Revolutionizing Packaging with Compostable Solutions ft. Daphna Nissenbaum (TIPA)

When considering sustainable solutions, many of us are quick to think about the final good or service being sold. But as we start to understand the broader impact of supply chains, certain areas are really coming into focus. At the top of this list? Packaging.

Our next guest has spent the past decade disrupting this industry, and she and her company are impeccably positioned to lead the change as companies around the world turn to more sustainable packaging options.

Daphna Nissenbaum is the CEO and co-founder of TIPA®, a compostable packaging company in Tel Aviv focused on supplying the food and fashion industries with better, more resilient solutions. With clients like Waitrose, Stella McCartney, Fresh Harvest, and Santini, TIPÄ’s flexible plastic offering is truly game changing.

Before launching TIPA, Daphna was CEO of the Caesarea Center for Capital Markets and Risk Management at the Interdisciplinary Center (IDC), Herzliya. Previously, she held various management positions at SPL World Group Ltd, a provider of revenue and operations management software, prior to which she held the position of project manager at Whelty Lager Ltd., located in Boston MA, USA.

Daphna holds an MBA specializing in Marketing and Entrepreneurship from IDC Herzliya and a BA in Economics and Software Engineering from Bar Ilan University. She graduated from the elite Israel Defense Forces software engineering program (Mamram) and served in the Israeli Navy software unit as an officer (ranked Captain).

Today, Daphna is leading the TIPA team in the movement to revolutionize packaging systems and rid the world of plastic pollution. TIPA fully compostable flexible packaging replaces conventional plastic, turning waste into resource, a crisis into an opportunity.

In this episode, Daphna shares her journey to entrepreneurship, raising capital, and (this part I found to be extra impressive) leveraging existing machinery around the world to be able to produce locally and at scale.

I love speaking with Daphna and I have no doubt that our listeners will be blown away by her story, vision, and advice to leaders everywhere.

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[Host: Lauren Scott] Well, welcome to this episode of The Resilience Report, Daphna. I am so excited to have you on today's episode. You certainly have one of the most interesting backgrounds out of any of the guests that we've had on the show. So, to start things off, would you mind sharing a little bit about who you are and how you got to where you are professionally?

[Guest: Daphna Nissenbaum] Okay, sure. So yeah, you're right. I'm coming from a totally different background than what I do today. I started my career in computer science. In Israel, we serve men and women in the Army. So, I grew up in the Army in one of the elite software units, served in the Navy, and then I worked in the software industry for several years. When I wanted a change, I joined a research center on risk management in capital markets. So, I was the CEO of the center of one of the private universities here in Israel, this institute for financial risks. Then when I wanted to change again, I looked for a challenge, and following discussions I had with my children and similar discussions around me about plastic packaging and what to do with plastic packages post-consumption with bottles, etc., you know, I thought to myself that there must be a different solution than what we do today in packing food. 

I went out jogging and thought to myself, what would be the most intuitive way to pack food? Let's forget everything we have today. Let's say we're starting from scratch. What would we do? The first thing that came to my mind was an apple because when I ate an apple and I threw the residuals into the waste bin, it just disintegrates and degrades by itself because this is the nature of the material. So, I said, "Okay, so this is the solution." Nature also packs bananas, nuts, oranges, etc., and nature packs with compostable packaging. So why won't we do the same? I thought it's very easy. Let's invent this new material that will be compostable and will pack food. It wasn't easy. It's not an easy journey, but that's what we did. We actually developed new technology that, on one hand, emulates organic material like nature's creation and, at the same time, emulates conventional plastic with all the good properties that conventional plastic brings to the packaging industry. We managed to emulate conventional plastic and emulate organic materials and create a new material that brings those two very important properties. So today, we pack food and other goods the same way as conventional plastic does, with a different end of life.

So, for me, the main problem of the plastic industry is the end of life of the package. What happens to this piece of plastic that I'm using now? Is it going to stay here forever? That's what happens today, forever. Forever can be 100, 200, 1000 years; it doesn't really matter. That's forever. We want those packages not to stay here forever because that's the damage that we see. So, the main problem that we had to tackle and that we were looking to tackle was the end of life of the package. We want the package to vanish once we finish using it. The compostable packaging solution enables that because the nature of the package is to decompose and biodegrade in a very limited specific period of time, which is up to six months. So post-consumption, we can discard the package into the organic waste stream, the same as we do with kitchen residuals like cucumbers, tomatoes, and all other organic waste. The package will go into the organic waste with organic waste and go into a compost system, either home compost or industrial compost, and will disintegrate and biodegrade, turning into a new material, which is fertilizer, within up to six months as opposed to hundreds of years of conventional plastic. This is maybe a long answer to a short question. So, my background is different, and the solution came from nature, not from being a scientist but from understanding what is the right solution probably. And thankfully, I can say that ten years after, we already sell our solutions in the market. The technology works. We replace conventional plastic very nicely. It works perfectly, and this is what we do in TIPA.

It's so inspiring, and it's really neat to see when nature can inspire the innovation that we end up coming up with. So, I love that. Admittedly, when I think of packaging, plastic packaging, I just think of plastic packaging, but there is a difference between hard and flexible plastic packaging. Could you explain that to the average listener as to what that difference is and why you might have different kinds of packaging?

Yes, so you're very right. We think of packaging as, "Okay, we have a packaging solution," but there are so many solutions in this industry. There's a variety and even variety within each segment. So rigid packages are bottles, jars, all those rigid packages. Flexible packaging is all those soft packages. We can think about granola bars, potato chips, snacks, fruits, bread, etc. Usually, not in all cases, but usually, sometimes, rigid packages are made from one raw material, and therefore the package can be recycled. Flexible packaging, in the majority of the cases, needs to implement a few materials in one solution in order to achieve the desired properties, in order to provide shelf life and to protect the packed goods for a certain period of time. Therefore, there are a few materials blended in one package. So flexible packages are usually thinner, flexible, and a few materials are implemented in one package. Plus, the package is contaminated, and therefore, flexible packaging can hardly be recycled. The recycling numbers are very poor, but in flexible packaging, it's less than 4% or something like that, around those numbers. In some places in the world, it's 0%. So we can say that there's no really viable end-of-life solution for flexible packaging. That's why at TIPA, we focus on flexible packaging. We also use different types of materials in one package, but all the materials that we use are compostable. Therefore, all compost can be composted together in the compost system. These are the main differences between rigid packaging and soft packaging, which is flexible packaging, and even within flexible packaging, for example, you can think about packing tomatoes or packing apples. It's different from packing a granola bar. We have a wide variety of different types of packages within the flexible packaging industry.

That is so interesting. I'll definitely look at my packaging more directly next time. When we're looking at the scale of waste from plastic packaging, what are we talking about globally? Especially if we talk about plastic packaging, and perhaps looking at the flexible, it sounds like it's traditionally, at least not recyclable. So, do we have any ideas as to what that scale is around the world?

It's a huge scale. It is actually increasing. The numbers are actually above 100 billion dollars annually of flexible packaging. The majority, like 60%, is used for the food industry. So, it's a huge industry, and as the population grows, the demand for packaging grows, and we're more used to that. The way the economy works today is that food is shipped from North America to Europe, vice versa to China, etc. We definitely need strong and long shelf-life protection for the goods, and that's why this industry is actually growing.

Another thing that TIPA does uniquely, at least from my research, is that you tend to work with the existing supply chain and machinery. Can you explain why that is such an important strategy, especially in terms of scaling a business?

That's one of the things that I brought to the company as a CEO. I wanted to see our solution growing fast and not just connected to one factory or specific machines, etc. One of the targets that we had from day one when we started developing the technology is to make sure that our materials emulate conventional plastic and can run on existing conventional plastic machinery. There's no need to change anything over the supply chain to work with our materials. I can proudly say today that we manufacture the films, which are innovative materials, on existing extruders, those are the film manufacturing machines. Films are then converted to different types of packaging on the same machines. Throughout the supply chain, we actually use an existing, well-known supply chain. Except for adjusting the temperature and sometimes very minor things on the machine, we work smoothly with the same yields on conventional plastic machines. That was a very important factor in developing our technology. It enables us to work with existing manufacturers, and therefore we are a fab company. We don't have our own machines and factories. We don't manufacture in Israel, as everybody thinks we manufacture in Israel. None. We manufacture today in Europe, North America, and Australia. Both our films and our packages. This model actually enables us to grow. We have the knowledge, we have an engineering team that knows exactly how to adjust the machines or the formulas to work on each type of machine. 

So, we work with local manufacturers. This model enables us first of all to manufacture simultaneously in several territories, to grow with existing manufacturers (they're actually becoming our partners). So today, they manufacture conventional plastic and they manufacture our products, which enables everyone to grow together. It opens the market for us, and maybe one of the important benefits is that we don't ship our products from here to there. We manufacture locally, and that also reduces carbon footprint, etc. This model is a model of the new economy. We use the existing supply chain, whatever exists in the market, and we collaborate.

 That is so innovative. I love that approach and (at a time where we need these sustainable solutions to be coming out faster and faster) it allows that velocity to take place. It’s incredible. And as part of that expansion, I know that TIPA is also expanding geographically. It sounds like there is local manufacturing, which is phenomenal. What does that process of expanding geographically look like? And are there any specific markets that you would like to share that were part of your journey?

So, you know, it's a process to manufacture in a new territory. It takes us a few months to allocate the right partners, to come to an agreement, and then run trials, several trials, until we get to a point that we say, "Okay, this is a certified process." Yeah, it takes from us, of course, intention, attention, and resources. But today, I think we're in a good place. We manufacture with global partners in North America. Europe was the first territory; we've been manufacturing in Europe in the last five years. Recently, in the last less than a year, we started manufacturing in North America with the CNG, which is a big, important leader in manufacturing films in North America. Very glad to work with them; a very good partner. Also, recently, we started manufacturing in Australia. Again, with very important and well-known partners. It was all announced, so I can share it here. We work with Amcor in Australia. It's been demanding but very rewarding at the same time.

And you mentioned a couple of the vertical markets or classic markets where you would use flexible plastic packaging, especially food. It sounds like that might be a leading one. Are there other vertical markets for our listeners to understand where TIPA does operate?

Yeah, so we focus on the food industry because the food industry is the number one contributor to plastic waste. So, there's no question there. And we also work with the fashion industry. So, packages with fashion, sometimes with a bit with the medical industry or personal care, but mainly focused on food, mainly focused on food. Plus, the food packaging is very demanding in terms of the properties that are needed to pack food. 

I'm sure the standards are that much higher when it's touching directly on food. Very interesting. 

And are there any bottlenecks that your industry sees perhaps over the next three to five years as being the real challenges that everyone will need to be focused on? 

You're talking about the composable packaging industry or the flexible. 

 
 I would say flexible, but you can take whatever direction you want to take, if it's flexible or compostable, whatever you want to share, is to see maybe what might be some of the challenges that we'll all have to focus on together. 

Yes, I think... Look, I think the packaging industry needs to focus on changing what we do to date because obviously, the numbers are not good. We keep using tons and tons and tons of plastic every day, which goes nowhere. There's a recycling system, but the rates are so low that I don't think anyone can say that that works. Obviously, it doesn't, and we keep doing it. As an industry, we're not adopting new solutions. So, for me, I think the packaging industry needs to go back to square one and say what are we doing in order to stop that? Are we going to eliminate packaging (that is one option) or are we going to only work with rigid packaging that can be recycled (that is the second option) or are we going to move to compostable packaging (also an option)? Etc., etc., so there are options, but let’s stop using those materials that don’t take us anywhere. So that is one thing.

For the sustainable packaging industry, the new materials industry, that's where we are, new materials. Let me just go back one step: the conventional plastic industry uses conventional polymers, and that's what they do. Very cheap, very available, damaging at the same time. In order to change that, sometimes we have to go back and change the raw material, change the basic of the package. That's what we offer, to change the basic of the offer. At the same time, get a package that can very well protect the goods and bring all the demands or whatever we demand from a package. But it's based on different raw materials that are biodegradable, compostable. So that's the third option for us as an industry.

And the compostable packaging industry, we have a challenge because, first of all, it's more expensive, at least for now, because of the differences of scale. So, it's more expensive, not high in the sky, but it's more expensive. It's definitely doable, and we need to see more and more companies adopting the compostable material solutions, not just ours. And as the market will grow, pricing will go down. So, it's a process. Now, for me, we’re at the start of a revolution, because I believe that even if we keep closing our eyes and not looking with open eyes on what's happening, in a few years, we'll have no option. I hope, and then we will be forced to use other solutions. And then, and what I keep saying is that and then we'll see the revolution actually accelerating. But today, there's an option to brands to do something else, to go to use different solutions, to lead this revolution, to gain points on bringing new innovation, new solutions different than conventional plastic to the market. That's our target as an industry.

Such an important target, and it sounds like it will be a collective effort. So, thank you for being part of the transformation of the industry. For some of our listeners who are tuning in and maybe are less familiar with the funding process, if you are a startup or a company that is growing and you're going to seek external funding to help you with that expansion, can you share a little bit about what that experience was like for TIPA and just how that has been part of your growth strategy? 

Yes, so actually we had to fund ourselves because it's a costly process to develop a new product. Plus, we had to make sure that it's scalable so it can run on a high scale, and we've been doing this in the last ten years or so. So, we needed to raise money. We did that as any other startup, approaching a variety of investors. I can say that it's not an easy process to raise money. It takes a lot of effort, specifically for me as the CEO. But I can say, first of all, gladly enough, we succeeded in that front. So, we raised money from very good investors that we have today. I'm very proud of our investors' portfolio, people who support us during the way, understanding that it's not software, it's not going to take two to three years to see the money back. It's a longer process. They all want to do a good thing to the world, and they understand the importance of what we do. So, yes, it's not an easy process. You, you have to hear "no, no, no, no, no" again until the first "yes" comes, and then it's a bingo. It's the best investor in the world. So yeah, I can write a book on that. 

You should, and I'll read it. I'm sure our listeners will read it as well. Are you working on any projects right now that you're particularly excited about and that you could publicly share?

There are a few, but unfortunately, I cannot publicly share. But I can definitely say that we work on new products, and we work with very important partners, which I'm proud of. We have many success stories that can be found on our website and so on and so forth. We do work on specific innovation with major players, and on that, I cannot talk, unfortunately. I hope that one day in the near future, I'll be able to talk about that, which will really change the market dramatically, but yeah, there is a lot going on.

On a more personal note, do you remember or was there a specific moment in time where you decided that you wanted to dedicate part of your career to sustainability? It sounds like maybe it was in speaking with your children and talking about packaging, but was there a specific moment, or was it more of a gradual process?

It's kind of a process that started with that discussion and that decision, and then keep walking in that direction. As you keep walking in this venue, your eyes keep opening, and you see more and more things and understand the importance of what you just started to do. I didn't know the majority of what I know today at the beginning. But it feels like a mission. It's like that's what you have to do, go and do it. That's how it feels. My life changed from the first minute I took the first dollar from the first investor. That's a significant step in my life because that's it. I'm all in now. I have to do it. It's not about me; it's about more than just me. And the company and the employees; we are a great team, and we all want to succeed. It's a journey of people, and that's maybe the thing that I'm most proud of, the team. So yes, it's not that I decided, "Okay, I'm going to change the world on packaging" and started. It's not. It's a step-by-step process that my eyes kept opening more and more and understanding more and more of what's going on out there and why we live under the assumption that every piece of plastic can be recycled, and it's not true. And then when you start to understand that, and it's so painful, there's no way back. There's no way back.

Certainly, an experience of opening your eyes and then just continuing to progress through that. That's really interesting. And as part of that journey, you mentioned at the start of the call that you started in the software world and elements of finance as well. Are there pieces from your education and early parts of your career that you still apply today, or is it a completely new part of your career?

It's a new part of my career, but definitely, the box of tools that I collected in my previous careers is very useful today. So part of it, you know, part of it in the beginning, specifically in the army, etc., there's no "no," so you have to figure out how to change it to a "yes," and that's part of the tools and the business model that we talked earlier about. The focus that actually comes from the software industry and the idea in the software industry, there's a phrase of "viral growth" because software you can just duplicate easily. And I want to see that happen with our solution, with our patents. So it's also viral growth within our industry, which is kind of weird to the industry, but it is part of it. So, I do bring knowledge and tools (management and business) from previous positions, not necessarily the technological one but more management tools and business tools, business development.

On a personal side, I definitely work in a male-dominated industry, and I would love if you have any thoughts on how you've navigated a more traditionally male industry as well and what have been perhaps some of the opportunities and obstacles and how you've navigated that landscape.

First of all, I agree with you; there is a difference or a difficulty, something out there of being different than males. It definitely exists. I chose, throughout my career, to ignore that. So, I just ignore that. I do what I need to do, and as long as I achieve what I need to achieve, it's fine. I don't care if someone treats me this way or the other way. And we talked about fundraising, etc. I'm sure it was more difficult for me than others. I know, but it doesn't matter. I keep doing what I believe in. I ignore that. I just, you know, it's not my problem; it's someone else's problem if they decide to look at it in a weird way. It's always, when I've been asked this question a lot, that's what I would recommend: be the best, be professional, ignore all the rest.

I think that's great advice. And if there is a young woman or even if you think of a young version of Daphna, if you were just to start in the sustainability space right now, what advice would you have for that young woman coming in? Is it what you were just sharing, or are there other ideas that you would share with them?

That's one thing. The second thing, believe in yourself. You know what to do. Listen to others, but eventually, take the decision as you think it's the most, i you have the intuition, you have the intuition. Just rely on yourself. Don't listen to all those advice; it takes you nowhere. We always get smarter with experience, and sometimes there's no other way rather than just to experience the experience. As a young kid learns how to walk, you have to fall several times until you start really running. This is it.

And do you have any resources that you would recommend our listeners check out that help keep you motivated and engaged, especially working in the sustainability space, as you said? The more you're exposed to the problem, it can feel a little bit overwhelming. So any resources that you would share with our listeners?

It's more personal resources. So, you know, my important resource is the team, the TIPA team. So, you know, I would recommend to anyone to surround themselves with the best people, whom you can treat as partners, not as employers but as partners. That's, sometimes, you feel very lonely in this journey, but if you have the right partners surrounding you, I think that's powerful and very important tool. And I think that's the main thing. Same with advisors, same with the board, same with the investors, people whom you can run a marathon with. That's very important. You know, sometimes I had to say no. For example, to an investor even though I needed the money desperately. I was about to maybe have to close the company, but I chose not to work with the wrong person for me. So, people, that is the secret. Because it is a journey, not an easy one. There are more downhills, lots of challenges. And you have to be surrounded by people that support you. 

I love that analogy of it being a marathon and not a sprint in terms of bringing the right people with you. If listeners would like to learn more about TIPA, what is the best place for them to go?

So, there's the website, which is www.tipa-corp.com. I think there are many articles and materials on the web, and they're always welcome to approach us. So yeah, I think there's a lot of information out there.

It's a great website. We do like to end every episode with the same question, which is, what do you think it will take for businesses and leaders to be resilient going forward?

I think it's part of what I said earlier. It's, you know, believe in yourself, keep working on your mission, don't change the mission because someone told you something. But at the same, keep doing what you are mandated to do and what you raised money for and what you built a company for. At the same time, be flexible enough to listen and change if the change is a real need. So it's being strict and flexible at the same time, believe in yourself, and eventually, you get there. If it's a true mission, if it's a true thing, I believe the truth wins. 

Thank you so much, Daphna. You are such a source of inspiration. TIPA is an incredible company. So I appreciate you coming on and sharing everything with our listeners today. 

Thank you very much. Thank you.