Without coffee, this comment would not have been typed, so this topic is near and dear.
I completely agree with your assessment that Nestle should focus on production: improving yields and reducing waste. While helping their suppliers improve sustainability and yields is noble and likely effective, Nestle must also put its money where its mouth is and demonstrate to its suppliers that it is similarly investing in sustainability and yield improvement.
Longer-term, perhaps Nestle could look to consumer education and new product development. The coffee industry experienced its second year of supply deficit in 2015/2016 . Therefore, coffee drinkers must be educated to reduce usage waste. Every drop counts. Additionally, Nestle could explore new products that require fewer beans for an equally strong coffee. Nestle would never want to sell less coffee or lessen demand, but they could reduce the raw materials necessary to make each beverage.
 International Coffee Organization, October 2016. http://www.ico.org/monthly_coffee_trade_stats.asp. Accessed November 2017.
As Clare and Francesca mention, most wineries do not have the luxury of relocating in the face of climate change. This is simply not a trend they can outrun. Additionally, region is so closely associated with the wine’s reputation that most well-known vineyards do not have the ability to move without impairing their reputations.
You mention shifting grape varietals to grow grapes that grow in warmer weather. A risk there is that wineries become known for wines that require certain grapes. Abandoning a “famous” wine could irreparably damage sales. However, I wonder if shifting product mix could be a near-term solution, before Isabel’s longer-term R&D suggestion. If climate change has caused red grapes to ripen earlier so they now compete for the white grapes’ space in steel fermenters, could wineries shift their mix of red vs white to alleviate space pressures? While the simple solution is buying more fermenters, that would require substantial investment and decrease utilization. A more cost-efficient solution would be to shift the product mix in the short-term, abandoning wines with subpar sales to give room to the ones that sell well. A long-term solution would still need to be found for vineyards that cannot relocate, however.
Kudos on this paper, and especially the headings.
This case is wrought with uncertainty on both sides of the border. As Jason raised previously, proactively diversifying production by producing in the U.S. would insulate Constellation from some risk. It does, however, present the risk of bad PR if beer drinkers rebel against an American-made Mexican beer. Although, I wonder how many people know where Corona is made versus simply assuming its Mexican production and heritage.
Perhaps this is a rare instance in which marketing departments can assist in supply chain decisions. A market research study could quantify the importance of Mexican beers being produced in Mexico and the potential consumer reaction to learning it was made in the USA. After all, the worst-case scenario is investing in USA production facilities only to incur backlash and sales declines.
In your closing, you mention Caterpillar integrating more closely with its customers. Companies that purchase Caterpillar equipment are likely quite brand loyal. Therefore, tracking a piece of equipment’s usage and efficiency over time could deliver Caterpillar valuable insights into when a customer will need to reorder spare parts and replacement heavy equipment. Essentially, Caterpillar would gain a clearer picture of demand and so be able to more efficiently schedule its production.
Fascinating piece, thank you.
Financially, the spare parts business certainly appears to be an attractive, high-margin opportunity. It also aligns well with the promise of additive manufacturing: faster production cycles and lower inventory costs. In capital-intensive industries such as airlines, I would imagine spare parts inventories represent a significant investment – one that 3-D printed parts could hopefully reduce.
However, for GE, I wonder if there is an inherent tension between additive manufacturing capabilities and the need for spare parts. If additive manufacturing reduces the number of parts in an engine from 855 down to 12, as in the ATP Turboprop referenced above, will the spare parts market still be profitable in a few years? Put another way, if GE uses additive manufacturing to reduce the number of parts in an engine, will they need to produce spare parts at all?