Product details

Cognac contributes strongly to French wine and spirits exports, making a major contribution to the country's positive trade balance. Some 98% of cognac is exported to a total of 160 countries, and almost 100% of it is manufactured in Cognac. This teaching case aims to support a better understanding of supply chain production challenges in the context of sustainability challenges. This case highlights the need to understand supply chains holistically, the importance of stakeholder engagement and supply chain cooperation between focal companies and their upstream and downstream partners, as well as cooperation with non-business partners. Various sustainability topics are addressed in this case. For the environmental dimension, the concepts of life cycle assessment, environmental footprint, transportation, eco-design and green packaging can be discussed. For the social dimension, topics such as employment, workers’ health and safety, multi-stakeholder cooperation and cultural heritage can be addressed. Finally, for the economic dimension, the concepts of profitability and competitive advantage can be considered. The cognac supply chain is characterised by a low incoming flow and a huge and complex outflow. That means that the environmental impact of the cognac supply chain can hardly be mitigated, hindering the industry's sustainability and attracting increased public attention. To date, there is no clear strategy to further improve the sustainability of the cognac supply chain: cognac is a luxury product (hence the quality of the packaging is very important) and a local product (cognac production cannot be relocated closer to its main consumption markets). The theoretical lens best suited to this case study is stakeholder theory. Through this case study, students will better understand the difference between operations happening upstream, within the firm and downstream of the supply chain. They will also realise that, although we often talk about 'sustainable supply chain management', some industries cannot be entirely sustainable because of production and market constraints. Also, this case highlights cooperation among supply chain members and non-supply chain members to improve sustainability in the entire supply chain.