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Mark, thanks for the write up and for highlighting the acute impacts of trade agreements (or violation thereof). Most of the time, people talk in broad terms about how issues are good, or bad, and it is refreshing to have a specific circumstance to evaluate true merits.

Though I’m not sure to what extent, there is clearly foul play here. A trade agreement is designed to allow the free flow of goods across borders. The “supply management” is simply a loophole that prevents free trade. While Canada has a right to protect its dairy farmers, it should not outwardly discriminate against Cayuga.

The issue here, as you point out, is one of scale and importance. Cayuga is a blip on the radar and doesn’t carry enough weight to force change on a broader scale. Furthermore, I’d argue that for every Cayuga, there is a Canadian Cayuga who is subject to the same “supply management” discrimination.

A sticky situation indeed, but as with many companies facing isolationism, it seems like Cayuga will be forced to adapt (turn more attention to the U.S. market) until legislation goes its way. Problem is, we are moving away from free trade at the federal level which will further complicate Cayuga’s situation.

Jordan, thanks for the post. I’m a fan of Walmart (personally) and a fan of their ELP strategy (as a student of business). Walmart was one of the first to figure out that “low prices” was not synonymous with “cheap.”

If we think of Walmart’s cost structure as a fixed pie, since I doubt they give away profits, they will be forced to compensate for increased costs elsewhere. While I’d expect to see some price pressure, I think Walmart’s first move will be to squeeze its suppliers. Similar to Amazon, Walmart is often referred to as “retail crack.” Suppliers are hooked on Walmart and their livelihood depends on it. As such, Walmart can pin suppliers and manufacturers against one another to drive down costs. This is an easier move than asking its beloved customers for more of their hard earned dollars.

Further, as more production gets shifted to the United States, it will be our American producers / manufacturers that subsidize Walmart’s higher cost profile.

All told, this “in-sourcing” rhetoric should be vetted by economists and scholars before becoming part of the political vernacular.

Calvin, thanks for a great article. Walmart is best position to lead the way given its deep pockets and immediate incentive to do so.

Walmart can establish a standard – whether suppliers like it or not – due to their massive purchasing power. Many question Walmart’s bullying business tactics, but here it becomes an agent for good. If an “Indian sea cucumber” provider cannot or will not get on board with the IoT strategy, Walmart will go down the road to the next competitor. Further, there are obvious benefits to becoming the “standard setter.” Eventually, governments will require this technology which objectively makes food safer.

Knowing where our food comes from has additional benefits other than safety. By highlighting the components of say, a McDonald’s hamburger, we can “brand” the cheese, the meat, the lettuce as being unique to a specific grower or farmer. These growers and farmers can then build a business, through innovation, that leads to better tasting and healthier outcomes. Today, the incentive for making the “best, sustainable cheese” doesn’t exist because it’s buried in the broader picture. It’s just “cheese,” but eventually consumers will demand “Blueberry Farms cheese.” Right now this info is only accessible / relevant to the high end of the market, but IoT has the potential to push it down the chain.

IoT means exciting times for food producers, chefs and consumers (all of us).

Thanks Ashley for a very interesting read. Where are these “fake drugs” being purchased? In other words, does the consumer knowingly participate in the “black market” and purchase through nefarious or off-brand providers? Alternatively, when I buy Pfizer drugs at CVS, there is some chance that someone counterfeited these drugs?

If the former, shouldn’t consumers be aware of the risks of buyer outside established channels? The other sad reality here is the unfortunate need to resort to alternate forms of medical procurement due to a lack of established insurance system and the overall rising cost of healthcare.

If the latter, who wins? In other words, where do the drugs go that are illegally nipped out of the supply chain (in a system without serialization / tracking?). I guess there are many intermediaries in the supply chain and it’s hard to keep track of the real vs. fake pills.

Either way, it’s good to know that Pfizer and others are trying to prevent a detrimental development within pharma.

Very interesting read. This one is a particular struggle for me, as I think about juggling the true motives of sustainability. I commend ABInBev on their efforts to pursue more sustainable methods of beer drinking. As a multi-national cooperation, AB is well-armed to be a leading voice in this fight. Their association with barley growers and is a step in the right direction. On the other side, they’re also one of the world’s greatest polluters. Billions of cans of their beer are transported into the ecosystem, causing a host of other environmental issues. In other words, with its water campaign, ABInBev is solving only a fraction of the problem it has helped create.

Still, something is better than nothing, especially something like AB’s water campaign that will produce economic returns for the company over the long term. I’ll be interested to monitor this one playing out.

On December 1, 2017, jee commented on Raksul, Japanese Uber for Printing :

Very interesting essay, particularly from the perspective of the USA which is fleeing paper altogether. I see two next steps for Raksul. First, sprint as fast as it can to win the Asia market. Today, they’re able to achieve scale through efficient operations and first-mover advantage. However, since they are essentially a “middle person” between end customers and printers, their technology could be easily replicated. If done at lower cost, Raksul will use share. Similar to riders with Uber, Lyft and other platforms – there is no reason for those with printing needs, nor the printers, to be loyal to one platform. As a result, Raksul should strike while the Iron is hot.

Secondly, I’m not actually convinced that the world – even developed markets – will be able to operate completely without paper. For one, digital writing and annotating is not advanced enough to supplant pen & paper. Second, I’m not convinced that reading comprehension is the same for text on paper vs. text on screen. Finally, in an increasingly digitized world, there are concerns over security. Transmitting documents over the internet is riskier than disseminating, say, 10 copies of a hard copy presentation and then collecting them after a meeting.

Either way, Raksul should be well positioned to capture share in an evolving market for paper products.

On November 30, 2017, jee commented on Is insurance against natural catastrophes sustainable? :

Excellent analysis of yet another problem caused by a climate change. I see a number of additional implications:

1. Underlying premiums will rise to compensate for the additional risk, which will flow through to Munich Re. Soon, insurance will become too expensive for end users who will either 1) be unprotected against national disasters 2) be forced to uproot from geographies that are prone to disasters.

2. Munich Re should lobby governments to support laws & international agreements that curb emissions. While this is not an overnight solution, the best result for Munich Re is less disasters.

3. Munich Re will shift its portfolio away from disaster to a different form of reinsurance. Again, loser here is the end user who faces a dearth of insurance options.