From this article it seems clear that climate change is going to have a direct and increasingly adverse effect on wine industry. While vineyard operators can certainly take steps to mitigate these impacts (as mentioned by the author),it seems as though some amount of increase in volatility is inevitable. What I wonder, then, is what this will do to the industry from a consumer demand perspective. If consumers see the price of wines fluctuate significantly year to year, will wine fall out of favor? What if the quality becomes variable as well? Consumers certainly have a wide variety of options for alcohol consumption, so stable demand for wine is not a given. I think winemakers will need to take steps to not only mitigate volatility from an operational perspective, but also manage consumer communication and marketing to ensure stable (and ideally increasing) demand for wine.
This is an interesting piece that clearly lays out all of the ways in which a shift to isolationism would be detrimental to Nike’s supply chain. If Trump really did get us into a trade war with China, Nike would be among a large number of companies that would stand to lose enormously from the increase in import costs or potential halting of the flow of goods altogether. I wonder whether, in their lobbying efforts, Nike could team up with other companies who stand to lose and push their collective agenda on capital hill. In doing this, I would hope that they could effectively counter the arguments in support of isolationism and show the overall detrimental effect of a trade war to the American economy. While it is all well and good for Nike to move some of its manufacturing to the U.S., there is no way they could afford to produce everything domestically and keep their current pricing structure. They must do everything they can to protect the free trade that enables their supply chain and the supply chains of so many other brands we enjoy.
I agree with LP’s comment above, that e-commerce can actually provide unique opportunities for Costco relative to its competitors. I think Costco’s focus on bulk, non-perishable goods lends itself quite well to e-commerce; customers don’t have to worry about carrying and transporting large items home from the grocery store, and can instead have these items delivered on a regular basis. Costco can also focus on selling its non-food & beverage items that it has in-store, such as electronics. Shoppers have become much more accustomed to buying these items online relative to groceries, so Costco can use these categories to get consumers onto their e-commerce platform. I do, however, worry about Triston’s point about Costco’s limited selection. I think this is an advantage for them in-store, but online shoppers are accustomed to comparing many options within a given category. I think Costco will have to balance this dynamic as they seek to build out their online presence.
It will be interesting to see how Airbus and the industry at large manage the increase in costs associated with Brexit. Whether Airbus chooses to keep production in the UK and absorb the costs associated with unfavorable Brexit terms, or relocate production to a more favorable country (such as the U.S., as suggested by TS), it seems highly likely that labor and duty costs are likely to rise. Will Airbus pass these costs on to the airline, who will they pass them on to air travelers? How will airlines manage the cost increase? It will be interesting to see whether Brexit and its implications for Airbus will have a material impact for the end consumer. My hypothesis is that consumers will see an impact in the medium term, but that in the long-term as Airbus optimizes its supply chain under these new conditions, costs will normalize to what they were prior to Brexit.
The author’s point about employment dynamics is a fascinating one that certainly warrants further exploration. While increased efficiency can be touted as positive, mines have seen enormous backlash from the communities in which they operate due to the extractive and degradative nature of the work. If Rio Tinto and other mining companies who follow suit are no long providing the employment that they once offered, how will local communities react? What benefit will communities see to allowing a mine to operate in their backyard? What about local governments who are often a critical player to enabling mining operations? Rio Tinto should focus on ways to redeploy their employees in this new world of a highly digitized supply chain. This would ensure that employment levels are not drastically reduced, but rather overall output increases such that the productivity of each employee goes up.
This article raises an interesting conundrum facing all consumer packaged goods companies, especially those reliant on agricultural inputs such as PepsiCo. I really like the idea of increasing commutation across the supply chain, given that each party likely has its own sustainability concerns and is thinking about the same problems Pepsi is facing. But as mentioned, they would be better off to think about sustainability as a collective whole, rather than each party take action in a vacuum.
I also wonder about the role of the consumer and the general public in this landscape, given that Pepsi ultimately cares about what the consumer wants. On the one hand, consumers have the opportunity to put immense pressure on PepsiCo to take bold strides to improve sustainability in their supply chain. However, does the average PepsiCo consumer care about sustainability? Or are low prices a much greater concern? If asked to pay 20% for a bottle of soda made from recycled packaging, would the average Pepsi consumer make that choice? My guess is that this will require collective action by Pepsi alongside its major competitors to make these sorts of changes industry-wide, and that consumers who do care about sustainability can help put the public pressure on PepsiCo to ensure this happens.