Resilience in a disruptive world is all about making your supply chain anti-fragile: Vikram Agarwal

If I look at nutrition, it is at the heart of what we do. Everything about Danone is about creating the science to deliver nutrition and then developing the products into which that nutrition can be packed. If you look at our entire global portfolio, essential dairy which is yogurts, drinkable yogurts etc., it's around nutrition. It's all around protein. The range of new yogurts that we have launched in Europe and US on high protein go exactly into the space of very targeted nutrition which is the protein requirement. Waters is about hydration and therefore that's also around nutrition. Specialized nutrition is for infants, for kids with allergies, and for adults who have deficiency or lifestyle conditions. So everything which Danone does is around nutrition globally. And our play of course in the Indian context is also to be able to understand the nutrition needs of the Indian consumers and to bring products which are relevant and appropriately tailored to the Indian consumer using our global science powerhouse.

It's causing a lot of disturbance and probably will cause even more in the future. Unfortunately, I think this is an agenda which needs to be strongly managed through public-private partnerships. We can't look at governments alone to handle that. We can't look at the private sector alone. This has to happen through a combination of public-private partnerships. Very often governments have the funding but not the know-how. Very often industries are willing to do it but they don't have the reach, penetration, or scale. I think this is an area which with every passing year is becoming more critical for strong programs and interventions, and that's where public-private partnerships need to play. Now we have what we call a Danone impact journey in which we have laid out some very clear commitments relating to health through food, social empowerment and fair living wages, and decarbonization and protection of natural resources. Focusing on the third, our commitments are reduction in carbon from scope one, two, and three, reduction in water usage, and reduction in usage of non-recyclable plastics. These are the three areas we are working on. We are not alone; other companies equally have strong programs. We have a strong program on methane: 30% methane emission reduction by 2030. Somebody else may have a stronger program on plastics. So every industry is trying to do their part, but I strongly believe it is time for industry and governments to come together in a pre-competitive manner in this very important mission of arresting climate change. We all know science-based targets initiative SBTI 1.5, which is targeted towards reducing the temperature increase by 1.5°C. Many big countries are signatories to that. We know the Carbon Disclosure Project CDP, which is monitoring who is achieving AAA rating and many other parameters. But if you bring all of this together, all the ingredients are there, but somehow it needs to come together into a nice big meal. People like me in operations in the supply chain are sort of the frontline troops whenever anything in terms of VUCA starts happening in the world. Whether it's a geopolitical disturbance, a tariff change, or any kind of regulatory change, product regulatory change, or an economic forex change, all of these start affecting supply chains very strongly. And you have to be resilient. You have to be always prepared to see how do you shift your lanes, your routes, your sourcing routes, and how do you continue supplying your products to a consumer in spite of all this volatility. It's not always easy. I'm oversimplifying. And actually there is a very interesting concept in the industry which is evolving now which is going beyond resilience. Resilience is about having the ability to supply in a VUCA world. And this one is called antifragility. Antifragility is that as the world becomes more VUCA, your systems become stronger. It's something like saying that I have a supply system which is so robust that if more uncertainty comes, if more disruption comes, it grows stronger because some parts of it are capable of taking up more load than other parts. So I think VUCA is a way of life. We have to cope with a world which is going to be disruptive sometime or the other, and that is a consequence also of the supply chains having become very efficient globally. We have taken efficiency to a level where any small disturbance somewhere causes a global crisis. A ship sails slightly sideways in the Suez Canal for three weeks, all the east-west trade is stopped. Could you have imagined it 20 years ago? COVID comes and half the world comes to a standstill, half the manufacturing in the world comes to a standstill. Russia gets into a conflict with Ukraine, you suddenly have a crisis around the world on sunflower oil, on some of the food grains. But at the same time, while I mentioned all these crises have come, the world has also been quick to recover from them. So I think over a period of time we have become much more resilient and able to cope with geopolitical crises. The latest one which is now happening, which people are already coping with, is the whole new talk about tariffs in the US. You start tariffs in the US, you start reciprocal tariffs in the rest of the world. We are entering a new regime. So I think we are resilient enough in the supply chain to be able to cope with all of this. This is the job of a supply chain leader every day.