Supply Chains of the Now
The future is already here- they just haven’t scaled yet, but they will. Our global supply chain systems, although brilliant and revolutionary for their time, have demonstrated their weaknesses- harm to the planet, hidden costs, lack of transparency, human rights violations, lack of resilience against disaster, etc. But nothing has torn apart the facade of status quo like Covid-19. Before I keep going, this isn’t a doomsday article for retailers and brands, in fact, many such as Walmart and Adidas, are taking steps in the right direction in trying to localize and circularize their supply chains. This piece will highlight four examples of up and coming startups that demonstrate that the Supply Chains of the Now and the commonalities they share- manufacturing is localized, circular or eco-friendly, resilient, and in many ways, led by underrepresented founders.
Local Consumer Products and Eco-Friendly Brands
This past week I spoke with one of the co-founders of Fem Patch Co. Fem Patch Co. is a feminine health company designed for women by women. They’ve created affordable and eco-friendly products for all of life’s stages — from tampons to incontinence products. They were set to launch this summer when the crisis hit. Investors expected them to put off the launch due to supply chain and market instability. But while others may be terrified, they saw an opportunity to thrive and give back all at once. You see, their products are manufactured locally in California by other female led companies. The cofounders saw an article explaining that there is currently a shortage of feminine hygiene products due to the pandemic. So what are they doing now? They’re ensuring that women have access and any products you purchase from them will go towards Covid-19 efforts.
The Fem Patch Co founding team has an impressive background, having worked at Google, Goldman Sachs and as VCs in Silicon Valley. The team intentionally created a sustainable, local supply chain, partnering only with other people who could deeply understand who they were solving for- other women. Their pricing is comparable if not cheaper than most other sustainable feminine health brands with their products typically costing consumers $9.99. They saw what other big brands were learning the hard way, making products abroad does not always make the most business sense and the hidden costs aren’t worth it. I highly recommend supporting this new company. They’re well on their way to creating “herstory”. They prove that “Made in USA or Made in X” is more than just patriotism, it’s an opportunity to set up sustainable supply chain models globally.
Agricultural Circularity
Another example of the Supply Chains of the Now is MicroTERRA founded and led by Columbia grad Marissa Cuevas Flores. Her company is based in Mexico. Like the co-founders of Fem Patch Co., this is not Marissa’s first company. She realized that the current system of feeding fish and animals in agriculture is outdated, killing the planet, and insanely inefficient. Her new business MicroTERRA transforms wastewater in agriculture into opportunities for businesses. They build onsite water treatment systems with microalgae, that transform wastewater into a sustainable protein source and clean water.
Their first successful pilots have been on fish farms in Mexico. They’ve already received funding from global early stage investors such as Techstars and have been recognized by National Geographic for their work. On the fish farms of the past, you had to feed one fish the equivalent of three other fish to get that one fish. That’s to say, they can only sell 25% of their products and the rest gets eaten. Then these farms have to constantly bring in new freshwater and dump the now toxic wastewater out. Marissa’s team is taking that wastewater and, with their technology onsite at the fish farm, cleaning the water by converting the waste into clean protein that then can be fed back to the fish, instead of other fish. This process also separates the waste from the clean water so that the water can be recycled back fully in a circular fashion instead of more being brought in. So now, these farms are saving on water costs and can sell 100% of their viable products.
MicroTERRA can apply this to cattle farms, pig farms, you name it. Their business model is following in the path of solar panels, the science is new, but the business model is already proven. And like with solar technology, it will be cheaper, faster, and more resilient in the long run.
Resilient Agriculture Networks
Recent supply chain shortages have led to global food anxiety and in people planting vegetable gardens. One of my favorite sustainable and hyper local business models, that shows a way forward to avoid these issues and create stronger communities in the long run, is exemplified by Handsome Brook Farms. Handsome Brook Farm was founded in 2007 by Betsy & Bryan Babcock. They help small farmers, and chickens, live their best lives. Handsome Brook Farms connects small family farms that practice the highest levels of animal welfare and sustainability for raising chickens through a shared supply chain logistics system. This allows farmers to sell their products at competitive pricing to the big industry giants but with clear proof that their model is good for business, the planet, the farmers, and the animals. Although no longer a startup, it reminds me of blockchain security systems in the sense that the smaller nodes allow for greater resiliency and safety but applied to the farming industry.
Workforce and Automation Co-Evolution
To successfully evolve global supply chains, retraining of workforce communities, to support and scale them, will be needed. What better way to recruit new talent than to upskill the one you already have? An example of a startup that could help tackle the workforce aspect of supply chain evolution is Shimmy. Shimmy is a women-owned and operated fashion technology company based in Brooklyn, NY. Sarah Krasley is their CEO and like the two previous founders, this isn’t her first company. She understands that supply chain resilience and automation go hand-in-hand and she works towards upskilling and reskilling the workforce to match the pace of new technologies and machines.
Companies like hers can help you invest in your own team, encouraging company loyalty and fostering team members that understand how to help your business grow from the bottom up. Shimmy Upskill is a multilingual application that teaches new job skills for garment workers through games successfully, regardless of their previous education levels. This helps apparel brands and manufacturers shorten lead time and improve product quality. In her first pilots, they worked with seamstresses in Bangladesh and helped them go from making roughly $200/mo, to $400/mo, to $600/mo because they now were educated in making garments AND fixing the latest machines in apparel manufacturing. This is a win-win for the companies and the workers who see their quality of life improve.
You’ve Got This
For companies with longstanding and entrenched global supply chains, changes like this can seem daunting. Investing in strong pilot programs to work with rising startups that can support supply chain evolution, or investing in a broad portfolio of startups and acquiring them as they grow, are a sampling of potential paths forward. That’s not to say that working with startups doesn’t have its own set of challenges from a large company perspective, and I’ve seen firsthand the challenges from the perspective of a startup founder. But now is the time. Support startups with evolutionary supply chain capabilities, think local, think circular, support underrepresented founders, and I have no doubt your shareholders and our planet will be glad you capitalized on this opportunity.
