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The Spiraling Opioid Epidemic in America

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US Opioid Epidemic Spiral in America

The Spiraling Opioid Epidemic in America

Over the last 20 years, the ongoing U.S. opioid crisis has claimed tens of thousands of lives. In fact, opioid overdose deaths accounted for nearly 70% of all drug overdose deaths in 2018.

Although the damage of the opioid epidemic is well documented, what people might not know is that it has escalated in three distinct waves.

We pull the latest statistics from the UN World Drug Report 2020 to uncover the scope of the opioid crisis in the U.S., and how national drug-related death rates compare to other countries.

Three Waves of the Opioid Crisis

According to the CDC, the opioid epidemic can be traced back to the 1990s, when opioids started being over-prescribed for pain relief purposes.

  • 1990s – Wave 1
    Over-prescription of opioids for pain relief, including natural opioids, semi-synthetic opioids, and methadone. Addiction risks were widely downplayed.
  • 2010 – Wave 2
    Heroin-related overdose deaths on the rise.
  • 2013 – Wave 3
    Synthetic opioid-related deaths on the rise, particularly fentanyl and tramadol.

Here’s how that breaks down in terms of opioid-related overdose deaths over the years. Note that by the year 2018, 67% of overdose deaths involved synthetic opioids such as fentanyl.

YearAny opioidsHeroinPharmaceutical opioidsSynthetic opioids
19998,0501,9603,533730
20008,4071,8423,903782
20019,4961,7794,935957
200211,9202,0896,7741,295
200312,9402,0807,8391,400
200413,7561,8789,0761,664
200514,9182,00910,2341,742
200617,5452,08812,4232,707
200718,5162,39913,6762,213
200819,5823,04114,0432,306
200920,4223,27814,4312,946
201021,0893,03615,5203,007
201122,7844,39716,1112,666
201223,1665,92515,0722,628
201325,0528,25713,9373,105
201428,64710,57415,5595,544
201533,09112,98916,0289,580
201642,24915,46917,86019,413
201747,60015,48217,68928,466
201846,80214,99615,57531,335

Overdose deaths from synthetic opioids such as fentanyl and tramadol shot up by over 4,000% between 1999-2018. This can be attributed to two things: their relative potency, and the minute quantities of each that qualify as a lethal dose.

As per the medical and legal standard, opioids are often compared to morphine. To that end, heroin is 2-5x stronger—while fentanyl is 50-100x more potent. Put another way, roughly a dime-size or 10-12mg of heroin is considered a lethal dose, compared to only 1-2mg of fentanyl.

What’s worse, fentanyl is typically mixed with other types of drugs such as heroin or cocaine to increase their effects, which is how it ends up unintentionally ingested. Between 2008-2017, drug-use disorders as a whole claimed the most healthy lives due to poor health or early deaths—measured in disability-adjusted life years (DALYs)—followed in close second by opioid use disorders.

The Death Toll of U.S. Drug Overdoses

It’s undeniable that the opioid epidemic in America has caused significant harm to communities. But how does the U.S. drug crisis compare to the same issue in other countries?

The UN Drug Report further puts these numbers into perspective by comparing drug-related deaths per million population. Note that the source also compiled the total deaths across years for selected countries.

Country (Latest Year)Latest Years of EstimateTotal DeathsRate per 1M (Aged 15-64)
🇺🇸 U.S.201867,367314.5
🇦🇺 Australia2016-20173,240202.6
🇸🇻 El Salvador2018765184.5
🇨🇦 Canada 20184,460179.8
🇺🇾 Uruguay2016264119.4
🇮🇸 Iceland2012-201623105.2
🇸🇪 Sweden201757592.9
🇳🇿 New Zealand201626988.6
🇫🇮 Finland201728983.9
🇬🇧 UK20173,54783

With 314.5 deaths per million, the U.S. by far had the highest proportion of drug-related deaths per million people in 2018. It also had the highest overall number at 67.4K deaths.

Elephant in the Room?

Another drug rearing its head on the streets is carfentanil. Formerly developed as ‘elephant tranquilizer’, this synthetic opioid is similar in appearance to other illicit drugs such as heroin, making it indistinguishable when mixed in. However, there’s one big problem—carfentanil is 100x more potent than fentanyl itself.

In response to the continued crisis, an additional $35.7 billion was requested for counter-drug funding efforts in the FY2021 Budget. This amount is expected to go towards prevention and treatment efforts ($18.6 billion) and law enforcement efforts ($17.1 billion) both domestically and internationally.

But will these efforts properly combat the crisis, or are we already in the midst of a fourth wave of the opioid epidemic?

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Agriculture

Cocoa: A Bittersweet Supply Chain

The cocoa supply chain is a bittersweet one. While chocolate is a beloved sweet treat globally, many cocoa farmers are living a bitter reality.

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Cocoa: A Bittersweet Supply Chain

From bean to bar, the cocoa supply chain is a bittersweet one. While the end product is something most of us enjoy, this also comes with a human cost.

Based on how much cocoa comes from West Africa, it’s likely that most of the chocolates we eat have a little bit of Cote d’Ivoire and Ghana in them. The $130B chocolate industry relies on cocoa farming for supply of chocolate’s key ingredient. Yet, many cocoa farmers make less than $1/day.

The above graphic maps the major trade flows of cocoa and allows us to dive deeper into its global supply chain.

From Bean to Bar: Stages in the Cocoa Supply Chain

Cocoa beans go through a number of stages before being used in chocolate products.

  1. Harvesting, Fermenting, and Drying
    First, farmers harvest cocoa beans from pods on cacao plants. Next, they are fermented in heaps and covered with banana leaves. Farmers then dry and package the cocoa beans for domestic transportation.
  2. Domestic Transportation, Cleaning, and Exporting
    Domestic transporters carry packaged cocoa beans to either cleaning warehouses or processing factories. Cocoa beans are cleaned and prepared for exports to the chocolate production hubs of the world.
  3. Processing and Chocolate Production
    Processing companies winnow, roast, and grind cocoa beans and then convert them into cocoa liquor, cocoa butter, or cocoa cakes—which are mixed with other ingredients like sugar and milk to produce chocolate products.

Cocoa farming and trade are at the roots of the chocolate industry, and the consistent supply of cocoa plays a critical role in providing us with reasonably-priced chocolate.

So where exactly does all this cocoa come from?

The Key Nations in Cocoa’s Global Supply Chain

Growing cocoa has specific temperature, water, and humidity requirements. As a result, the equatorial regions of Africa, Central and South America, and Asia are optimal for cocoa farming.

These regions host the biggest cocoa exporters by value.

Rank (2019)Exporting CountryValue (US$, millions)
1Côte d’Ivoire 🇨🇮$3,575
2Ghana 🇬🇭
$1,851
3Cameroon 🇨🇲$680
4Ecuador 🇪🇨$657
5Belgium 🇧🇪$526

Côte d’Ivoire and Ghana are responsible for 70% of global cocoa production, and cocoa exports play a huge role in their economies. Although the majority of exporters come from equatorial regions, Belgium stands out in fifth place.

On the other hand, most of the top importers are in Europe—the Netherlands and Germany being the top two.

Rank (2019)Importing CountryValue (US$, millions)
1Netherlands 🇳🇱$2,283
2Germany 🇩🇪$1,182
3U.S. 🇺🇸$931
4Malaysia 🇲🇾$826
5Belgium 🇧🇪$719

In third place, the U.S. primarily sources its cocoa from Côte d’Ivoire, Ghana, and Ecuador. Mars, Hershey, Cargill, and Blommer—some of the world’s biggest chocolate manufacturers and processors—are headquartered in the U.S.

Finally, it comes as no surprise that the biggest importers of cocoa beans are among the biggest chocolate exporters.

Rank (2019)CountryValue of Chocolate Exports
(US$, millions)
1Germany 🇩🇪$4,924
2Belgium 🇧🇪$3,143
3Italy 🇮🇹$2,100
4Netherlands 🇳🇱$1,992
5Poland 🇵🇱$1,834

Not only is the Netherlands the biggest importer of beans, but it’s also the biggest processor—grinding 600,000 tons annually—and the fourth largest exporter of chocolate products.

Belgium is another key nation in the supply chain, importing cocoa beans from producing countries and exporting them across Europe. It’s also home to the world’s largest chocolate factory, supporting its annual chocolate exports worth $3.1 billion.

Breaking Down the Cocoa Supply Chain: Who Gets What

Without farmers, both the cocoa and chocolate industries are likely to suffer from shortages, with domino effects on higher overall costs. Yet, they have little ability to influence prices at present.

cocoa supply chain breakdown

Farmers are among the lowest earners from a tonne of sold cocoa—accounting for just 6.6% of the value of the final sale.

Low incomes also translate into numerous other issues associated with cocoa farming.

The Bitter Side of Cocoa Farming

The World Bank has established the threshold for extreme poverty at $1.90/day. Cocoa farmers in Ghana make $1/day, while those in Côte d’Ivoire make around $0.78/day—both significantly below the extreme poverty line.

Farmers are often unable to bear the costs of cocoa farming as a result of low incomes. In turn, they employ children, who miss out on education, are exposed to hazardous working conditions, and get paid little or no wages.

CountryCocoa Farmers Making $1/day or lessChildren in Cocoa Agriculture
Côte d’Ivoire 🇨🇮600,000
891,500
Ghana 🇬🇭800,000708,400

To make matters worse, cocoa farming is primarily responsible for deforestation and illegal farming in Côte d’Ivoire and Ghana—adding environmental issues to the mix.

These interconnected problems call for action, so what is being done to fight them?

Combating Cocoa’s Concerns

Mars, Nestlé, and Hershey—some of the world’s biggest chocolate manufacturers—have made several pledges to eradicate child labor in cocoa farming over the last two decades, but haven’t reached their targets.

In addition, organizations such as UTZ Certified, Rainforest Alliance, and Fairtrade are working to increase traceability in the supply chain by selling ‘certified cocoa’, sourced from farms that prohibit child labor.

More recently, Côte d’Ivoire and Ghana announced a fixed premium of US$400/tonne on cocoa futures, aiming to improve farmer livelihoods by creating a union for cocoa, also known colloquially as the “COPEC” for the industry.

While these initiatives have had some positive impacts, more still needs to be done to successfully eradicate large-scale child labor and poverty of those involved in cocoa’s bittersweet supply chain.

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Agriculture

The Economics of Coffee in One Chart

What makes your cup of coffee possible, and how much does it really cost? Here’s how the $200B coffee supply chain breaks down economically.

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Coffeenomics-shareable-v2

Breaking Down the Economics of Coffee

What goes into your morning cup of coffee, and what makes it possible?

The obvious answer might be coffee beans, but when you start to account for additional costs, the scope of a massive $200+ billion coffee supply chain becomes clear.

From the labor of growing, exporting, and roasting the coffee plants to the materials like packaging, cups, and even stir sticks, there are many underlying costs that factor into every cup of coffee consumed.

The above graphic breaks down the costs incurred by retail coffee production for one pound of coffee, equivalent to about 15 cups of 16 ounce brewed coffee.

The Difficulty of Pricing Coffee

Measuring and averaging out a global industry is a complicated ordeal.

Not only do global coffee prices constantly fluctuate, but each country also has differences in availability, relative costs, and the final price of a finished product.

That’s why a cup of 16 oz brewed coffee in the U.S. doesn’t cost the same in the U.K., or Japan, or anywhere else in the world. Even within countries, the differences of a company’s access to wholesale beans will dictate the final price.

To counteract these discrepancies, today’s infographic above uses figures sourced from the Specialty Coffee Association which are illustrative but based on the organization’s Benchmarking Report and Coffee Price Report.

What they end up with is an estimated set price of $2.80 for a brewed cup of coffee at a specialty coffee store. Each store and indeed each country will see a different price, but that gives us the foundation to start backtracking and breaking down the total costs.

From Growing Beans to Exporting Bags

To make coffee, you must have the right conditions to grow it.

The two major types of coffee, Arabica and Robusta, are produced primarily in subequatorial countries. The plants originated in Ethiopia, were first grown in Yemen in the 1600s, then spread around the world by way of European colonialism.

Today, Brazil is far and away the largest producer and exporter of coffee, with Vietnam the only other country accounting for a double-digit percentage of global production.

CountryCoffee Production (60kg bags)Share of Global Coffee Production
Brazil64,875,00037.5%
Vietnam30,024,00017.4%
Colombia13,858,0008.0%
Indonesia9,618,0005.6%
Ethiopia7,541,0004.4%
Honduras7,328,0004.2%
India6,002,0003.5%
Uganda4,704,0002.7%
Peru4,263,0002.5%
Other24,629,00014.2%

How much money do growers make on green coffee beans? With prices constantly fluctuating each year, they can range from below $0.50/lb in 2001 to above $2.10/lb in 2011.

But if you’re looking for the money in coffee, you won’t find it at the source. Fairtrade estimates that 125 million people worldwide depend on coffee for their livelihoods, but many of them are unable to earn a reliable living from it.

Instead, one of the biggest profit margins is made by the companies exporting the coffee. In 2018 the ICO Composite price (which tracks both Arabica and Robusta coffee prices) averaged $1.09/lb, while the SCA lists exporters as charging a price of $3.24/lb for green coffee.

Roasting Economics

Roasters might be charged $3.24/lb for green coffee beans from exporters, but that’s far from the final price they pay.

First, beans have to be imported, adding shipping and importer fees that add $0.31/lb. Once the actual roasting begins, the cost of labor and certification and the inevitable losses along the way add an additional $1.86/lb before general business expenses.

By the end of it, roasters see a total illustrated cost of $8.73/lb.

Roaster Economics($/lb)
Sales Price$9.40
Total Cost$8.73
Pre-tax Profit$0.67
Taxes$0.23
Net Profit$0.44
Net Profit (%)7.1%

When it comes time for their profit margin, roasters quote a selling price of around $9.40/lb. After taxes, roasters see a net profit of roughly $0.44/lb or 7.1%.

Retail Margins

For consumers purchasing quality, roasted coffee beans directly through distributors, seeing a 1lb bag of roasted whole coffee for $14.99 and higher is standard. Retailers, however, are able to access coffee closer to the stated wholesale prices and add their own costs to the equation.

One pound of roasted coffee beans will translate into about 15 cups of 16 ounce (475 ml) brewed coffee for a store. At a price of $2.80/cup, that translates into a yield of $42.00/lb of coffee.

That doesn’t sound half bad until you start to factor in the costs. Material costs include the coffee itself, the cups and lids (often charged separately), the stir sticks and even the condiments. After all, containers of half-and-half and ground cinnamon don’t pay for themselves.

Factoring them all together equals a retail material cost of $13.00/lb. That still leaves a healthy gross profit of $29.00/lb, but running a retail store is an expensive business. Add to that the costs of operations, including labor, leasing, marketing, and administrative costs, and the total costs quickly ramp up to $35.47/lb.

In fact, when accounting for additional costs for interest and taxes, the SCA figures give retailers a net profit of $2.90/lb or 6.9%, slightly less than that of roasters.

A Massive Global Industry

Coffee production is a big industry for one reason: coffee consumption is truly a universal affair with 2.3 million cups of coffee consumed globally every minute. By total volume sales, coffee is the fourth most-consumed beverage in the world.

That makes the retail side of the market a major factor. Dominated by companies like Nestlé and Jacobs Douwe Egberts, global retail coffee sales in 2017 reached $83 billion, with an average yearly expenditure of $11 per capita globally.

Of course, some countries are bigger coffee drinkers than others. The largest global consumers by tonnage are the U.S. and Brazil (despite also being the largest producer and exporter), but per capita consumption is significantly higher in European countries like Norway and Switzerland.

The next time you sip your coffee, consider the multilayered and vast global supply chain that makes it all possible.

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