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Spikes in demand require supplier nurturing

Avocado plantation and supply chain risk

In an ideal world, procurement would have months, perhaps even years to develop a new product. In reality, it has days, if not a matter of hours to get products to market to take advantage of changing trends, technologies, fashions and tastes. This places enormous pressure and increases risk in supply chains that may not have ever expected to experience such demand. In such instances, procurement must carefully manage and support its supply chain at each individual process stage.

 

This was highlighted recently by the sudden increase in demand for avocados. Dubbed as a healthy ’super food’, demand has risen substantially, but this has caused problems within the supply chain.

 

Mexico accounts for the majority of the world’s avocado production, however, because of the increase in consumption, coupled with some poor harvests, prices have almost doubled over the last year, according to Bloomberg data.

 

This has attracted the attention of Mexico’s drug cartels who have looked to take over avocado farms or set up illegal plantations. Small farmers have reportedly been subject to extortion, kidnapping and even murder.

 

In the Mexican state of Michoacá, the world’s capital of avocado production, official statistics count 8,258 murders between 2006 and 2015, according to the Guardian.

 

Avocados provide just one example.

 

Coconuts have also experienced a sudden spike in demand, with stories circulating about monkeys being captured and used to pick the coconuts due to the fact that they can pick them at a much faster rate than humans. The reason for this rise in demand is that consumers increasingly want coconut oil and coconut water because of their supposed health and beauty benefits.

 

Clearly, when demand increases, suppliers do all they can to try and meet that demand but that can lead to a number of risks rising within the supply chain.

 

Procurement needs to support suppliers in any way it can. Not only will this help them meet demand but it will also help them deliver a better product in the long run.

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Rachel Sharp
Posted by Rachel Sharp