{"id":12551,"date":"2016-11-04T16:36:48","date_gmt":"2016-11-04T20:36:48","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/camposol-growing-fresh-produce-or-concern\/"},"modified":"2016-11-04T16:36:48","modified_gmt":"2016-11-04T20:36:48","slug":"camposol-growing-fresh-produce-or-concern","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/camposol-growing-fresh-produce-or-concern\/","title":{"rendered":"Camposol: Growing fresh produce or concern?"},"content":{"rendered":"

In recent years, Peru has almost become a synonym of cuisine. It has many times been named the world\u2019s leading culinary destination, and its unique gastronomy is\u00a0subject to continuous praise and awards. Peruvian food is a reflection of identity, heritage, and creativity. However, what most people don\u2019t know is that it is mostly a reflection of a diverse set of ingredients, possible due to the country\u2019s geography (a mix of desert coast, Andean highlands and jungle) and varied climates. [1]<\/p>\n

Agriculture represents 6% of Peruvian GDP but accounts for over 25% percent of employment in the country and much of export growth in recent years, [2] positioning Peru as one of the top 10 food suppliers in the world with products like quinoa, asparagus, and coffee amongst others, and increasingly contributing to world food security. [3]<\/p>\n

Camposol is the leading agro-industrial company in Peru. It harvests, processes, and markets a wide range of products, some of the main ones being hass avocados, asparagus, mangos, and shrimp, which they export to leading world markets and known retailers such as Walmart and Costco. It is also one of the top three employers in the country, and hires over 15,000 workers in peak production cycles. [4] In recent years, Camposol has been affected by climate change conditions, especially by El Nino Southern Oscillation, a naturally occurring phenomenon that involves fluctuating ocean temperatures in the equatorial Pacific, strongly related to global warming. [5]<\/p>\n

El Nino Southern Oscillation and rising temperatures<\/strong><\/p>\n

\"screen-shot-2016-11-04-at-4-33-14-pm\"<\/a><\/p>\n

Source:\u00a0\u00a0State Climate Office of North Carolina http:\/\/climate.ncsu.edu\/climate\/patterns\/ENSO.html<\/a><\/em><\/p>\n

\u00a0<\/strong><\/p>\n

El Nino Southern Oscillation, as seen in the graph above, directly affects cities in the north of Peru with rising water and air temperature, and abundant rain. It also creates fluctuations in the intensity and duration of summer and winter seasons, affecting land productivity and harvest periods. This is a main reason why in 2015, production of mangos, avocados and asparagus (all grown in the northern coastal region of Peru), dropped significantly for Camposol. [6] In addition, low yields have increased prices of certain products like hass avocados and mangos, placing them in a premium category for consumers and limiting their potential for growth.[7] It is surprising to see that in 2015, even given these tough conditions, the company registered record sales, closing Q4 2015 with revenues of USD 86.4 million, up 18.4% from Q414. [8]<\/p>\n

 <\/p>\n

Camposol Sales 2015<\/strong><\/p>\n

\"screen-shot-2016-11-04-at-12-58-04-pm\"<\/a><\/p>\n

Source: Camposol 2015 Results Presentation, Company Documents<\/em><\/p>\n

 <\/p>\n

How is Camposol tackling climate change and what can they do looking forward?<\/u><\/p>\n

Camposol is taking strategic measures to remain competitive in the global trade of its products. Through unique competitive advantages, a solid strategy and corporate governance it remains a growing market leader. How is it then that they are mitigating the risks of climate change and securing a better future? Mainly through the following three measures: [9]<\/p>\n

    \n
  1. Diversification:<\/strong> Camposol is undergoing an expansion process to become a global healthy food conglomerate. Through diversification into new products and formats, the Company is able to compensate for the lower yields of their current portfolio. Their production of blueberries, for example, grew from 0.3% to 4.4% of their sales from 2014 to 2015. This strategy also allows them to maintain a baseline of sales throughout the whole year, as harvesting periods shift.<\/li>\n
  2. Vertical integration: <\/strong>This allows for reduced variability in the production process as a whole. In addition, Camposol is able to enforce certifications, encourage best practices in land use, production and farmer training across the supply chain.<\/li>\n
  3. Increasing efficiencies in seafood production: <\/strong>Camposol Seafood division is optimizing its farming techniques by controlling water temperature and using intensive farming, a method that optimizes the use of larvae while minimizing diseases, boosting productivity and achieving higher yields. This was the cause of shrimp and other seafood products to increase to 10.3% of sales in 2015.<\/li>\n<\/ol>\n

     <\/p>\n

    Camposol is a member of the UN Global Compact, the world\u2019s largest corporate sustainability initiative, and enforces in all its divisions certifications on good agricultural practices like responsible sourcing and clean pest control. As a market leader and aspiring global healthy food conglomerate, Camposol should aim to become a benchmark in the agriculture industry of Peru for addressing and reducing the effects of climate change. By leading by example and promoting dialogue on the subject in the region, Camposol can be a positive promoter of change.<\/p>\n

    Additionally, on a more practical level Camposol could establish clear goals around energy and water utilization Specifically, there is an opportunity to contribute to freshwater efficiency, especially in the northern region of Peru where they source shrimp and where the El Nino Southern Oscillation is more impactful. [10] Finally, due to that Camposol operated across different geographies, it would be useful implement Climate forecasting techniques that can highlight risk probabilities per region, to identify which parts of the business are more vulnerable and address the issues accordingly. [11]<\/p>\n

     <\/p>\n

     <\/p>\n

    Sources<\/u><\/p>\n

    [1] Marca Peru, \u201cPeruvian Gastronomy\u201d http:\/\/www.peru.travel\/en-us\/what-to-do\/peru-of-today\/food.aspx<\/a>.<\/p>\n

    [2] http:\/\/gestion.pe\/economia\/sector-agrario-representa-6-pbi-emplea-mas-25-pea-2061757<\/a><\/p>\n

    [3] http:\/\/cnnespanol.cnn.com\/2016\/06\/06\/el-peru-y-las-agroexportaciones-en-el-entorno-mundial\/<\/a><\/p>\n

    [4] Bloomberg, Company Overview of Camposol S.A.<\/p>\n

    http:\/\/www.bloomberg.com\/research\/stocks\/private\/snapshot.asp?privcapId=27222537\/<\/a> Camposol Company Website http:\/\/www.camposol.com.pe\/quienes-somos\/nosotros_en.html<\/a><\/p>\n

    [5] El Nino Southern Oscillation (ENSO), State Climate Office of North Carolina http:\/\/climate.ncsu.edu\/climate\/patterns\/ENSO.html<\/a><\/p>\n

    http:\/\/www.camposol.com.pe\/inversionistas\/informacion-financiera_en.html<\/a><\/p>\n

    [6] Instituto Interamericano de Cooperaci\u00f3n para la Agricultura \u201cEl fen\u00f3meno del ni\u00f1o en la agricultura de las Am\u00e9ricas\u201d http:\/\/repiica.iica.int\/docs\/b3820e\/b3820e.pdf<\/a><\/p>\n

    [7] Reporte \u201cLa Economia y el cambio climatico en el Peru\u201d http:\/\/repositorio.cepal.org\/bitstream\/handle\/11362\/37419\/S1420992_es.pdf?sequence=1&isAllowed=y<\/a><\/p>\n

    [8] Camposol Financial Information 2015 http:\/\/www.camposol.com.pe\/inversionistas\/informacion-financiera_en.html<\/a><\/p>\n

    [9] Camposol Company Documents, \u201cFourth Quarter 2015 and Preliminary Full Year 2015 Results\u201d http:\/\/hugin.info\/138464\/R\/1983586\/746152.pdf<\/a><\/p>\n

    [10] Five ways Cargill is addressing climate change http:\/\/www.cargill.com\/connections\/five-ways-cargill-is-addressing-climate-change\/index.jsp<\/a><\/p>\n

    [11] McKinsey, \u201cHow Companies can adapt to climate change\u201d http:\/\/www.mckinsey.com\/business-functions\/sustainability-and-resource-productivity\/our-insights\/how-companies-can-adapt-to-climate-change<\/a><\/p>\n

     <\/p>\n

    (800 words)<\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

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