Cadbury Case Study

Submitted By Wbpanda1
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Date of Submission
Impacts of Global Change on Cadbury
Cadbury is the world’s leading chocolate producer and the second largest confectionary industry after Wrigley. Despite continuous public criticism, Cadbury has continued to work on Fair Trade products. Its largest chocolate brand is Cadbury Dairy Milk. The major raw materials in the chocolate industry include cocoa beans, milk and sugar. Therefore, anything that affects the production of the cocoa plant and milk would have an adverse negative impact on the company’s business (Oyekale 142).
The global climatic change has direct effects on the agricultural production through changes in precipitation, temperature, timing of critical growing events, and the length of the growing season. Cocoa plant is more sensitive to hours of rainfall, soil condition, sunshine and temperatures; hence, vulnerable to climate change. Climate change can also alter the growth and development of diseases and pest and change the host resistance. Moreover, an extended drought will make the newly planted cocoa seedling wither. In addition; some major pests and diseases are promoted by unfavorable climatic shifts. An example is the black pod disease that thrives in very high humid conditions (Oyekale 143). Oyekale (144) reports an increase in the deaths of cocoa plants as a result of mirids that are destructive during high heat intensity and prolonged dry season. Consequently, the climate change led to the reduction of the cocoa beans yield by 60 percent in 2011. The reduction in the yield was majorly by pest infestation. Moreover, cocoa pods become ineffectively sprayed due to the increased rainfall. In addition to this, some farmers find it difficult to dry cocoa beans after harvesting them as they lack sunshine. Climate change also led to a number of wildfires on the cocoa plantation which increased from 2 to 5 percent between 2009 and 2011 (Oyekale 144).
It should be noted that cocoa farmers are anticipating reporting higher intensity of weed growth and challenges to deal with their control. This being that weeds have large genetic diversity than cocoa plant; hence, shifts in water, nutrients, light and carbon dioxide within the ecosystem will more probably lead to their enormous growth and reproductive response. The challenges have already been reported in some states of Nigeria in which 72 percent of cocoa farmers have difficulties in controlling weeds on their farms in 2011 (Oyekale 145).
Climate change as well has direct negative impact on the production of milk. Too much humidity and heat stress dairy cows which leads to reduced milk production. However, due to variability in diurnal temperature and humidity range, the milk loss as a result of global warming will probably vary from region to region (Bauman 2). The decrease in milk production for cows under heat stress results to either transitory or longer term reduction of milk depending on the severity or the length of the stress. The decrease in milk production can be as much as 25 percent. For instance, most of the dairy cows in New York were observed to have decreased daily milk production by 15 pounds (Chase 18).
With effects on milk, cocoa, water, energy among other raw materials, climate change is expected to threaten the normal flow of these materials within the existing supply chain models. In the past twenty years, Cadbury business has developed to depend on a web of supply chains that has revolutionized the manner in which its basic raw materials and products are sourced, processed and distributed. Cadbury has increased vertical integration and intertwining its supply chain. Cadbury has more than 6,000 suppliers who in turn have more than 4,000 partners thus any disruption of its supply chain will hugely affect its business. Supply chain in any company is a key indicator to faster, speed to market commodities which in turn result to higher profits and sustainable growth.
While Cadbury’s global integration of