Really interesting read – I worry that Macy’s is going to end up caught in the middle here. It feels like the apparel industry is gradually biforcating into 1) fast-fashion retailers like Zara who have the flexibility to keep a tight cost structure because they control their own product and can ‘pull’ as they need and 2) more upscale department stores / e-commerce retailers that carry a variety of upscale brands and excite customers with new innovative pieces. It feels like Macy’s is trying to ‘have their cake and eat it too’ by playing in both camps and I feel like they risk not being able to achieve the cost structure benefits of 1 (and / or having resistance from brands as mentioned above) and dampening their ability to deliver 2 in the process. It feels scarily analogous to the moves made at J.C. Penney that led to their downfall, but let’s hope they are more effective in execution at Macy’s!
This was a really fun read and a blast from the past – I was working at Tesco for the better part of 2016, including during Brexit. It was a fascinating time to be inside an organization that was already going through so much turmoil as a result of the political volatility. Observing how much of a distraction / disruption it was for senior management even in the days following the announcement was worrying.
Our perspective at the time, which I think remains the case, is to focus on the ‘no regret’ moves highlighted above, and do some initial investigation into the option set for larger investments and big bets, but not make any fundamental changes before the real definition of what Brexit will be is written in stone. The reality at the time and still today is that there are just too many unanswered questions about how it’s going to work, when it’s going to happen, and what the true operational implications will be. I would continue to advise them to be cautious and tread lightly, while investigating what they can without distracting their teams from operating the core business. They’re a big enough player that they’ll have power to really control the market on this, so they’ll want to do so thoughtfully.
It’s so exciting to see a massive, mature player embracing agility in an industry that you might otherwise assume would be ‘behind the times’. I appreciate the optimism of your outlook that diversifying into these technologies could shelter Maersk from the risk of potentially decreasing shipping rates. With that said, I do wonder: is this just too much of a jump away from their core competency? The path you outline shows them transitioning to be part transportation company, part software company. My initial reaction is that those are entirely different businesses, and they might actually be better off finding a strategic partner that’s more advanced / experienced in the latter, rather than trying to win at a new game.
Really interesting read. Some of the interventions you lay out make me really optimistic in this industry in particular. When I was in consulting, I spent a good amount of time across multiple projects working at the largest processed meat manufacturer in Canada and we looked at Tyson as an analog on a lot of these issues. What makes me optimistic is the alignment between what needs to happen what consumers are saying they want in their meat products. In the research we did, we learned – unsurprisingly – that consumers want a more natural, simpler, healthier product. What was interesting was that they often saw animal treatment designations, such as some of the ones you mentioned, as leading indicators for these attributes (even if they aren’t in practice). The move to plant-based protein is also a win-win: mitigating operational challenges while giving consumers what they want. Of course there will still be mismatches of supply and demand along the way, but exciting that both trends are moving in the same direction.
Really interesting (and a bit scary) read. I can’t help but wonder how the vicious cycle is not obvious to the Trump administration: forcing manufacturing operations / sourcing into the US will increase the company’s cost structure (albeit maybe mitigated by some of your suggestions) which will inevitably have to be passed on to consumers, which will drive volume away from the american players. These companies will gradually lose share and be forced to divest assets and therefore jobs in the United States – exactly the opposite of the stated campaign goals. While that might oversimplify and there are clearly mitigating strategies to take along the way, I worry that the underlying fundamentals make this a bleak picture regardless of the steps taken.
I really appreciated how this piece provided a really holistic overview of how climate change is impacting Nestle, highlighting the company plays a role in cause, but also deals with effect. I think some of the most interesting and impactful interventions could actually address both sides of the coin. I think about the rise of automation in food production  and how it helps to address the reliance on workers who are at risk of food / economic security, but also makes the farming / plant operation inherently more efficient, and therefore less damaging from an emissions standpoint. Of course, then the conflict highlighted in the referenced article will be top of mind – how do we manage these constraints with the unemployment created by these moves?