Nuts for Nutella

BUSINESS

Nutella, it turns out, is a perfect example of what globalization has meant for popular foodstuffs: Not only is it sold everywhere, but its ingredients are sourced from all over the place too. (The Atlantic)

Use our resources to better understand what the Organization for Economic Co-operation and Development (OECD) calls “global value chains.”

Although the company that makes Nutella has its headquarters in Italy, the hazelnut-chocolate spread is an international product, with contributors from every continent except Antarctica. Photograph courtesy Pava, courtesy Wikimedia. This file is licensed under the Creative Commons Attribution-ShareAlike 3.0 Italy license.

Although the company that makes Nutella has its headquarters in Italy, the hazelnut-chocolate spread is an international product, with contributors from every continent except Antarctica.
Photograph courtesy Pava, courtesy Wikimedia. This file is licensed under the Creative Commons Attribution-ShareAlike 3.0 Italy license.

Discussion Ideas

  • Read through our terrific activity, “The Geography of a Pencil.” This activity outlines the global value chain of a pencil. The OECD defines a global value chain as “the full range of activities that firms undertake to bring a product or a service from its conception to its end use by final consumers.” Apply the activity’s essential questions to the Atlantic article.
    • Take a look at Nutella’s ingredients, and identify some raw materials, processed materials, and industrial components in Nutella’s global value chain.
      • raw materials: sugar, palm oil, hazelnuts, cocoa, milk
      • processed materials: whey, emulsifier, vanillin, plastic packaging
      • industrial components: factories or machines that produce materials (such as emulsifier from soy) used in Nutella, distribution networks to supply factories that produce Nutella, factories that produce Nutella itself, sales offices to establish the regional market demand for Nutella, distribution network to supply stores with Nutella
  • Identify other products value chains. What products have short value chains? What products have longer, more complex value chains, involving a wide variety of raw materials, processed materials, and industrial components?
    • short value chains: Agricultural products, such as milk or fresh vegetables, often have short value chains. In some cases, a value chain can be as short as a raw material (tomatoes, for example) and a distribution network (farmers’ trucks) to supply a local store, restaurant, or farmers’ market. Longer value chains might include raw materials (bananas, for example), local distribution network (to a packaging facility), packaging facility, global distribution network (cargo planes or ships to foreign countries).
    • long value chains: Industrial goods, such as cell phones or sneakers, have much more complex value chains. Use our interactive “Global Closet Calculator” to better appreciate a complex global value chain.

Thanks to our favorite mapmaker, Sean, for the heads-up on this great current-event connection!

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