{"id":10431,"date":"2016-11-04T00:53:11","date_gmt":"2016-11-04T04:53:11","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/califia-farms-cracking-the-drought-in-california\/"},"modified":"2016-11-04T00:54:26","modified_gmt":"2016-11-04T04:54:26","slug":"califia-farms-cracking-the-drought-in-california","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/califia-farms-cracking-the-drought-in-california\/","title":{"rendered":"Califia Farms: Cracking the Drought in California"},"content":{"rendered":"

There\u2019s a modern-day gold rush happening in California, but this one doesn\u2019t glitter. Driven by increased health consciousness and oft-cited health studies, Americans are \u201cconsuming more than 10 times as many almonds as [they] did in 1965\u201d (1). And they\u2019re not just eating almonds by the handful \u2013 they\u2019re pouring them over their cereal and into their coffee.<\/p>\n

Meet Califia Farms, the Los Angeles-based new kid on the block that has helped make almond milk cool and given WhiteWave\u2019s Silk<\/em> and Blue Diamond\u2019s Almond Breeze<\/em> a run for their money. Founded in 2010 by Greg Steltenpohl, the entrepreneur behind Odwalla, Califia, with its distinctive rounded jugs and wholesome branding, has grown rapidly, reaching 27,000 storefronts in the U.S., and has gained industry recognition, winning BevNet\u2019s 2015 Brand of the Year and Beverage World\u2019s 2015 \u201cBreakout Brand\u201d (2).<\/p>\n

\"picture1\"<\/a>Califia started with citrus juices and has expanded into ready-to-drink coffee beverages, but its core product is its almond milk, which tripled in revenue in 2014 (3) and \u201cexperienced triple digit growth [in 2015]\u2026accounting for 75%\u201d of the growth of the overall almond milk category (2). Since 2010, that category has itself grown from 10% to 65% of the roughly billion dollar nondairy milk substitutes market, dethroning soy milk, long embittered by health concerns (4).<\/p>\n

\"picture2\"<\/a>Given its Mediterranean climate, ideal for harvesting almonds, California produces almost the entirety of the U.S. almond supply, and comprises 82% of the global supply (1). California almond farmers are keeping pace with the demand and cashing in, with land devoted to almond production doubling and overall crop value growing at an 11% CAGR since 1995 (5). Almonds are big business, with industry revenues in California of $11bn (6), of which $4.5bn is exports, primarily to China (7).<\/p>\n

But all is not well in the goldmine. California is in \u201cits fifth year of severe drought\u201d with \u201c2015 as the warmest year on record\u201d (8). The severity of the drought caused Governor Jerry Brown to declare a state of emergency in 2014, enacting residential and commercial water use restrictions. These restrictions were renewed in 2016, and drought conditions are expected to persist (8). Given a single almond requires an average of 1.3 gallons of water to produce (9), and almond production in California contributes roughly 10% of the state\u2019s annual water usage (10), the almond rush will not be able to continue unchecked.\"picture3\"<\/a><\/p>\n

The amount of water required to produce a single almond and the fact that almonds are the state\u2019s largest export have made them an easy scapegoat for California\u2019s crisis. \u00a0Skeptics point out however, that almonds\u2019 water requirement is comparable to other crops, and in fact less than that required to produce cow\u2019s milk (10). The issue is one of timing.<\/p>\n

Unlike \u201crow\u201d crops such as tomatoes, which can be left fallow in a dry year, almond trees are permanent (11) and \u201cmust be watered even when they\u2019re not producing\u2026farmers are locking in future water use for decades to come\u201d (10) in areas of the state where \u201cwater shortages are most severe\u201d (11). As global climate change and California\u2019s drought continue, almond growers risk further restrictions \"picture4\"<\/a>on their water supplies, but can\u2019t simply relocate their trees.<\/p>\n

Califia Farms has built its brand on an input that will become increasingly expensive and limited as climate change continues to put pressure on California\u2019s water supply, but the company has made sustainability a core component of its message. When it comes to its own production process, Califia repurposes over 90% of its post-production byproduct (mostly water) for irrigation on farms near its facility, and has reduced water usage at its production plant by 64% from \u201915 to \u201916 (12). While admirable, these improvements pale in comparison to the environmental impact of the upstream almond production Califia relies on. To address this, the company has made sure to partner with growers that use drip-irrigation methods (only 30% of growers still use high-volume flood irrigation (7)) and active soil monitoring to reduce water usage (12).\"picture5\"<\/a><\/p>\n

As an innovator at the forefront of the plant-based beverage space, and one whose brand depends on almonds, Califia must do more. Incremental efficiencies will not change the fact that almonds are becoming an unsustainably large part of California\u2019s agricultural complex and resource use. \u201cHigh-input, mono-crop agriculture [is] a \u2018key driver of and major victim of global warming\u201d (13), and the solution lies in agricultural diversification.<\/p>\n

Califia has turned almonds into gold, but to be a sustainable company, it must now leverage its know-how and powerful brand to find and market the next plant-based milk, reducing reliance on almonds. Let\u2019s just hope it tastes as good.<\/p>\n

[Word Count: 780]<\/p>\n

References<\/strong><\/p>\n

    \n
  1. James Hamblin, \u201cThe Dark Side of Almond Use,\u201d The Atlantic<\/em>, August 28, 2014, http:\/\/www.theatlantic.com\/health\/archive\/2014\/08\/almonds-demon-nuts\/379244\/<\/a>, accessed November 2016.<\/li>\n
  2. \u201cCalifia Farms Doubles Bakersfield, CA Operations to Support Growth, Innovation, and Customer Service,\u201d press release, May 4, 2016, on PR Web, http:\/\/www.prweb.com\/releases\/2016\/05\/prweb13382806.htm<\/a>, accessed November 2016.<\/li>\n
  3. \u201cCalifia Farms Named 2015 Brand of the Year by BevNet,\u201d press release, December 14, 2015, on PR Web, http:\/\/www.prweb.com\/releases\/2015\/12\/prweb13127969.htm<\/a>, accessed November 2016.<\/li>\n
  4. Ryan McCormack, \u201cSoy & Almond Milk Production in the US,\u201d July 2016, via IBISWorld, accessed November 2016.<\/li>\n
  5. United States Department of Agriculture, National Agricultural Statistics Service, April 29, 2016, https:\/\/www.nass.usda.gov\/Statistics_by_Subject\/?sector=CROPS<\/a>, accessed November 2016<\/li>\n
  6. Daniel Sumner, William Matthews, Josue Medellin-Azuara, Adrienne Bradley, \u201cThe Economic Impacts of the California Almond Industry,\u201d 2014, University of California Agriculture Issues Center, http:\/\/www.almonds.com\/sites\/default\/files\/content\/attachments\/the_economic_impacts_of_the_california_almond_industry.pdf<\/a>, accessed November 2016.<\/li>\n
  7. Almond Board of California, \u201cAlmond Almanac 2015,\u201d 2015, \u00a0http:\/\/www.almonds.com\/sites\/default\/files\/content\/attachments\/2015_almanac.pdf<\/a>, accessed November 2016.<\/li>\n
  8. S. Geological Service, California Water Science Center, \u201cCalifornia Drought,\u201d http:\/\/ca.water.usgs.gov\/data\/drought\/<\/a>, accessed November 2016.<\/li>\n
  9. Jo Craven McGinty, \u201cThe Numbers Behind Agricultural Water Use,\u201d The Wall Street Journal<\/em>, June 21, 2015, http:\/\/www.wsj.com\/articles\/the-numbers-behind-agricultural-water-use-1434726353<\/a>, accessed November 2016.<\/li>\n
  10. Eric Holthaus, \u201cStop Vilifying Almonds,\u201d Slate<\/em>, in Moneybox blog, April 17, 2015, http:\/\/www.slate.com\/articles\/business\/moneybox\/2015\/04\/almonds_in_california_they_use_up_a_lot_of_water_but_they_deserve_a_place.html<\/a>, accessed November 2016.<\/li>\n
  11. Dale Kasler, \u201cCalifornia Almond Farmers, Lured by High Profits to Expand Orchards, Face a Drought Struggle,\u201d The Sacramento Bee<\/em>, May 11, 2014, http:\/\/www.sacbee.com\/news\/local\/article2598507.html<\/a>, accessed November 2016.<\/li>\n
  12. Califia Farms, \u201cFAQs,\u201d https:\/\/www.califiafarms.com\/faqs<\/a>, accessed November 2016.<\/li>\n
  13. Dana Goodyear, \u201cWhat Milk Should I Drink?,\u201d The New Yorker<\/em>, October 23, 2015, http:\/\/www.newyorker.com\/news\/daily-comment\/what-milk-should-i-drink<\/a>, accessed November 2016.<\/li>\n<\/ol>\n

    Images and Figures<\/u><\/p>\n

      \n
    1. Cover Image of Desert, \u201cCalifornia Drought Emergency Declared by Governor Jerry Brown,\u201d Huffington Post, <\/em>January 25, 2014, http:\/\/i.huffpost.com\/gen\/1569133\/images\/o-CALIFORNIA-DROUGHT-facebook.jpg<\/a>, accessed November 2016.<\/li>\n
    2. Cover Image of Califia Farms Almond Milk, http:\/\/static1.squarespace.com\/static\/542758dbe4b0b8d209da4e1e\/t\/54ae2974e4b061eb98d49e57\/1420700030906\/<\/a>, accessed November 2016.<\/li>\n
    3. Emine Saner, \u201cAlmond Milk: Quite Good for you \u2013 Very Bad for the Planet,\u201d The Guardian<\/em>, October 21, 2015, https:\/\/www.theguardian.com\/lifeandstyle\/shortcuts\/2015\/oct\/21\/almond-milk-quite-good-for-you-very-bad-for-the-planet<\/a>, accessed November 2016.<\/li>\n
    4. Julia Lurie, \u201cCalifornia\u2019s Almonds Suck as Much Water Annually as Los Angeles Uses in Three Years,\u201d Mother Jones<\/em>, January 12, 2015, blog, http:\/\/www.motherjones.com\/environment\/2015\/01\/almonds-nuts-crazy-stats-charts<\/a>, accessed November 2016.<\/li>\n
    5. Alissa Walker, \u201cSeriously, Stop Demonizing Almonds,\u201d Gizmodo<\/em>, April 8, 2015, blog, http:\/\/gizmodo.com\/seriously-stop-demonizing-almonds-1696065939<\/a>, accessed November 2016.<\/li>\n
    6. Almond Board of California, USDA, \u201cAlmond Crunch: California Drought Withers World Supply,\u201d MarketWatch<\/em>, March 11, 2014, http:\/\/www.marketwatch.com\/story\/almond-crunch-california-drought-withers-world-supply-2014-03-11<\/a>, accessed November 2016.<\/li>\n
    7. Califia Farms, \u201cAbout Us,\u201d https:\/\/www.califiafarms.com\/about-us<\/a>, accessed November 2016.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

      Having reinvented almond milk, Califia is one of the fastest growing beverage brands in the world. But is it helping run California dry?<\/p>\n","protected":false},"author":2206,"featured_media":10542,"comment_status":"open","ping_status":"closed","template":"","categories":[28,1530,1321,1579,1578,1254,63,1356,1580,328,427],"class_list":["post-10431","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-agriculture","category-almond-milk","category-almonds","category-beverages","category-califia","category-california","category-consumer-goods","category-drought","category-irrigation","category-milk","category-water"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\nCalifia Farms: Cracking the Drought in California - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/califia-farms-cracking-the-drought-in-california\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Califia Farms: Cracking the Drought in California - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Having reinvented almond milk, Califia is one of the fastest growing beverage brands in the world. 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