The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios de Rabobank, México
8 – 12 de Diciembre de 2008

The World

Taking colors out the rainbow: In the present environment, more than ever, companies are looking for way to cut costs. We have seen them take a number of different strategies including reducing personnel, brands, SKU’s, etc. Now there is one more. Unilever after reviewing their packing costs has decided to reduce “the more than 100 hues they use on their spreads and dressings packaging in Europe to six.” While this may seem somewhat inconsequential Unilever thinks that they can “save tens or eventually even hundreds of millions of dollars a year.” Apparently where the savings come from a reduction in waste from using so many different colors as well as savings from being able to buy a few number of colors, but in larger volumes. Unilever says that even with the reduced number of colors, they can “achieve nearly the same look”. As an added benefit, cutting down on waste has environmental benefits. So is this strategy for everybody? The feeling by those who have looked closely at this is that cutting down on colors can result in significant savings for larger companies with complex coloring in their packaging. For smaller companies, however, coloring in packaging maybe an important element for differentiation.

“Greenwashing” in Canada: Increasingly companies are not only taking measures to protect the environment, but also we are seeing more and more companies including claims about their environmental efforts or product characteristics as part of their promotional strategies. Meanwhile, abuse of environmental claims has resulted in a new term entering into the marketing vocabulary: “Greenwashing”. The term greenwashing is used “to describe environmental credentials highlighted for a company or product that are unfounded or irrelevant”. One of the companies that have most recently come up against charges of greenwashing is Nestle. They advertized their bottled water as “the most environmentally responsible consumer product in the world”. In response the Friend of the Earth said, in regards to Nestle’s claims, that “it is clear that they are not based on fact” further alleging that many of Nestle’s “own bottles end up in the solid waste-stream and that most of its bottles are not recycled”. We have no opinion regarding the validity of Nestle’s claims. What is a concern, though, is that are not generally recognized best practices “to establish consistent measures and transparency” for measures and reporting standards. This leaves companies open to greenwashing charges, which whether true or not.

Mexico

More money for rural Mexico: The final 2009 budget approved by the Mexican Congress increased the resources destine for rural development to MX$235.9 billion (approximately US$17.3 billion); an increase of 15.6% compared with last year’s budget. The adjustments reflect both the lobbying skills of large farmer and campesino organizations as well as Congress’ growing role in setting budget priorities. Congress twitted original budget submitted by the Administration both by increasing the amount by MX$21.4 billion and reallocating monies. Interestingly, the programs that were most favored by Congress were those designed to generate rural employment (infrastructure, rural finance) and respond to problems of poverty in the countryside.