Ketty, as an avid runner I have to say that I was extremelly excited when I read your article. I don´t think that customization is a new trend on this market, NIKE has been doing that for many years on their “ID” project. What is pretty unique in this case is the production process (3D printing) and the features ADIDAS is now allowing customers to choose. The company is not only giving customers the capability to choose the colors of the shoes but it also specifically designs the product to meet the dimensions of client´s feet and optimize the distribution of weight. There are two points that were already mentioned here that would be of my concern: introduction of new technology to this business model and scalability. I can definitely see a time where you can get your shoes “printed” from a local distribution center in a matter of minutes, but it is difficult to understand how new materials and design changes could be applied on this model. Scalability concerns come from the fact that these printers today are still running at very low pace, and it would require significant improvements to meet global demands from ADIDAS. I´m interested to see what the future of this industry will be.
Thanks for sharing!
Miguel, that is a very interesting article that highlights one of the major problems of an industry that is in my opinion in a fast decline trend. Taking into account the increasing concern from all nations and governments for renewable energy sources and low environmental impact, it is just a matter of time until this industry falls into a complete latency stage. I mean latency because renewable sources are highly dependent on external weather/climate factors that might influence their output rate. I believe that coal mines and this whole industry will still exist for a while to supply energy during severe droughts or times times where the amount of sunlight or wind is not able to generate energy from other renewable sources. It is also of paramount importance to highlight that coal is a raw material used in other major industries (60% of the steel manufactured today uses coal – https://www.worldcoal.org/coal/uses-coal/how-steel-produced) and for this reason a market for this element will continue to exist on the foreseable future.
I was surprised to read that one of the main concerns in Colombia is regarding the dust and pollution generated during the transportation process. In Brazil, I was able to follow the implementation of an strategy used to reduce the amount of dust dispersed in the air during the transportation of iron ore throughout the railways and the port. The mining company installed portals that would spray a special polymer on the iron ore as the containers were moving through the railways to bond the molecules and make them heavier, preventing the material to be carried out by the wind. I don´t know if this solution could be implemented by Drummond but at least it is used by iron ore mining companies.
I would be curious to see what will be the outcome of this industry in Colombia.
Kenya, thank you for sharing this incredible article.
In my last job I had a project with one of the largest plastic manufacturers in Latin America and during one of our meetings he told me that companies don´t adopt these new technologies because the costs associated with implementation is really high. Other options do exist, but most of the time they require a significant investment to be applied. Considering Coca-cola´s size, I wonder if they would be willing to make this huge capital investment taking into account solely the benefits for the environment. As Landen mentioned, changing the material might change the whole manufacturing process and how the consumer interacts with the product. This same plastic manufacturer argued that they had developed a bioplastic made from corn that had very similar mechanical/chemical behavior compared to a standard carbon-based plastic, but companies had never adopted the technology because it was a lot more expensive and the final value couldn´t be perceived by customers. I would like to see companies like Coca-Cola more engaged in initiatives focused on removing the trash and pollutions caused by their activities, specially the dissemination of PET bottles in oceans and rivers.
Sarah, I hope they find a solution because coffee is already an integral part of my daily diet! Brazil is one of the largest coffee bean producers and exporters and this topic is of special interest to us. By far the variety that is mostly cultivated in Brazil is the Arabica, which is apparently fairly sensitive to climate changes. There is a governmental agency there called “Embrapa” that is focused on agricultural research and they have a division fully dedicated to coffee beans (www.embrapa.br/cafe). Similar to what you described in your article, their intention is to continuously improve the beans yield, resistance, and quality, creating value to the whole coffee chain in Brazil. It would be nice to see more public-private partnerships fostering research in institutions like Embrapa, because as Alejandro mentioned, moving growers seem to be only a short-term solution for the problem. I also believe that soon we´ll reach a limit on how much we can improve the coffee bean/tree in order to withstand these uncommon climate changes, but without tackling the root causes we will not prevent a future production decline. Large economies have been highly dependent on the cultivation of coffee since the 18th century, and the habit of drinking coffee has penetrated all levels of society in many countries. If actions are not taken today, either we´ll see an increase in prices or this pleasant drink will simply vanish from our diet (which would be a pity…). How would we survive 15 cases a week without that delicious espresso shot in the morning?
Thanks for sharing!
Miguel, to be honest I was extremely excited when I saw that you wrote about wrist watches, in particular the effects of the digital market on this highly traditional industry. I am a wrist watch aficionado and I spend a good amount of my free time reading about differences in movements, designs, horological complications, etc. What this company is doing isn´t unique, there are other major players taking a very similar approach and I´m curious to see who´ll be the most successful one down the road. As you mentioned, the manufacturers realized that a good portion of the final price is due to the high margins charged by dealers and distributors, who at the end set the final prices in levels that are not affordable for most people.
There is a company called “Christopher Ward” (https://www.christopherward.com) that has lately received a lot of attention from watch fans and a significant amount of media coverage because they have been successfully designing and manufacturing their own time pieces for the past 15 years and their only sales platform is their website. They don´t use any distributor or dealer to sell their watches and they don´t spend money on marketing campaigns. The best part is that they were even capable of developing their own in-house mechanical movement, which is quite an achievement for a company competing on a market dominated by “sharks”, as you mentioned. There is a very small number of companies capable of fully manufacturing their own mechanical in-house movements, since it requires a lot of engineering and craftsmanship from the companies. For you to have a comparison basis, today most mechanical movements installed in several different brands (Junghans, Longines, Seiko, RW, etc) all come from the Swatch group (ETA movements) and if you want a true unique in-house manufactured piece you must pay the premium charged by brands like Omega, Rolex, AP, Glashütte, Patek, Nomos, etc…
Christopher ward also tries to be very transparent in their pricing structure, charging always 3 times more than the cost to produce the watch (this is already a lot, imagine the margins charged by dealers and distributors!!!). Therefore, a good CW with an in-house movement costs around USD 1500,00. Don´t take me wrong, this isn´t cheap, but at least it is a lot more affordable than other companies are charging for their watches. It is amazing to see how effective digitalization was able to reduce and disrupt the industry so far.
I love the idea of having a software/VR platform where you can see how the watch looks on your wrist. It´s usually hard to assess how the case and the bezel will fit. That would be an amazing tool to add into these online platforms.
Thanks for sharing! I would love to discuss other interesting details about this industry in person.