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On December 1, 2017, Ian commented on Could isolationism be a drag on H&M’s fast fashion? :

When evaluating the tradeoffs in establishing new production facilities in Europe/North Africa to mitigate potential trade disruption risk, H&M and other companies should also consider the likelihood of the trade restrictions sustaining long term as well as the ease with which a company could pivot away from the new facilities if trade restrictions are once again relaxed. What was first launched as a defensive move to protect against global supply chain uncertainty could quickly become a significant liability that prevents H&M from continuing to offer a broad, rapidly evolving product portfolio at a tremendous value.

I think the commercialization strategy for Memphis Meats as well as other similar companies – Impossible Foods, Beyond Meat, etc. – is interesting to consider. It is critical that traditional meat eaters are converted to these alternative products. And for these consumers, the value proposition will need to go beyond the environment and also add value from a health and experience perspective. In a talk I attended given by the CEO of Impossible Foods, he made the point that ‘lab-grown’ meat alternatives may have an inherent advantage to traditional meat products in that traditional meat can only be, well, meat. Attributes such as flavor and aroma are relatively fixed with narrow ranges of variability. With engineered alternatives, flavor and aroma profiles are fluid. While Memphis Meats and others will need to provide a similar experience to traditional meat to ensure initial adoption, in time, the product can be further refined to offer a disruptive improvement to both experience and climate impact.

On December 1, 2017, Ian commented on Can Protectionism Save Auto Jobs in the US? :

It’s interesting to compare the auto industry, where cost and technical expertise concerns may continue to drive production out of the US, to the apparel industry where production is beginning to move back to the US in some instances. This reversion to domestic production in apparel is a result of the pursuit of ever shorter product development timelines (fast fashion) and mass customization in smaller batch runs. Today, it is difficult to imagine a world where consumer demands for automobiles more closely reflects those seen in apparel in thus necessitate that production moves closer to the consumer. Still – if auto production does shift – sustainably – back to the US, it won’t be because of protectionist policies, but rather due to business needs.

Another thought that struck me as I read this piece was whether Olam could potentially leverage OFIS as an additional income stream, aggregating and selling anonymous grower and yield information to other agribusiness companies and upstream actors, to supplement their core business. There is obviously a risk in Olam providing access to proprietary grower data if doing so disadvantages Olam in competing with other major agribusiness players, but if Olam could successfully communicate the value to all parties involved in establishing a centralized grower database, this could be a substantial supplementary income stream and potential competitive advantage with Olam’s core business in the future.

I do not feel that ABInBev has a responsibility to reduce their water usage except to the effect that it grows revenues (through greater sales vis a vis marketing or consumer goodwill), reduces costs or ensures that the company avoids a certain, significant supply or demand disruption in the future. Consumers are not yet demanding improved water conservation practices. Reducing water usage is unlikely to reduce ABI’s costs and would almost certainly require significant investments in and changes to their current supply chain and production process. Lastly, as another post mentioned already, water scarcity today impacts select, localized markets and I do not believe the company faces a burning platform necessitating a reevaluation their water supply today. Instead, consumer groups, grassroot organizations and governments should work together to highlight the water scarcity issue and allow market forces to waterfall and drive company’s such as ABI to change their approach in the face of changing consumer demand, competitive pressures and/or new regulation.

On December 1, 2017, Ian commented on Digitization of Walmart :

Not to play the same tune, but I also feel that the future of retail looks like a blended B&M/e-comm model. In a way, Amazon and Walmart could eventually converge to a similar form although they come from opposite ends of the spectrum. Walmart’s recent acquisitions – both Jet.com as well as others such as Bonobos – are attempts to jump start their earlier efforts to become more digital, with limited success to date. One initiative that Walmart recently launched that has been tremendously successful is leveraging their current B&M footprint to enable order online/pick-up in store which provides some of the convenience of traditional e-commerce and solves for some of the challenges in e-comm market growth beyond the wealthier, more urban/suburban core. Here, we see Walmart is leaning in to their edge and differentiate themselves compared to Amazon rather than chase after bolt on pure play acquisition targets.