In the battle for mind-share, space vs. sea is no contest.
From the epic race to reach the surface of the moon, to the well-documented trials and tribulations of SpaceX’s rocket launches, space is widely regarded as mankind’s natural next step.
For centuries, we’ve gazed at the night sky attempting to decode the messages of the cosmos, but we’ve treated the ocean as a dumping ground or as a nemesis. In the era of big data, it’s strange to note that an estimated 95% of the world’s oceans still remain unexplored.
A Deep Dive Into the World’s Oceans
Today’s video, from Tech Insider, helps shed some light on just how deep the ocean is, and put that depth into a context us surface-dwellers can understand.
The ocean is vast, but looking at it in terms of light and food supply allows us to better understand the structure of that ecosystem.
There are five main oceanic divisions:
|Ocean Zone||Depth (m)||Depth (ft)|
|epipelagic||Surface to 200 m||Surface to 650 ft|
|mesopelagic||200 to 1,000 m||650 to 3,300 ft|
|bathypelagic||1,000 to 4000 m||3,300 to 13,000 ft|
|abyssopelagic||4,000 to 6,000 m||13,000 to 20,000 ft|
|hadopelagic||6,000 to 11,000 m||20,000 to 36,000 ft|
Let’s take a look at each layer in more detail.
Scratching the Surface
The surface layer of the ocean, or epipelagic zone, is the portion we’re most familiar with. This portion of the ocean is amply lit by the sun, and though it’s the smallest zone by volume, it contains much of the ocean’s life. In fact, the phytoplankton living at this level produce half of the world’s oxygen.
One of the chief concerns about climate change is that acidification and temperature changes may dramatically influence levels of phytoplankton in the ocean, thus putting Earth’s largest source of oxygen in jeopardy.
Due to its proximity to sunlight, this layer of the ocean is the fuel that feeds the rest of the ocean. As organisms die, they begin to sink to the lower depths in the form of “marine snow”. This is vital since plant life cannot survive beyond this thin, top layer of water. Put simply, the epipelagic zone feeds the rest of the ocean.
The Twilight Zone
The next layer, called the mesopelagic zone, begins 200m below the surface and extends down to the 1km level. At this point, sunlight illuminating the water begins to wane and water pressure already begins to push beyond what the human body can tolerate.
This dimly lit zone is where we begin to see evolutionary adaptations such as bioluminescence. Large fish and whales also enter this zone to hunt for food.
Hello Darkness, My Old Friend
At 1km below the surface – in the bathypelagic zone – sunlight has faded completely and the ocean is nearly pitch black. This region accounts for 90% of the ocean’s volume and as the video below (via TEDed) explains, this is where things start to get really weird.
The aptly named abyssopelagic zone, begins at 4,000 meters below the surface and extends down to 6,000 meters (or the ocean floor). At this level, the water temperature is nearly at freezing level, and because no sunlight reaches this zone, many of the animals that live here are sightless. The Abyss is the largest zone in the ocean, accounting for about 75% of the ocean floor and 54% of the ocean’s volume.
This region of the ocean is the home of the Abyssal plains. The plains are the upper surface of sediment that has accumulated in abyssal depressions, smoothing out what would otherwise by irregular topography. By this depth the consistent flow of marine snow has decreased dramatically, so organisms depend on occasional “feasts” to survive. Occasionally, events such as large algae blooms near the surface end up delivering huge amounts of food to the ocean floor once those blooms die off.
Abyssal plains could eventually become a big deal economically due to hydrocarbon exploration and mineral extraction. An example of the latter is polymetallic nodules. These potato-sized concretions are scattered around the seafloor at depths greater than 4,000 meters. If it becomes economically viable to harvest these nodules (comprised of manganese, iron, nickel, cobalt, and copper), companies could generate considerable revenue. Currently, there are eight commercial contractors licensed by the International Seabed Authority to explore the extraction of nodule resources.
Earth’s Final Frontier
The hadopelagic zone comprises less than 1% of ocean volume and 0.2% of the seafloor, but looms large as one of Earth’s least understood ecosystems. In fact, more humans have been on the moon than have visited this area of the ocean, and most of this zone only exists within deep water trenches and canyons that extend well beyond the Abyssal plains. There are 33 “hadal trenches” and five of them exceed 10,000 meters – including the world’s deepest oceanic point, the Mariana Trench.
The water pressure here can reach a mind-bending eight tons per square inch, but in spite of the extreme pressure, lack of food, and near-freezing temperatures, life can still be found. Most of the creatures that inhabit the hadal zone are literally bottom feeders; they eat the very last bits of marine snow that reach the trench floor.
While nearly all organisms on Earth derive energy either directly or indirectly from the sun, certain organisms have adapted to survive by using hydrothermal vents as an energy source. Many of the creatures living around vents contain symbiotic bacteria, which subsist off hydrogen sulphide emissions. This unique ecosystem provides clues for how life could exist on other planets with more extreme ecosystems.
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.
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 $1/day.
The above graphic maps the major trade flows of cocoa and allows us to dive deeper into its global supply chain.
From Bean to Bar: Stages in the Cocoa Supply Chain
Cocoa beans go through a number of stages before being used in chocolate products.
- Harvesting, Fermenting, and Drying
First, farmers harvest cocoa beans from pods on cacao plants. Next, they are fermented in heaps and covered with banana leaves. Farmers then dry and package the cocoa beans for domestic transportation.
- Domestic Transportation, Cleaning, and Exporting
Domestic transporters carry packaged cocoa beans to either cleaning warehouses or processing factories. Cocoa beans are cleaned and prepared for exports to the chocolate production hubs of the world.
- Processing and Chocolate Production
Processing companies winnow, roast, and grind cocoa beans and then convert them into cocoa liquor, cocoa butter, or cocoa cakes—which are mixed with other ingredients like sugar and milk to produce chocolate products.
Cocoa farming and trade are at the roots of the chocolate industry, and the consistent supply of cocoa plays a critical role in providing us with reasonably-priced chocolate.
So where exactly does all this cocoa come from?
The Key Nations in Cocoa’s Global Supply Chain
Growing cocoa has specific temperature, water, and humidity requirements. As a result, the equatorial regions of Africa, Central and South America, and Asia are optimal for cocoa farming.
These regions host the biggest cocoa exporters by value.
|Rank (2019)||Exporting Country||Value (US$, millions)|
|1||Côte d’Ivoire 🇨🇮||$3,575|
Côte d’Ivoire and Ghana are responsible for 70% of global cocoa production, and cocoa exports play a huge role in their economies. Although the majority of exporters come from equatorial regions, Belgium stands out in fifth place.
On the other hand, most of the top importers are in Europe—the Netherlands and Germany being the top two.
|Rank (2019)||Importing Country||Value (US$, millions)|
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)||Country||Value of Chocolate Exports
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.
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.
|Country||Cocoa Farmers Making $1/day or less||Children in Cocoa Agriculture|
|Côte d’Ivoire 🇨🇮||600,000||891,500|
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.
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.
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.
|Country||Coffee Production (60kg bags)||Share of Global Coffee Production|
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.
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.
|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%.
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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