While North America and much of Europe emerge from Covid, the rest of the world lingers. However, the learnings from the pandemic are plentiful, and global companies are choosing to move forward. Recently, CEOs of some of the Fortune 1000 gathered to talk about all that has happened. This blog post is 3-of-3 summarizing some of what was shared.
Geraldine Matchett, Royal DSM. The ingredients for the perfect storm were brought by Covid-19: supply chain disruptions + lower incomes + increased cost of food. This brought the close interplay between agriculture and the climate to the foreground for many. Matchett claims that agriculture is the second biggest contributor to greenhouse gases on a global basis, as well as the biggest victim to it. The pandemic lifted the conversation of food sustainability to a new level, specifically asking about what we eat and how we produce it. The global supply chain showed the weakness of not having things made locally, and the food supply chain is no better. Some estimate that 33% of all food is wasted through transport, production, and/or not being purchased or utilized. This awareness immediately calls for individualization: digital tools may allow for personalized nutrition in which that data could influence the supply chain and agricultural planning. The possibility of the future of food is exciting!
Dirk Van de Put, Mondelēz International. Luckily for Mondelez, Covid did not cause as significant of disruption because their supply chain is not as global. Consumption increased quite a bit as cooking at home increased, a shift that has been good for many companies. Yet, the learning for Mondelez was not as poignant in developed markets as it was in emerging markets. In those emerging markets, Mondelez saw difficult situations for consumers with fewer options and less financial independence. For example, traditional retail outlets were not open in many countries, causing a seismic-level disruption that developed markets didn’t experience.
Mondelez sees that several significant questions have emerged for producers and consumers. First, what is more important: do you want the benefits and costs of a global economy and supply chain (e.g., production in a few emerging markets with global distribution)? Or do you want the reliability of local production and the ancillary benefits of sustainability and reliability that come with it (as well as the high production costs)? While one might answer that they are okay with the costs, the reality of that answer will never be known until consumers demonstrate (or do not demonstrate) their willingness to pay significantly more for the same but locally produced product. Entering into that arrangement should not be taken lightly.
When considering sustainability, Van de Put says each company must choose its path. Mondelez looks at several critical things when making its choices. One of them is agriculture, as that’s the company’s most significant footprint on the environment. That gets highlighted more when one considers the intertwining of the supply chains from vendors, suppliers, distribution, and retail partners. The pandemic showed Mondelez how interlinked and interwoven its operations are. Unwinding that is no simple task. Another issue is the consumer and what they do with Mondelez packaging, such as reuse, recycle, or trash. It is clear to Mondelez that they must look at where suppliers and producers can save and use better methods as we move out of this pandemic.
As the Delta Variant begins to gain traction across the globe, many places are reconsidering what the final stretch of this pandemic will look like for businesses and everyday life.