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The statistics on food wastage and the amount of fresh water (+ other resources) going into food production are shocking to me. I agree with Worried Sommelier’s concerns about scale of impact. Scale is a huge issue for a lot of startups in the food space, as the market is so large that moving the needle will be a difficult feat. We’ve seen this with Impossible Foods, a fake meat company (beef production is one of the most energy and land intensive processes in the food production chain, using 10x more land than vegetable end products). Blue Apron shipped 8M monthly meals in 2016 (, while the US market is 29 bn monthly meals. The meal delivery kit appeals to a particular demographic (busy, urban, higher willingness to pay), more mainstream than an Impossible Foods burger consumer but probably not so different. These two companies and small scale of their operations lead me to believe that for real change to occur, a shock will have to take place (for example, a big increase in the price of beef).

On December 4, 2017, Jen commented on Nestle: Greening the Supply Chain :

Interesting article on a topic I know little about, but should know more about given the mass reach of Nestle products. On the whole, I don’t think consumers take sustainability into account when making purchase decisions. The average consumer cares about how they can fill the shopping cart in front of them given their financial means. Not the impact that the box of cereal they buy will have on agricultural yields in 2050. So I think big companies like Nestle bear much of the responsibility of convincing not only their suppliers, but also their consumers.

On December 4, 2017, Jen commented on L.L.BEAN: DIGITALIZING AND THRIVING :

Totally agree that the shift from a supply driven retail landscape to a demand driven one puts a lot of “old paradigm” retailers at risk. The channel count increase means that a 360 view of the customer base is harder to achieve but also more valuable, as different channels are frequented by different customer profiles. However, I’m not sure LL Bean’s success so far has been due to its effective use of digital channels so much as its strong brand loyalty. Due to globalization (cheap goods, sourcing + transportation) and the internet (limitless information in the hands of the customer), the apparel market saw a swift movement of power to the hands of the consumer. Ubiquity in the apparel market is still eating into the once superior margins of J Crew, Gap, etc. Some companies survived, and it’ll be interesting to see what characteristics the winners have (sustainable sourcing? superior customer service? distinct design?), and whether LL Bean possesses enough of those characteristics.

If I understand correctly, 3M is looking to use a digitized supply chain to tackle costs in the short term and gain new R&D related revenue from customers in the long term. The cost strategy – reducing cycle time, inventory holding costs, expedited deliveries, and such – will occur incrementally as data gets cleaner and managers figure out how to use the data. Integrating with suppliers on the supply chain front is a great way to achieve a lot of this. But BASF is a well established company, and I wonder about the 1000s of suppliers on the tail end, whose supply chain information technology calibers and capabilities vary greatly. It would be more difficult to get those suppliers to invest in the same platform and protocols. We also saw with the Barilla case that business entities need compelling evidence of the upside to hand over their data, so 3M will need to devote more human capital to managing that. Lastly, a company with the size and age of 3M will encounter internal resistance from people who are content with the status quo.

Drew makes a good point above- when you manufacture abroad, competitive knowledge goes abroad as well. This is why government contractors dealing with security payloads such as SpaceX are not allowed to manufacture outside the US. However, I think Boeing and Airbus have much more power than we give them credit for. Though I do not want to underestimate Chinese and Russian development capabilities, the commercial jet market is a firm duopoly and the sheer size of investments needed to break into the market give them some time to think about their strategy. Because scale matters, I think both Boeing and Comac would both benefit by partnering, although Boeing would certainly take a reputational hit at home.

On December 1, 2017, Jen commented on Lotte at the Whim and Mercy of Chinese Nationalism :

Interesting article. I agree with your suggestion to play by the Chinese government’s book and establish some sort of JV. Losing the Chinese market entirely will be a major blow to Lotte’s financials. I’m worried about the second order effects to Lotte- to what extent were Lotte’s operations, supply chains, and internal org structures, designed to accommodate their Chinese business? How will that all have to shift now?