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Thanks for sharing – I agree with you and other commenters that Unilever’s commitment to this cause is commendable. As I think about reducing water usage, there are two sets of people that Unilever can influence: suppliers and end customers. On the supplier side, I support your recommendation that Unilever choose “preferred” suppliers – Unilever definitely has the scale / buying power to convince suppliers to reduce water consumption. They should also work with suppliers to figure out which actions are most effective and share these best practices across the supplier base.

I think the consumer side is more difficult because Unilever has to fundamentally change customer behavior, which is deeply ingrained (i.e., decade-long habits). The product innovations you mentioned (detergent or shampoo formulations) could alter behavior in emerging markets. However, I think they would be less effective in developed markets, where access to water is not an issue. I’d be curious to see what types of actions will create meaningful impacts in developed markets.

Finally, I wonder if Unilever can market its sustainability mission more effectively. I was unaware that Unilever was focused on this before reading your article, and now I want to buy more Unilever products! I think a lot of consumers care about supporting sustainable products and it would be a really effective way to differentiate Unilever’s brand.

I find it really interesting that Driscoll’s is investing in automation. Essentially, they are shifting their business model from high operating costs (ongoing labor) to high capex costs (machinery). While automation seems like a potential solution to rising labor costs, I wonder how Driscoll’s will handle this shift. How will they finance the investment in capex and what do they expect the lifecycle of the machinery to be? How will they collaborate with machinery suppliers on the product development process?

Another main concern I have with automation is whether it will even be effective – the stat you mentioned (robots missing 1 in 3 berries) is shocking. It seems doubly expensive to invest in robots that cannot do the job and hire workers to pick the berries that the robots missed.
Finally, it will be curious to see how Driscoll’s handles the people element. They will need new skills in their workforce to coordinate robot usage across farms (to maximize utilization), drive innovation, and operate new machinery. Investing in automation is expensive (both from a capex and people perspective), and with the low quality of robots today, I’m not sure if the investment will generate positive ROI until years down the line.

*Update: I accidentally posted my comment as a reply to another comment. Reposting here as a new thread.

Thanks for an interesting read. To answer your first question, I believe that CVS Health is well positioned against Amazon – CVS’s integration throughout the value chain (via its PBM and pending merger with Aetna) is a major competitive advantage that is difficult to replicate. CVS has already leveraged its PBM to drive traffic into its pharmacies. For example, In March 2017, CVS announced that its pharmacies would offer discounts on Novolin insulin through its PBM. [1] The potential savings of up to $100 for a 10ml vial have no doubt driven traffic to its pharmacies (and also benefited front-of-store sales).

If the Aetna merger is approved, CVS could take a similar approach to drive volume at its retail locations. For instance, they could offer Aetna members preferential rates to fill their prescriptions through CVS retail stores or its mail-order pharmacy. As Leigh points out in an earlier comment, it will be interesting to see whether these new Aetna programs will lead to an influx of new members. As you point out, CVS is also innovating on last-mile delivery to compete with Amazon’s convenience factor. Ultimately, if CVS can achieve a comparable level of convenience, its vertical integration will be a core barrier to entry – this integration will allow CVS to drive demand in a way that Amazon cannot.

1. CVS Health. “CVS Health Launches Reduced Rx Savings Program to Give Patients Access to More Affordable Medications,” https://cvshealth.com/newsroom/press-releases/cvs-health-launches-reduced-rx-savings-program-give-patients-access-more, accessed November 2017

Thanks for an interesting read. To answer your first question, I believe that CVS Health is well positioned against Amazon – CVS’s integration throughout the value chain (via its PBM and pending merger with Aetna) is a major competitive advantage that is difficult to replicate. CVS has already leveraged its PBM to drive traffic into its pharmacies. For example, In March 2017, CVS announced that its pharmacies would offer discounts on Novolin insulin through its PBM. [1] The potential savings of up to $100 for a 10ml vial have no doubt driven traffic to its pharmacies (and also benefited front-of-store sales).

If the Aetna merger is approved, CVS could take a similar approach to drive volume at its retail locations. For instance, they could offer Aetna members preferential rates to fill their prescriptions through CVS retail stores or its mail-order pharmacy. As Leigh points out in an earlier comment, it will be interesting to see whether these new Aetna programs will lead to an influx of new members. As you point out, CVS is also innovating on last-mile delivery to compete with Amazon’s convenience factor. Ultimately, if CVS can achieve a comparable level of convenience, its vertical integration will be a core barrier to entry – this integration will allow CVS to drive demand in a way that Amazon cannot.

1. CVS Health. “CVS Health Launches Reduced Rx Savings Program to Give Patients Access to More Affordable Medications,” https://cvshealth.com/newsroom/press-releases/cvs-health-launches-reduced-rx-savings-program-give-patients-access-more, accessed November 2017

To address the first of your outstanding questions, I think that COMOC will likely run into difficulty securing the regulatory approval to fly aircraft within the U.S., even on international airlines. The FAA is very focused on safety and analyzes “lessons learned” from accidents around the world. [1] Given the reliability concerns around COMOC’s aircraft, the FAA will likely scrutinize COMOC’s performance in foreign countries. Any safety incidents could be major red flags and block approval in the U.S.

I recommend that COMOC hold-off on approaching the FAA for approval. COMOC should wait until it has several years of reliable operations. If COMOC rushes through the process and gets approval prematurely, any safety incident could severely damage its reputation and inhibit the ability to sell aircraft in the U.S. down the line. Waiting until COMOC has a better product will not only make the U.S. approval process easier, but more importantly – it will also mitigate downside reputational and financial risk.

1. Federal Aviation Administration. “Lessons Learned from Transport Airplane Accidents,” http://lessonslearned.faa.gov/transport.cfm, accessed November 2017

Thank you for sharing – interesting read. I noticed that many of the recent developments you’ve laid out are on the supply side (i.e., partnering with CPG companies and Sony). I’d be curious to hear what Rappi has done on the demand side to successfully generate more volume (i.e., marketing to new customers, promotions to retain existing customers). You mentioned that Rappi should focus on growth and profitability, but is it possible to do both at the same time? Going back to the demand side, I’ve seen several of the U.S. companies you referenced spend heavily on sales and marketing to acquire new customers. As a result, they have prioritized growth over profitability in the short-term. I think this strategy also makes sense for Rappi, so that they can build brand awareness and win market share, making it more difficult for competitors to enter.

I was surprised to hear that Uniqlo has announced matching Zara’s product lifecycle – I view it as an unnecessary move. I am concerned that shortening the product cycle will reduce ongoing innovation and quality, two key elements that Uniqlo has built its brand on. As you point out, their current product development cycle takes a year, with extensive testing of new fabrics and textile “masters” driving their production process. How will they ensure the highest quality fabrics without the long sourcing and development process? To meet their goals, will they need to get rid of the textile “masters”? If so, will this shift from a people-centric to machine-centric process negatively impact their products?

While I agree that all retailers should be evaluating ways to digitalize their supply chain, I think that Uniqlo’s goals are too extreme and put their customer value proposition at risk. At their core, they are a basic wear business, not a fast fashion business. They can afford to take the time to develop high-quality, timeless products. Ultimately, Uniqlo should look at how they can optimize their supply chain through digitization, but in a manner that aligns with their business model.