First Avacados, and now Sriracha? Climate change is definitely not a good thing for the consumer.
On a serious note, thank you for surfacing this interesting case study on the effects of climate change. For me, it highlighted that when I personally consider the impacts of climate change, I think primarily of rising water levels, more severe weather patterns, and hotter temperatures in general. I never considered the impact of climate change on our food supply. Combined with the fact that population growth will continue to outpace our food supply, the potential negative impact of climate change on our food supply cannot be overstated.
I do wonder, however, if there is another side to this argument. As climate gets warmer, does that turn previously un-farmable land warmer to the extent that they now would be arable? If so, to what extent does global warming / climate change actually help increase food production. Coming back to Sriracha specifically, I agree that their first priority must be to find another supplier, and diversify their supply base (both in terms of which farms they work with and where they are located) to ensure that there is no Sriracha production disruption.
What an interesting article! I had no idea that Airbus had such a global, diverse supply base – it’s almost hard to believe that something as complex as an airplane is actually the amalgamation of factories all over the world producing very distinct parts. I think you great up a great point regarding isolationism not being limited to just Europe – there are definitely underlying currents of isolationism playing out across the United States today.
During Donald Trump’s election, his inauguration speech included the explicit promise that he would “Make America First” – implicitly implying that globalization and the perceived outsourcing jobs has hurt the middle-class in the United States. He’s publicly launched attacks against companies like Ford, Carrier, and Apple, all companies that have built extensive supply chains outside of domestic borders. These companies face very real threats in the current administration. Over the short-term, my impression is that Trump’s inflammatory rhetoric has, at the margin, deterred some global companies from more aggressively trying to enter the U.S. – we’ll need to see how this plays out over the longer-term to ascertain whether this is just a blip on the long road to increasing globalization, or if this is a U-turn back to the protectionist policies of the 20th century.
This is a great article, Angela!
I would like to share my thoughts on the impact of isolationism for US.
For most people, It seems that isolationism is good for the country. It helps a country to protects is business from the impact of foreign businesses. But is the impact really that good for the companies? This case is a good example of this controversial issue. Clearly for Sun Power, it is a huge negative impact. They are suffering for this isolationism policy of their own country.
I am pretty sure this is not the only example of the backfire of isolationism. Nowadays, many US companies have presence in the entire world. Rather than saying they suffer from globalization, they actually benefited a lot from it. For them, isolationism means limitations on their global footprint, which will have a huge impact on their company profit and will eventually hurt their employees back in the US.
Joe, this is a very interesting article – thank you for sharing. While drones are becoming more and more familiar in the US from a recreational context (i.e., for photography) or for warfare, I hadn’t realized that they were being used for such a unique and value-added purpose. To address your last question of whether Drones are the right place for the government to spend money relative to infrastructure, I think that it is. The reason is two-fold – (i) Drones, even 30 of them, will be significantly cheaper than building roads, bridges, or hospitals; (ii) Speed – ramping up drone deliveries will take a matter of months, not the years that it will take to build hard infrastructure. To be clear, this does not mean that Rwanda should not invest in infrastructure – it should. But in the meantime, Zipline is a great stop-gap measure to incrementally improve the existing situation.
Jonathan, thank you for highlighting this interesting (and serious!) topic. This may be radical – but I wonder if vertical integration is the key here. For today’s consumers, sustainable and environmentally friendly sources of food are becoming increasingly critical considerations. As the overall population grows, demand for products such as avacodos will far outstrip any potential crop yield increases, particularly as arable land decreases. So for a company like Chipotle, I’d argue that is is not inconceivable that vertically integrating all the way backwards to the farm is a good idea (i.e., “farm to table”). I think the concept has two significant advantages – (i) from a sustainability perspective, it allows Chipotle to directly control how the bee population is being affected at its own farms, what types of fertilizers (if any) are used to grow its products, and how workers are treated, (ii) vertical integration will also be a source of competitive advantage. As crop prices increase more and more and supplies stay stagnant or even decrease, Chipotle being in a position to grow its own avacados will be a significant competitive advantage to attract customers! I personally can’t wait to visit a Chipotle Avacado / Bee farm someday soon!
Thanks, Kai for the thoughtful post. In your article, you touched upon Nike’s recent decision to sell through Amazon, which represents a strong channel conflict for its traditional retail partners. Nike’s decision implicitly demonstrates the degree to which traditional brick and mortal retail is being disrupted, and the growing clout of Amazon. Personally, I believe that the future of traditional brick and mortar retail remains bleak. As customers are increasingly comfortable with shopping online, more and more of the traditional mall foot-traffic (where most Foot Lockers are) will be diverted online. I can imagine one day (not that far off) when a customer sitting at home can click on a button on Amazon, scan his feet through his iPhone, and get a customized pair of shoes delivered to his doors less than a week via an Amazon drone. To be clear though, I think selling through Amazon will ultimately be a boon for Nike – but be a clear existential threat to its traditional retail partners.