Tag Archives: Easter spending

Sorry Kids: Easter Chocolate To Be Cancelled After 2050

The world is running out of chocolate… And if procurement pros can’t find a way to save the day, no one can! 

Most of us like to indulge in a little (or a lot of!) chocolate over Easter.

In Britain alone, the projected Easter spend for 2018 is $892.6 million.

And in the US, 2018 Easter spending is expected to total a whopping $18.2 billion.

But, depending on how attached you are to your Creme Eggs, Lindt Gold Bunnies or your Waitrose chocolate avocados , you might need to stockpiling now; in preparation for a very uncertain future!

Why climate change is claiming our chocolate?

More than 50 per cent of the world’s cocoa comes from West African countries, primarily Côte d’Ivoire and Ghana, whose climates have traditionally best-accommodated the cacao tree.

But,  in recent years, drying conditions, long draughts and rising temperatures, are making it harder to grow cocoa beans.

Warmer, dryer climates “will suck moisture from the soil and make it impossible to produce a good crop in many regions around the world.”

In short, climate change could destroy the chocolate industry within 30- 50 years.

What can procurement professionals do?

All is not lost! Procurement teams around the world are already investing in alternative, and more sustainable options, for their cocoa sourcing.

  • Developing a sturdier cacao plant

Last year, Mars unveiled their Sustainable in Generation Plan stating:

“We’ll invest $1 billion over the next few years to tackle urgent threats facing our business and the society we operate in – threats like climate change, poverty in our value chain and a scarcity of resources.”

Part of that investment will go towards “recruiting University of California researchers to develop a sturdier cacao plant that won’t wilt in drier climates.”

  • Changing farming approach

The majority of farms in Côte d’Ivoire and Ghana are run by poorer families who cannot afford fertilisers and pesticides. If modern farming techniques were made available to the farmers in Western Africa; cocoa production might be easier.

The Rainforest Alliance is working with smallholder cocoa farmers to manage climate change and protect their livelihoods and way of life.

  • Relocating suppliers

Farmers in Western Africa have the option to move their crops to higher ground; but there is limited space and many upland areas are protected for wildlife.

Organisations could look to source their cocoa beans from a different region entirely.

Dr Barry  Kitchen, executive chairman of Daintree Estates, told the New Daily that “Cairns generally had ‘ideal’ conditions for cocoa trees, which need consistent rain, warm temperatures, and shade with dappled light.”

“You’ve got to be continually innovative and continually looking at ways that you’re preparing yourself for the future.” he said.

But, given the much higher labour costs in Australia, it’s unlikely that the industry could ever migrate to Australia.

  • Changing the nature of chocolate

Research by The Conversation suggests wild mango butter, made from the fruit’s stone, has a very similar chemical, physical and thermal profile to cocoa butter.

If procurement teams decide to invest in the science behind it,  it mightn’t be too long before we’re eating mango butter Easter eggs.

Personally, Procurious thinks it’s an egg-cellent idea!

In other procurement news this week…

Starbucks Testing Blockchain

  • Starbucks is piloting the use of data technology, including blockchain, to make its coffee supply chains more transparent
  • The firm hopes the technology will provide real time information about the beans within the supply chain and help financially empower rural farmers
  • Kevin Johnson, chief executive officer at Starbucks, said: “Over the next two years, we will look to demonstrate how technology and innovative data platforms can give coffee farmers even more financial empowerment

Read more on Supply Management 

Amazon’s Latest Drone Patent

  • Amazon’s latest patent is a delivery drone that understands when you shout at it
  • The drone is designed to recognise human gestures, and then respond accordingly. Gestures the drone would recognise include, for example, waving arms, pointing, the flashing of lights, and speech
  • An illustration demonstrating the drone’s functionality shows a man wildly waving his arms and with a speech bubble next to his mouth

Read more on The Verge 

Easter Supply Chain Set for Record Year

You may not realise the complicated Easter supply chain that exists in order to cope with increasing consumer demand.

Easter Supply Chain

Whether your Easter delicacy of choice is the humble egg, sweets like jelly beans and marshmallows, or something more like a Spanish torrija, you are contributing to the enormous spend on confectionary and other Easter-related items.

In the UK, Easter sales of chocolate make up 10 per cent of the figures for the entire year. According to the National Confectioners’ Association in the USA, around 70 per cent of the Easter sweets purchased are chocolate, which works out to a whopping $2.2 billion spend.

All of this puts pressure on the Easter supply chain plans that businesses have in place. And 2016 is expected to be a bumper year for consumer spend.

Highest for 13 Years

According to the National Retail Federation (NRF) in the USA, total spending on Easter this year is expected to hit $17.3 billion, the highest level for 13 years. To put it into perspective, that’s a spend of $146 for each person in the USA.

According to some statistics, this will put spending, particularly on sweets and chocolates, at a higher level for Easter than it is for Halloween. The NRF have estimated confectionary sales will total $2.4 million, surpassing the average of $2.1 million for Halloween sweets.

Possibly not good news for the 81 per cent of adults who admitted to stealing chocolate from their children’s stashes over the holiday period…

Retail Sales

And it’s not just the confectionary market that sees a huge spend at this time of year. With adults planning on spending on average 50 per cent for Easter than they did on Halloween, the money is being spread around.

According to the NRF survey, spending will see high figures in the following areas:

  • $5.5 billion on food
  • $3 billion on clothing
  • $2.7 billion on gifts
  • $2.4 billion on confectionary
  • $1.2 billion on flowers

And with over 40 per cent of shoppers visiting department stores to carry out their shopping, and 21 per cent shopping online, organisational supply chains will be working flat out to cope with demand.

Easter Supply Chain Optimisation

Delivering all this chocolate, sweets and other items to stores requires a mammoth effort from logistics organisations around the world. Shipping efficiency, customer location, order quantities and supply chain management all have to be reviewed in order to keep up with the demand.

In the USA, Hersheys opted to optimise their supply chain around the elements of customer geographical location and grouping stock-keeping units with product groups. It is estimated that by doing this, and using off-the-shelf software, the organisation has saved itself in excess of $15 million per year.

Just Born, a confectionary manufacturer who are responsible for America’s favourite non-chocolate treat, the Peep, changed their Easter supply chain strategy in order to cope with the huge demand for their products over the holidays.

The organisation now uses distribution centres and 3PL to break bulk orders for more efficient delivery to retailers. Just Born also shares these centres with other organisations, with this collaboration further reducing the costs associated with deliveries.

An increasing use of technology for inventory management and planning is making life easier for organisations too. Barcodes can be used to manage inventories more efficiently, while also allowing for real-time tracking of stock at both distribution centres and retail outlets.

Further advancements in technologies such as ERP and MRP systems will allow organisations to further increase efficiencies, while increased collaboration will benefit not only the whole industry, but also the consumer.

So just remember, the next time you crack open that chocolate egg, there’s more than a simple process required to get it from manufacturer to shelf (and that’s before the Easter Bunny gets involved!).