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Supply Chain Csr Initiatives Group Presentation 4

MBA Team project, recommendation to a California Wine Manufacturer for CSR initiatives

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Supply Chain Csr Initiatives Group Presentation 4

  1. 1. Supply Chain CSR Initiatives – Wine Industry<br />Consultants: Timothy Barba, Joseph Fidago, Kim Finney, Doug Keeley, Justin Smith<br />1<br />
  2. 2. Description of Industry<br />Section One<br />120<br />70<br />50<br />2<br />
  3. 3. Background<br />Consultants to Small / Medium sized Winery in Southern, California<br />Leverage trend towards affluent, health, environmental, social demographic <br />Emphasis on Sustainability by:<br /><ul><li>Use of biodynamic grapes
  4. 4. Re-use of byproducts
  5. 5. Eco-friendly packaging
  6. 6. Public education/awareness</li></ul>3<br />
  7. 7. Current Status of the Industry<br />How is the wine industry doing lately?<br />4<br />
  8. 8. Industry Snapshot<br />Worldwide there are now 360 certified vineyards and/or wineries, with a total 20,000 certified vineyard acres. <br />Of the major wine producing countries, France leads the list with 138 certified operations that include Burgundy's acclaimed Domaine de la Romanée-Conti. <br />The United States is second with 70 certified operations. <br />As an indication of increasing interest in Biodynamic farming, Demeter USA’s winery and vineyard members increased from 5 to 60 between 2005 and 2009, and as many as 20 new growers and wineries were expected to be added during 2010. <br />Wine is one of the higher-profile Biodynamic products in the marketplace.<br />5<br />
  9. 9. Future of the Industry<br />There is an increased awareness of the environmental and health aspects of business in society in general. <br />One example is the use of CFLs (Compact Fluorescent Lights).<br />CFLs put out equal or greater light, use 1/3 of the electricity, and last over 10 times longer than a normal bulb.<br />As referenced by the fact that there was a Green Sustainability Conference in Buffalo back in 2001, this has been on people’s radars for quite some time. <br />We will address this increased awareness through these new CSR initiatives.<br />6<br />
  10. 10. Profiles of Companies Selected for Case Studies<br />Section Two<br />7<br />
  11. 11. Wineries already using Biodynamic<br />Established in Sonoma, CA ~30 years ago.<br />Family owned business that switched to Biodynamic wine making in the mid 90’s.<br />Their entire portfolio of wines is certified sustainable, organic or biodynamic.<br />Want to be known as the “green winery”. “Great wine has green value”.<br />8<br />
  12. 12. Wineries already using Biodynamic<br />Family owned and run.<br />Mission is to craft small lots of wines from organic and biodynamic grapes using the best of old and new world winemaking techniques.<br />Premium “boutique” winery with a case production of 8,000 annually.<br />Located in Nice, CA, near Clear Lake and Napa Valley<br />9<br />
  13. 13. Other Industries – Great Lakes Brewery<br />Started by two brothers in September 6, 1988<br />Mission: focused on “environmentally respectful and socially conscious” as well as high-quality beer, service, continuous improvement and education to consumers.<br />Currently brews over 100,000 barrels a day<br />Located in Cleveland, Ohio<br />10<br />
  14. 14. Other Industries – Tennessee Short Mountain Distillery<br />First distillery in Tennessee, referendum passed November 2010<br />Construction began March 2011<br />Family owned and funded<br />Roots in moonshine<br />Wheat from first farm in Cannon County to be organically certified<br />Mission is to provide sustainability to the community and local farmers as well as the environment<br />11<br />
  15. 15. Other Industries – Aurora Organic Dairy<br />Located in Boulder, Colorado<br />Founded in 2003<br />Produces/markets private label and store-brand organic milk and butter<br />One of the principles is the comfort and humane treatment of the animals on their farms<br />12<br />
  16. 16. Development and Implementation of CSR Practices<br />Section Three<br />13<br />
  17. 17. Stakeholders<br />Consumers (health/taste)<br />Growers (economic)<br />Employees (employment/health)<br />Company owners/stockholders<br />Local communities (economy/environment)<br />Local government (tax revenue)<br />14<br />
  18. 18. The Business Case – Business Matrix<br />15<br />
  19. 19. The Business Case (Inside-Out)<br />Procurement<br />Operations<br />Outbound Logistics<br />Marketing and Sales<br />16<br />
  20. 20. The Business Case (Outside-In)<br />Local Demand Conditions<br />Related and Supporting Industries<br />Factor and Input Decisions<br />Context for Firm rivalry and strategy<br />17<br />
  21. 21. McKinsey 7s Framework<br />18<br />
  22. 22. Biodynamic® – What is it?<br />“A type of organic farming that incorporates an understanding of “dynamic” forces of nature not yet fully understood by science” – Biodynamic Farming and Gardening Association<br />“It’s the oldest ‘organic’ agriculture dating from 1924 - came about when a group of central European farmers felt that the industrialization of agriculture had rendered their soils less healthy, their seeds less fertile, their crops less nourishing and their own health less certain” – Monty Waldin Biodynamic expert <br />19<br />
  23. 23. Why Biodynamic?<br />Traditional production involves use of chemical fertilizers and pesticides<br />Greater corporate awareness of own social responsibility<br />Raised public awareness of environmental and health concerns<br />Desire to become market leader in sustainable production of wine<br />Increases competitiveness versus others engaged in this same movement<br />Sustainability<br />Health<br />Bottom line<br />Environment<br />20<br />
  24. 24. Quality and Taste<br />In addition to the environmental and health benefits from this initiative, there is evidence that this method of viticulture produces better tasting wines which will lead increased profits.<br />21<br />
  25. 25. How will we incorporate Biodynamic® into our business?<br />We will partner with local growers that are - or will become - Biodynamic® certified to supply our grapes.<br />22<br />
  26. 26. Sustainability Gameplan<br />Produce<br />Market<br />Sell<br />Monitor<br />Expand <br />23<br />
  27. 27. From Grape waste to Biofuel<br />What can be done with the mountains of waste produced by the wine and juice industry?<br />Use it to make Biofuel!!<br /><ul><li>Grape Pomace can be made into a pellet blend after oils and nutraceuticals have been removed.
  28. 28. With Glycerin added it has the same attributes as straw or wood without the air quality concerns.
  29. 29. Run the pellets through a gasifier and it can be turned into combustible gas which can be sold as renewable energy to power companies.
  30. 30. After gasification the charcoal pellets can be used as reusable filters as good as other filtering methods on the market.
  31. 31. Biggest possible use is in home heating to replace wood used in pellet-burning stoves.</li></ul>24<br />
  32. 32. From Grape waste to Gourmet Oil<br />Grape seeds can be cold-pressed into Merlot or Chardonnay oils<br />The added benefit – its good for your health - it contains:<br /> - polyunsaturated fatty acids (omegas 3, 6, and 9)<br /> - antioxidants<br /> - phytochemical<br />Unlike olive oil, grape oil takes a high heat during cooking<br />More than a ton of grapes is needed to produce just one gallon of grape seed oil.<br />Flour from grape seed, milled from dried grape pomace (bread with high antioxidants)<br />5% of the net revenues from sales of grape oils are being contributed to scholarships at Heritage University where Lieber previously taught.<br />25<br />
  33. 33. Grape Seeds and Youth<br />Scientists studying grape seed extract found that it was beneficial in the treatment of symptoms of:<br />Free radical damage and poor circulation<br />Chronic Venous Insufficiency (CVS)<br />Varicose Veins<br />Macular Degeneration<br />Diabetic retinopathy<br />Grape seed extract applied topically acts as a natural Alpha-Hydroxy Acid which improves skin tone and reduces wrinkles thus it is used in many cosmetic lotions<br />High concentrations of antioxidants found in grape seeds were found to be better than synthetic - making it a good choice for vitamins.<br />26<br />
  34. 34. Grape waste to Fertilizer<br />Waste has the ability to become compost:<br />The ground up waste (seeds, stalks, skin and pulp) sits for three months and is then reground to make compost<br />Can be used to fertilize vineyards or bagged and sold<br />Mixed with water it is turned into liquid fertilizer<br />27<br />
  35. 35. Wine Wastewater to Renewable Hydrogen Production<br />Wastewater comes from cleaning equipment, grape disposal, wine making and other processes.<br />Typical way of treating wastewater from wine production:<br />Sludge ponds (sludge build-up will occur)<br />Strong odor<br />Possibility of EPA fines <br />New Treatments:<br />Use of electrolysis combined with special microbes<br />Penn State Environmental Engineer’s system (tested at Napa Wine Company vineyard)<br />Wastewater is converted and cleaned<br />Cleaned water is safe to use to irrigate vineyard<br />Hydrogen is captured<br />28<br />
  36. 36. Uses for waste in other Industries<br />Great Lakes Brewery<br />Beer delivery truck runs on straight vegetable oil, reclaimed and filtered restaurant oil<br />Spent brewery grain used to feed local farmers livestock, also used to make beer bread and pretzels, also used as compost for fertilizer<br />Tennessee Short Mountain Distillery<br />Used grain is feed to livestock, manure is composted with other organic material and used to fertilize the fields<br />Aurora Organic Dairy<br />Dry-vac manure replaces water flush (saves 400,000 gal. of water per year)<br />Milk parlor wash water (100%) recycled for crop and pasture irrigation<br />Compost used to improve soil and fertilize crops<br />29<br />
  37. 37. Packaging - Overview<br />2 Options – both 100% Biodegradable<br />PLA plastic wine bottles (750ml)<br />Wine box from Landaal (5 liter)<br />Reduced waste <br />Reduced energy consumption in production<br />No added cost compared to glass bottles<br />30<br />
  38. 38. Packaging – PLA Plastic Bottle<br />Comparable in price to glass bottles<br />Used in China by Wine/Sake producers for past few years <br />Poly Lactic Acid (PLA) <br />Made from compressed corn starch or sugar cane<br />Compressed into “fabric” that can be formed<br />100% Biodegradable, but can also be recycled<br />Compared to Petroleum based plastics <br />Requires less energy to produce<br />Emits less greenhouse gasses<br />Less and less hazardous waste from manufacturing <br />Sustainable - produced from a renewable resource<br />31<br />
  39. 39. Packaging – Value Chain<br />Impact (compared to other packaging options)<br />Inbound Logistics – renewable resources - no shortage of raw material<br />Operations – less waste, standard bottling equipment can be used (cost savings)<br />Marketing/sales – no additional cost for consumers, green initiative<br />Outbound logistics – sturdier packaging leads to less breakage in transit<br />After Sales Service – packaging can be recycled or 100% biodegradable<br />Procurement – multiple suppliers<br />Technology Development – evolving & decreasing cost<br />32<br />
  40. 40. Packaging – Social Impact<br />Inside – out<br />Supported by the value chain initiatives<br />Cost effective draws interest from non target consumers<br />Outside – in<br />green packaging benefits environment<br />fits target consumer <br />33<br />
  41. 41. Public Awareness & Education<br />National:<br />Partner with Publications <br />Publicize a wine portfolio<br />Local:<br />Education for children & Adults<br />Wine Tastings (festivals, etc.)<br />Suppliers<br />34<br />
  42. 42. National Public Awareness & Education<br />Publications: Create Biodynamic wine course W/publication<br />Creates a credible branded training program<br />Creates national awareness & interest in a new wine segment. Provides instant credibility to the biodynamic wine making. <br />Media: Food Network Biodynamic wine portfolio <br />Similar to the WenteVineyards deal<br />Establish credibility, generate exposure<br />National exposure, credibility & increased mindshare.<br />35<br />
  43. 43. Local Public Awareness & Education<br />School Education: Student field trips<br />Provides local students hands on biodynamic education<br />Benefit: Create sustainability awareness & seasonal job interest<br />Adult education: Biodynamic classes for adults<br />Provide adult geared education about BD farming best practices.<br />Benefit: Create sustainability awareness as well as interest in biodynamic farming. Attract potential employees .<br />36<br />
  44. 44. Local Public Awareness & Education, Cont.<br />Wine Tastings:<br />Partner with local media outlets to advertise wine tastings<br />Create Fall/Spring/Summer festival concepts<br />Create local biodynamic winery awareness. <br />Benefit: Marketing + education + biodynamic winery exposure.<br />Partnerships: <br />Suppliers<br />Create a educated and sustainable supply chain.<br />Benefit: Sustainable and biodynamic practices are adopted<br /> throughout the supply chain.<br />Local agriculture universities/colleges<br />Continuing education in sustainability and farming<br />Benefit: Educated work force<br />37<br />
  45. 45. Public Awareness & Education – Social Impact<br />Inside – out<br />Supports industry segment & job growth<br />Promotes sustainability education<br />Positive long term impact on environment<br />Outside – in<br />Increased demand for products<br />Brand recognition & brand sustainability<br />38<br />
  46. 46. Recommendations for replication of CSR practices<br />Section Four<br />39<br />
  47. 47. Recommendations for replication of CSR practices<br />Document current process, roles and responsibilities<br />Conduct internal lesson's learned review's frequently <br />Participate in regular CSR training and review against current process and update with best practices. <br />Conduct annual benchmarking with recognized leaders in the industry or cross industry's. Review against current process and update with best practices. <br />Update documentation and revision history.<br />40<br />
  48. 48. Thank You!<br />41<br />
  49. 49. References<br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />The Washington Post – March 28th -The Environmental Impact of the wine we drink<br />5minmedia. (2011). Turning Grape Waste into Organic Compost. Daily Motion. video. Retrieved on April 13, 2011 from<br />42<br />
  50. 50. References continued<br />Arvanitoyannis, I., Ladas, D. & Mavromatis, A. (2006). Potential Uses and Applications of Treated Wine Waste: a Review. International Journal of Food Science and <br />Technology. 41. PP. 475-487. Retrieved on April 12, 2011 from <br /><br /> (2011). Sustainability – Other Sustainability Projects. Retrieved April 15, 2011 from<br />Hansen, Melissa. (2007). From Pomace to Pellets. Good Fruit Grower. April 1, 2007. <br />Retrieved on April 13, 2011 from <br /><br />43<br />
  51. 51. References continued<br />Innovation Center for U.S. Dairy. (2010). Sustainability in Practice. Aurora Organic Dairy. Retrieved April 10, 2011 from<br /> (2010). Integrating a Distillery into Sustainable Permaculture. Retrieved April 15, 2011 from<br />US News and World Report. (2009). Renewable Hydrogen Production Becomes Reality at Winery. October 6, 2009. Science. Retrieved on April 15, 2011 from<br />44<br />
  52. 52. References continued<br /> (2011). Grapeseed Extract. The Herbs Section. Retrieved April 15, 2011 from<br /> (2011). Winery Benefits from Green Reclamation Technology. Retrieved on April 15, 2011 from<br /> (2010). A Brighter Tomorrow Using LED Lighting.<br />Seeking Solutions to Environmental Concerns. (2001).<br />45<br />

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    Sep. 27, 2019

MBA Team project, recommendation to a California Wine Manufacturer for CSR initiatives


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