JanSport

Ryley Johnson

Growing up I was one of those people that had the same backpack for all of elementary school and into high school. I loved my backpack and every time a strap would break or something would tear I made sure that I mended it. Like most of the other students I used a Jansport backpack. Along with their very well made backpacks we see around campuses Jansport also produces several different clothing lines. These clothing are also seen in our bookstore at Point Loma Nazarene University.
Jansport is owned by a bigger corporation called VF Corporation. VF owns a wide variety of other clothing companies. Because of this they outsource a lot of their production to other countries one of those countries being Mexico. In 1994 NATFA was passed which allowed Mexican factories to take on more roles within the supply chain which previously was blocked by tariffs. After these tariffs were lifted companies like VF capitalized on the change. Companies are able to pay employees much lower wages then in the US and have to give little or no benefits. They also have less restrictions on safety and disposal of waste.
This change in restrictions that was brought on by NATFA and the shift of production from the US to Mexico and other countries have caused a huge loss of jobs in the US. Some critics from the United States believe that about 250,000 jobs in the US. It is no larger beneficial for American apparel companies to have their factories within the US. They take that portion of their business overseas and across the boarder. This is a reality now in the business world but how is it affecting or country? We see the clothing that Jansport produces and we think to ourselves that we are buying a product produced by an American company. Unfortunately our economy is missing out on a large portion of the potential profit from this product in the form of taxes and jobs.

JanSport

The Sexy in Powerbars

Restore

Blog Post #5

Yesenia Gomez

Economic side of Consumption- Powerbars

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The Sexy in Powerbars

The Restore can be described as PLNU’s very own mini-market. Students are constantly in and out of this venue. I was able to talk with Irene Alvarado, Manager of the Restore, about the best-selling products. The Powerbar was one of the top 2 selling products in the Restore. Most people would agree that the energy bars are quite expensive but the satisfaction one receives from eating a filling, healthy bar is better than a bag of chips. The benefits of the taste and nutritional gains have obviously outweighed the financial costs. As a school, we have proved it by making energy bars one of our top 2 selling products.

Since 2004, energy bars have made steady gains even with the relatively high prices on the energy bars. In 2011, Food Management wrote an article titled Food Bars Growing Fast; Packaged Facts reported that the retail market was $5.7 million dollars in cereal and energy bars.

Energy bars, such as Powerbar, have expanded their markets from the sports nutritional market to recreational and life-style users. A 2010 Market analysis report from the International Market Bureau says that niche markets in sports nutrition are selling products in grocery stores and market outlets; they are no longer just seen at nutritional or sports stores. Sport nutrition markets are using new ingredients in new products to incorporate different target markets. The general American population has athletes, recreational users, and life-style users. The consumption of each of the groups has a different intention and purpose of purchase. Just like the general population, PLNU is a small sub-scale of the energy bar consumption; there are students, faculty, and staff that engage in different sub-categories of exercise.

According to the International Market Bureau, there are 3 specific trends seen in the consumption of energy bars. First, Powerbars have included innovative ingredients such as protein and nutritional boosts like energy; this attracts the athletic population. Second, appearance and fitness concerns have become more openly common. Third, the accessibility of these bars has grown; they are in mini-markets like the Restore and supermarkets like Walmart. The last two trends attract the general population.

The United States has become the biggest consumer for sports-related products. In the global market, it is estimated to consume two-thirds of both the value of retail transactions and volume sales. Consumer behavior has pushed sports nutrition markets to make a variety of energy bars with new specific flavors and purposes. This is why Powerbar has a total of 37 bars in 8 specific categories. Taste is a significant factor and ingredients like cocoa and whey or soy protein can manipulate whether consumers will continue to purchase bars.

Nestle, owner of Powerbar, has easily outstripped cocoa supply from plantations in the Ivory Coast. Corporations like Nestle know the value of cocoa; they know it can be transformed into a great tasting bar with high demand. The problem is cocoa farmers are not receiving a fair share of the end product being sold. Percival’s article, From bean to bar: Why chocolate will never taste the same again, discusses the problem with local community farmers being at the bottom of a multi-layered supply chain. The cocoa-nomics do not allow these farmers to economically benefit from what has become an increasingly demanded market in the United States.

This means that either Powerbar comes up with a new supplement to replace cocoa or they change the way their supply chain is currently operating. If they choose to keep cocoa, they need to be paying farmers a fair amount of the profits gained. This also means better working conditions and the stop to child labor. If they do not choose to keep cocoa, they will lose a large number of consumers, and it would not be the same product anymore.

We know that energy bars have become increasingly popular and trendy. Is it more important to the consumer to buy trendy food items? Are consumers that shallow? Is it our duty to investigate where the ingredients of a Powerbar come from? Are corporations like Nestle using our own consumer behavior for their own economic benefit?

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The Sexy in Powerbars

“Don’t Buy Our Jacket”

By definition of the Merriam-Webster dictionary, Commercialization is “to use (something) as an opportunity to earn money”.  Other definitions state that commercialization is the process in which a new product is introduced into the market.  The launch of the product, the advertising, sales promotion, and any other marketing strategies are all a part of commercialization.  Commercialization is a standard business practice that is used in order to promote a companies products with the goal of maximizing products.  Consumption is defined as the “using up of a resource”.  The goal of commercialization is to convince potential buyers to consume the companies product. Consumption is often viewed as food being eaten, but in the sense of material goods, consumption as far as the company is concerned is based on sales.  As long as a company continues to sell their product, there are buyers “consuming” their product.  It is typical of companies to commercialize their products in a way that influences people to continuously consume their products, but Patagonia has taken a unique strategy of commercialization.  This campaign is known as their “Common Thread” campaign.

Marketing campaigns are not always focused on a single particular product.  Sometimes it the marketing campaigns are not even particularly focused on a particular line of products.  Often times, marketing campaigns are designed to promote the entirety of a particular company.  This is the type of campaign that Patagonia began in late 2013 with their “Common Thread” campaign.  The “Common Thread” campaign included ads in the New York Times with big black letters above their products saying “DON’T BUY THIS JACKET”, a short length video tracing the history of individual products and the stories that came with them, and promoting the: reduction of goods bought, the repair of “broken” gear already purchased, the reuse of unused gear, and the recycling of worn out gear to avoid additional growth to landfills.  When Patagonia launched this campaign on Black Friday, the opening day of the all important holiday shopping season, they were they only retailer who asked consumers to rethink what they bought, and to consider buying less.  As an environmentally aware company, Patagonia recognizes the footprint left behind by the production of every product (including their organic ones).  Instead of persuading their customers to purchase more of what they don’t need, they took a different stance in an attempt to take care of the environment but also to convince consumers that Patagonia products (while pricy) are superior to alternatives.  This campaign suggested that Patagonia produces products that are designed to “last and be useful”.  The company asks that their customers buy only what they need.  This stance in a consume happy society has earned Patagonia the loyalty and trust of it’s existing customers, and through this unique campaign also caught the attention of new customers.

Patagonia makes every effort as a company to make the process in which they create the product you’re about to purchase available for you to see.  On their website they have a feature called “The Footprint Chronicles” that allows consumers to view where each product comes from.  They even go into depth explaining why they encourage to “Don’t Buy This Jacket”.  This particular campaign was aimed at giving consumers confidence in the quality of their product which is typically more expensive than their competitors.  It is hard to measure the economic impact of this particular campaign, but it is safe to say that Patagonia gathered a lot of attention and respect as a result of their unique marketing strategy while maintaining their values of taking care of the environment.

 

-Taylor Langstaff

 

Sources: http://www.thecleanestline.com/2011/11/dont-buy-this-jacket-black-friday-and-the-new-york-times.html

http://www.fastcoexist.com/1681023/how-patagonia-makes-more-money-by-trying-to-make-less

http://www.steiner.com/

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Economic Benefits of Sustainable Production

Production is the combination of many different raw materials that have been altered in one way or another to create a final product.  Often times, the raw materials used in the production of a product are from many different places in the world.  One of the hardest aspects of tracing the footprint of a product is the many different raw materials that are utilized to create any given product.  The product that was purchased by the Point Loma Nazarene University “Spiritual Life” department was a Patagonia jacket.  While the particular product was not specified by those that were contacted form “spiritual life”, it is likely that cotton was used in the production of the jacket.  Since cotton is a primary material typically used in clothing and most jackets, the production of and process in which the cotton is grown for Patagonia became the focus of the production aspect for this project.  Instead of attempting to track all of the materials that could have possibly been used for any and/or all of the Patagonia jackets, cotton was selected as the most reasonable raw material to track.

While not all of the cotton that Patagonia uses is from the Texas Organic Cotton Marketing Cooperative, the company and this particular cooperative do have a long lasting relationship.  The cotton farmers of the high plains of Texas, became frustrated around 1993.  The chemicals that were poured on their crops as pesticides and herbicides were not performing as they had been promised.  Poor results from the use of the se chemicals led a handful of farmers to rethink the effects of these chemicals, and reevaluate what was not only environmentally positive but also economically strategic.  Farmers met and some of them who were serious about making change began the Texas Organic Cotton Marketing Cooperative,  (TOCMC) who Patagonia has been working with since the mid 1990s.  THese farmers decided that they would revert back to the old farming techniques and focus on taking care of the land so that it could continue to produce cotton for them in years to come.  They figured that avoiding the intense usage of chemicals would be good for the soil, and would allow them to produce cotton for many years.  The environment in the high plains of Texas are ideal for organic cotton farming.  There is low insect pressure and  there is just enough rain to dryland farm a solid amount of the cotton.  The combination of an ideal environment and the movement of the TOCMC has made the high plains of Texas the majority producer of organic cotton in the United States with the production of at least 95% of American Organic Cotton.

This cotton does not come without a cost however.  Organic cotton above all else is much more labor intensive than conventionally farmed cotton.  On a 3500 acre farm that would typically only require one full time employee for conventional farming, would require at least 4 for organic farming.  This does not however make organic farming less economic.  Instead of pouring money into the technology of the chemicals and giving money to these large corporations, organic farming pays the local workers.  These field workers then spend their money in the community and support one another.   While the cost in labor increases, the personal aspect, and growth of the community for a superior raw material is well worth it.   The organic cotton that is used in the production of Patagonia’s jackets will allow farmers to keep their cotton farms soil healthy for many years, while their employees pour into the community and continue to support one another.

– Taylor Langstaff

 

Source: http://www.patagonia.com/us/patagonia.go?assetid=84716

 

Economic Benefits of Sustainable Production

Economic Strategy of Patagonia’s Transportation and Distribution

Transportation/Distribution The bottom line for any business is to increase profits.  Without the goal of making money, a business will fail and no longer exist.  A simple practice that many companies often use to maintain efficient business is to periodically evaluate the process in which they operate.  In 2011, Patagonia re-evaluated the way their transportation network was set up, and it has proved to be quite profitable. Patagonia had their distribution tracked and evaluated.  Over 60% of their products are manufactured in Asia.  To get them to their warehouse, the products (i.e. the jacket which was purchased by Point Loma Nazarene University Spiritual life) was (up until 2011) shipped to the Port of Los Angeles/ Long Beach harbor.  Shipments would come in from Shanghai, Manila, Haiphong and other Asian cities where Patagonia products are made.  From the Port of Los Angeles, product must be transferred to their distribution center.  When Patagonia began, this was in Ventura at the headquarters.  In 1996 the distribution center was relocated to Reno, NV as the company grew.  Reno is 523 miles away from the Port of Los Angeles.  The re-evaluation of this transport determined that this distance caused unnecessary costs.  Shipping via truck has higher fuel costs than those of boats.  There are also regulations that require truck drivers to rest for 10 hours after 11 hours of driving.  This regulation can potentially cause delayed deliveries.  There are also potential mechanic breakdowns, weather conflicts, and other unexpected interferences that can occur during long distance shipping via truck. There were reasons for Patagonia keeping their port in Los Angeles, such as: grown relations over many years, reasonable costs, convenience of “vessel sail times”, flexibility of three separate trucking routes in the case of weather or other unpredictable interferences, among other things.  As a part of their 2011 evaluation, Patagonia had their freight forwarder company “Expeditors” analyze the transportation route.  As a result, Expeditors suggested that Patagonia move their receiving port up to the Port of Oakland.  While this move allows trucks only one route from Oakland to Reno, the greater proximity has proven to substantially improve other costs.  Fuel and maintenance costs have greatly decreased, and drivers are capable of making the 229 mile drive well within ten hours.  This allows drivers to avoid lengthy truckstop layovers, and provides for more timely and predictable delivery. There are so many different aspects that go into the whole of a company.  It is easy for companies to continue with operations that have been a part of the company for many years.  While many companies overlook the foundation of their routine, re-evaluating all processes can prove to be very profitable.  Ten months after Patagonia shifted their receiving port to Oakland, they saved an estimated $324,000.  As a company that is also environmentally conscious, the move also reduced their carbon footprint by 31%.  For such a simple adjustment to the company, Patagonia has been pleased with the resulting economical and environmental improvements in their decision to move receiving ports.

-Taylor Langstaff

Source: http://www.patagonia.com/us/patagonia.go?assetid=79365

Economic Strategy of Patagonia’s Transportation and Distribution

Nestle’s Marketing Strategies

Restore

Blog Post #3

Yesenia Gomez

Economic side of Distribution- Powerbars

Nestle’s Marketing Strategies

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Recently, Nestle has broadened its marketing strategy by working as a franchise machine across the world. It is a global multinational corporation that exists within local communities. Nestle brands everything locally and works regionally. Most of its plantations are abroad while corporations are in the US and Europe. They have a global approach in technology and are very advanced in the way it enters new markets. Rapoport’s article, Nestle’s Brand Building Machine, calls Nestle the modern day “Roman Empire School of Marketing” for its tactic in settling in, colonizing as much territory as possible, adapting to the new land, and keeping away competition that trying to intervene for resources.

Nestlé’s business approach consists of traveling across open markets to discover new markets. Its persistence in entering markets in China has led it to reach a leading role as a food company in China and Vietnam. Nestle has already branded many products and resources in Mexico, Brazil, Chile, and Thailand. Nestlé is considered one of the most powerful food companies in the global economy. There is a give and take with the companies it makes business with. For example, Rumble the Jungle explains the extraction of palm oil in Indonesia is hurting the local communities. Yet, the Indonesian government benefits from the income gained from the extraction of palm oil; it goes towards the corrupt elite. Why?
Well, when every metric ton in Indonesia forests are priced at $900 and there is an annual 24 billion dollars made from exporting palm oil from Indonesia…it is tempting for those who want more money and power.

Nestle does not always buy directly from “damaging” markets. It is careful about its reputation. It has been humiliated and media-bombed for its engagement in labor exploitation and destruction of natural environment resources in the past. For example, farmer’s beans are bought by other middlemen which later exports goods to Nestle. The supply chain goes through a series of distributors and as the cocoa or coffee beans gain market value, it is too late for the primary farmers to receive their proper share. They are forgotten and left at the bottom of the value chain. Farmers are left with little to nothing.

Rapoport, C. (1994). Nestlé’s brand building machine. Fortune,130147.

Gilbert, D. (2013). Rumble in the jungle. Earth Island Journal, 27(4), 40-45.

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Sustainable Business Practices

Restore

Blog Post #10

Kelsey Werner

Social side of Distribution- Guayaki

Fair trade, living wages, packaging made from recycled products, subtracting carbon emissions, no harmful synthetic agents, salvaged or recycled waste, bio-diesel, and 100% renewable energy. Sound too good to be true? Well, it isn’t. Welcome to Guayaki.

As stated on their website:

In 2009, Guayakí became the first Fair Trade Certified yerba mate supplier in the world through IMO’s Social & FairTrade Certification Programme – “Fair for Life”.  “Fair for Life” combines strict social and fair trade standards with adaptability to local conditions. The Certification guarantees that human rights are guaranteed at any stage of production, so that workers enjoy good and fair working conditions and that smallholder farmers receive a fair share. Fair trade improves the livelihood of thousands of smallholder farmers and workers by providing the means for social community projects and empowerment of people.

Guayakí is also a member of the Fair Trade Federation and guarantees living wages to the artisans who make our gourd and bombillas. Instead of purchasing gourds and bombilla from commercial factories, we employ Argentine artists who work from their home studios so they can spend more time with their families and create truly one of a kind pieces of art. At Guayaki, it’s not just about making a tasty cup of mate, it’s about meaningful work.

Our packaging material is a minimum of 100% recycled corrugated cardboard with 30% post consumer, although most are 100% post-consumer waste. Our packaging peanuts are made of plant based materials (dissolve in water) or salvaged and cleaned from other companies that we collect from inbound materials. Our plastic pallet wrap is recyclable. Our bottle shipper cases are completely recyclable, non-petroleum based, and made of 100% post consumer recycled corrugated board. This is a first in the industry – we are proud to say we pioneered these new boxes!  The paper used for inserts, invoices, brochures, etc is always made from 100% post-consumer recycled paper.

All invoices, flyers, brochures and other paper materials printed for our customers and vendors are 100% recycled post consumer waste material or the highest post consumer content available. We will never use virgin paper materials in anything we print for our business.  In our offices, we recycle, reuse, and reduce as a daily practice.  We use real dishes and cups (and gourds) and wash them instead of using paper or plastic.

Guayakí third party life cycle analysis shows that after growing the yerba mate, and adding up all of the carbon emissions, guayakí is subtracting carbon from the environment. For example, your purchase of one pound of loose guayakí yerba mate reduces atmospheric co2 by 573g.

Our mate tea box packaging material is recycled paperboard with 35% minimum post consumer, and printed with vegetable inks.  We package our bulk loose mate products and bulk tea bags in cutting-edge biodegradable and compostable bags made from tree pulp cellulose from sustainably maintained forests. They will compost in your home compost or landfill in 180 days. The packaging material is made from renewable, non G.M.O. wood-pulp sourced from plantations employing Sustainable Forestry Management Principles, who conform to the environmental standard I.S.O. 14,000 and have either achieved or are working towards F.S.C.

Guayakí does not use, nor allow within its facility, chemical cleaning agents, bleaches, synthetic and chemical based soaps, ammonia, chlorine, dioxide, commercial pest repellents, fumigants, or other synthetic agents which are harmful to ourselves and the environment. Pest management practices include the use of sticky traps. We do not fumigate nor do we use chemical killing agents. All cleaning products used within our facilities are 100% natural, bio-degradable and are approved for use within certified organic facilities. The primary industrial cleaning agents we use is TKO Orange Oil which is completely biodegradable, approved by the EPA and our organic certifiers.

Virtually all waste generated by Guayakí is either recycled or salvaged. All office paper, scrap paper, cardboard, cans, bottles, plastic, steel, and wood is salvaged and recycled. We also recycle all electronic and computer components which are no longer in working condition by taking them to a local facility for proper salvage, reclamation or disposal, thus preventing several known heavy metal sources from being land-filled. A few times a year, we even reuse our mate after it’s brewed for the bottles to use it as energizing compost for our gardens around our main office.

Our marketing cargo vehicles run on bio-diesel! This further outlines our commitment to environmental sustainability and lessening our impact on global warming.

Guayakí is proud to have converted its entire operation to 100% renewable energy by transferring all of its conventional electrical power usage to renewable solar energy. We offset over 55 tons of our corporate CO2 footprint … locally. In tandem with this commitment, we have purchased enough solar power to offset the carbon 1 energy market in a similar way the purchase of a Guayakí product helps drive more reforestation.

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Guayaki is making outstanding efforts in order to protect the environment and all people who are affected by its product. It is rare to hear of a company doing this much. It gives me a bit of hope that this sort of business model is possible and also successful. I believe in what Guayaki is stands for. They walk their talk and carry out their mission of restoration all along their supply chain.

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