Manufacturing

The Confection Connection Between Chocolate and Supply Chain: A Sweet or Sour Tale?

In the Mexican coastal town of Puerto Vallarta, where the weather is hot and the tequila flows like wine, a new trend is emerging from an old Mexican delicacy...chocolate. The town is host to a chocolate museum, chocolate tour and fancy tequila/chocolate-paired tasting. Last week I had the opportunity to attend to one of these tastings where I learned about the different types of tequila and how the chocolates amplify their flavors when properly paired.

This unique experience also came with a crash course on the history of Mexican cocoa, the main ingredient used to make chocolate. Cocoa was once only consumed by ancient Mexican royalty. According to my tequila sommelier and a report by the World Agroforestry Centre, the Olmecs – an ancient tribe in Mexico – were thought to be the first people to consume chocolate. These indigenous people crushed the beans, added water, spices and chilies and drank the delicious elixir.

Ironically, last week an article came across my desk about cocoa. What were the odds that in the same week that I learned about the origins and use of this delicious nut, I’d also circumstantially run across an article about its production? I found the correlation too good to be true until I read the article and discovered the unfortunate state of cocoa production. Sadly, this article did not come with tequila, but the bitter reality of a lack of ethics in the cocoa industry’s supply chain.

As supply chain practitioners know, it is critical to know where and how your products are being sourced, but the farther you are geographically from the beginning of the supply chain, the harder it is to control…and in countries where labor laws are lax, it becomes even more tragic. This gets tricky with products that can only be produced in very specific environments. Cocoa is one such product that can only be grown 10 degrees north or south of the equator with the majority of its production in West Africa, the Ivory Coast and Ghana.

Hailey Corr, Junior Editor and Marketing Associate, Outsource and SIG

When Commodity Prices go South, Commodity Manufacturers get Innovative

Few areas of the economy have faced stronger headwinds over the past year than those occupied by commodity manufacturers. Chemicals, steel and plastics are all feeling the effects of China's economic slowdown in a highly competitive and price sensitive marketplace. Many of the top commodity manufacturing firms have reacted decisively to these conditions; however, after the first wave of layoffs are complete and excessive overhead costs are reined in, the prospects still remain gloomy. The sustained impact of depressed demand and oversupply are forcing executives to look inward for additional, innovative sources of cost savings. The positive news for many organizations is that the "good years" of strong demand and rising prices have left behind pockets of inefficiency and waste that can be structurally addressed in the interest of long-term corporate competitiveness. A few examples of such opportunities are as follows:

Joel Johnson, Director - GEP