Coffee 2050

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On December 1, 2017, Coffee 2050 commented on Cotton in footwear and apparel manufacturing :

Interesting thoughts. I commend Nike for working towards a zero-carbon footprint. So far, I favor their initiatives compared to their competitor. Adidas partnered with Parley to create some good-looking shoes made with ocean plastic. I remember seeing pictures of the shoes cycling through social media last year. I couldn’t believe the price (and enthusiasm) – I think they started at over $200 per pair. It looks like that price has come down a bit, but the entire initiative rubbed me the wrong way. It was clear that Adidas was capitalizing on a “feel good” story. Most of us don’t like to see our beaches crowded with litter, but the most efficient way for a shoe company to solve that problem isn’t to spend an exorbitant amount of money incorporating that specific material into their supply chain. In turn, I am almost certain that this product raises Adidas’s carbon footprint through increased inefficiencies and emissions.

Certainly thought provoking. I think it benefits Johnson & Johnson in the long run to hold business units in the developing world to similar standards as their US counterparts. Although setting a high environmental standard in a new market can open you up to competition from less stringent players, it also creates a barrier to entry for other international competitors. It would be a pretty big PR risk if a new player decided to optimize for lower costs via much higher emissions.

In addition, developing countries are becoming much more sensitive to environmental issues, particularly because of their high youth population which is especially susceptible to air pollution. There are a variety of social enterprise initiatives that are attempting to combat this directly. It may be in Johnson & Johnson’s favor to partner with some of those organizations seeking to reduce emissions in booming cities that must fuel their growth with cheaper, less environmentally friendly resources.

Compelling thoughts. I’d like to play devil’s advocate to an extent by connecting this to another writer’s article about Iran Air. I wonder if Boeing risks future exports to other countries if they do too much to prop up the Chinese aerospace industry. Iran is desperate for commercial aircraft, and once COMAC matures into a direct competitor they may be willing to make a deal. Iran is already coordinating with COMAC [1], which lends me to believe that they are hoping to get a technology partnership or C919 export deal approved. Boeing is accustomed to having only one competitor. There may be a lot of risk in the long-term by pursuing a Bombardier-style JV, which could accelerate COMAC’s rise to competitor status.

[1] “Mr. Tian Min meets with Iranian aerospace colleagues in Teheran,” COMAC, March 14, 2016,, accessed November 2017.

On November 26, 2017, Coffee 2050 commented on Iran Air: Sanctions and Sanction Relief :

Very interesting problem set. The same issues are prevalent in the supply chain for military equipment procured prior to the revolution, including Iran’s infamous purchase of 79 F-14 Tomcats that today are almost impossible to maintain. So accustomed to seeing a constant influx of Russian technologies into the country, I had never stopped to think how sanctions were impacting Iranian civil aviation.

As Lucas mentioned, the backbone of profitability for these aviation companies is the long-term parts and maintenance relationship. However, without running the numbers, I’m assuming that Boeing has priced in a healthy margin to hedge for any future political instability disrupting that side of the contract. I would also trust Boeing to continue to fight politically for a contract valued at ~20% of 2016 revenue. The US defense contractors have it figured at from a lobbying standpoint already: as an example, it currently takes 45 states and Puerto Rico for Lockheed to build one F-35. In terms of vested interests, a comparable measure for this purchase would not surprise me.

On November 26, 2017, Coffee 2050 commented on, Digitizing the food delivery service in China :

Love the topic Cissy! I used to work as a pizza delivery driver, so I’m always intrigued by new entries into this space. I agree that should continue to expand their internal delivery capacity. By operating their own delivery service, the company can reduce variability and increase quality in the supply chain. As a Grubhub customer, I’m continually disappointed with the quality of the food and the accuracy of the tracking feature on the app. I’m sure that Chinese customers have the same complaints with food delivery services. It would benefit to use digitalization to internally/externally score restaurants that are not meeting company standards. Lastly, since speed and quality are highly correlated (late deliveries also tend to be cold), could dynamically rank restaurants by delivery speed. Real-time data on traffic and restaurant order volume could be used to accurately estimate which restaurants are below capacity at any given moment.

On November 26, 2017, Coffee 2050 commented on On-demand Drone at Farm Friend: Digitalization in Agriculture Takes Off :

Interesting topic! I have a background in drone operations, and I think there are a variety of initiatives Farm Friend could pursue to maintain a competitive advantage. In the States, the FAA has released very little guidance on drone piloting. Many regulations exist all the way down at the municipal level, but frequently it is unclear where drones are permitted. Farm Friend should continue to partner with government agencies from a safety/legal perspective to highlight geographic areas that may not be permitted for drone usage. In addition, drones are highly susceptible to wind and precipitation. The app could include weather data so that pilots and farmers can plan orders accordingly. Lastly, I agree that the app should expand to include aerial imagery. Many drone pilots are hobbyists who own multiple platforms. Farm Friend could be limiting its growth opportunities if it fails to invest in the full suite of agricultural services.