Supply chain risk is like the Mark Twain adage: “If you don’t like the weather in New England now, just wait a few minutes.”
Weather is capricious, just like supply chains. When it comes to managing a supply chain and mitigating risk, it’s a dynamic, constantly changing endeavor, not a “set it and forget it” exercise.
Moreover, we need to strike “black swan” and “once in a generation” events from the supply chain planning lexicon, and treat everything as a possibility.
Diversification remains at the heart of a truly effective and successful supply chain. Too often, we continue to see supply chains crippled by geopolitical events, transportation strikes, weather and climate change, and more. Admittedly, some industries, such as agriculture, have less control over certain aspects of their supply chain. Wine grape production has geographical limits, seasonal swings, and is vulnerable to extreme weather.
Currently, U.S. wine importers and exporters are dealing with critical congestion issues at West Coast ports, including equipment issues for both dry and reefer containers. Retaliatory tariffs are still in place on imports of certain European wine. Labor is tight across the supply chain, from the field to the warehouse, to distribution and transportation. And, the on-premise sales channel remains mostly stalled, at least in the U.S.
What changes can be implemented to buffer the current—and future—impacts facing the global wine supply chain? Start by constantly challenging your supply chain strategy to expose risk and weakness. Poke holes in your existing plan. Look at every node and ask, “What if…”
Notwithstanding the curve balls that Mother Nature can pitch, once the finished product moves downstream in the supply chain there are plenty of opportunities to optimize the care, custody, and control of the wine.
On a related note, a recent report from Rabobank, “The American Alcohol Consumer is Changing,” identified four trends worth noting, one of which addresses the lack of diversification in the wine industry:
The Consumer Is Diversifying Fast, but the Industry Has Been Slow to React
- Fifteen years ago, only 23% of regular drinkers were people of color. Today, that number is 31%. The shift is even more dramatic among young people: 40% of regular alcohol users aged 25 or younger are people of color.
- Most of the individuals we interviewed said company leadership is not doing enough to address the lack of diversity within their organization. Without more diversity, it is not clear how brands can thoughtfully and ethically market to some of these underserved communities.
- Inviting people of different backgrounds, race, and gender to the table won’t just help companies speak to underserved consumer groups and avoid marketing snafus, it can refresh how they market to all audiences!
In what VinRoutes calls the New World of Wine, diversification is key for a nimble, resilient supply chain AND organization.