Episode 45 Transcript: Making Better Everything with Natural Materials

Molly Wood Voice-Over: 

Welcome to Everybody in the Pool, the podcast for the climate economy. We dive deep into the climate crisis and come up with solutions. I'm Molly Wood.

Molly Wood: 

Ok so last week we talked about the hard realization that there are some plastics we simply can’t live without… so we might as well try to come up with a replacement for those plastics made out of seaweed.

This week, we’re continuing that theme, but instead of talking plastics, we’re talking materials… things like rubber shoe soles and textiles, leather, fabric of all kinds, that are made from toxic chemicals, fossil fuel byproducts, and animals PLUS all those other things.

I first became aware of my guest today when I was talking to the team from Allbirds, which has a shoe coming out called the Moonshot that’s billed as a net-zero shoe, mostly because it’s made from materials that come from these guys.

Luke Haverhals: 

My name is Luke Haverhals. I'm the founder and CEO of Natural Fiber Welding.

Molly Wood Voice-Over: 

And that means this…

Luke Haverhals: 

So what we do is we make materials from nature, which, of course, nature, maybe everyone takes for granted, makes a lot of materials. What we don't take for granted is how much of the human economy in the past, let's say, 50, 60, 70 years has gone to making everything you own out of synthetics. Synthetics that are high in carbons, that come from fossil resources, that are fundamentally extractive, that are fundamentally toxic, not just to the environment, but toxic to you. And then can't be recycled because they're toxic. So if you could make shoes, clothes, cars, furniture, built environments out of only natural recipes, natural recipes that are safe, regenerative, and then have a circular economy story that fits into nature, then that would change everything in terms of trillions of dollars per year of human activity.

Molly Wood Voice-Over: 

Luke grew up on a farm before going to get a PhD in chemistry and says he grew up fundamentally aware of the abundance of nature.

Luke Haverhals: 

When you, you don't have to have grown up on a farm, maybe just drive on the interstate, I-80 through the Midwest, the US, in the summertime. And if you see those long stretches of roads, you see nothing but green. And it probably doesn't come to most people's minds to imagine if you took all of that green stuff and put it on a scale, what would that add up to? And the answer is, well, it adds up to way more than all the food you could ever eat, or that people could ever eat.

In fact, when you grow corn crops or soybean crops or you look at trees, you know, we get maple syrup from trees. We also get rubber from trees. When you look at all the green things that grow all over the planet, but even just specifically in the Midwest, and you note that there's dandelions and grasses and all that. What you find is the byproducts and the co-products that you get from food production is way more than enough raw materials to run the entire human materials economy. So you could build all clothes, all shoes, all furniture.

Molly Wood: 

From just, you're saying from just leftovers, from byproducts of what we're already doing. So not even like growing or harvesting new stuff.

Luke Haverhals: Yeah, that's right. In fact, the leftovers from just one day, one average day of photosynthesis on planet Earth, the leftovers is way more than what people needed in years.

Molly Wood: 

So, but wait, back to you though. At what point were you driving along that freeway and thinking, you know, I've learned all about the toxicity of synthetic materials and I gotta fix it.

Luke Haverhals: 

That was innate context for me. Growing up, kind of took it for granted, didn't know, it was like facts floating around in my head maybe when I was a kid already, but I didn't know what to do with those facts. Then I got a PhD in chemistry. And when you get a PhD in chemistry, you learn about how people synthesize materials, where materials come from. And any PhD chemist that's paying attention while they get their education is going to note how much of our stuff is synthesized.

You know, it starts in oil rigs or starts at pump jacks, flows through pipelines, fleets of ships, gets to refineries. The refineries fractionate and distill and collect different fractions of those fossil resources. And then those machines are optimized to churn mostly out fuel, but the toxic byproducts are what end up being plastics.

And then what you find out is plastics aren't really plastics. You think plastics are just one thing, like a polymer, like polyester. But you find out that polyester actually is a mixture of hundreds, if not thousands, of chemistries, both intentionally and unintentionally added to the polymer we call polyester. And many of those molecules have shapes that are like the shapes of hormones in your body.

And you only need tiny fractions of shapes in your body that are like the normal shapes in your body to mess with your ribosomes and be endocrine-disrupting, signaling-disrupting to your biochemistry, causing all sorts of things from fertility issues to diabetes and things like that. So we live in a world where we're doing this uncontrolled experiment to the tune of trillions of dollars of materials per year, tens of trillions of dollars of products per year, made with synthetics that are fundamentally extractive, toxic, and will never ever have a circular economy story, despite what some people say. The uneconomic reality is that there won't ever be a circular economy for plastic.

Molly Wood: 

Because it's simply not cost-efficient to recycle it, and/or it is so cheap to make it or both.

Luke Haverhals: 

So a petrochemical refinery only knows how to do one thing, which is take therms of natural gas and crude oil and churn it into a standard suite of chemistries. It has no idea what to do with your old shoes. And because that global infrastructure costs tens, hundreds of trillions of dollars, no one can afford to build tens, hundreds of trillions of dollars worth of infrastructure that it would take to efficiently know what to do with old shoes and old furniture and old plastic synthetic things.

Let alone the fact that those synthetic things are mixtures, not just the plastics are mixtures. Think about a shoe. A shoe is many, many different, sometimes half a dozen to a dozen different kinds of materials, because the sole of the shoe is different than the upper, is different than the eyelets, is different than the laces.

Molly Wood: 

Mm-hmm.

Luke Haverhals: 

And so unmixing these complex products costs a lot of money. There's no machines to effectively unmix that, especially down to the molecular level, and make money. So who's going to front trillions of dollars in order to make that happen at the kind of scale it would need to happen? Nobody. So that's why it doesn't happen.

And there is no technical law. Once thermodynamics are against you and economics are against you at the same time, you're not going to get anywhere. Not in any short timeframe.

So we've got this like 70-year head start of just making this virgin stuff and people talk about recycling, but it doesn't happen statistically. And when people do say it happens, they're calling burning it recycling. Okay, like I guess we can play with our definitions, but it doesn't change the reality.

Molly Wood Voice-Over: 

Luke was a chemistry professor at the US Naval Academy, looking into how to mimic nature to come up with new kinds of materials.

Luke Haverhals: 

And I had this epiphany one day, which is I was trying to dissolve, using chemistry, some hemp fiber in the lab. But instead of that hemp fiber getting perfectly liquefied how I thought it should, it was fusing together and I thought to myself, huh, maybe less is more. What if I could weld, fuse, mold, shape natural materials as they are without derivative them? Why do I want to derivative them? It'll cost money. It'll make them toxic potentially. Anyway, it'll be an impediment.

Molly Wood: 

Yeah.

Molly Wood: 

Be harder to untangle on the back end, like you said.

Luke Haverhals:

 What if we could build recipes, kind of like we build recipes in our kitchen? We take abundant, low-cost nutrients, and we put them together in different ways, and we make food, nutritious dishes. What if I optimize recipes not for nutrition, but what if I take the byproducts of things we're not going to eat that are very structurally strong, flexible, robust? Non-toxic because they're everywhere. What if we could take that stuff? What if we could make shoe soles? What if we could make fabrics? What if we could make furniture? You know, leather-like materials, let's say, this other way.

Then some amazing things happen. Number one is that's the most scalable thing you could ever do because nature is that bigger scale than anything people do.

Molly Wood: 

Right, right.

Luke Haverhals: 

It would be the safest thing that you could ever do because we already have sort of evolved and grown up in this gomish of nutrients that are all around us. It's all solar powered. It's already globally deployed. It regenerates itself. And nature has a recycling plan for everything that's natural. It's already built.

And if you can make recipes that perform and get those recipes to run in the global supply chains that make shoes, make clothes, make cars, then that would be the biggest takeover story maybe in, well, at least in materials economy history. The biggest one since synthetics took it over in the last 70 years.

So I got really excited about that first as a chemistry professor. I got really excited, Molly, about this idea that you could mold and shape nutrients. And you could make complex, high-performance materials.

And what was really exciting to me was not only could you do it, when you get the performance that way, it's the safest, most scalable, most regenerative, most circular, most... all the goodness that's all around us when you take a walk out in nature, that kind of goodness could be your shoes, could be your clothes, could be your home and built environment, could be in your car.

Molly Wood: 

Right. And hence this kind of wonderful, I am a huge fan of names that are really on the nose like Taiwan Semiconductor Manufacturing Company. So hence this wonderfully on-the-nose name, Natural Fiber Welding. It's all coming together now. No pun intended.

Luke Haverhals: Natural Fiber Welding. One of my colleagues wanted to call it ionic liquid facilitated biopolymer mobilization and remobilization or something like that. And I said, that's very technically correct. Let's call it Natural Fiber Welding, because even scientists like nice hooks.

Molly Wood: 

So what was the, so when was that? Sorry, remind me. How long ago was that?

Luke Haverhals: 

So I was at the Naval Academy from 2008 through 2013. Three beautiful little girls came along for my wife Noelle and I in our time at Maryland. And we moved back to the Midwest to be close to our families in the Midwest. And I took a job at Bradley University as a chemistry professor in Bradley in Peoria, Illinois.

Molly Wood: 

Okay.

Luke Haverhals: 

And within a couple of years, actually within about a year or so of starting at Bradley, at Peoria, I started building spreadsheets.

Luke Haverhals: 

When you grow up on a small family farm and you're taught to care about the water, you're taught to care about the land, you're taught to care about cleaning things up because you live there. You're drinking that water, etc. You're also taught one other thing, which is there's accounting to do, because Uncle Sam wants to get tax money, and you want to figure out the most effective way to use your corn and your soybeans and your land to try to feed your family. And so I watched my father and grandfather basically run the family business on notebook paper, run the P&L.

So I learned things about, you know, what's a gross margin dollar? How do you market your product? Things like that. And I started building spreadsheets that were like, so what if I took this process that I know works in a lab, works phenomenally well, does super interesting things? What would happen in a world of automation if I took advantage of robots and big machines that exist in the world that already mold and shape synthetic things? But what if those machines could be programmed to run natural recipes and mold and shape natural stuff?

Molly Wood: 

Right, right.

Luke Haverhals: 

Could that be a business? And very quickly, I convinced myself not only could it be a business, it could be the business that changes the material world. Not because I'm so special, but because nature is so special, because those machines have been invented. And the work, to me, seemed really obvious, which was figure out how to regeneratively source these natural ingredients. Make sure you're not wrecking people's day eating food or something. Make sure you're not causing deforestation. But run these abundant, safe recipes.

Run them in supply chain or through machines that supply chain has. And if you can convince BMW, Ralph Lauren, Stella McCartney, and many, many others. Well, if you can just convince those three, you probably can convince everybody that they should be a customer.

Molly Wood: 

Including the ones you mentioned, right? Those are not hypotheticals, plus Allbirds, plus, you know.

Luke Haverhals: 

The biggest consumer electronics companies, the biggest car companies, the biggest furniture companies, the biggest clothing companies, the biggest footwear companies. If you think about it, who doesn't want to move away from synthetic if they can get performance at scale that supports their business, at cost points that are normative?

And think about if you're a shoe company, for example. Do you really like making synthetic shoes and then having to buy carbon credits or do some strange contorted marketing to try to get people to buy your shoe and not feel bad or not feel guilty? No one likes doing that. That's hard work.

But what happens when your shoe can have natural goodness? Now, your consumer can have a shoe and feel good about it. And by the way, when you can tell stories, like if you go to the Stella McCartney webpage, you can see beautiful bags, objects of desire, where not only did NFW deliver materials, that's a given, but those materials have a transparent data story. So the marketing ties all the way back to the farmer.

And you can feel good that when your dollars go into this quality thing, you're going to enjoy it. And you can enjoy it knowing that farmers, people who are managing, indigenous people who are managing forests and rewilding places, they're getting paid to take care of the land. And you're not getting sick from chronic exposure to endocrine-disrupting nastiness that's put in synthetics. So everybody wants that.

Molly Wood: 

Pretty good pitch. Yep.

Molly Wood Voice-Over: 

Ok, so that’s the origin story. After this short break, we’ll talk a little more about what NFW is actually making with all these natural products.

Molly Wood Voice-Over: 

Welcome back to Everybody in the Pool. We’re talking with Luke Haverhals, the founder and CEO of Natural Fiber Welding, about using nature to replace textiles and synthetic materials. And much like Sway, my guest last week, NFW is making materials using existing machinery and processes.

Molly Wood: 

So tell me more about the technical bridge because I do, as both a journalist and investor, it's always exciting to hear somebody say, we can plug this into existing systems. Like go back to that kind of machinery and automation part where you said it was part of the unlock for scale and price, the ability to use existing materials creation, machinery and equipment.

Luke Haverhals: 

(CUT TO) The tire industry, for example, has mixing equipment. In the last 100-plus years, people have been making cars. And what do cars have? Tires. And to mix up rubber formulations, there is a more than 100-year-old industry of people who build mixers where natural rubber, and then the dirty little secret is, really nasty petrochemicals like 6 PPD go into the mixer and mix this natural and synthetic stuff up so that you can have a modern tire that is durable and performs.

And along come some chemists at NFW and we recognize that, oh, by the way, NFW has solutions to some of these nasty petrochemicals that are used. Some other time we can talk more about tires, but I'll focus on leather-like Miram.

Molly Wood: Mm-hmm.

Luke Haverhals: 

For example, we can take those same mixers that normally mix up formulations for tires, and we can mix up flexible recipes for a leather alternative or leather complement called Mirum. And we don't have to invent the mixer. We just have to invent the recipe that can run in the mixer. And then that recipe has to mix right.

Then when you take that recipe, think of that as dough. Now I've got dough. What can I do with dough? Well, in the kitchen, you know, you can make bread that's really fluffy and airy and light. You can make it sweet, call it angel food cake. You could call it sourdough. You could call it crackers.

You can use dough, depending on how you make the dough, you can use it in a lot of different ways, make a lot of different kinds of things. So our dough, sometimes what we call intermediates, are designed to be able to do different things.

Molly Wood: 

Mm-hmm.

Luke Haverhals: 

So then you can take this, in other words, you can take this dough and you can take a lump of it and you can put in the right dough, you can put into a shoe sole mold and you can pound out and we'll give you pictures and you can show it. Shoe soles, all natural, no petrochemicals to cure the materials.

But then if you can do that, then you can also do leather-like material. So in that case, to do leather-like materials, that's more like a sheet. So what do you want to do with the dough? Sheet it out like it's, you know, like a sheet of noodles or something like that. And then feed that.

I mean, by the way, there's already standard equipment for that because the plastics industry has been making sheets of plastic for a long time. So there's big heavy-duty roller-type machines that can take the dough and squeeze it flat and you roll up the flat dough now and you bring that to a roll-to-roll belt press that makes laminate flooring or plywood at massive scale.

Molly Wood: 

Mm-hmm.

Molly Wood: 

Right.

Luke Haverhals: 

That kind of machine, which is cost optimized to make those kinds of things, is way more than necessary, cost optimized to make an even more valuable material that's leather-like, that's Mirum. So these kinds of equipment, they already exist. And there are people in the world that then manufacture shoes, manufacture clothes, that already have these gargantuan facilities where they take in both natural materials and also tons and tons of synthetics, they mix up these materials.

They make materials, or they buy materials direct from other people who do the mixing and making. But then they cut, sew, and they make. They cut, sew, and make bags. They cut, sew, and make shoes. And when the material is made, they cut, sew, and they make shoes.

Molly Wood Voice-Over: 

So NFW has a manufacturing facility in Peoria, Illinois, where for the last seven years, they’ve been making and perfecting materials and recipes, testing them on existing manufacturing infrastructure, bringing on customers, and then they’ll license the recipes for materials for manufacture around the world.

Molly Wood: 

You brought up the sourcing, the regenerative sourcing systems that you're setting up. So tell me a little more about the feedstock, where it comes from, how you find people, how you get it places.

Luke Haverhals: 

(CUT TO) So all of our ingredients, first and foremost, our ingredients are just like the commodities of life, if you will. Then there's different kinds of farming in this world. The prairies of the Midwest have been turned into fields. And what you don't want to do is be sourcing and causing people to cut down a biodiverse forest in order to put some very monolithic kind of cropping system in its place.

So what we do is, and that's clearly people are concerned, usually people are too concerned about sourcing as they should be, about two different things. Number one is, are you competing with food? And number two is, are you causing deforestation or loss of biodiversity?

And there's a simple answer to both those things which is no because we go find and talk to the farmers. So we literally have people on team NFW that are partnering with existing commodity supply chains to pick out those parts of the supply chain that are very explicitly and willfully working with farmers on land management and in particular regions so you can buy your veggie oil from the Midwest of the United States and not from some deforested place. And you can prove that with a paper trail.

Molly Wood: 

Tell me in our remaining time about the products. You mentioned the leather replacement, the shoe sole replacement. I know there's a specific product line, if you wouldn't mind.

Luke Haverhals: 

Yeah, so first of all, it's a materials platform. You know, there's lots of different kinds of materials that use petro or petrochemical, you know, that are either wholly petrochemical or partly petrochemical. So leather and rubber, you know, the inputs start natural, but then leather and rubber both get formulated with, like in the case of leather, chromium in order to be automotive grade.

Back to the products, it's a platform. So you need it to make modern, let's take shoes for example. You're gonna want to have fabric or thread. You're gonna want to have a leather-like or flexible, durable material maybe that's coated, that's smooth instead of just a fabric. You're gonna want an outsole to be walking on. You're gonna want a comfy foam insole to cushion your heel strike.

And that you need all of those materials or otherwise you can't make a shoe or you make a shoe but it's not going to be the modern comfy ones that we've all come to know.

We developed these recipes that run on this infrastructure. But then the infrastructure can deliver many kinds of materials. And so we have this material that's a leather alternative called Mirum. And we have a foam platform of family of materials we call Tunera.

And we have these molded outsoles. We mostly are talking about molded outsoles, but I could also say molded cases to phones and personal computers. And there's all kinds of areas where you want molded things.

Molly Wood Voice-Over: 

Luke told me the ground rules for the whole company are to start well, using only natural ingredients; stay clean by not adding anything toxic or unnatural to those ingredients; and end well by making sure those materials can safely return to the earth when the user is done with them.

And not for nothing, but although we, the consumer, definitely have a responsibility to seek these types of products out and buy them whenever possible, it’s increasingly the job of the manufacturer to make sure the products end well.

This is something called extended producer responsibility, in which it’s not the job of a city and its landfill or recycling services, or the job of me, you, Goodwill and the buy-nothing group to responsibly dispose of our items. It’s the job of the *producer to be responsible for the entire lifecycle of a product, from creation to end.

And you can’t do that well without knowing where every part of your items came from in the first place.

Molly Wood: 

Ok, that's it for this episode of Everybody in the Pool. Thank you so much for listening. I’ll have links to some of the manufacturers and goods we talked about in this episode in case you’re in the mood for shopping. I know I’m hitting up Stella McCartney once I’m done with this episode.

Email me your thoughts and suggestions at in@everybodyinthepool.com, and find all the latest episodes and more at everybodyinthepool.com, the website.

And if you want to become a subscriber and get an ad-free version of the show, hit the link in the description in your podcast app of choice. Thank you to those of you who already have. See you next week.