have the best, least impactful packaging material. We want to use the least amount of energy, the least amount of water. We want to work with our customers to allow them do the exact same thing. We want to reduce our carbon footprint across the value chain. And that gets us involved in a lot of different things. We’re very involved, for example, in the recycling value chain because we need to be there, that’s part of what contributes to it. But we also take very seriously how we source our materials. Because you can have a very recyclable package, but if it all comes from fossil-based materials, you’re not looking at things… You’re not taking the planet into consideration. And so this is why for us, we do it. And by breaking it into those three areas, it allows for good focus as we drive our mission forward.
Sarah Nicastro: That makes sense. Sasha, I was wondering if you can talk a little bit about how people typically view the sustainability life cycle. And so as I just mentioned, one of the things that struck me when we spoke about this topic is sort of the attention to detail in terms of Tetra Pak looking at all of the areas where it can improve sustainability and making sure that things don’t get missed. And the description you gave of sort of, “Here’s some of the top of mind areas that people commonly default to thinking about,” which are important, “But here are some of maybe the less-considered areas to address,” which relates into the services conversation we’ll get to. But I think it also would be a good point now to touch on so people can sort of visualize what we talk about when we say holistic.
Sasha Ilyukhin: Yeah. I think that that’s a very, very good word that Jason had used as well, and I like it. All of the value chains are becoming circular. People are looking for products as consumers that are circular products. So you buy something, you consume parts of it, and whatever is left kind of enters the value chain in one shape or form, and then it just makes that full circle. So if you look at that circular value chain, sourcing becomes extremely important and recycling becomes extremely important. Jason mentioned those two things. And I would argue that if you just go out in the street and stop the first 20 people and you ask them, “What is the most important part of the value chain?” that’s what they would most likely say. The would say that it’s important to them where the product is coming from, that it’s actually sourced properly, and how is that product then recycled, what happens to it at the end of life so it doesn’t just go into the landfill and just pollute the planet.
Sasha Ilyukhin: What is interesting about this is that there is one piece in the middle there in that circular value chain that is called manufacturing. So you source the materials, you start putting them together, that typically happens in a manufacturing plant. Then there may be multiple manufacturing nodes, if you will, on that value chain because then it goes further. We manufacture, for example, equipment. We manufacture packaging material. Our customers manufacture consumer products using what we had manufactured previously. So if you take that whole manufacturing piece, our data suggests that the whole impact on sort of the carbon footprint of the entire value chain, 48% of that footprint is actually caused by manufacturing. So you think about, again, sourcing, extremely important, recycling is extremely important, but half of this entire impact comes from manufacturing.
Sasha Ilyukhin: And for many people, for good reasons, manufacturing is kind of a black box. You, as a consumer, you have no idea how different products are made. Yeah, there is this how it’s made series on TV. That’s great. I love to see it as an engineer. But for most people, it’s kind of a black box. That black box is extremely important. I think it’s gaining a lot of relevance. And we can talk about it when we talk about services. We can talk about how services can actually impact what’s happening within that box, too, to reduce the footprint.
Sarah Nicastro: Okay, perfect. Yeah, go ahead, Jason.
Jason Pelz: Sarah, can I just add something to what Sasha said which is super important, and that’s where we’ve made some of our commitments. We’ve committed to be part of the Renewable Energy 100, which is by 2030, we want to have 100% of our infrastructure supplied by renewable energy. So we’ve made investments. We’re not just talking, we’re walking the talk. We’ve put solar arrays. We’re buying credits. We’re buying green energy where we can, because Sasha’s got a great point, if we don’t start working on that manufacturing base to make sure that we reduce the impact it makes, and even take it a step further, and even with our suppliers, how do we work with them? Because again, we have to look at the whole scope. It’s true that black box becomes a big piece of the puzzle. And if that 48% can get reduced, it makes a big deal.
Sarah Nicastro: Absolutely. And you actually… That was a perfect segue into the next question I wanted to ask you. Which is there is more and more conversation around sustainability, which is a great thing, it’s something that should be being discussed for sure, but acted upon. And so the point you made around we’re not just talking, we’re doing, is super important. Because the reality is, as these things become top of mind for people and reach sort of a buzzword status, then you have a lot of people that jump on and say, “Oh yes, we’re also focusing on sustainability.” And so what the actual efforts are and what impact they’re having is super, super important. And I was just wondering if you could talk a little bit about how do you create accountability around making real progress on the goals that you’re setting as an organization?
Jason Pelz: What we do, we have reporting, there’s government, so you have reporting mechanisms. When it comes to our sourcing, for example, we have certifications for our renewable sourcing, be it FSE certification. We have certification for our plant-based polyethylene. We’re part of the Aluminum Stewardship Initiative. Which even though aluminum is not necessarily a renewable resource, there’s still a right way to source it. So we do engage with a number of those things. We’ve signed on to the UN Global Company. And so these are ways that we’ve kind of done it. Our targets are verified by science-based targets. So we make sure that we’re very transparent and we have these ways to show the people that we’re not just saying it, we’re doing it. And these are well-respected certifications. And it’s a commitment. It’s a commitment with time and people and costs. This isn’t free to do this stuff. These are all the things that we do to take into consideration and how we’ve driven it and continue to drive it.
Sarah Nicastro: Yeah. No, that’s good, and I just think that’s such an important part of this topic is how do you make sure that the areas you’re focusing on are having a real impact and that you’re doing enough. Every bit helps. But just going back to the conversation about if you think only about sourcing and recycling, there’s this chunk of half in the middle that never gets addressed. So just thinking about how to make sure you’re looking at all of the areas you could have an impact and keeping yourself accountable for making progress is really important. All right, Jason, last question for you before we talk a bit about services is what lessons have you learned or what advice do you have related to driving this topic forward and making real, significant progress as it relates to sustainability?
Jason Pelz: A couple of things. You have to have… Your company’s got to be committed. And when I say committed, it’s got to be top down, bottom up. One layer in the company can’t drive it, and then you can’t expect everybody else to just be there. No one can be a spectator. That’s a good way to put it. Everybody’s got to be engaged. Doesn’t matter, from the CEO down to the person working in the plant every day, everybody’s got to understand it and everybody has to drive it. Because really, if your company believes in it, I think that’s key. You’ve got to be willing to spend some money. It’s not free. It’s going to cost money. The returns will probably not be immediate in some cases. But long term, there will definitely be a benefit.
Jason Pelz: And I think the final thing that I’ve learned through this and I think we as a company have learned is you can’t do it alone. There’s no one group that’s big enough, or one company, I believe, that is big enough that can make this happen on their own. You’ve got to have partners. And it can be interesting partners. It can be your competition. It can be whomever. But you’ve got to be willing to work with others. For two reasons. One, it’s important for knowledge to be shared both directions, whether you to them or them back. Secondly, people think of stuff that you might not have or your company might not have. So you can’t assume you know it all. And by having these partners, and whatever it is, and we’ve done, I think, a great job more recently in doing so, if someone is better, bring them along, have them help. Don’t look at it as a challenge, look at it as something to take advantage of and work together to create something better. That’s what I would say.
Sarah Nicastro: Yeah. Those are really, really good points. Good. Okay. So let’s shift gears a little bit and talk about services. Sasha, I want to talk about your perspective around how sustainability is going to become a bigger driver for services businesses overall, but specifically Tetra Pak’s service business. I guess before you comment on that, for folks that didn’t listen to your first podcast, maybe just speak a little bit about sort of the types of services that you provide and how that shift toward sustainability as a driver is taking place.
Sasha Ilyukhin: Yes. Wow, what an introduction. Let me start first with a little bit of a story, and then I will talk about the portfolio and kind of where we go with this. So the story goes like this. I recently booked a business trip, so yay, we’re starting to travel again after over a year of these lockdowns. I want to go and see my customers face to face. So I’ve started to book some business trips. And an interesting bit of information I see in our travel booking software is that I see carbon footprint. So always, when I look at flights, I’m choosing flights, and okay, this flight is this many kilos of CO2 and this flight is this many kilos of CO2. And if look at the price of the flights, okay, I could choose a flight that’s, let’s say, $200 less, for example. But now I see that, wait a second, it’s 500 kilos more when I choose that flight. So all of a sudden, I am, as a business consumer in that case, I’m kind of thinking about, I’m making conscious decisions, how should I focus and what should I focus on? And we have a commitment to reduce carbon footprint across the value chain and within Tetra Pak as well. So all of a sudden, I’m paying attention to these things.
Sasha Ilyukhin: This actually very much applies to just us as regular consumers. So a lot of customers, or many of our customer, I should say, are starting to put carbon footprint on their package. Oatly is a great example. Oatly, all of their packages, you take any package from Oatly, there is a figure on it, and I know that they’re working hard on reducing that figure across the board. So that’s a good example. And it’s not only Oatly, but there are many other customers that are starting to put their carbon footprint on the package.
Sasha Ilyukhin: So again, it becomes very relevant for consumers. It becomes very relevant for customers. And of course, it is very relevant to us as well. And I think at the end of the day, from a business point of view, it also becomes a competitive advantage. If I was a consumer starting to choose which package do I buy or which ticket do I book, with which airline, etc., etc., all of a sudden, that drives my decision, my purchase decision. And that, of course, has a big impact on the business if you kind of accumulate that across the consumer base.
Sasha Ilyukhin: And now so let me just kind of digress a little bit and talk about the portfolio and kind of where we’re coming from as a company. And these two lines will meet together. So we as a company, in services, we started very traditional. If you watched the previous podcast, Sarah and I, we talked about this at length. But we started with a traditional portfolio, kind of parts, maintenance, after sales, if you will, etc. And then over time, we started to introduce outcome-based solutions, well, service contracts, maintenance contracts, and then outcome-based solutions, solutions that are focused on cost reductions, on improving efficiencies, and some hard commitments, for example, on operational costs, etc., share of savings, and these types of contracts.
Sasha Ilyukhin: And what we see lately is there’s also a clear need from our customers in improving sustainability as well. Because Jason said it. You cannot do it alone. And it’s the whole value chain that we talked about earlier that needs to work on it. So all of our customers are setting their science-based targets on their reductions and their commitments to the environment. We do the same. So how do we work together? We work together by basically aligning our services portfolio into what it can do to help our customer reduce their carbon footprint to enable them to be more competitive versus other producers out there. And this is our commitment to our customers on that as well, on sustainability.
Sasha Ilyukhin: So this is kind of how it all kind of comes around, and this is where services play a big role. But from a services organization perspective, then we need to think about, “Okay, so what are the competencies that we need for this? How can we do this?” Because this is not just claiming and proclaiming, we need to actually prove. We need to put the numbers. We need to calculate. We need to make sure that the numbers are audited, they’re confirmed, and that we are really reducing the impact across the value chain.
Sarah Nicastro: Okay. So I want to go back to the value chain part. But, what was interesting to me about the story you shared about your flight and kind of looking at the criteria and then talking about how some of your customers have started to publicly state their statistics on their packaging, it just made me think, we have this whole point about accountability. And so that public declaration of, “Here’s where we are. And you can watch and see if we’re making progress,” is them forcing accountability on themselves to continue prioritizing this as an objective. And I think that to your point, that is a competitive advantage. It will become increasingly so.
Sasha Ilyukhin: Absolutely.
Sarah Nicastro: But what’s interesting to me and what sort of helps paint the picture of the opportunity you see is so some customers are doing that now, it’s going to be more and more and more, and so they will be creating their own accountability and forcing their own increased actions to have this impact. And so that’s where you’re seeing this as a growing driver of services. So, I guess, going back to the value chain point and the sort of manufacturing part that sits in the middle that makes up for roughly half of the opportunity here, talk a little bit about some of the ways that that can be addressed and some of the areas there to tackle from a services standpoint to really provide value to your customers.
Sasha Ilyukhin: Yeah. We are learning. I’m not going to claim that we know everything here on how to approach this. So we’re also on a learning journey. But what we’ve learned so far is what I can share is that when we do the cost reduction projects with our customers, when we help our customers reduce their operational costs, we do it through total productive maintenance. So we use the methodology of TPM, total productive maintenance. And that typically starts with doing things like mass balance of the plan and what is called activity-based costing. This may be too specific of a term, but we call it ABC, so activity-based costing. Where you basically slice and dice everything that’s happening in the manufacturing facility on the vector of time and on the vector of the phase of production to see what activities are actually happening, how much cost they generate, and where are the opportunities to actually reduce that cost. So this is how we sort of map it out and start to approach it.
Sasha Ilyukhin: With sustainability, it’s a very, very similar process. So we’ve learned how to do a mass balance, but using the energy, using the water consumption, using the VODs, CODs, using the waste. So we are doing a different type of mass balance, but it is, anyhow, a mass balance of energy, if you will, energy that is a carbon equivalent of mass balance. And then we approach it in a similar way with total productive maintenance. So we basically set up focus improvement teams. We set up pillars with our customers with the typical sort of lean manufacturing TPM where you look at autonomous maintenance, you look at preventive maintenance, you look at education and training, early equipment management, etc. So you have these pillars and you have the standard 16 losses in manufacturing. We’ll look at that. But we look at it also from the standpoint of how they impact the carbon footprint of the facility.
Sasha Ilyukhin: And to give you some examples, so recently we’ve managed to reduce in one of our customers over 1,000 tons of CO2 per year. So this is a confirmed equivalent that we have reduced. If you convert that back to the efficiency of the plant, so overall equipment protectiveness, that increases 19.4%. So 19.4% efficiency increase plant-wide is equivalent in that case to just over 1,000 tons of CO2. If you convert that to yet another equivalent of like, “Okay, so what does that even mean?” That means that you need about 1,500 acres of forest to sequester that CO2 out of the atmosphere, so just to put it kind of common terms.
Sasha Ilyukhin: How is that done? About 40% of that actually came from standardization across the plant. And the specialists out there, the black belts and the green belts, they will immediately understand what we’re doing. What we’re starting with is we’re center lining everything. So we are bringing equipment to basic conditions. We’re making sure that everything is serviced properly, that it’s properly maintained, managed, etc., and so everything runs properly in that facility. That itself brought about 40% of that improvement over the year. And then, for example, another big chunk was cleaning. So when we looked at cleaning, not only the cleaning cycles themselves, but it has to do a lot with how the production is planned, for example, all the production cycles. So we analyze all of that. So we have this what is called minimal economic quantity. We look at balancing supply and demand. It’s a lot of very tedious work. So it’s not just you come with a very quick method, etc. No, it takes weeks and weeks and weeks. But we balance supply and demand of that manufacturing facility. That drives the corporate cleaning routines, for example, and corporate downtime for cleaning. That, in itself, gives around 30% of that overall annual carbon footprint reduction, for example. But there are some other things, of course.
Sarah Nicastro: Okay. So I got really wrapped up in the example and forgot where my next question was going to come from. All right. So there’s all of these ways, all of these specific detailed ways that you can go in and really examine, in the same way you would if you were driving efficiency. So if the whole goal was to increase efficiency to reduce cost, in this instance, you’re talking about really examining processes and increasing efficiency to lower carbon footprint. So same concept that you are accustomed to using, just different metrics by which you’re operating. And you can go in and look for all of these areas of opportunity. Now, we had talked previously about the fact that this is maybe a different way to approach this than some may initially think of when they think about, “Okay, how do we have a more sustainable manufacturing facility?” And maybe the first thought is, “Let’s get more energy-efficient equipment.” But that can be cost-prohibitive. And so talk a little bit about why that’s not a bad goal to have, but it might not be immediately feasible for everyone that thinks that that could be a good option. And so this process of examining the current operating conditions and structure and looking to make these improvements can be an option to make immediate impact and maybe put yourself in a position where new equipment becomes a more reasonable option to invest in.
Sasha Ilyukhin: Yeah. Well, what can I say? We also manufacture equipment. And we’d love to sell more equipment, because our new equipment is awesome. From the sustainability standpoint, our packaging lines, for example, use 40% less energy than our previous generation packaging line. So if you talk to any equipment manufacturing, any OEM, of course they would tell you that, “Yeah, absolutely, just go and change out the equipment and this will help reduce the carbon footprint.” And that’s true. The tricky part for that is, of course, budgets and CAPEX in general, there’s not a lot of appetite for CAPEX out there. In fact, I see, even from the services point of view more and more drive towards OPEX. Even with the big brands, what’s happening is they’re saying, “We don’t want to focus on the manufacturing assets anymore.” So a lot of it goes into contract manufacturing or co-packing. And the brands then focus on their brand, on developing the products and what’s inside the package and the ingredients and the recipes and all this great stuff and marketing and so on.
Sasha Ilyukhin: But manufacturing still becomes relevant. So all of a sudden, you have these co-packers and contract manufacturers that are getting bigger. They are, of course, typically a mix of old equipment, new equipment. So what do you do? If you’re a contract manufacturer or if you’re a traditional manufacturer with capital equipment, what do you do? You can’t go out and just start changing all the equipment in your facility. That’s completely unrealistic. So my advice to that is, is there such an enormous potential in total productive maintenance, in that case. So please look into sort of fine tuning, calibrating your equipment and looking at where the costs are, driving the costs out. In a typical manufacturing facility, in food manufacturing, I’m speaking food manufacturing now, the average total utilization of the equipment, if you take total capacity utilization, is somewhere between 30 and 40%. So equipment, you’ve got the CAPEX out there, it’s only producing products 30 or 40% of the time. Is that an opportunity? Absolutely. Absolutely it is an opportunity.
Sasha Ilyukhin: And when it’s producing, it’s typically producing with some losses, some quality losses. A lot of food manufacturers, the way that they risk manage, for example, is that there’s a lot of quality sampling. I’ve seen up to 2% quality sampling, which is, in my opinion, a pretty crazy figure statistically speaking. So there are a lot of different ways to drive efficiency and therefore reduce carbon footprint without changing the capital equipment.
Sarah Nicastro: Yeah. It makes sense. And certainly, it’s not to say that new capital equipment isn’t great when it becomes a reasonable option to invest in. But in the meantime, there are all of these other things that can be done to have a more immediate impact. One of the comments that we talked about is the fact that sustainability is just good business. So, talk a little bit about what that quote means to you.
Sasha Ilyukhin: Yeah, I think it’s becoming more and more the license to operate, in my opinion, the license to stay in business, not only good business, it used to be good business. It used to be you are in business, and if you also care about the planet and if you do some things for sustainability, you’re doing good business. And that’s true. But I don’t think it’s any longer relevant. I think that it becomes mandatory, it becomes license to operate for businesses to define how they impact sustainability, what are they doing to impact sustainability. And people can argue for days and days about, for example, how humans are impacting climate change and whatnot. There’s huge arguments about this. But there is no argument to we as stewards to this planet, it’s just good stewardship. And to me, it makes absolute sense that businesses are starting to pay more and more attention and put more and more effort into sustainability goals. It’s not the bottom of the balance scorecard anymore. It goes to the top of the balance scorecard. And I have examples in our business where in talks with our customers, some customers are starting to place these goals as equivalent to their business goals. So they not only want to achieve their net sales and profitability, they also want to achieve their goals on carbon reduction and being carbon neutral and things of that nature. So, absolutely, it is a license to operate.
Sarah Nicastro: Yeah, I was having a conversation not long ago with Dr. Andreas Schroeder from the Advanced Services Group at Aston Business School. And we were talking about the intersection between servitization and sustainability. And it was a similar reflection from him that the business they work with on their servitization journeys, sustainability historically has been sort of a secondary focus. So there was always a primary focus and that would be sort of, “And where and when we can, we’d also like to positively impact this.” And his point is it’s very quickly picking up steam and being the primary driver, not a secondary objective. So I think that’s very much in line with what you’re seeing in terms of those priorities becoming more level versus it being further down the scorecard. Okay, so I want to ask you both one final question for today, which is, I guess, if you had to kind of give one premonition or prediction on what we think is something notable we’ll see over the next six or 12 months, what are your thoughts on where this is all heading?
Jason Pelz: Do you want me to go first?
Sasha Ilyukhin: Go first, yes.
Jason Pelz: Listen, I would say to you the importance of this topic, the premonition is it’s just going to become that much more important. I think Sasha hit it on the head when he said it’s a license to operate. I also think it’s almost becoming not even so… It’s going to become a license to survival is what I really think. I would even take it one step beyond to that, where companies, and we as society, are going to have to make some decisions. Because clearly, you see things going on. And really, I only see the topic of sustainability, how it’s going to affect how people run business or are even able to start businesses, it’s going to just become more and more important. Again, one is a license but two is a survival thing. Because really, we’re in a resource-strapped world, I would say. And if things aren’t taken into consideration, whether it is reducing what you take from the planet or your ability to take advantage of those renewable things to run your business, you may find yourself in a situation where you can’t run your business. So it’s not a question that someone might shut you down, it’s a question that you just might not have access to some input that you need. So I would say, and people may think, “Thanks, Captain Obvious,” but truly, it’s going to be more and more important. This subject is not going away.
Sarah Nicastro: That’s what I call my husband a lot of times, Captain Obvious.
Jason Pelz: It’s an easy one to quote from the TV.
Sarah Nicastro: All right, Sasha, what do you think?
Sasha Ilyukhin: Well, what I think is that this is really people-driven. And I wanted to say consumer-driven, but that’s not the right way to say it. It’s really people-driven. So of course we’re all consumers. We all go to the grocery store. We all buy different products and food and beverages, etc. But what’s happening here and the need for this increased attention to sustainability and real action happening in sustainability is people-driven. And we as consumers will make choices, we will make these decisions. So, I agree with Jason, it’s not only a license to operate, it’s a license to survive.
Sasha Ilyukhin: But the good news is that we as people, we’re everywhere, at all levels of all of these organizations, at our customers, in Tetra Pak, and at IFS and in all of these companies. We are people that care, and people that start to care more and more and more. And I for one, I want to leave a better planet for my daughter. So I do care. I do make choices when I can make these choices. And I think that’s a great thing. So every small change counts. And if you’re running a business out there, tap into your people’s potential. I strongly believe in the power of teams, power of people. This is where the change is happening. Don’t wait for someone to come in, some smart consultant or vendor or whatever to tell you what to do. You need to figure out what to do and then look for the right partnerships in that area. So that’s my thought on this.
Sarah Nicastro: Yeah, I think that’s a really good point. It’s the power of people. And like you just said at the end, it’s also the power of partnerships. Jason, you made a really good point earlier where, yes, in instances, this is a competitive differentiator, but it’s also a moral imperative. So it can’t be something where we’re feeling like, “Oh, this is our secret sauce to sustainability so we won’t share this.” We all really should be invested in the bigger picture and the common goal of, to your point, Sasha, leaving the world in the best possible state for the next generation. And so the point you made earlier, Jason, about this is something where the benefits of community and collective knowledge and learning from what others are doing and tapping into whomever and wherever and whatever you can get some perspective from to drive the needle forward is super important.
Sarah Nicastro: So yeah, and this podcast is a good start. This is great. I really, really appreciate you both being here. I think that we will need to revisit this conversation because I do think that it, as we’ve said, Captain Obviouses, it will only become more and more important. And I think that as that continued focus plays out, there’s going to be more and more lessons learned and best practices and what’s next for us to be talking about. So thank you both for spending some time with me today.
Jason Pelz: Pleasure.
Sasha Ilyukhin: Thank you, Sarah. Thank you. It’s such a relevant and such an important topic. So thank you. I really appreciate being here.
Sarah Nicastro: Absolutely.
Jason Pelz: Yes, I appreciate you inviting us.
Sarah Nicastro: Yes. All right, you can find more by visiting us at futureoffieldservice.com. You can also find us on LinkedIn as well as Twitter @thefutureoffs. The Future of Field Service podcast is published in partnership with IFS. You can learn more at IFS.com. As always, thank you for listening.