  {"id":25736,"date":"2017-11-15T20:44:30","date_gmt":"2017-11-16T01:44:30","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/campbells-climate-challenge-preserving-an-iconic-american-food-brand\/"},"modified":"2017-11-15T20:44:30","modified_gmt":"2017-11-16T01:44:30","slug":"campbells-climate-challenge-preserving-an-iconic-american-food-brand","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/campbells-climate-challenge-preserving-an-iconic-american-food-brand\/","title":{"rendered":"Campbell\u2019s Climate Challenge: Preserving An Iconic American Food Brand"},"content":{"rendered":"<p>Founded in 1869, Campbell Soup Company (\u201cCampbell\u2019s\u201d) is an iconic American food company with ~8B<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a> in revenue. Best known for soups and its eponymous brand, Campbell\u2019s has diversified into other products such as pasta sauce (Prego), salsas and dips (Garden Fresh Gourmet, Pace), juice (V8), salad dressings (Bolthouse Farms), and snack foods (Pepperidge Farms).<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a> A common attribute of many of its products is a high degree of water and fruit\/vegetable content, which contribute meaningfully to COGS, which is 61% of total revenue.<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a><\/p>\n<p>Climate change poses challenges for Campbell\u2019s supply chain in a number of ways. First, climate change directly affects the availability of water, an important direct ingredient in Campbell\u2019s products. For example, the Natural Resources Defense Council found that 1\/3 of counties in the U.S., where much of Campbell\u2019s manufacturing occurs<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a>, are at risk of water shortages due to climate change by mid-century.<a href=\"#_ftn5\" name=\"_ftnref5\">[5]<\/a> Second, water shortage also affects ability to grow crops, including Campbell\u2019s five key agricultural ingredients (tomatoes, carrots, celery, potatoes, and jalapenos). Third, climate change can lead to more extreme temperatures and precipitation, which can directly affect crop yields.<a href=\"#_ftn6\" name=\"_ftnref6\">[6]<\/a> Producing and sourcing water and agricultural products is essential to Campbell\u2019s business, and the effects of climate change could substantially increase costs in those parts of the supply chain.<\/p>\n<p>In the last decade, Campbell\u2019s has increasingly emphasized its concerns over climate change in its external communications and exhibited a commitment to action. In 2005, Campbell\u2019s set its first global greenhouse gas (GHG) emission reduction target as part of the U.S. Environmental Protection Agency\u2019s Climate Leaders Program.<a href=\"#_ftn7\" name=\"_ftnref7\">[7]<\/a> In 2010, Campbell\u2019s announced a 2020 sustainability goal to reduce environmental footprint (water and GHG emissions per ton of food) by 50% relative to 2008 baseline.<a href=\"#_ftn8\" name=\"_ftnref8\">[8]<\/a><a href=\"#_ftn9\" name=\"_ftnref9\">[9]<\/a><\/p>\n<p>So far, Campbell\u2019s has made meaningful progress. It has reduced water use by 18% per ton of food produced relative to 2008 baseline <a href=\"#_ftn10\" name=\"_ftnref10\">[10]<\/a> by making capital improvements to reduce water use, especially after relaunching it Sustainable Agriculture Program. For example, for tomatoes, its biggest agricultural ingredient which it grows almost exclusively in California, it has increased use of more water-efficient drip irrigation from 29% of crop grown in 2012<a href=\"#_ftn11\" name=\"_ftnref11\">[11]<\/a> to 51% in 2016, leading to a significant reduction in water use.<a href=\"#_ftn12\" name=\"_ftnref12\">[12]<\/a> Campbell\u2019s also reduced water use at its California tomato processing sites by 35% between 2010 and 2015.<a href=\"#_ftn13\" name=\"_ftnref13\">[13]<\/a><\/p>\n<p>Campbell\u2019s has also reduced GHG emissions by 24% by reducing energy use, increasing reliance on renewable energy, increasing recycling, decreasing packaging per product, and increasing sourcing of packaging materials from sustainable sources.<a href=\"#_ftn14\" name=\"_ftnref14\">[14]<\/a><\/p>\n<p>Campbell\u2019s has also ramped up support of efforts to reduce climate change more broadly, especially through public policy. In 2015, it joined the California Water Action Collaborative aimed at improving water security in California.<a href=\"#_ftn15\" name=\"_ftnref15\">[15]<\/a> More recently, Campbell\u2019s joined We Mean Business,<a href=\"#_ftn16\" name=\"_ftnref16\">[16]<\/a> a global coalition of environmental non-profits and 600+ companies, aimed at working together to promote sustainability and lobby for pro-climate policy.<a href=\"#_ftn17\" name=\"_ftnref17\">[17]<\/a> In July 2017, Campbell\u2019s publicly expressed its objection to the U.S. decision to exit the Paris Climate Agreement.<a href=\"#_ftn18\" name=\"_ftnref18\">[18]<\/a><\/p>\n<p>So far, Campbell\u2019s has shown itself to be a leader in sustainability. Unsurprisingly, it has been part of Dow Jones\u2019 Sustainability Index for nine consecutive years.<a href=\"#_ftn19\" name=\"_ftnref19\">[19]<\/a> Campbell\u2019s should continue with the general framework of its approach: (1) reduce water use so that its supply chain is less reliant on a resource likely increasingly scarce due to climate change; (2) reduce its own GHG emissions to do its part to combat climate change; (3) partner with non-profits and other businesses to promote collective action and advocate for policy solutions on climate change. For each of these three items, Campbell\u2019s should go further in the coming years.<\/p>\n<p>With regards to (1) and (2), Campbell\u2019s should create a new sustainability target for the next decade (i.e. 2030). In conjunction with this, it should invest further in R&amp;D and capex to improve operations to waste less water and energy and improve product design to further reduce packaging. Doing so will likely require investments in next-generation water-saving, renewable energy, and energy efficiency technologies. These technologies may currently be quite expensive, but without early adoption, they will likely remain cost prohibitive for the broader market for much longer.<\/p>\n<p>On (3), Campbell\u2019s should further ramp up its support of organizations\/initiatives promoting collective action in sustainability and advocating for policy solutions. Given the current resistance to addressing climate change from the Trump Administration, Campbell\u2019s will likely need to further shift its focus to achieving policy wins on the state\/local level as opposed to federal level.<\/p>\n<p><strong><u>Questions for Discussion:<\/u><\/strong><\/p>\n<p>To what extent can Campbell\u2019s pass along the costs of its sustainability efforts to customers without losing market share?<\/p>\n<p>How can Campbell\u2019s better address the collective action problem around combating the effects of climate change? Is there a better way to coerce free riders?<\/p>\n<p>(798 words)<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> Campbell Soup Company, FY\u201917 Annual Report, p. 41, <a href=\"http:\/\/investor.campbellsoupcompany.com\/phoenix.zhtml?c=88650&amp;p=irol-reportsannual\">http:\/\/investor.campbellsoupcompany.com\/phoenix.zhtml?c=88650&amp;p=irol-reportsannual<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> Campbell Soup Company, \u201cOur Businesses, \u201d <a href=\"https:\/\/www.campbellsoupcompany.com\/about-campbell\/our-businesses\/\">https:\/\/www.campbellsoupcompany.com\/about-campbell\/our-businesses\/<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> Campbell Soup Company, FY\u201917 Annual Report, p. 41, <a href=\"http:\/\/investor.campbellsoupcompany.com\/phoenix.zhtml?c=88650&amp;p=irol-reportsannual\">http:\/\/investor.campbellsoupcompany.com\/phoenix.zhtml?c=88650&amp;p=irol-reportsannual<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a> Campbell Soup Company, FY\u201917 Annual Report, p. 18, <a href=\"http:\/\/investor.campbellsoupcompany.com\/phoenix.zhtml?c=88650&amp;p=irol-reportsannual\">http:\/\/investor.campbellsoupcompany.com\/phoenix.zhtml?c=88650&amp;p=irol-reportsannual<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref5\" name=\"_ftn5\">[5]<\/a> Theo Spencer, \u201cClimate Change, Water, and Risk: Current Water Demands Are Not Sustainable\u201d, <a href=\"https:\/\/www.nrdc.org\/sites\/default\/files\/WaterRisk.pdf\">https:\/\/www.nrdc.org\/sites\/default\/files\/WaterRisk.pdf<\/a>, July 2010, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref6\" name=\"_ftn6\">[6]<\/a> U.S. EPA, \u201cClimate Impacts on Agriculture and Food Supply\u201d, <a href=\"https:\/\/19january2017snapshot.epa.gov\/climate-impacts\/climate-impacts-agriculture-and-food-supply_.html\">https:\/\/19january2017snapshot.epa.gov\/climate-impacts\/climate-impacts-agriculture-and-food-supply_.html<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref7\" name=\"_ftn7\">[7]<\/a> Campbell Soup Company, \u201cMAKING A DIFFERENCE AS THE CLIMATE CHANGE DIALOGUE HEATS UP\u201d, <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2014\/10\/17\/making-a-difference-as-the-climate-change-dialogue-heats-up\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2014\/10\/17\/making-a-difference-as-the-climate-change-dialogue-heats-up\/<\/a>, October 17, 2014, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref8\" name=\"_ftn8\">[8]<\/a> Campbell Soup Company, \u201c2017 Corporate Responsibility Report\u201d, p. 42, <a href=\"http:\/\/www.campbellcsr.com\/_pdfs\/Campbells_2017_CSR_Report.pdf?v4\">http:\/\/www.campbellcsr.com\/_pdfs\/Campbells_2017_CSR_Report.pdf?v4<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref9\" name=\"_ftn9\">[9]<\/a> Campbell Soup Company, \u201cCAMPBELL UNVEILS 2020 SUSTAINABILITY AND CITIZENSHIP GOALS IN 2010 CORPORATE SOCIAL RESPONSIBILITY REPORT\u201d, <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/press-releases\/campbell-unveils-2020-sustainability-and-citizenship-goals-in-2010-corporate-social-responsibility-report\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/press-releases\/campbell-unveils-2020-sustainability-and-citizenship-goals-in-2010-corporate-social-responsibility-report\/<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref10\" name=\"_ftn10\">[10]<\/a> Campbell Soup Company, \u201c2017 Corporate Responsibility Report\u201d, p. 40-44, <a href=\"http:\/\/www.campbellcsr.com\/_pdfs\/Campbells_2017_CSR_Report.pdf?v4\">http:\/\/www.campbellcsr.com\/_pdfs\/Campbells_2017_CSR_Report.pdf?v4<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref11\" name=\"_ftn11\">[11]<\/a> Campbell Soup Company, \u201cMAKING A DIFFERENCE AS THE CLIMATE CHANGE DIALOGUE HEATS UP\u201d, <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2014\/10\/17\/making-a-difference-as-the-climate-change-dialogue-heats-up\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2014\/10\/17\/making-a-difference-as-the-climate-change-dialogue-heats-up\/<\/a>, October 17, 2014, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref12\" name=\"_ftn12\">[12]<\/a> Campbell Soup Company, \u201cWATER, SUN AND STEAM\u2014INGREDIENTS IN OUR SUSTAINABILITY STORY\u201d, <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2016\/04\/22\/sustainabilityearthday2016\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2016\/04\/22\/sustainabilityearthday2016\/<\/a>, April, 22, 2016, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref13\" name=\"_ftn13\">[13]<\/a> Campbell Soup Company, \u201cTAPPING OUR RESPONSIBILITY TO CONSERVE WATER\u201d <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2016\/03\/22\/tapping-our-responsibility-to-conserve-water\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2016\/03\/22\/tapping-our-responsibility-to-conserve-water\/<\/a>, March 22, 2016, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref14\" name=\"_ftn14\">[14]<\/a> Campbell Soup Company, \u201c2017 Corporate Responsibility Report\u201d, p. 40-44, <a href=\"http:\/\/www.campbellcsr.com\/_pdfs\/Campbells_2017_CSR_Report.pdf?v4\">http:\/\/www.campbellcsr.com\/_pdfs\/Campbells_2017_CSR_Report.pdf?v4<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref15\" name=\"_ftn15\">[15]<\/a> Campbell Soup Company, \u201cWATER AS A HERITAGE\u201d, <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2017\/03\/22\/water-as-a-heritage\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2017\/03\/22\/water-as-a-heritage\/<\/a>, March 22, 2017, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref16\" name=\"_ftn16\">[16]<\/a> Marc Gunther, \u201cWhy Won\u2019t American Business Push for Action on Climate?\u201d, <a href=\"http:\/\/e360.yale.edu\/features\/why-wont-american-business-push-for-action-on-climate\">http:\/\/e360.yale.edu\/features\/why-wont-american-business-push-for-action-on-climate<\/a>, February 16, 2017, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref17\" name=\"_ftn17\">[17]<\/a> We Mean Business, \u201cAbout,\u201d <a href=\"https:\/\/www.wemeanbusinesscoalition.org\/about\/\">https:\/\/www.wemeanbusinesscoalition.org\/about\/<\/a>, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref18\" name=\"_ftn18\">[18]<\/a> Campbell Soup Company, \u201cOUR POSITION ON THE PARIS CLIMATE AGREEMENT AND CLIMATE CHANGE\u201d <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2017\/06\/02\/position-paris-climate-agreement-climate-change\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/news\/2017\/06\/02\/position-paris-climate-agreement-climate-change\/<\/a>, June 2, 2017, accessed November 2017.<\/p>\n<p><a href=\"#_ftnref19\" name=\"_ftn19\">[19]<\/a> Campbell Soup Company, \u201cCAMPBELL NAMED TO THE DOW JONES SUSTAINABILITY INDICES FOR NINTH CONSECUTIVE YEAR\u201d, <a href=\"https:\/\/www.campbellsoupcompany.com\/newsroom\/press-releases\/campbell-named-to-the-dow-jones-sustainability-indices-for-ninth-consecutive-year\/\">https:\/\/www.campbellsoupcompany.com\/newsroom\/press-releases\/campbell-named-to-the-dow-jones-sustainability-indices-for-ninth-consecutive-year\/<\/a>, September 7, 2017, accessed November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As a major user of water and agricultural products, Campbell&#039;s is significantly threatened by climate change on its supply chain. How is it addressing these problems and what should it do in the future?<\/p>\n","protected":false},"author":9653,"featured_media":25737,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-25736","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","hck-taxonomy-organization-campbells","hck-taxonomy-industry-food-and-beverage","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Campbell\u2019s Climate Challenge: Preserving An Iconic American Food Brand - 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\/campbells-climate-challenge-preserving-an-iconic-american-food-brand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Campbell\u2019s Climate Challenge: Preserving An Iconic American Food Brand - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"As a major user of water and agricultural products, Campbell&#039;s is significantly threatened by climate change on its supply chain. 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