Season 4, Episode 147 : Russell Gong

Will Richardson 00:04
Welcome to the Green Element Podcast, where we meet business leaders and innovators transforming their operations to be more environmentally and socially sustainable, and in the process help you on your journey of sustainability. I'm your host Will Richardson. Today we are speaking with Russell Gong, the Co-founder, and Head of Brand and Product for Cabinet Health, an organisation that strives to be the world's first zero waste medicine company. Russell worked for Deloitte Consulting for over eight years as a Product Manager before co-founding Cabinet Health. For over six years he volunteered on the board of directors for the Highland Support Project, supporting indigenous communities of the Americas deliver on their land, in their community, and with their culture. Russell is also an infantry officer and is US Army Ranger qualified. Russell, welcome.

Russell Gong 00:59
Thanks so much for having me. Thank you for the intro.

Will Richardson 01:02
Thank you so much for joining us today. It's great to have you here because Cabinet Health is a relatively new and groundbreaking business. Before we get into sustainability and the medical industry, I'm really interested to know about your journey and what motivated you to set up Cabinet Health. Because you've got a really interesting background; you've got a degree in political science, you're volunteering, and also your role in the army. So, how did you get involved in this industry and co-found Cabinet Health?

Russell Gong 01:32
Oh, thank you. Yeah, you know, it's like many people involved in social innovation and environmental sustainability, I think a lot of their paths are quite windy, in the same way that we are starting to continually learn about what sustainability actually means. To share my personal background, I was born in a family of, I would call very curious and purpose-driven parents, my father was a foreign service officer in the US, and my mother was a journalist from Singapore. And so I grew up around the world, and a lot of my weekends and evenings were them dragging me into different villages to try different foods and spices. I think that's really where I learned my sense of mission-driven work and found that that was really what made me feel the most alive. And so how that's manifested itself professionally is, throughout college, I spent my time primarily understanding what my view of impact was, I was an ESL teacher in Richmond to get through courses and as you mentioned, I joined a consulting practice to see how social innovation can work in the private sector. And I think through all of that, it all started to point to, community-driven solutions can scale and environmental solutions are ultimately the core of social problems today. And so prior to Cabinet, as you described, I ran a social innovation programme within one of the big four consulting firms Deloitte, and that was my first foray in building environmentally sustainable and mission-driven companies. Our programme was focused on identifying social enterprises and then helping them scale. So I cut that for about eight years and really learned business models, sustainability, and how to measure that. And then also, how do you compete in old industries that are not really looking for a change, as you mentioned, my military service ultimately at the end of that private sector experience, I felt a little bit of limit in my ability to contribute to causes. I joined the army with the single goal of being able to contribute to less rational social issues. So, being able to understand how does a natural disaster or war plays a role and impact. And upon returning from my military service, I really connected with an old friend and my co-founder, who is a third-generation pharmaceutical entrepreneur, his name is Achal Patel. And we took that blend of experiences that I would say my family experiences around purpose, my work experience around building innovative models and sustainability and service, and we applied it to the medical supply chain. And that was really what sparked Cabinet is our blend of his experiences as a third-generation pharmaceutical entrepreneur, and mine as sort of this wayward purpose-driven finder. And ultimately, we decided to tackle healthcare.

Will Richardson 04:30
I've got two questions. Just quickly, has it helped you with work that you did at Deloitte, I'm slightly envious having gone through the scale-up process and not having had any experience at all of it. Has it helped you see how others have done it and learning from others' experiences?

Russel Gong 04:52
Immensely. I think that the biggest levers for us are to address climate change and sustainability with multinational corporations and large companies that work together with smaller organisations. So my specific role at Deloitte was really two things, was one, leading a social innovation programme, and effectively learning from traditional ways of doing business, applying them to new environments. And then the other role was really pure product development, primarily technology. And I've learned through that experience that if you can move the elephant of multinational corporations, then you can move it with a significant amount of scale and impact. The challenge is how do you move an elephant? You know? And so I would say like those experiences of learning, you know, how do you move an elephant? How do you make the business cases? How do you make the project plans that tangibly take you from one impossible task to the next, were really valuable? I think as it comes to our own startup, we're in our second year now, we're quickly scaling in a space that requires standard operating procedures, that requires the ability to partner with multinationals. And so yes, that experience has been really valuable. You know, I would say the last thing about that experience is being able to think about partnerships, you know, how do we partner with large healthcare organisations, in other sustainable businesses that are further along? And I would say that experience was very, very valuable for me.

Will Richardson 06:38
And you've alluded to it by mentioning SOPs Standard Operating Procedures. That's something that a startup wouldn't even think about. And I would imagine partnering with larger organisations, probably particularly in the health care, there is that quality management that is expected, straight off the back.

Russell Gong 07:00
You're exactly right. And we're a bit nerdy, but I think those things are quite important for, as you mentioned, for quality medicine and then actually meaningfully addressing the sustainability challenge.

Will Richardson 07:00
Yeah, it's funny, I mean, we deal with ISO 14,001. And we're quite process LED, and not to the detriment of I think that organisations can be processed LED and can be innovative. I don't see it as hampering innovation.

Russell Gong 07:29
Yeah, me too.

Will Richardson 07:31
So, Cabinet Health. I described you as the world's first zero waste medicine company. Can you tell us a bit about Cabinet Health?

Russell Gong 07:41
Absolutely. So on the highest level Cabinet is a sustainable health care company focused on improving customer relationships with their health care and their environment. We are a B-Corp certified company, and today we sell 30 over the counter medicines and supplements that cover basic health needs like allergy, cold and flu, pain, things like that, along with basic health care services, such as speaking to a nurse or doctor. Later this summer, we're launching the world's first fully compostable medicine system focused on reducing single-use plastic and medical waste. And that's our start, why we call ourselves the sustainable health care company is that we're working systematically to address the medicine supply chain, and starting with packaging, transportation, but ultimately working through the full lifecycle and ultimately ending in the production world. So that's really what we're building. And as far as our vision from a pure consumer standpoint, you know, we believe that there should not be a healthcare company in existence, that if they really do care about the health of their customers, aren't also addressing environmental health as those are both so inextricably linked.

Will Richardson 08:57
No, absolutely. Is it possible we delve into the compostable, compostable refill system, isn't it? So why did you choose to implement a compostable refill system as opposed to glass or plastic?

Russell Gong 09:15
You know, I articulate the problem from a consumer, from a philosophical standpoint, as we call them, the three P's: pills, prices, and plastic. And that's our first challenge is how do we improve customers' relationships with the three of those things? Just to quickly cover those, when it comes to pills, we believe that healthcare is not just about pills. You know, if you look in the United States, so much of our medicine is very transactional. We have about 3 billion transactions within pharmacies alone. And so many of those are these confusing aisles of medicines with funky names, weird colours, and cheap prices and high pill counts when consumers truly need more than just medicine, they need actual health care. And so that's the first challenge, how do we give people care, not just pills. The second is prices that the average American household spends around $500 every single year on over the counter medicines alone when we know that if you create a better experience that's more sustainable, we can cut that down to an eighth or a quarter and provide a smarter experience for how people use their money. And if you've been to any Cabinets in the United States, around 47% of that medicine purchase ultimately gets disposed of before it's actually used, leading to an enormous amount of waste, and then contamination of natural ecosystems. And the last one to your question is plastic. That in the pharmaceutical world, there are 194 billion bottles of pharmaceutical plastic, single-use, created every single year, and only one to 2% of that gets recycled, the rest goes into oceans and landfills. And as you know better than I do, ultimately that trickles into our biosphere, goes into people's bodies, and ultimately is a healthcare hazard. And so pills, prices, and plastic. And so to your question of why did we go with compostable and what is the system, we went with something that is earth-digestible, and for the components that we couldn't make, we made them hyper-recyclable. So very specifically, a person who orders from Cabinet will go on to our website, they'll have a bundle that fits their life moment or their condition, let's call it the allergy bundle, they'll have organised those products based on what they need and get a permanent glass vessel that comes in the mail. And anytime that they need to refill that glass vessel, they'll get a compostable pouch that is purely earth-digestible, and that's the start. Eventually, we'll go into additional formularies and prescription drugs but ultimately having customers improve their relationship with their product, in their environment, and they're in their health.

Will Richardson 12:07
That's great. And the compost, could it be put into a normal compost bin in your garden?

Russell Gong 12:12
Yeah, this is the constant challenge around compostable. So ours is city compostable, and the reason that we wanted to do that was that in order to meet health and quality standards for medicine, we needed to ensure that it had a longer shelf life than your at-home compostability pouches. That being said, we have also projects that are for more stable medicines that will be city compostable. But for our first go on this one, it is city compostable.

Will Richardson 12:45
I.e. only people in cities can compost it because the infrastructure is already in place.

Russell Gong 12:54
There's two frames of thought and there's the first answers city compostable pouching is where you know, it needs the organisms and the conditions to break down the materials. So that is true. So any city that has a compost pile or commercial compost pile will be able to break this down. Our view on going with this for those that don't have that infrastructure is that it's still better than putting plastic into the world for the time being. Ultimately, it has the open-air landfills that might meet similar conditions to any organic material composting.

Will Richardson 13:35
Okay, and is this what makes you different to other medicine companies?

Russell Gong 13:41
Now, there's two things. And what I want to be very clear for our listeners and our future customers is that we're imperfect with a plan. I think if there's anything I've learned over the years is that we're aspiring for the same goal of sustainability. And ultimately, it's the continual fight for that. So what makes Cabinet different in my mind is one, you know, we're a B Corp certified company, so that we're legally not just that we love to do impact, but we're legally required to do good and continually aspire and report those impacts into the world. The second to your point is we are innovators, you know, the compostable pouch is step one. But what we have is ultimately an ongoing set of innovation projects that unpack the medical supply chain and make it more sustainable. So I would say that, unlike some other brands that are really centering it on just one product, it's my ambition that our team will always be working on improving the pouch, on improving our transportation, as well as the factories that we work in. And what makes us different in that sense is that all of that supply chain is family. So unlike a multinational corporation that might have a number of CSR campaigns that are more marketing in nature. You know, we're truly changing our own supply chain in and out, and we're encouraging other companies to do the same.

Will Richardson 15:12
So I hadn't actually clocked that you're making the pills as well?

Russell Gong 15:14
That's right. So our supply chain, as I mentioned with Achal is really family. His grandfather built one of the first acetaminophen manufacturing operations in India, which is paracetamol for European listeners, which is the core ingredient for your Tylenol or your others. And also a number of other key ingredients. That factory started a supply chain of medicine makers and healthcare healers. So everything from the raw ingredients to the drugs to how they safely arrive into different countries. And then what Cabinet really is building is the sustainable layer, that packages that provide the care for customers, and then ultimately also works as a white blood cell or a catalyst to improve the remaining supply chain. So an example of how we will do that is we have a project that was called Project Solar, that will be applying solar panels to our manufacturing operations and our packaging operations, and ultimately unpacking the broader sustainable life cycle.

Will Richardson 16:30

That's cool. That's nicely moving into the ways that you are taking to reduce your waste and emissions and other environmental factors. I mean, how are you measuring those?

Russell Gong 16:44
Yeah, I know, you guys are a B Corp cert company as well, I'm sure you know how difficult this is. But also, you know, with the right philosophy, it's very manageable. And so we look at our own environmental footprint in concentric circles. So starting at the centre of it, what is the product that we're building, and ultimately tracing the physical product that the consumer holds, and then working backwards. So we are looking at everything from the physical product to the ways that we're building and constructing it and sourcing it, ultimately working for one circle out into what is the company's sustainable effect and carbon offsets or carbon impact, etc. And so our company is quite small, we have a team of about 10, and we're working remotely with a broader team that's across the supply chain. And so measuring that impact is manageable, and then ultimately going into suppliers themselves. So I would say that you know, we're taking a bit of a concentric circle approach, starting with the product. And then as we look at where do we prioritise our innovations, that's where we look at our broader lifecycle, and effectively work backwards in the same way, investing our savings into improving those areas that need the most change.

Will Richardson 18:10
Out of curiosity, have you set targets on what you're trying to achieve? I'm interested to know about science-based targets and whether you've looked at them?

Russell Gong 18:19
We have on the packaging itself. So I think we're starting, our first go at this is plastic, and then carbon emissions. Some of those targets are a bit in flux as we get the new operations rolling. but targets are really critical for us. And ultimately, as we start unpacking the remainder of the supply chain, we'll use those targets to make actual improvements.

Will Richardson 18:45
That's really good. It's really, really good to hear that you say you're early on, but you're acting like a mature organisation at the same time.

Russell Gong 18:54
Well, one thing that we learned, you know, because we're not a sustainable company yet. And I think again, what I want to try to encourage all my teammates to do is being confident with this idea of imperfect with a plan. And what that allows us to do is like keep improving, to your point I think that startups are the perfect time to think sustainably, so many of the things particularly when it comes to material choices, fulfilment, suppliers, etc. are long-tail decisions. You know, when we choose a material and you find product market fit, it's really difficult and painful to switch that out. When we have, you know, operations like a fulfilment centre, or transportation, it's really difficult on a very practical level to switch those out from a contract standpoint, disruption and operations. And so we're really trying to get ahead of that. I think that we want to start and make sure that we don't shut the company down by all these costs and fighting these battles, but we also want to make sure that we're setting up the right infrastructure so that when we scale, we can scale with that sustainability plan in motion.

Will Richardson 20:17
Did you find the B Corp certification a really good structure for that and a good foundation?

Russell Gong 20:25
I did. You know, it's a really logical framework. And I think that it looks at sustainability, or it looks at social good, and in a very logical way, and thinking about governance and people and ultimately, environment and kindness. And I think it's really critical. I think it brings some of the philosophy to a measurable result. It's a good start, I think where we want to challenge ourselves is that it ultimately doesn't get to the core science that I think Cabinet as a sustainable healthcare company needs to get, you know, we want to challenge ourselves a little, a lot further to think, you know, how do we actually look further than our walls of our office and actually get to product innovation that's sustainable. And I've seen some B Corp companies that hide behind that certification a little bit. And while I think it's an incredible punch and challenge to get into it, I've also seen it as a complacency sort of tool.

Will Richardson 21:40
Yeah. I mean, I was funnily enough on a meeting today with a watch company that were thinking about becoming a B Corp, and they're asking me all about it. And one of the things I said to them was that it's a really good structure, but almost what is better is the reassessments. So when you go through the assessments, and we've gone through three now, and every time you go through it, you always answer no to things. And we pull those nos out and put them in a document. And those nos need to be yes, the next time we go through. So that's our kind of strategy. So each time we're improving ourselves. So we're using that structure and using it to improve and I think with anything, and you've just hit the nail on the head, you can have a complacency, but with anything with ISO 14,001 with B Corp with anything really, it's a really good standard. It's how you deal with it personally that makes it better.

Russell Gong 22:46
Totally agree. I think to your point, in that experience, it's a really good energizer for teams. I know that on a leadership level when we share the B Corp cert with our teams, they look at that survey. And I can see so many of the different team members kind of daring and challenging to make sure that they do it a little bit better next year, or they don't let it down for the following year's assessment. And so I'm definitely going to reach out to you when we go through that next assessment. One experience recently is MK who is our Director of Operations, she is extraordinarily passionate about bringing sustainability to our supply chain. And I showed her the operations component of the B Corp cert and just the what are your suppliers, like you're their energy consumption, etc. And it's her sort of like, a measurable challenge where she's like, I can do better than that. And it's going to help me when you're going in the trenches of do I go with the supplier? It's more expensive, or do I think more local, it's that additional sort of measurable voice in your head when you're making those decisions in the trenches that help, I think, push teammates along for the right decision. And you know, you just multiply that by also how we treat our employees or whatever that might be. So you know, I totally agree with you, I think from on a very practical sense, it's really solid accountability.

Will Richardson 24:21
I immediately think listening to you to Walmart, and what they talked about back in 2008. And why they changed back then to more sustainable, locally produced options.

Russell Gong 24:35
Absolutely. And kind of goes back and we're talking to a number of large multinational corporations. And it's interesting how B Corp has actually come up quite frequently, because they with the intent of the leaders in those companies, they really just need the language to show stakeholders whether that's investors or executives that look here's how it's measured, here's how it's done, here's where we get credit for that. And I think few people have the time to like to make their own logic framework for like, why it's impactful, even fewer have the time to do true lifecycle assessments on their sustainability footprint, and so B Corp is a great way to do that. I think we have a couple of partners right now that we're working with that, you know, B Corp has come up with frequently, and it's great. What we've also found is it's where they want to plug in, you know, so things that are our weakness, i.e. we're small and young, they say, well, we can help scale that impact with you and it seems like, this is where you guys are in terms of your overall impact, how can we scale that further? And so yeah, it's a helpful talking tool.

Will Richardson 25:54
That's really, really good. At the moment, B Corp is such a buzzword in the UK. Almost, dare I say it's worryingly so. Is that the same in the US just out of curiosity?

Russell Gong 26:06
You know, I think in some circles, it is a respected, I get it looks good, I would kind of unpack it in a couple of ways. You know, on the consumer side, the knowledgeable consumer sees it, and it's a thumbs up. I think, for the most loyal it just improves conversion, for the thoughtful and might just keep on loyalty. I would say that in the entrepreneurial space in the US, it is aspirational, it is a hard thing to achieve. But it is not so buzzy, that it's being unpacked is like disingenuous. And then I will say companies, larger companies that are thinking about going B Corp, you know, they often reference the Ben and Jerry's or others. And so, sorry, a bit of a long winded way of saying it really in the US is credible, but I wouldn't say has been overused to any degree.

Will Richardson 27:16
Okay, because it's literally in our mainstream media. What so you can now talk to the lay person on the street, and most of them will a lot of people have heard about now. And it's literally over the last six months to a year that this has happened.

Russell Gong 27:32
Yeah, that's incredible.

Will Richardson 27:33
Our adverts, for example, you know, Cafe Direct and the larger B Corps in the UK have got adverts out and they have B Corp on those adverts.

Russell Gong 27:43
Yeah. In the US that's not, that's not really well known. In that sense. It's much more of a, it's much similar to sort of the organic symbology of organic product. I have never seen an ad on TV that says, and we're a B Corp certified company. And so, you know, I think we've got some work to do and hopefully Cabinet is able to do that a little bit in the healthcare space and encourage people.

Will Richardson 28:12
Do you think the medical industry is doing enough to tackle the climate crisis?

Russell Gong 28:17
No. I think that's a very bold statement for me to say because the medical industry is very large. And the healthcare industry is very large. But on a philosophical level, I think that the healthcare space has large in part been protected from the criticism of sustainability. For a number of reasons, I would say, number one is that the healthcare space is helping people. And we are also, so much of the sustainability improvements might make risk for patients and might make risk for the advancement of care. So there's a logical reason for why they've been sort of protected from a lot of the criticism unlike the drinking industry, or others, or household goods. But I think for that same reason, the healthcare space has been slow to adopt sustainable practices. You know, we're the science for sustainable materials, the science for reducing carbon emissions, and the science for educating the and the practices for educating patients and people is available. And so now it's a matter of shifting the broader healthcare space to start to address sustainability and not feel like they can be just waiting for the larger industries to be taken down before it's their turn. I would say, you know, there's just to articulate that there is a very clear example, when it comes to how we needed to support people during the pandemic, in the production of plastic, the production of whether that was masks or others, the increase in carbon emissions for freight for medicines to be transported quickly. You know, those are really important issues. And so I think that's a personification on a large level of why the healthcare space has not been as quick to adopt sustainability, there's so many things that we also need to take care of in terms of just preserving human life. So really, what Cabinet wants to do is, and why we are so bold to own the moniker of a sustainable healthcare company, even though we're still imperfect with a plan is that we want to challenge the industry to say: look, we can do at least something, and let's start with the bottle and then work more broadly out. I would say the last thing is regulation makes it really difficult to be sustainable in healthcare in the United States. What I mean by that is, you know, we have a very patient-centred protection view of regulation. And then on the other side, we have a very big pharma-protection view of regulation. And that makes it quite difficult for innovation. So the short of it is there are plenty of leaders that are pushing sustainability and health care. And I was talking to Grove Collaborative, I think they're incredible in terms of pushing sustainability, and we're thinking through how do we build health care categories? There's a number of other groups that are trying to push at this. So the short answer is a no, but I do think that there are ways to unpack it.

Will Richardson 31:48
It's a bit of a different question. But I think I'm just curious to know, to be honest with you, I've noticed on your LinkedIn that you're an infantry officer with the US Army. I'm actually curious to know if the US Army has engaged with sustainability that you've seen? And if so, how?

Russell Gong 32:05
[laughs] Yeah, yeah, it's funny that you ask, because there are actually some ways that they've done this. I think overall, though, you know, I wouldn't call the US Army sort of the most sustainable or green innovating groups. But there were some examples where they had really interesting creative reuse. So two examples that come to mind, that I love, is that the US Army has miles of military facilities in the United States and abroad, some of those facilities are not used. And so if we take like a government building, for example, there are certain projects that are looking to use those facilities for creative reuse, imagine big parking lots that are turned into gardens or farms, or places where they can house materials so that local fulfilment is quicker. That's one that I've I've been tracking is the creative reuse of government space, and the army being able to do that. The second one, which is, I think, was just an experiment, and I don't actually think it's a scaled project, is that for artillery, there are large artillery shells, that when they are shooting artillery shells, they ultimately land in the ground. And when you're doing training exercises, they create these big divots in the ground. I was reading that there was a creative reuse project that was using those artillery shells to plant trees. So ultimately creating, you know, having some of the artillery planting, firing, creating a hole in the impact zone, and then ultimately, using that hole to plant trees. It seems like a bit of an oddity but I think my point in both of those stories is that the army is the least environmentally sustainable or progressive issues, they're working on other things. But even then, can be an elephant to move that is more sustainable in even being able to advance their missions, which is to serve and protect people.

Will Richardson 34:23
It's really interesting to know. And so lastly, can I ask, please, about the future of sustainability at Cabinet Health and what that looks like? And do you have any plans to implement additional actions and systems to make your business even more sustainable?

Russell Gong 34:40
Yeah, I love that question. And as a young startup, the future of Cabinet is tomorrow and next month, but in reality, we're really focused on our compostable packaging launch, which will come this summer. That will be the first compostable refillable system for medicine. That for us is the start of bringing compostable packaging and sustainable packaging to medicines. And we plan on going one category of medicine at a time. So that has its long roadmap to include medicines, supplements, prescriptions, etc., unpacking the plastic challenge when it comes to medicine. The second is, and we have products that are going on today, is ultimately looking at our plastic waste that is created outside of our packaging, as well. As you're aware, you know, when you have to create palettes or testing labs, that test the medicine safely, sometimes there is plastic used. So a big initiative for me is getting beyond plastic neutral and ultimately to plastic negative. So supporting organisations, that for every ounce of plastic that Cabinet produces or creates, we also pay for those offsets to work with organisations that remove those plastics from the ocean. The third is that we're working through carbon to be carbon negative. So carbon neutral is something that we've achieved when it comes to fulfilment, but ultimately measuring the broader carbon emissions across our entire supply chain, and then going a little bit further to be carbon negative. And then the last one, I would say, are these innovation projects that really unpack supply chain elements and our value chain. And we plan to share those extremely openly with the customers. So when we fail, we're going to tell you why, and ultimately how we're improving at the next time.

Will Richardson 36:42
That sounds great, really good admissions. Congratulations. It's really, really good. Well done. Russell, thank you so much for joining us today.

Russell Gong 36:49
Thank you so much, Will. It's such a pleasure.

Will Richardson 36:51
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