Cocoawhat?'s Profile

While Cadbury has very limited ability to control the increasing labor costs and tarifs brought on by isolationism, I do think that the company can play a significant role in decreasing the costs of its inputs in order to increase profitability. Through Mandalez International, Cadbury is part of a industry, Hershey has combined forces with 8 leading chocolate companies to form CocoaAction, which has an aim to double the yields of 300,000 farmers through improved planting materials, fertilizer, and improved agricultural practices by 2020.[1] Since its inception in 2016, this initiative has already successfully supplied 147,000 farmers with interventions to improve their productivity. However, producers such as Cadbury need to play an increasingly greater role in ensuring supply chain sustainability and controlling costs of cocoa. To this end, Cadbury can work with private and public-sector partners to address both credit constraints and information asymmetries that have historically prevented smallholder farmers from reaping the full benefits of innovations in agriculture, and in doing so enable increased productivity at lower cost. This can include innovations such as using high cell-phone penetration to deliver precision agriculture (e.g. through providing agronomic and weather information) as well as increasing access to financial services (e.g. credit and insurance) for purchase of key inputs such as fertilizer and high-quality seeds.

[1] CocoaAction. Annual report 2016. Accessed November, 14 2017 at http://www.worldcocoafoundation.org/wp-content/uploads/2016-CocoaActionReport-English_WEB_10-30.pdf

Dan, thanks for posting about this topic. In addition to the points raised above about representing the interests of the relevant private sector actors, lobbying also plays an important role in cost-effectively providing legislators with access to key research and information. Lobbyists often-times have more resources and time than the government to analyze and distill large amounts of information, and present key conclusions. Given that there are usually lobbyists on both sides of an issue, the government is thus able to receive key pieces of information both in support and against a specific legislation from lobbyists, enabling more evidence-based decision making. Given that the government does not have to set aside public funds to gain access to this information, it is doubly valuable.

Given that Concha y Toro is supplied by hundreds of independent grape suppliers, Matt you are correct in pointing out that these farmers present one of the greatest supply chain risks to the winemaker. I agree with your suggestion that Concha y Toro partners with these farmers to increase productivity in the wake of climate change. Producers have partnered with growers in other regions in innovative ways that include cost-effectively delivering precision agriculture (e.g. through providing agronomic and weather information), enabling access to financial services, especially during times of droughts (e.g. credit and insurance) as well as providing access to more climate change resilient inputs. Concha y Toro could adopt these innovations in order to ensure steady, reliable supply of grapes going forward.

Tesla has clearly had ambitious targets for scale, which they have struggled to meet. The scale of raw materials needed for production seems to be a significant constraint for scaling. In order to address this, Tesla can think about working with other manufacturers that also require these raw materials to develop methods for increasing production. This would likely require these private sector players to form strategic partnerships with the governments in the relevant countries to address issues to scale such as infrastructure and labor. While this while likely be a long-term play, given the significant gap between projections and current output and the need to be a first mover in this space, Tesla likely does not have a choice.

While I agree that a shorter supply chain using real-time data to predict demand has the potential to enable more tailored programming, I do agree with UserError that this will likely come at the price of innovation and diversity. I think this is because most shows that have become large-scale hits, usually spent the at least half the first season developing the plot. If viewers were to cast judgement on the show based on these preliminary shows, we would no longer have long-form, story-telling shows and instead shift towards very simplistic plot-lines that can more easily instantaneously capture audiences.

I do think that this shorter supply chain approach could be used to diversify content production. As people increasingly have access to the internet, content used in shows can increasingly come from individuals as opposed to relying solely on creatives at production studios. In think this is a significant untapped source of content that needs to be integrated into main-stream media. Companies such as ABC could host shows on their platform that are created by every-day people, thus both diversifying their content whilst also decreasing production costs.

This is a really interesting article on the potential of digitization to address issues in ice-cream supply chain. My initial thoughts on the questions raised about the cost burden of the smart shelves is that Nestle could consider a cost-sharing strategy with the retailers. Given that the smart shelves would prevent stock-outs or excess inventory as well as decreasing operational costs (e.g. electricity costs by 5-10%), the retailer would also experience significant cost-savings from adopting the smart shelves. I would suggest that Nestle educate retailers on the potential for operational efficiencies from smart shelves and create partnerships where both Nestle and retailers contribute to the cost of the smart shelves.

In terms of the 20% of cold chain goods are wasted at the time of shipping, Nestle could consider partnering with producers requiring a cold supply chain, such as meat and other dairy producers, to create a joint venture that focuses on co-developing trucks and planes with the appropriate cold chain facilities to prevent wastage. Given that this is an pervasive challenge, Nestle would benefit from pooling resources across other key players to find an industry-wide solution.