Sustainable Supply Chains in the Food and Beverage Industry

Abstract

The food and beverage sector of the economy has faced increasing pressure from consumers to provide transparency on the sources and operations related to their products. Responsible and ethical procurement is especially challenging for food and beverage, because agricultural commodities typically rely on low-cost labor inputs and environmentally-damaging technology and practices in order to produce high volumes. These negative environmental and social impacts threaten the reputation of food and beverage firms in the short-term, and the certainty of food supply capacity in the longterm. Therefore, supply chain management in food and beverage firms is shifting from an operational activity to a strategic activity. This research identified the key categories of information that significantly determine the feasibility, opportunity, and/or perhaps urgency of working toward a sustainable supply chain in agriculture. A concise, yet suitably comprehensive analytical tool for supply chain professionals and corporate social responsibility (CSR) practitioners in the food and beverage sector was developed. The Sustainable Agriculture Supply Chain Assessment (SASCA) is a simple screening tool for large food and beverage companies to evaluate, improve, or benchmark the sustainability of their agricultural supply chains. Key findings of this research are: Prevailing supply chain incentives and norms often contradict the behaviors necessary to improve environmental and social performance. Creating a sustainable supply chain requires different models and working relationships. Although agriculture is a mature sector, there remain significant inefficiencies in on-farm resource management that present opportunities for environmental improvements through use of better management practices (BMPs). The WTO and other trade agreements are significant determinants of supply chain leverage in global agriculture.