Sustainability in the Food and Beverage Industry
An analysis of Nestlé and Mondelēz shows that companies in the food and beverage industry have already made the first step in dealing with the challenges of sustainability by setting goals to curb the hazardous effects of their business operations. However, while some have made significant improvements in reducing pollution and societal degradation, others lack necessary communication, planning, and monitoring for internal accountability and operations improvement.
With the increase in globalization over the past few decades, more and more companies have entered international markets and forged new partnerships. The resulting increase in both local and global competition has created more innovative and, at the same time, cheaper products. However, this highly-competitive market has forced some organizations to drive profits at any cost — even to the detriment of society and the environment. This critique draws a need for sustainable business ethics in worldwide organizations, as sometimes the harms from completely industrialist practices can negate the value created by them.
“CSR is the set of practices companies adopt to ensure ethical operations in the society and environment in which they exist.”
Given the state of operation of companies in the food and beverage industry, it can be said that Corporate Social Responsibility (CSR) is important to food-producing companies since the industry intensely impacts and has a high dependence on the environment, economy, and society.
The food and beverage industry’s challenge started in the 1990s with the onslaught of widespread obesity, caused by unhealthy amounts of sugar in packaged foods. This was in contrast to infant malnutrition, which was a top killer among children under five, with a UN report showing that every second child in this age group died due to malnutrition. The blame was again shifted to food companies as packaged foods did not provide infants with enough nutrients such as iron and zinc.
To deal with these challenges, governments have set up regulations to curb child labor, as well as more stringent food controls such as banning misleading nutrition labeling to give consumers open information on the products they consume. Hence, companies must not stop at meeting these regulations, but create innovative internal solutions for sustainable results.
Mondelēz responded to the malnutrition challenge by reducing the amount of sugar, sodium, and saturated fats in its foods by 10% in 2020. This was accompanied by plans to increase its use of whole grains by 25% for healthier snacks . The company has also committed to reducing child labor by sourcing its cocoa from certified farmers in Africa, with plans to implement a child labor monitoring policy. Overall, Mondelēz has done a good job responding to the challenges in this industry. However, it needs to set clear targets for its child monitoring system to ensure that internal processes are redesigned to meet its goals.
Nestlé, on the other hand, was forced to adopt CSR methods after a scandal around its baby formula which caused infant deaths in Africa. It rebranded as a nutrition, health and wellness company in 2003 to show dedication to more nutritious and healthy products for consumers of all ages. In response to child labor issues, Nestlé adopted a CSR method it called Creating Shared Value (CSV) which aims to not only train farmers on ethical farming, but also educate kids in primary and secondary schools about child labor problems. Nestlé has an efficient CSR strategy because it clearly communicates the importance of CSR with employees and released annual CSR reports to guarantee accountability and internal operations improvements to stakeholders.
Additionally, Nestlé responded to pollution issues by announcing plans to make 100% of its packaging reusable or recyclable by 2025. However, this time the company failed to give a detailed plan on how it will do this in the next seven years. Furthermore, Nestlé has also failed to deal with cleanup efforts of its packaging waste in places such as the Philippines. Overall, Nestlé has not adopted practical manufacturing methods to reduce land pollution.
Some of the biggest challenges in food and beverage industry are issues surrounding nutrition and land pollution. A number of sustainable and unsustainable approaches towards these issues have been put forth by large food and beverage firms like Nestlé and Mondelēz. And although companies in this industry are committed to reducing their global footprint, some of the goals lack adequate environmental management systems to achieve practical results.
Thumbnail image: Steven Depolo