Category management in Swedish food retail: challenges in ethical sourcing

Abstract

Ethical aspects of consumption of fast moving consumer goods, have received increased attention during the last decade. In part, this can be explained by an increasing awareness among consumers at large of environmental and social issues that are embedded in the production of fast moving consumer goods, such as food products. Standards and eco-labels serve as a guiding support for consumer choices, but the role of the food retailer, above and beyond providing services and information for the consumers, is a matter of making corporate decisions in line with responsible corporate governance. This paper aims to explore corporate responsibility, CR, in terms of ethical sourcing in category management, which selection reflects the overall corporate value grounds and create basis for differentiation. Categories are seen as single business units, where considering ethical aspects in business decisions might be conflicting with strategic goals such as profit maximization on a corporate level. Therefore, in a practical setting, category management concerns making choices regarding in which way and what products should be offered in the food retail stores. Key research questions target the conditions for making strategic choices; who are the stakeholders? And what values are given priority? The paper is based on a qualitative research design where two food retail case studies are presented as illustrations of conditions and challenges in addressing complex corporate responsibility issues. These case studies adopt a corporate perspective of key food retailers in Sweden and their approach to managing social and environmental issues in supply chains. Research findings illustrate the central position for food retailers in the supply chain. Yet, it is unlikely that solutions to complex problems, such as those embedded in supply chains, can be achieved by a single actor since businesses that respond individually to complex challenges often find the competitive environment restricting their activities. An extended stakeholder dialogue, in terms of industrial networks and multi-stakeholder dialogue, offers valuable exchange of knowledge and an opportunity to balance a wide set of values and interests. Corporate challenges of creating legitimacy are associated with the selection of dialogue partners, perceptions of created shared values, communicational efforts made to establish trust, and, the underlying query of corporate raison d’être.