There has been a lot of talk and noise about Corporate Social Responsibility but what is it, and what is its relevance to the food industry?
In its broadest sense, Corporate Social Responsibility or CSR as it is commonly known is concerned with the relationship between companies and the local society in which they reside and operate. It can also be defined as the relationship between an organisation and its stakeholders.
But what about CSR and its relevance in meeting some of the challenges in the food industry?
We can perhaps try to answer this by looking at some of the real issues that food producers face when looking to create and execute a meaningful Corporate Social Responsibility strategy.
The food supply chain begins with product either grown or produced on a farm. Such production involves using natural resources such as water and soil. This may also require the use of imported goods or services such as fertilizers, pesticides, foreign expertise or even seeds, and all of these has its own complex supply chain where things can also go wrong, making the modern supply chain an intercontinental affair, introducing increasingly difficult challenges for businesses to manage. This new demand now requires an even more complex supply chain where goods are being moved around the world, from raw ingredients, to packaging materials, finished goods, etc.
2. Retailers Power Abuse
One of the great challenges for the food supply chain of course is the power yielded by major retailers. According to power dependence theory, the more suppliers (for example, small food processors) depend on their customer (for example large retailers), the higher the power of the latter to control and influence the former. No rocket science there!
This result of such coercion leads suppliers to bend to the will of the requirements of their customer. As a result small food processors that depend on large retailers, which can control and influence them, often resort to practices that at best, are not in line with being corporately responsible, and at worst can lead to unfair practices.
3. Food Safety
Another worrying issue that happens throughout the supply chain is food safety incidents. This is a concern at any point in the process, from agricultural production, manufacturing, transportation and end user sale of the product.
The WHO stated in a 2001 report on food safety strategy that “Global trends including changing practices in agriculture, increased urbanisation, changing food consumption patterns, (…) and the globalization of the food trade, seem to have contributed to the increased risk of foodborne disease”.
Indeed, there are numerous examples of cases of foodborne diseases that happened such as listeria or salmonella outbreaks, which cause concern to businesses and the public.
4. Social Issues
Another unintended consequence of having international supply networks and being part of the global village is the need to be cognizant of emerging social issues. For example, we see and hear of many including child labour, workers’ exploitation, forced labour, displacement of population, poor working conditions, people trafficking, discrimination and lack of workers rights. Responsible employers in the food production environment need to ensure that there CSR strategy and policies are mindful of such concerns and robust enough to be able to deal with them as they arise, either within their own organisations or in their wider value chain.
5.Environmental Impact of Food Production
One of the major challenges the food industry is facing is the degradation of the ecosystem. There is likely no other sector that is as highly dependent on natural resources as the food sector while at the same time having considerable and diverse impacts on the environment.
Given what has been written above it might be tempting to think why bother, however, there is no doubt that there are some clear business benefits to Corporate Social Responsibility, including:-
- Increased brand awareness and recognition. If you are committed to ethical practices, this news will spread and quickly. More people will therefore hear about your brand, which creates an increased brand awareness. Equally if you get a reputation for unethical practices then that news will spread quicker!
- Potential cost savings. Many simple changes in favour of sustainability, such as using less packaging, will help to decrease your production costs.
- Competitive Advantage. By embracing CSR, you stand out from competitors in your industry. You establish yourself as a company committed to going one step further by considering social and environmental factors.
- Increased customer engagement. If you’re using sustainable systems, you should get the message out there, through social media and content marketing and create a story out of your efforts.
- Greater employee engagement. Similar to customer engagement, you also need to ensure that your employees know your CSR strategies. It’s proven that employees enjoy working more for a company that has a good public image than one that doesn’t. Funny that!
Furthermore, by showing that you’re committed to things like human rights, you’re much more likely to attract and retain the top candidates. Organisations in the 21st century in any sector, but especially in food production, cannot afford to ignore CSR and the implications of working in an increasingly, complex and deregulated world.