The Wendy's Company Chief Sustainability Officer Liliana Esposito

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Liliana Esposito is the Chief Corporate Affairs and Sustainability Officer at The Wendy's Company. 

What are the challenges of the quick serve restaurant in the world of sustainable packaging? 
How can we purchase packaging locally? 
What is the potential for reusable packaging in a QSR? 

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Transcript

Cory Connors: 0:15

Welcome to Sustainable Packaging with Cory Connors. Today's guest is Liliana Esposito. She is the Chief Corporate Affairs and Sustainability Officer at the Wendy's Company. Hi, how are you?

Liliana Esposito: 0:28

Hey, doing great, Corey.

Cory Connors: 0:29

How are you? Really good. Thank you so much. we were talking before, we started here and I was showing you my Wendy's bag from the other night, so we'll go over all the cool kinds of packaging that you use at your restaurants and, I'm really looking forward to this, but

Liliana Esposito: 0:44

Great. Well, I appreciate you being at Wendy's, so thanks for doing

Cory Connors: 0:46

Oh yeah. You gotta support your, guess. Right? Absolutely. let's talk about your background. you're in a very prestigious position at a very large company. I'd love to know kind of your route to getting there. Well,

Liliana Esposito: 0:58

I think I, I have the best job in the company and certainly the best company I can, imagine being part of. And, for me personally, I've been, in and around the food industry for the vast majority of my career. So, better part of 25 years now in different, types of food companies, and predominantly in roles, related to communications, corporate affairs, public policy, and now in. Increasingly, the world of E S G, environmental, social, and governance. And so I've been at Wendy's for, just about nine years now. And, responsible for our, our internal external communications, our government affairs work, quality assurance. And then, as I mentioned, e ESG is really, it's always been, important I think for companies to be. Obviously responsible in their business practices and in the way they're communicating with their consumers. But I think in the past several years, it's become even more prominent that, companies and certainly, especially those that are very, consumer facing brands, be very intentional about what. Their, responsibility commitments are across environmental, social, and governance topics. at Wendy's. That's something that we refer to as our good done Right platform, and I'm sure we'll talk a little more about that. but yeah, I think that's really been an evolution to, to make that more a, more intentional and focused part of certainly my role, but more importantly for Wendy's overall.

Cory Connors: 2:16

Well said. The, the older listeners will understand this reference, but I wanted to talk about where's the beef and and maybe we'll call this episode, where's the sustainability? And talk about how quick serve restaurants. It sure is a challenge to. Be sustainable and to use sustainable materials. And it looks like Wendy's is doing a great job there. But, let's talk about your sustainability goals at the Wendy's company. very impressive. Can you tell us what's been the most satisfying to see, being accomplished?

Liliana Esposito: 2:46

Yeah, happy to. and certainly it's a journey and we continue to, to be on that journey and probably will never consider ourselves complete. but a few years ago, we went through a process of, first just identifying, really formalizing our corporate responsibility work, going through a materiality assessment, which just, in its simplest term, means determining what are those issues that are most important to the company, and that the company and our system can most materially. Materially impact across environmental, social, and governance, kind of dimensions. And out of that, we set, four goals across three areas of food, people and footprint. The first was to, in the food area, to responsibly source our top 10 food categories by 2030, in the people area to increase the representation of populations that has, have historically been underrepresented, amongst our company management and leadership, as well as in our franchise community. And then in the footprint area, two goals. One related to packaging, which I'm sure we'll talk about, to, sustainably source a hundred percent of our customer facing packaging in the US and Canada by 2026. So that's coming up on us, here shortly. And then second, to set a science-based target for our greenhouse gas, emissions reductions across scope one, two, and three. We had originally committed to set that target and have it validated by the Science-Based Targets initiatives. by the end of this year, we actually were able to get that, set and validated, substantially earlier. And so that's now already set and we're working towards, progress against that. In terms of what, is most, driving, I think the most, kind of pride and encouragement. It's just seeing us make progress against all of those goals. And so, it takes some time, it takes some time to really set the foundation, get it right, make sure you have the right processes and systems in place, to really track progress against your goal. And where I see, 2022, with our, and we came out with our corporate responsibility report in April, and that was really where I think we were able to demonstrate. Forward motion and really starting to make progress against some of those goals. even in the area of setting a science-based target, being able to not just set the target and have it validated, but be able to report, emissions reductions across scope one, two, and three against our baseline, year, which is 2019. And then in the sustainable packaging area, which I'm sure you'll wanna, spend some time on. Really moving our system beyond the halfway point. And so we're now at a place where, we ended 2021 with about just under half, about 48% of our packaging portfolio, what we would consider to be sustainably sourced. We're now, well above the 50%, mark in that and continuing to move forward.

Cory Connors: 5:18

Well done. Congratulations. That's huge. Thank you. Achievement, by you and your team, and very exciting to see. And I think it should be an inspiration to other, quick serve restaurants and other companies that look, this is possible. Look at what we're doing over here. this is, these challenging goals have been, met or we're halfway there and, that's, we're ahead of schedule, which is very rarely, what we hear. Usually it's, actually it looks more like 2040. and that's been kind of the trend is make a big goal. get the headline, make everybody look at it and then, oh, don't look at that anymore. We're not there. But what you're doing is the opposite and it's the right way I think. So well done. Let's talk about, what you were saying, purchasing locally and buying your materials domestically. I think this is often overlooked and, in the world of sustainability, it's something I try to talk about a lot when people say what, I'm often asked, what are five things we can do, or, what are three things I can do today? And I say, buy local. And, you have, I don't know, thousands of stores or tens of thousands of stores, domestically and being able to purchase in near where those restaurants are is making a huge impact. can you talk a little bit more about that and how that's changed your supply chain?

Liliana Esposito: 6:38

Yes, we've got just over, 7,000 restaurants across the Wendy's system globally. I like your number of tens of thousands, so we'll get there. but today we're just over 7,000 and the majority of those restaurants are in the United States. Our second largest market is Canada. And then, a couple dozen other, countries throughout the world. And certainly our global footprint is growing. one of the things that I think is, unique about Wendy's is just. The kind of the company origin story. And so, going back to 1969 in Columbus, Ohio where I'm sitting today, Dave Thomas founded Wendy's having come out of a really a already a very long career of time in the restaurant industry. He was actually a franchisee, with K F C, and he developed Wendy's with the idea that. The customer deserves something better that in this world of quick serve, that still needed to be, fast, affordable, and convenient, which is really kind of the hallmark of, the quicks serve industry, but that we could really differentiate on quality. And so that was going to start with a. a fantastic hamburger that was made of, fresh never frozen beef. alongside that, fresh produce. So, lettuce, tomatoes, onions, that we're gonna really make that hamburger. fantastic. And then, signature favorites like the frosty that, has been on our menu really since day one. And so I think what that. Enabled, it may not have been intentional that way, but in order to get that level of fresh, ingredients, they were domestic. And so largely today, and certainly there are items, particularly in the packaging space where we maybe, purchasing offshore, but. The vast majority of what is going into our restaurants from a food and beverage perspective is coming from the d domestic source. So either in the us, where I am now, if in Canada that's true as well and elsewhere around the world also. And so I think that gives us a, a, it helps us give our consumers, an assurance that what they're, and it's interesting what the consumer cares about. They care very much about freshness. Absolutely. And they always have. But I think in 1969, the importance of fresh was around, that I could get something that tastes really great and it's gonna be, good for me and my family. And while that's still true, I think increasingly today you see, consumers that fresh, the idea of fresh really resonates with them as a, an indicator of kind of minimal processing or that, you didn't do a lot to my food before it got to me. And I feel really good about that. And so I think as we look particularly in the food side, Sustainability overall, I think it really starts from a place of give our customers the confidence that we know where our food comes from, and so then therefore they know where their food comes from and that we can make them feel great about the suppliers that we're working with. whether that's, from the farm level, through the processing level, through our, distributors and that they, we want them when they're coming into a Wendy's and they're bringing their family, like you said that you did, that you feel great about the choice that you made. So I think that's a continual, process, but certainly. the quality and the freshness and the sourcing of our food is absolutely integral to that.

Cory Connors: 9:32

Yeah. Well said. Wow. Excellent. I know you mentioned your frosties, very delicious. And, people love to dip their french fries into them. kind of a thing that we do here in the

Liliana Esposito: 9:42

Totally encouraged. Totally. I think it's the original, sweet, salty,

Cory Connors: 9:46

that's right. I'd love to know. The most important question is what's your favorite frosty flavor?

Liliana Esposito: 9:52

So I have to say that I am, I'm a classic chocolate fan for sure. but I also have really loved to see what we're starting to do from an innovation perspective. bring, we brought the strawberry frosty into our restaurants last summer for the first time. brought it back again. this year we got into peppermint, frosty in the wintertime. And I think you can continue to expect to see, your classic favorites, but also some, some great, flavor innovations as

Cory Connors: 10:17

we go forward. You gotta keep mixing it up. And I think that's right. I agree with you. I'm an old soul and I like the, chocolate, frosty myself. But I want to talk to you a little bit about, I've saved some of the packaging. And you and, your corporation have joined the how to recycle trend here. I'm, if you're listening, I'm holding up one of the Wendy's cups, and it says, rinse before recycling and it's a plastic cup and US only, and this is the How to Recycle, organization, came out of the Sustainable Packaging Coalition. Which I'm a member of. And, Paul Nowac and the team over there are doing amazing things. But I'd love to know kind of the origin story of how, you heard about it and how you joined the how to Recycle trend.

Liliana Esposito: 11:05

Yeah, absolutely. And the cup that you're holding up, that's our new, beverage cup. So across all of our, cold beverages in, in the US and Canada, and that cup is a big part of how we were able to move our, packaging, status from 48% of our, packaging being sustainably sourced to 56%. And we'll, keep going from there. And one of the, things that, so one, we don't. intend or think that we can accomplish any of this alone. And so there's really several components as I'm, I'm sure to sustainability around packaging. it starts with what is the packaging made of, and can the pack, is the packaging sourced in a way that's, not contributing to deforestation? Is it, done in a way that's gonna be, respectful of the natural resources that it relies on? is we hope, that it's. It's, making a, a positive contribution in terms of, overall kind of carbon footprint and greenhouse gas, emissions. And then, second, can it be disposed of in a way that's sustainable. So is it for us, we define that as, recyclable, compostable, or reusable. and, that cup is, recyclable where that's available. But the third piece is, does the consumer, the person who's actually using the packaging, know what to do? Do with it. And so, the How to Recycle program, we were proud to join, in the US and Canada. And then, as you mentioned to fix that, that label to our packaging because for us, and we're not terribly unique in the quicks serve industry, but about 80% of our packaging leaves the restaurant. that a customer's ordering through the drive through, or they might be, picking up, they might be getting it delivered to them through, a delivery provider. And so while we are piloting some, in restaurant recycling, facilities in Chicago specifically, we know that the vast majority of our packaging is in our customer's hands. And so we wanna be sure that we can do what we can to encourage the customer and partnering with, a known, respected, credible organization like how to recycle, is a great way to do that so that the customer, can continually reinforce what they're supposed to do with that packaging once they're finished with it.

Cory Connors: 13:02

Yeah, that's a big number. I didn't know that statistic. And that's very interesting. I wanted to go over a couple other things. You've got your famous, nuggets. Yep. and fries, paper, easily recycled. And, just a really simple but beautifully printed paper bag. My daughter was thrilled with this and just, looked at it the whole time. Yeah. And that's the kid's meal. That's the kids' meal, yeah.

Liliana Esposito: 13:25

Today, what a simple solution. I would say, and if you were interested, you could, look at our 2022 corporate responsibility report, which is on our website. And one of the graphics that we have is around our packaging. And when I say 56% of our, packaging we would consider sustainably sourced today, we break it down by category. And I would say, you know what you've identified bags are pretty much all the way there. cups are almost all the way there. because of the rollout of this. New cup and we still have some transitions to make with our, our Hot Cups. interesting. The cartons that you referenced, that will be a big focus for us this year for 2023, which won't necessarily be changing that carton, but will be certifying that it is, that it is sustainable, and probably in some fashion, labeling that in a, in a sim similar way. packaging doesn't kind of change overnight. You sometimes need to, go through production runs, but, those. Those cartons for, fries and nuggets will be a big part of our, and our focus this year. And I would anticipate that when you see us, come out with our corporate responsibility report next year, you'll see some progress in that area in particular. Yeah.

Cory Connors: 14:28

Excellent point. Really important topic because we need to remember that when we're talking about changing packaging, especially for someone that has over 7,000 locations, you're purchasing, hundreds of thousands or sometimes millions of items and you can't just say all of a sudden, snap your finger, we're gonna do this today. we need to. Go through the supply chain and use up our old stuff first. and then, transition to the new materials.

Liliana Esposito: 14:57

Absolutely. it's a great point. And it's also, I mean, it's one that from a, just from a restaurant economic perspective, I mean, certainly no one would want to, just, throw away what you have, already produced. And from a sustainability perspective, that's. a terribly wasteful, way to approach it as well. So, it is important that sometimes these transitions take time. but we're actively working with our suppliers to make sure we're planning for that.

Cory Connors: 15:17

and sometimes you have to rely on your supplier to hold the inventory for a while. build it up. And, we've had that happen at Orora many times is, Hey, we need you to store this for a month and build up supply and then we'll distribute it nationally with, for this launch or locally. And really cool, system. Sure. So let's talk about, reusable packaging. I, recently got back from France and they at another one of your competitors. I won't say their name. they were, piloting reusable in a quick serve restaurant environment. Is that something that Wendy's would consider?

Liliana Esposito: 15:53

we absolutely would. I will say, just candidly it's not, an area that we've, kind of. Launched anything yet. but it is an area, I think particularly with partners, and that true idea of circularity, that one, party, can't do it alone. And so we, several years ago joined the, next gen consortium that is looking at a number of different, circularity paths, one of which I think will be, looking at Reusables. And so we're certainly interested in partnering, partnering in that. again, it's challenging and particularly with packaging that leaves the restaurant. How do you get it back? What do you do with it? you, but it absolutely is one that, you know, that I think is part of that path and it's why we've. We were intentional about saying that, we would define sustainably sourced as, recyclable, compostable, or reusable. admittedly the vast majority of our portfolio right now is meeting that, that's meeting our sustainable status is doing so through recyclability. but we think that compostable and reusable are important components to that as well.

Cory Connors: 16:53

Very true there. It's, the pie will continue to change and I look at like these solutions as a pie and I just feel like the wedges will continue to grow and Decline as trends change, as things are tested. And maybe the, maybe that reusable in a quick serve isn't a good idea and maybe it fails, but, and that's okay, but we gotta try And, so good for you for looking at that And, talking about testing it, I think it's, I think you're right. It's, even if it's only 20% what it, that, that could be a very significant, reduction in waste. Sure. Well said. So what's next for you? any events coming up? Anything exciting you wanna tell us about? Any secret, items coming up in the Wendy's world?

Liliana Esposito: 17:38

Well, there's, I think there's always innovation coming at Wendy's. I think it's one of the things that we, makes our brand so special is the combination of, kind of, all time favorites. you can always come in and get a, a Dave Single and a Frosty and a great, order french fries. but you're also gonna find a, a made to crave sandwich or a salad that's seasonal or something that's, a limited time offer. And so I think it's really that balance of, kind of. all time favorites as well as, innovation and just fun new items. So, I won't, reveal any secrets, but, I will encourage you that, you haven't been to Wendy's recently. come on back. we've got a lot to share.

Cory Connors: 18:13

Yeah, very true. That, that, Dave single stack and double stack, those burgers are delicious. I had one last night and I was very impressed. One of the best quick serve restaurant burgers I think I've had in many years. So we think so too.

Liliana Esposito: 18:26

We think so too.

Cory Connors: 18:28

Okay. Well, thanks again, Liliana. This has been awesome. And, if you're listening, make sure you subscribe to this podcast, so you don't miss the next episode. And I'd like to thank Orora Packaging for sponsoring this. Stay tuned for more.