Sarela Herrada is the Co-founder and CEO of SIMPLi, an emerging CPG brand creating Regenerative Organic Certified supply chains that empower farmers and satisfy shopper demands for healthy, sustainable food.
ES: What was the inspiration behind starting SIMPLi?
Sarela Herrada: I was born and raised in Lima, Peru. And I moved to the U.S. when I was 15 years old. I have been living in the U.S. for the majority of my adult life now. And I’ve noticed and learned that the American consumer always wanted to know more, especially in the last 10 to 15 years, with the movement of local sourcing and supporting your local farmer, where the food comes from and the people behind it. And how do you do that in the international global market with international supply chains and how do you carry those values and that information and connectivity to the farming communities at such a large scale when the majority of our food is being imported? And that’s where the idea of Peru came from. Connecting to my background and understanding where the market was really trending simply came about out of connecting the dots, creating vertical supply chains and bring the power back to farming communities for the products that have been Westernized or the market has already been created, and being able to shift that power back.
ES: That’s literally a 180 degree opposite philosophy of how most big CPG companies think about supply chains. So what are some of the products that you’re applying this philosophy to?
Sarela: We live mainly in four categories grains, beans, oils, superfoods/spices. The way that we’ve been able to grow has been based on the products that our communities are growing and also the rotational crops that are alternatives to the crops. We started with quinoa in the Altiplano border of Peru and Bolivia on the Peruvian side, working with communities. And if we wanted to break out of this mono-crop in high demand of quinoa, we needed to introduce what are the other native crops that quinoa is naturally seeded to, that will create a biodiversity that will really build an ecosystem around agriculture for the communities and bring back the power to these indigenous communities that have been doing this for thousands of years. And this is where we got really, really interested in working very closely with Regenerative Organic Alliance in bringing back those rotational crops to preserve and increase the health of the soil. So quinoa rotates with lupini beans, which also can rotate with potatoes or oats. So by just understanding the market and what the communities were growing, we were able to expand into those four categories.
ES: So you describe what you’re doing as regenerative agriculture, because there’s a lot of hype about that now. There’s a lot of different interpretations. How do you describe what you’re doing?
Sarela: I think of regeneration as a way to bringing back agricultural practices that maybe were lost because the markets and growing communities were not aligned. Regeneration is also a whole practice. Right? Minimum tillage, rotation of crops, creating the biodiversity and keep increasing the health of the soil. But to us, regeneration is also cultural preservation and just really understanding the alignment. What do the communities want out of this journey? I mean, regeneration is not just achieving a certification, but it’s a whole journey.
So we start with a four step approach where we understand 97% of agriculture is circumvention. Also, we start with conventional farming practices to the level that sometimes communities are not even co-ops, so they’re not part of a group. So it’s individual farmers with one or two acres having 100 or 200 kilos of product available that they might be selling to the middlemen. So we try to work with that community of 100 or 200 farmers to start creating some type of leadership, some type of educational cadence, some type of practices that they can use as a whole and then elevate them to a cooperative level. So that’s what we call conventional farming programs.
From there, we get into transitional organic. And as we look into the export model, working directly with international farming communities, the more we can create value to the communities, the more we can create a premium for them, and the more we can continue to motivate some of these initiatives that both parties are aligned on. Transitional farming is reinstituting some of those farming practices that were lost because the market was just not aligned with what they were growing at that time.
The third step is achieving that Organic certification, achieving some type of social cadence into their governance that is Fair Trade or Fair for Life. And then the fourth and final step for us is really achieving that Regenerative Organic Certification, which allows us to not only have visibility of the operations of the community, have complete alignment with them, but also being able to tell the story and educate the consumers of what Regenerative Organic Certification is so we can be differentiated on the shelves.
ES: What are some of the challenges that you anticipate?
Sarela: I think that for us, the first one is education, it is really trying to have a clear path towards the business, specifically with the movement of regeneration in which there can be lots of certified parties that are coming out with different guidelines of what regenerative is. And some are built on Organic, some are not. Some are built on social justice, some are not. Some are built on food sovereignty. Some are not. So it’s just really having that education piece versus greenwashing on the label.
ES: And how do you define food sovereignty?
Sarela: This is being able to have alignment and transparency of the market to the people that are growing the food. For example, when we started SIMPLi, the first item we launched was, as I mentioned, quinoa. Talking to buyers in the U.S. side, we said, hey, we have this supply chain that we are building. The feedback was, you know, this crop is crazy. Prices are so volatile, they’re up and down every year and hard to predict. When you talk with the communities, pricing has never changed to them, right? The purchasing pricing, it has been steady for years. There hasn’t been any major drought or any major yield loss on the crop. So that gap in between and that noise is all being managed by the middlemen. Right? That local broker or that local processor. That exporter, the importer, the distributor, the U.S. broker, that is creating that noise because it was a super food, it was so new and there was such a high demand for it. How do you take that noise out and bring that power back to the communities where there is a clear cadence and clear communication on where the market is shifting, what’s really happening with the crop. So you can take that noise out and you have a food system that is sustainable for the market.
What SIMPLi stands for is three main pillars. One of them is fighting food fraud in the supply chain. Second is improving the livelihoods of our farmers, and third is combating climate change. So food fraud is something that we see and we deal with every single day in our supply chains because we are working on commodity products. In that communication piece for us is the distinction that will come with validation of certifications in the market, as well as understanding all the middlemen that we’re cutting out to highlight the sourcing and traceability. And with marketing content and technology, traceability gives that information needed to the buyer to understand the difference between that and something that could be a commodity that’s been exploited or fraudulent.
ES: Where does this go in the next few years for SIMPLi?
Sarela: We are trying to become that leader in the regenerative space with our philosophy of really bringing the power back to farming communities and really aligning that supply to demand. We see ourselves having accessibility not only through Whole Foods channels, but through also natural spaces so the consumers can be empowered to enjoy those meals in fast casuals, in your favorite fine dining restaurants, and pick up that product so you can make those meals at home as well. We really see ourselves just growing into the categories where supply chains are confused. The consumer doesn’t know where food comes from, doesn’t trust where the food comes from. And we’re able to tell this story and empower our farming communities.