1

CHAPTER 1

THE CHALLENGE OF SUSTAINABLE INNOVATION IN AGRI-FOOD

SUPPLY CHAINS

RAFFAELLA CAGLIANO

Dipartimento di Ingegneria Gestionale Politecnico di Milano

Milan, Italy raffaella.cagliano@polimi.it

CHRISTOPHER G. WORLEY Center for Leadership and Effective Organizations

NEOMA Business School Reims, France

cworley@marshall.usc.edu

FEDERICO F. A. CANIATO

Dipartimento di Ingegneria Gestionale Politecnico di Milano

Milan, Italy federico.caniato@polimi.it

2

ABSTRACT

Purpose: This chapter introduces the volume’s theme by describing the challenges of sustainability

in the agri-food industry and the critical role of agri-food supply chains. Following a description of

traditional and sustainable supply chain management practices, we discuss the likely characteristics

of sustainability oriented innovations and how organizations pursuing higher levels of economic,

social, and environmental performance will need to adapt their capabilities.

Design/Approach/Methodology: Drawing on the emerging concepts and practices from sustainable

supply chain management as well as traditional and emerging concepts from innovation, we develop

general propositions and expectations about how organizations might address sustainable

effectiveness in their supply chains. The importance of the agri-food industry to all three pillars of

sustainable effectiveness and predictions about the inability to feed future populations gives the

discussion a certain urgency.

Findings: Sustainability oriented innovations in the agri-food supply chain are different from

traditional innovations. We develop propositions regarding the driving motivations, their nature and

scope (i.e., more radical and systemic than incremental and focused), and the importance of a multi-

stakeholder approach. The ten cases presented in the volume are summarized.

Keywords: Sustainability, agri-food industry, sustainable supply chain management, sustainability

oriented innovation

3

INTRODUCTION

Organizations -- and the economic system of which they are a part -- are finding new ways to match

their economic logics and operations with the protection of those resources that are essential to the

planet and its population to survive. The challenge of sustainable development is particularly

compelling in the agri-food industry because of its relative impact on the environment, the amount

of natural resources it consumes, and its structural interrelatedness with the health and well-being of

humanity. Far too many studies predict that the industry will not be able to provide enough food in

the future given current operating methods and expected dynamics in the world population.

Within the food industry, the agri-food supply chain produces, processes, distributes, and

consumes products through a complex network of interrelated actors. A major source of

unsustainability in the industry is the current structure and logic of these supply chains (Marsden,

Murdoch, & Morgan, 1999). Although each single actor in the chain can contribute incrementally to

the overall sustainability of the final product, a much more systemic effort is required to achieve

significant improvements. Thus, actors in agri-food supply chains must look for ways to become

more sustainable but must also look beyond their boundaries and include many different other

actors in their innovation process. Often, these actors are not the primary stakeholders of the firm,

but less traditional actors, such as NGOs, governmental bodies, or research institutes.

Modern day supply chains – including modern day agri-food supply chains – are no less a

product of history than modern day organizations. The history of management and organization has

been well documented (e.g., Piore & Sabel, 1984; Stout, 2012; Williamson, 1995), and most

organization design models identify economic performance as the primary measure of effectiveness

and growth as the primary strategy. When the measure of performance and effectiveness is

economically or financially based, a strategy of growth allows firms to access cost efficiency,

value-add, and productivity through scale and leverage. Scale and leverage are a by-product of the

overriding concern for efficiency, productivity, and shareholder wealth (Albert, 1993). Sometimes

efficiency and productivity can serve the cause of providing safe, varied food to a larger share of the

4

world population. However, scale and leverage are also the causes of many unsustainable models of

production, processing, delivery, and consumption. The never-ending search for efficiency results

in larger farms, massive feedlots, increasing chemical usage and greenhouse gas emissions, longer

supply chains, centralized distribution centers, and more transportation. Thus, the emergence of

alternative indicators, such as environmental sustainability and social/community engagement,

suggests taking a step back from the logic of scale and leverage to consider alternative new business

logics and their supply chains.

Research on these new logics is in general agreement (Pullman & Wu, 2012). Innovation

will be a key lever to change current systems, allow companies to apply more sustainable models of

production, and foster more sustainable models of consumption. Innovation can be developed at

different levels and can be pushed by different drivers. In particular, innovation can target products,

processes, and organizational models in one or many stages of a complex supply chain. In addition,

sustainability oriented innovation (SOI) can address one or more sustainability dimensions and

produce more or less radical departures from the traditional models.

This volume in the Organizing for Sustainable Effectiveness Series is aimed at presenting

and discussing a variety of supply chain SOIs in the agri-food industry. They are all aimed -- in a

more or less radical way -- at improving the sustainability of the companies or the systems

involved. The ten cases are very different in terms of the scope of innovation, the dimension of

sustainable performance targeted, the levers used to change the supply chain model, and the level of

maturity and success achieved by those innovations. This variety allows us to appreciate the

alternative patterns that can be followed to achieve sustainability in this industry and the challenges

and opportunities associated with them.

Despite this variety, there are two common threads.

First, a common feature of the cases presented here is the strong strategic focus behind the

solutions proposed. Most of the innovations analysed lay in the strategic arena rather than at the

level of tactical solutions. Although they may be aimed at incremental improvements of a single

5

sustainability performance dimension, most of the innovations are pushed by a strong belief that the

company can create more value by finding ways to produce the same or better products though

more sustainable systems. The main push to innovate does not always come from regulations or

market opportunities, but also arise from an enlightened awareness of the role played by an

organization in society.

Second, in keeping with the theme of this Series, all of the cases address the organizational

capabilities needed to develop and adopt the proposed innovation. That is, successful innovation

does not solely rely on the quality and nature of the solution proposed, but also on the ability to

implement it effectively. Besides analysing solutions that address sustainability problems in the

agri-food supply chains, these chapters also discuss the organizational assets and routines required

to make them work. The appropriate organization design, resources, and capabilities are essential.

To better frame the cases presented in the book, we describe the challenges posed by the

agri-food industry in terms of sustainable development and the range of answers that have been

proposed in the literature. The structure of the agri-food supply chains and their central role when

looking for sustainable models in this industry is discussed next. This section also categorizes state

of the art sustainability practices and innovation in food supply chains. We then discuss the concept

of sustainability-oriented innovation (SOI) and propose it as an overarching concept to make a

company more sustainable. The chapter closes with a summary of the questions that arise from the

literature and the practice of sustainable innovation in the agri-food supply chains. We try to

address those questions when analysing and comparing the cases in Chapter 12, where we try to

provide some answers and show some possible ways forward. A short synopsis of the ten cases is

also presented.

THE CHALLENGE OF SUSTAINABILITY IN THE AGRI-FOOD INDUSTRY

The food industry is undergoing unprecedented challenges and pressures. No other industry like the

agri-food industry represents, in such a complete and dramatic way, the challenge of sustainability.

6

It is a central economic feature of many countries around the world and accounts for a significant

share of production, consumption, and employment. In Europe, the food industry represents 14.5%

of total manufacturing revenues, 15.5% of the employment, and 12.5% of value added in

manufacturing. But it is also a fragmented industry. On the one hand, European multinationals

competing in the international foods market are few in number but sell a wide variety of products.

On the other hand, 99% of the companies and 63% of employment is accounted for by small and

medium enterprises (SMEs) (ECSIP Consortium, 2016; Fooddrink Europe, 2015).

In the U.S., agriculture and agriculture-related industries accounted for 4.8 percent of the

country’s gross domestic product (GDP) in 2014. Farming output represents about 1% of GDP,

although that understates the overall contribution of agriculture because other sectors, including

food service, catering, and drinking establishments, among others, depend on agricultural inputs for

their value-added contributions (USDA, 2016).

The above figures suggest that the food industry reflects the characteristics of a highly

competitive, commodity industry. Many suppliers, especially farmers, are price takers and have

little bargaining power. Downstream producers and retailers have some opportunity for

differentiation, but they too are under intense and effective pressures to lower prices that can take

their toll on sustainability (Lawrence, 2013). As pressures for sustainability evolve, one source of

differentiation is the food itself and farmers may have a window to adapt innovative practices to

create branded products. For example, Driscoll’s, the California-based berry producer, is

aggressively and successfully working to create a unique and worldwide brand in this category.

Similarly, illy has been one of the first coffee producers to transform a typical commodity – coffee

– into a strongly differentiated product associated with a highly reputed brand. The centrality of

food to the economy, to life, and to human cultural identity, and the volatility brought on by

consumer concern for food security, safety, and sustainability, have created a more dynamic

industry, sometimes referred to as “the new oil” (Bradsher, 2008).

7

In addition to its economic centrality, the industry is also and obviously tightly connected to

the natural environment. Farming, for example, is one of our oldest technologies, delivers an

original and essential raw material for human life, and is completely dependent on basic resources,

such as land, air, and water. The industry is among the largest users of surface water and energy.

Despite its deep connection with the earth and human existence, an increasing body of evidence

demonstrates that many of our current food production systems are harming the planet and its

inhabitants (Gerbens-Leenes, Moll, Uiterkamp, 2003; Godfray, Beddington, Crute, Haddad,

Lawrence, Muir… & Toulmin, 2010). The excessive and thoughtless use of chemicals compromises

the natural rhythms of the Earth and its capability to produce food in the coming years (EU

Standing Committee on Agriculture Research – SCAR, no date). Food systems as a whole

contribute between 15 and 28% of overall greenhouse gas emissions in developed countries

(Garnett, 2011). As important contributors to climate change and global warming, these activities

threaten the stability of the whole food system, including negative impacts on food production, food

prices, food utilisation, access to food, and supply chain infrastructure (Schmidhuber & Tubiello,

2007; Wheeler & von Braun, 2013). The exploitation of natural resources and changing land use

patterns have led to biodiversity losses, especially in agriculture and fisheries, and to the inability of

nature to regenerate resources at the same pace as their depletion.

Finally, the agri-food industry is a social issue. The world’s population is expected to

increase to 8 billion by 2030 and to exceed 9 billion by 2050 (UN, 2013). This forecast includes the

projected growth of a middle-class that will demand more varied and high-quality food products

requiring additional, differentiated, and more costly resources. Such a population will require 60%

more global food supplies (Global Commission on the Economy and Climate, 2014) and utilize up

to 45% of global energy and 30% of global water demand exclusively for agricultural activities

(Foresight, 2011). However, in too many countries, more food is produced than can be consumed.

Research shows that one third of the global food production is wasted or lost annually (Gustavsson,

Cederberg, Sonesson, Van Otterdijk, & Meybeck, 2011). On the other hand, there is wide

8

agreement that without waste, through the responsible use of available resources, and thanks to

expected scientific progress, the food system will be able to feed the world’s population (Aiking &

de Boer, 2004).

The increasing gap between the poorest and wealthiest parts of the population (Piketty,

2014) suggests that an increasing percentage of the global population may suffer from hunger.

Today, estimates suggest that there are more than 900 million people worldwide suffering from

hunger. Although undernourishment has fallen from 18.7 to 11.3 percent globally, the problem is

far from solved, with Sub-Saharan Africa and Southern Asia still having severe undernutrition

problems. Many other factors, such as price volatility, access restrictions, the interconnectedness of

global commodity markets, increasing vulnerability of food production systems to climate change,

and loss of agro-biodiversity, will further increase the food insecurity and inaccessibility for poor

people in the future.

At the same time, the average Western diet includes high intakes of meat, fat, and sugar

posing a significant risk to individual health in this area of the word. Worldwide 1.9 billion people

are overweight and of these over 600 million are obese. Worse, the worldwide prevalence of obesity

more than doubled between 1980 and 2014. But both hunger and obesity are critical social issues

that affect up to a quarter of the world’s population (Aiking & de Boer, 2004).

In sum, sustainable development in the food sector faces three main and integrated

challenges. The first challenge is that food production significantly impacts and strongly depends on

environmental, human, and physical resources. Respecting, protecting, and regenerating this

interdependency is fundamental to sustainable development. The second challenge involves the

vital role that food holds for humans. Consumers are increasingly aware of and concerned with the

negative impacts that unsustainable production methods, food miles, and food origin can have on

their health. They are expecting and requiring more information and transparency on production

processes and food sources (Bourlakis, Maglaras, Aktas, Gallear, & Fotopoulos, 2014). As a result,

9

consumer and regulatory requirements will become central to sustainable development, but this will

increase the complexity and challenges faced by manufacturers, suppliers, and the entire chain.

The third challenge reflects the peculiar characteristics of the food supply chain. The actors

involved in the chain often belong to different companies that are diverse in terms of size and

approaches toward sustainability and their participation in a process that is time sensitive. The

interdependence of the actors – with different motivations and the threat of perishability/spoilage -

increases the possibility that conflicts will arise from the adoption and implementation of

sustainable practices by any one actor in the food chain (Hartmann, 2011).

THE AGRI-FOOD INDUSTRY AND SUPPLY CHAIN

Food tends to be produced in a complex system made up of mainly industrialized and mass

production processes, diverse actors, and layers of complexity. The sustainability of the food

industry is intrinsically dependent on the sustainability of its many agri-food supply chains -- from

the sustainability of the actors that grow or produce the food through the complex actor interactions

that make the food available to the final consumer. In addition, many supply chain stages have been

internationally integrated to form global food supply chains. Globalization, along with changing

marketing techniques, consumption trends, and modern technology, has raised concerns regarding

economic, social, and environmental sustainability. These concerns are pushing organizations to

develop systems that ensure the control of the entire supply chain, guarantee quality and food

safety, and track/trace practices and products (Gulati, Minot, Delgado, & Bora, 2007).

As food sector sustainability comes under increasing scrutiny, the management of supply

chains as a potential differentiating competency has become a forefront issue for organizations all

over the world (Fritz & Schiefer, 2008; Validi, Bhattacharya, & Byrne, 2014). There is wide

consensus that coping with the challenge of a more sustainable food production and consumption

system will require a holistic solution that comprises the whole supply chain.

10

In fact, the food sector was among the first to explore sustainability issues (Fritz & Schiefer,

2008) and is constantly looking for innovative supply chain solutions to decrease the impact on the

natural environment and improve social and ethical dimensions. For example, the European

Sustainable Production and Consumption policies are aimed at creating more sustainable food

supply chains, protecting the environment, increasing the competitiveness of the European food

sector, and contributing to economic and social welfare (European Commission, no date).

Agri-food Supply Chain Characteristics

Food supply chains have specific and challenging inventory and production characteristics

compared to other types of supply chains (Akkerman & van Donk, 2007; Zavanella & Zanoni,

2009), including:

• Production processes characterized by frequent setup cycles that are highly dependent on

timing, season, and sequence;

• Limited storage times due to expiration issues, but also because specific products require

dedicated techniques; and

• Short processing times that require sophisticated tracing, monitoring, and quality systems to

assure final consumers about quality, food safety, and authenticity.

Improper attention to these issues can affect human health if various hygiene, temperature, or

production standards have not been respected. Regulations and regulatory enforcement can push the

development of new procedures and managerial systems for the food chain (Zanoni & Zavanella,

2012).

Reflecting these characteristics, a food supply chain or food system comprises a set of processes

and the economic, institutional, and political actors that determine how food reaches the final

consumer starting from its cultivation or breeding (Saccomandi, 1999). It is made up of different

actors and organizations operating in diverse markets and selling a variety of food products (Figure

11

1) (Bukeviciute, Dierx, Ilzkovitz, & Roty, 2009). According to the UK Department for

Environment, Food, and Rural Affairs, a food supply chain consists of agricultural production, food

processing, food wholesaling, food retailing and food catering (DEFRA, 2006). When we consider

food sustainability, we need to add food consumption and waste at the consumer stage.

[Insert Fig. 1 here]

These actors can be classified in three main sectors: agriculture, food processing, and

distribution. The agricultural sector engages in mainly crop production and livestock breeding

activities. Organizations belonging to this sector sell their products to the food processing sector, to

their own sector in the form of feed for animals, but also to distributors

(exporters/wholesalers/retailers) and in some cases even directly to food catering, final consumers,

or alternative markets (biofuels).

The food processing sector includes a highly diverse set of organizations and activities, such

as cutting or drying (related to fruit and vegetables), slaughtering and disassembling (related to

livestock), or roasting (related to coffee). In most cases, the final activity is packaging, after which

products are delivered to customers, including distributors, food services/catering, or final

consumers. This sector is also involved in marketing and new product development activities.

The distribution sector (wholesale/retail) is the primary channel through which food is sold

to customers and consumers. A special case of food distribution is hotels, restaurants, and catering

(Ho.Re.Ca), which buy either processed or non-processed food and delivers it to consumers after

final, on-site, and on-demand processing. Since the distribution sector has direct contact with

consumers, another important activity that can be carried out is the promotion of the food products

(Bukeviciute et al., 2009).

These sectors can be configured in a variety of different ways. Several supply chain

classifications have been proposed and here we adopt the classification proposed by Smith (2008).

12

It provides an effective framework for highlighting the different sustainability implications of food

supply chains:

• Local Food Supply Chains: These are short-distance, small-scale supply chains, generally

involving medium/small companies and traditional products. They are particularly suitable

for fresh, highly perishable products that require a very short time from the field to the table.

• Conserved Food Supply Chains: Through a variety of conservation techniques (canning,

pasteurization, freezing, chilling, controlled atmosphere, etc.), food can be stored for longer

times and transported over long distances. They are generally operated on a large scale and

involve large organizations. Today, “fresh” fruit and vegetables and dairy produce can be

traded as “conserved food.”

• Manufactured Food Supply Chains: This involves processed food, often through large-

scale, industrialized processes, utilizing a variety of ingredients derived from multiple

sources, often scattered around the globe and pre-processed. Supply networks are typically

complex and dynamic, often overlapped with those of competitors.

• Commodity Food Supply Chains: Simple conserved foods, including coffee, wheat, and

cocoa, are defined by standard specifications worldwide, often bulked for low costs, easy

transportation, and simple storage, traded on a global scale according to market prices, and

shipped using sea freight.

Sustainable Food Supply Chain Criteria

To be considered sustainable, the UK Sustainable Development Commission (DEFRA, 2006)

proposed a comprehensive set of supply chain features and characteristics:

o “Produce safe, healthy products in response to market demands and ensure that all

consumers have access to nutritious food and to accurate information about food

products.

13

o Support the viability and diversity of rural and urban economies and communities.

o Enable viable livelihoods to be made from sustainable land management, both

through the market and through payments for public benefits.

o Respect and operate within the biological limits of natural resources (especially soil,

water, and biodiversity).

o Achieve consistently high standards of environmental performance by reducing

energy consumption, minimizing resource inputs and using renewable energy

wherever possible.

o Ensure a safe and hygienic working environment and high social welfare and

training for all employees involved in the food chain.

o Achieve consistently high standards of animal health and welfare.

o Sustain the resource available for growing food and supplying other public benefits

over time, except where alternative land uses are essential to meet other needs of

society.” (Smith, 2008: p. 850)

This framework focuses mainly on production and processing phases. With increased

awareness that a food supply chain’s footprint and sustainability derives from the consumption

phase, at least two other dimensions should be added to the framework.

o Encourage consumers to adopt healthier and more sustainable food behaviors

through education on healthy diets, responsible consumption, and awareness of

food’s impact on sustainability;

o Consciousness regarding food security by educating consumers to adopt more

sustainable lifestyles concerning food consumption, reduction and disposal of food

waste, food preparation (cooking), consumption, and recycling.

14

When these criteria are applied to Smith’s (2008) food supply chain classification, the

possibilities and challenges for sustainability and sustainable oriented innovation become apparent.

• Local Food Supply Chains can be considered relatively sustainable. They support “mixed”

and organic farming and reduce emissions thanks to short-distance transport. Local food

supply chains sustain rural enterprises, regenerate rural communities, and break agribusiness

monopolies. On the downside, they can struggle in achieving economic sustainability and

can offer only a limited range of products.

• Conserved Food Supply Chains can be moderately sustainable because, historically, they

have been important for reducing losses and degradation during transport from rural areas to

urban populations, and allowing people to enjoy a nutritious and varied diet throughout the

year. However, the economic benefits often disrupt local food supply chains by bringing

high quantities of low cost food from far away, with additional negative impacts due to

long-distance transportation.

• Manufactured Food Supply Chains are among the least sustainable. Mixing and

substituting ingredients along complicated dynamic supply networks can limit traceability

and the flow of information and influence along the chain. The complex industrial processes

and the growing sophistication of products may hamper their healthiness and drive

unhealthy consumption behaviors. They are economically attractive but environmentally and

socially problematic – an area ripe for innovation.

• Commodities Food Supply Chains are extremely volatile. When production exceeds

demand, prices tend to be low, making commodity-based foodstuffs widely available, but

having catastrophic impact on the lives of farmers. This in turn may lead to lower

investments and production in subsequent years, thus creating the opposite situation, with

insufficient production and high prices, thus impacting food availability, in particular for

poor people. This too is a system with innovation possibilities.

15

Sustainable Food Supply Chain Practices

The sustainable supply chain management literature highlights the differences between practices

aimed at “harm reduction” and those oriented to “harm elimination” (Pagell & Shevchenko, 2014).

In particular, the literature underlines that most current practices and studies focus on making

unsustainable supply chain and business models less unsustainable, rather than on creating “truly

sustainable supply chains.” Truly sustainable supply chains are economically viable and do not harm

(and may actually aid) the natural and the social environment (Pagell & Wu, 2009). Studying what is

different and what is new about sustainable supply chain management, and what completely new

practices and business models are arising to create truly sustainable supply chains underlines the

importance of studying different, new, unconventional cases alongside more traditional ones. That is

one of the aims of the research cases presented in this volume.

To achieve the desired sustainability performance, a broad variety of practices have been

identified and adopted by various actors involved in the food supply chain. Several authors have

proposed possible practice classifications to help synthesize this complex domain (e.g., Maloni &

Brown, 2006; Smith, 2008). However, such classifications are often incomplete or contradictory,

and we therefore summarize and integrate a variety of proposals according to the well-known pillars

of environmental, social, and economic sustainability.

Environmental sustainability practices attend to natural resources conservation, green

processing, packaging, and transportation, and animal welfare. Natural resources conservation

practices reduce the consumption of land, water, and energy, reduce emissions into the air, land, and

water, and preserve the soil and biodiversity. Green processing, packaging, and transportation

practices reduce the impact of industrial and logistic processes through reducing and recycling

waste, reducing energy consumption, and using renewable energies; reducing packaging or using

recycled, recyclable, or reusable packaging materials; and reducing fuel consumption and emissions

during transportation. Animal welfare practices deal with the establishment of breeding conditions

16

that eliminate cruelty, handle and house animals safely, and slaughter and transport animals

humanely.

Social sustainability in a food supply chain is approached through health and safety practices,

health and human rights policies and procedures, and community development practices. Health and

safety practices improve food product quality and safety for the consumer. It considers the controlled

handling, processing, transportation, and traceability of food in the chain and the promotion of healthy

life styles, consumer education, and responsible consumption. Work and Human Rights practices

ensure safe and respectful working conditions along the whole supply chain and lead to higher levels

of motivation and performance. Community development practices are aimed at improving the

relationship with the community in which the supply chain operates. This can include economic

development activities, educational practices, childcare, and employee volunteering as well as

philanthropic investment and aid.

Economic sustainability is supported by sustainable procurement and fair trade practices.

Downstream actors in the supply chain, such as industrial processors and large distributors, should

adopt sustainable procurement practices in managing their supply base to ensure ethical purchasing

processes (fairness, transparency, confidentiality, no power abuse), and to foster supplier

development and collaboration. Fair Trade practices ensure a proper distribution of profits along the

supply chain, monitor the economic sustainability of all the actors involved, and enable the pursuit of

other pillars of sustainability. Practices aimed at monitoring and certifying the sustainability of the

whole chain, as well as increasing consumer awareness, should also be adopted to obtain a premium

price on the market.

SUSTAINABILITY ORIENTED INNOVATION IN AGRI-FOOD SUPPLY CHAIN

Despite the research and practice on how to build more sustainable food supply chains, the previous

sections also suggest that current food supply chain configurations and practices are putting future

development at risk. Innovation – the introduction of new processes, products, or organizational

17

methods to an existing system (OECD, 2005; Tornatzky, Eveland, & Fleischer, 1990; Utterback,

1996) – is required to enhance sustainable effectiveness (Hansen, Grosse-Dunker, & Reichwald,

2009; Horn & Brem, 2013; Schaltegger & Wagner, 2011). These innovations will range from

developing new technologies and processes, to establishing goods and services in new ways, to

discovering fundamentally new business models. Each of these approaches is important because

they attempt to overcome the challenges of inherent trade-offs among sustainability dimensions.

That is, gaining traction in environmental issues often threatens economic outcomes. Overall, the

sustainability practices discussed above represent significant innovations compared to traditional

supply chain management in the food sector.

In this section, we describe how sustainability oriented innovations (SOIs) differ from

traditional innovation and how the diverse determinants of SOIs will require novel organizational

approaches and capabilities.

Characteristics of SOIs

Sustainability-oriented innovation can be defined as the establishment of new products, processes,

and/or management systems that have an overall positive net effect on the capital stock of the

company, by addressing environmental, social, and economic goals (Hansen et al., 2009). Extant

research suggests that innovations aimed at sustainable development differ from conventional

innovation in four important ways (Hall & Vredenburg, 2003; Van Kleef & Roome, 2007).

First, SOIs are more likely to have multidimensional objectives (De Marchi, 2012) because

they address product or process improvements along social, economic, and environmental

dimensions (and the specific multiple aspects within them). Packaging innovations, for example,

can save products from damage, lower environmental footprints, and reduce costs.

Second, SOI’s involve a higher level of complexity and uncertainty (Sarkis, Cordeiro, &

Brust, 2010) because the outcomes from integrating or trading off the social, economic, and

environmental dimensions are unknown. Shortening the supply chain can successfully increase

18

social and environmental benefits but may struggle to demonstrate economic sustainability.

Similarly, when the overall concept of sustainability is tackled, SOIs generally require innovation

not just in a specific product, but rather a product-service system (Carrillo-Hermosilla, Del Río, &

Könnölä, 2010). The product-service system perspective stresses the relevance of the entire supply

chain during the production, processing, consumption, and disposal of the product (Linton, Klassen,

& Jayaraman, 2007), thus leading to increased complexity.

Third, SOI’s are fundamentally riskier (Hall & Vredenburg, 2012) because they require

adjustments in the configuration of the supply chain, its members, and the way practices and

activities are managed. The more radical the product/process innovation in one part of the system,

the more likely that interventions in the supply chain will meet with resistance from other supply

chain members.

Finally, and also as a consequence of the above distinctive elements, SOIs generally require

more collaborative and/or open system approaches (Chesbrough, 2010). To date, most open

innovation research has addressed traditional types of innovation. There is less knowledge on the

specific challenges of this approach when used for SOI. Because of its complexity, the diverse types

of knowledge needed, and its risk uncertainty, especially in terms of market acceptance, SOIs

require the involvement of a number of different actors, especially non-conventional ones, including

customers, NGOs, and other stakeholders such as local communities (Foster & Green 2000; Hall

and Vredenburg, 2003).

Drivers and Motivations for SOIs

Although SOIs are different from traditional innovations, their sources, determinants, and

motivations are both similar and different. For example, the traditional innovation literature

recognizes two main drivers of innovation: technology push and market pull (Martin, 1994).

Technology push innovation is driven by internal investments in R&D that contribute to the

evolution of a product or process through learning and scaling (Sahal, 1981). Technology push

19

innovation is recognised as an important driver of eco-innovation by reducing the environmental

impact of production processes, their energy consumption, or polluting emissions (e.g., Horbach

2008). Technology push innovation also includes organizational routines or specific knowledge

developed within the company that can be exploited by producing more sustainable products

(Horbach, 2008).

Market pull innovation starts from the recognition of more or less explicit needs in the

environment among customers or other traditional players in the market. Those demands result in

efforts to develop new solutions, also at the level of technology. Customers and consumers are

increasingly concerned with the environmental and social sustainability of the products they buy.

For some product categories where sustainability can be seen as an added value, consumers might

consider it as a product differentiation dimension (Kammerer, 2009). As a consequence, market pull

forces generate a demand for products that are supplied, produced, and distributed in more

sustainable ways.

The research and debate surrounding these two approaches is well documented (see e.g., Di

Stefano, Gambardella, & Verona, 2012) and a full review is beyond the scope of this chapter.

However, a clear conclusion of this debate is that while most innovations have a main driver, push

or pull, the presence of both factors allows the development of technically advanced product and

process solutions that address the explicit or tacit needs of the market. That is, successful innovation

requires both internal and external resources.

More recently, three additional approaches to innovation have been proposed: design-driven

innovation (Verganti, 2008; Verganti 2009), regulatory push/pull innovation (del Rio Gonzales,

2009; Rennings, 2000), and values-driven innovation (Hart, 1997; Walker, 2014). Design driven

innovation is the opportunity to propose and attach new meanings to products, thus addressing

latent needs descending from socio cultural changes. In this type of innovation, languages,

semantics, and rhetoric are the key components of innovation and technology is an important

enabler. Buying a product at Whole Foods has a completely different meaning compared to buying

20

food in an unattractive, niche, organic store where only highly environmentally conscious

customers would shop (Verganti, 2009).

Regulatory push/pull innovation (del Rio Gonzalez, 2009; Rennings, 2000) is driven by the

need to comply with existing regulations, changing regulations, or by the willingness to anticipate

future regulations (Khanna, Deltas, & Harrington, 2009). Although this might be viewed as a

variation on market pull innovation, it is different because it opens up the numbers and types of

stakeholders involved. It suggests, given that sustainability involves understanding and meeting the

needs and the demands of a number of different stakeholders (Carroll & Buchholtz, 2014; Steurer,

Langer, Konrad, & Martinuzzi, 2005), that SOIs are driven by the more or less stringent

requirements from external actors, from governmental bodies and local communities, from

demanding customers or suppliers, or from NGOs and other non-governmental bodies. The

company’s approach could be reactive to the stimuli coming from stakeholders or proactive by

anticipating or even pushing needs and expectations.

Finally, there is an additional driver that plays an important role in many of the cases in this

volume. Why would Italian pasta producer Barilla develop a new kind of pasta that cooks with

much less water compared to the traditional one? Why would Unilever develop a tea bag that results

in exactly the same flavour of its traditional product but without the need to boil water? Why would

an entrepreneur decide to use prisoners as a main workforce for its production activities? There is

no market need, no technological advance, and no change in meaning that can explain where these

innovations sprung from. Nor are there any current regulatory or stakeholder requirements behind

these innovations. Although one might argue that consumers are demanding more sustainable

products that use less water or energy, or that firms are always looking for a cheaper source of

labor, these would only be a partial answer. The cases in this volume point to yet another force: the

conscience of a single individual or individuals (sometimes the owners or top managers within the

organization) or the whole company about the role of the business in the society. This driver is

21

often been referred to as vision-pull (e.g., Day, 1998; Hart, 1997) or values-based (e.g., Walker,

2014).

Another recurring aspect in SOI innovation is that companies thinking about more

sustainable ways of managing their food supply chains are increasingly looking to the past for

inspiration. Retro-innovation designs new products, services, and processes by combining

approaches from the past and present (Loucanova, Parobek, & Kalamarova, 2015; Stuiver 2006).

Walburn noted that “…not all innovation needs to be about high tech to contribute to economic

growth, and much innovation can be achieved by drawing on existing technologies, or re-visiting

former ways of doing things” (cited in Loucanova et al., 2015, p. 3). Retro-innovation is instead

based on valuing traditions, heritage, technologies, processes, recipes, and ingredients that were

developed and have endured over time.

The way food products were sourced, produced, distributed, and consumed in the past were

more sustainable. Supply chains were, in most cases, shorter and local. Produce was cultivated

without the use of chemical, animals were bred naturally and without unhealthy living conditions,

and farming systems did not deplete the soil. Everyone in the community participated in sustaining

the society. Food consumption was more responsible and conscious, for one’s own health and with

a balanced distribution of resources. Although production was likely less efficient, the

countervailing social and ecological benefits produced an overall higher level of sustainability.

Many of the innovations chronicled here harken back to these issues. They favor local production,

shorter supply chains, and local community development.

This approach is considered appealing not only for its possible solution of a number of

sustainability problems, but also because market acceptance is often higher than with breakthrough

innovations. The methods of production, processing, and distribution are well-known, more

transparent, more easily trusted, and require less investment (Loucanova et al., 2015). These are the

antithesis of scale and leverage.

22

Retro-innovation does not simply borrow from the past while innovating, it contains

elements of design-driven innovation that require finding ways to connect the past to the present in

order to develop solutions for the future (Castellano, Ivanova, Adnane, Safraou, & Schiavone,

2013). It represents “yesterday’s tomorrows, today” (Brown, 1999). Traditional food producers, for

example, value the historical origins of the products, their link with the local territory and traditions,

the purity of the food, and recipes as key values and differentiators.

The Scale and Scope of SOIs

As a result of the characteristics described above, SOIs – to borrow two traditional innovation

dimensions – are likely be more radical and systemic rather than incremental and focused in nature.

SOIs that are radical and systemic can require the complete rethinking of the firm’s business model,

and business model innovation is required to obtain such radical shifts in sustainability

performance. Business model innovation, in the context of sustainability, refers to completely

rethinking the way a business is run, abandoning the logics related to traditional economic models,

such as scale and leverage. Bocken, Short, Rana, and Evans (2014) provide an overview of potential

business models for sustainability. Some examples – that are particularly relevant for the food

industry – include fair (or ethical) trade approaches, the creation of value from waste, bottom of the

pyramid solutions, scaling up solutions through collaborative approaches or open innovation, as

well as more general models of leveraging renewable resources, natural processes, or maximizing

material and energy efficiency. Business model innovation can be a powerful way to obtain

significant improvement in sustainability at both the firm level and the economic system level as a

whole. Schaltegger, Lüdeke-Freund, and Hansen (2012) emphasize the importance of “creating

economic success through (and not just along with) a certain environmental or social activity” (p.

98). They underline that proactive sustainability strategies often require the complete redesign of

the business model to continuously create business cases for sustainability.

23

Such radical business model innovation can face relevant barriers, including conflicts

between new and existing business models that create inertia to change; conflicts with the current

asset configuration of the company; and uncertainty about the “right” business model, especially as

a consequence of the multidimensional nature of sustainability and the difficulty in assessing it

(Chesbrough, 2010). As suggested by the innovation literature (Christensen, 2013; Utterback, 1996)

as well as the SOI research (e.g., Montabon, Pagell, & Wu, 2015), introducing new business models

with a sustainability orientation may come more easily for new entrants in the market. Incumbents

face a high level of risk in changing their traditional way of operating. However, new entrants often

find it more difficult to scale up their innovation due to lack of resources and assets to diffuse

innovation.

The Capabilities Required to Implement SOIs

The development and implementation of SOIs, the ability to incrementally or radically change an

organization’s business model, will place new demands on an organization’s competencies,

processes, and management (Carrillo-Hermosilla et al., 2010). In particular, the nature of SOIs will

require organizations to implement many of the sustainable supply chain management practices

described above, innovate their traditional supply chain tools, and be more able to engage in

collaborative, multi-stakeholder problem solving and learning.

The ability to implement the new sustainable supply chain management practices or to

innovate on traditional tools to improve sustainability will require organizations to acquire new

skills and knowledge, develop new architectures, designs, processes, and systems, and learn to

balance, integrate, or trade off a variety of outcomes. The new practices will require new

competencies, such as chain-level analysis knowledge, a global orientation, and an awareness of the

interactions among social, technical, and environmental factors, in addition to traditional logistics

and operations management, contracting, and lean/continuous improvement skills. These skills will

interact with new tools and frameworks to better understand how to replicate and reinforce

24

sustainable processes over time. Finally, implementing these new sustainable supply chain practices

will require practice. Many of the practices defined above represent real innovations in an

organization and cannot be simply dropped into place. They require learning, testing, and

adjustment to make them fit an organization’s culture and strategy.

Perhaps most importantly, and because of the nature and characteristics of SOIs, a

collaborative stakeholder integration capability may be key to successfully develop and implement

these innovations (Sharma & Vredenburg, 1998; Van Kleef & Roome, 2007). However, although

stakeholder diversity provides greater potential for learning and for developing innovative solutions

to complex problems (Boons & Berends, 2001), there is also the risk that actors do not share

common perspectives and are unfamiliar with one another. This can create more integration

problems, and in the context of sustainability-oriented innovations, implies the need for and the

importance of effective stakeholder integration capabilities (Worley, Feyerherm, & Knudsen, 2010).

A stakeholder integration capability refers to the ability to establish trust-based, collaborative

relationships with actors both inside and outside of the firm (Sharma & Vredenburg, 1998, p. 735).

In the apparel design, manufacturing, and retailing supply chain, Worley, Feyerherm, and Knudsen

(2010) showed how a multi-stakeholder collaboration and problem-solving capability helps Gap,

Inc. develop important innovations in their sustainability journey.

Involving multiple stakeholders offers important potential benefits (Sharma & Vredenburg,

1998). First, it facilitates the inclusion of missing knowledge or new insights about issues ranging

from technological to sustainability-related inputs (Ayuso, Rodriguez, & Ricart, 2006; Hansen et

al., 2009; Laperche & Picard, 2013). To the extent that information asymmetries or the lack of

transparency exists in a supply chain, bringing the system actors together allows them to see

potential unintended consequence more clearly. Second, stakeholder involvement can enhance the

strategic orientations and consciousness of firms to sustainable development (Ayuso et al., 2006;

Sharma & Henriques, 2005; Van Kleef & Roome, 2007), and better address stakeholder

satisfaction, trust, or commitment (Grafé-Buckens & Hinton, 1998; Strong, Ringer, & Taylor,

25

2001). Third, a more systemic view can be a crucial instrument for directing stakeholder behaviors

toward sustainability, especially when stakeholders are users (Jelsma, 2003; Lockton, Harrison, &

Stanton, 2008) and/or suppliers (Carter & Rogers, 2008). For example, the EUInnovate project

studied the role of stakeholder involvement, especially users, in developing SOIs oriented to more

sustainable lifestyles. The project showed that in many cases the involvement of users was

fundamental in promoting more sustainable behaviors (http://www.euinnovate.com/en/ourprojects).

KEY QUESTIONS AND CASE SUMMARIES

Improving the sustainability of current food supply chains or designing completely new supply

chains that are truly sustainable is a complex challenge. There are different dimensions and

different drivers at play, economic viability and fair profit level must be maintained, and different

actors need to be coordinated. This volume hopes to provide some answers to the relevant questions

about sustainability-oriented innovation in the food industry raised in this chapter. Those questions

include:

o What types of innovation are needed to create truly sustainable food supply chains?

What motivates firms to pursue SOIs?

In what ways do successful SOIs utilize radical vs incremental approaches, narrow vs.

broad stakeholder engagement, push/pull/design driven/regulatory push, or values-based

processes?

Are SOIs more likely to target multiple dimensions of sustainability or narrow

objectives?

o How and when do SOIs pay off?

What are the business case drivers for sustainability?

Can sustainability be “cheap” for the customer?

Does change in the business model always need to be “radical?”

26

Are the economic benefits of SOIs equally distributed along the supply chain?

o How can truly sustainable supply chains be scaled up or scaled down?

What alternatives exist to the scale & leverage paradigm?

o What learning/development mechanisms are needed?

What capabilities need to be present?

What is the role of external stakeholders?

What are the relative roles of standards and learning processes in helping companies

develop sustainable supply chains?

The general questions discussed above will be addressed by describing and comparing ten

different supply chain-related case studies in the agri-food industry. These cases are purposefully

diverse in terms of industry, type of innovation performed, stage in the supply chain in which they

operate, dimension of sustainability that has been targeted, and country where the initiative was

developed.

We organized the cases according to the innovation’s primary focus as follows:

- Product innovation

- Upstream, Supplier management innovation

- Downstream, retail/distribution and catering innovation

- System-wide innovation (local and country level)

- Social innovation

The Alcass case and the TRADEIT case address product innovation. The Alcass case (Chapter

2) describes how different types of product innovation affects supply chain practices and

configurations. Incremental product innovation within existing product lines required adjustments

in the existing supply chain and improved an organization’s sustainability. These adjustments were

aided by a narrow and often well-understood set of dynamic capabilities that allowed change to

27

occur without much disruption. More radical new product development efforts required new supply

chain configurations and relied on a more complex and sophisticated set of dynamic capabilities.

León-Bravo, Caniato, Moretto, and Cagliano suggest that increasing sustainability in the supply

chain is dependent on the availability of these dynamic capabilities. Organizations that lack the

ability to change may find productive product and supply chain innovation and sustainability more

difficult.

Chapter 3 presents and discusses the development of a learning network among traditional food

producers. The network was built through the support of an EU funded action learning project

(TRADEIT). Coughlan, Coghlan, O’Leary, Rigg, and Barrett discuss how traditional food

producers must be able to share knowledge to overcome the limits and difficulties of size, to

preserve their sustainable way of producing, and to remain viable without being swept away by the

large competitors. The use of action learning appeared to facilitate and foster knowledge exchange.

As a formalized, externally funded approach, the key challenge that emerges from the case is the

extent to which this learning network can be self-sustained and durable.

Two cases explore examples of supplier management innovation. The illy case (chapter 4)

describes a program to reconstruct, develop, and sustain the coffee supply base in Brazil.

Inefficiencies, price volatility, and quality issues had depleted the suppliers. The company deployed

a long-term, systematic effort to build social capital into the local supply network and to improve

both quality and sustainability by offering premium prices and knowledge sharing. Longoni and

Luzzini suggest that supply chain relationships are a crucial asset for the buying company, the local

supply base, and the community at large. The advantages of a relational governance process in the

context of a global commodity food supply chain is a key contribution of this case.

Formentini, Sodhi, and Tang use the Barilla case (chapter 5) to show how innovative supply

contracts were used with durum wheat suppliers in Northern Italy to pursue sustainability

objectives. The company wanted to reconstruct, develop, and sustain a local supply base of high

quality, durum wheat so that a secure supply, stable prices, and reduced transportation costs could

28

be achieved. Local, small-scale growers were offered economic incentives and knowledge sharing

opportunities to create the conditions for local community development and to improve

environmental performance through traditional cultures and sustainable growing practices. This

case demonstrates how traditional supply contracts can be used in innovative ways to pursue triple

bottom line objectives simultaneously.

A trio of downstream innovation cases are presented next. The Google case (chapter 6) shows

how the company used its food program – one that provides food to all its associates – to develop a

range of initiatives to minimize food waste. Pullman and Rainey describe initiatives that included

systematically measuring food waste, providing feedback and fostering more conscious behaviors in

the workforce, and working with suppliers and employees to use normally wasted food to co-create

innovative food products. The case builds upon stakeholder influence, new product development

through co-creation and pro-environmental behavior theories and models to discuss how food waste

can be minimized along the supply chain (involving producers, processors, catering and

consumption), thus improving the overall sustainability.

The Buon Fine program at Coop Lombardia is the subject of Chapter 7. Sert, Garrone,

Melacini, and Perego describe the development, step-by-step, of a surplus food redistribution

process to reduce food waste. Contrasting the benefits of this process to traditional food banks

provides an important addition to the tools available to fight the paradox of food insecurity. The

simplicity of the process keeps retailer costs low, the socially oriented mission of the cooperative

form of organization, and the proactive involvement of the government make for a compelling

example of sustainability within reach.

Singh, Shani, Femal and Deif provide one of the truly unique chapters in this volume (Chapter

8) by presenting data on the economic costs and social benefits of re-usable plastic containers

(RPCs) in the food supply chain. Their data suggest that improvements in productivity and food

waste/security are greatly aided by this packaging innovation and raise the provocative question:

When do fossil fuel based tools provide a more sustainable solution than tools based on renewable

29

resources? In contrast to recyclable cardboard packaging, the RPCs sheer durability may more than

offset the energy required to produce and recycle them, and their clear contribution to reducing food

waste is compelling.

The Origin Green and Northeast Ohio Food Network cases describe processes of system-wide

innovation. The Origin Green case (Chapter 9) presents a unique nation-wide effort to brand agri-

food products from Ireland as sustainable. Shelman, McLoughlin, and Pagell describe the effort of

Bord Bia, the national food board, to use the Irish agri-food industry as a key resource to improve

national exports and contribute to the country’s economic recovery. The topo-down program of

extensive certification based on standards and declared improvement goals involved a vast majority

of farms, food processing companies, and retailers. A group of ambassadors, with a specific training

in sustainable management, was used to advocate the quality of Irish produce in the most important

food multinational companies. Overall, the program’s success was a function of the extremely high

percentage of companies involved and to the increase in the national exports. The case thus shows

the value and importance of associating a brand to the effort of supply chain risk mitigation through

sustainable innovation.

In the Local Foods Network in Northeast Ohio case (chapter 10), Mohrman, Parker, Palacpac,

and Wilk utilize complex adaptive systems theory to explain the emergence of a network of small

food producers, entrepreneurs, government initiatives, institutions, retailers, and consumers. Aimed

at supporting the economic revitalization of the region through a sustainability focus, the case

describes the robust development of social and environmental programs within a fragile economic

framework. The viability of the system – whether it can achieve economic sustainability alongside

the impressive social and environmental gains – raises the challenging question about the role of

values in design.

The cases conclude with a chapter on social innovation. In an innovative case of social

inclusion, entrepreneurship, and sustainability, Mapelli, Arena, and Strano (Chapter 11) use a model

of network development as a lens to explore the growth of Semi di Libertà, an artisanal beer

30

brewing operation staffed by prisoners, guided by master brewers, and involving disadvantaged

groups. Four drivers of innovation and resistance – institutional, organizational, market, and

informal norms – are shown to operate formally and informally, intentionally and unintentionally on

this entrepreneurial effort to reduce recidivism and increase social inclusion. How to scale up the

benefits of this small scale operation presents interesting implications.

31

REFERENCES

Aiking, H., & de Boer, J. (2004). Food sustainability: Diverging interpretations. British Food

Journal, 106(5), 359-365.

Akkerman, R., & van Donk, D. P. (2007). Product prioritization in a two-stage food production

system with intermediate storage. International Journal of Production Economics, 108(1),

43-53.

Albert, M. (1993). Capitalism against capitalism. London: Whurr Publishing.

Ayes, S., Ángel Rodríguez, M., García-Castro, R., & Ángel Ariño, M. (2011). Does stakeholder

engagement promote sustainable innovation orientation? Industrial Management & Data

Systems, 111(9), 1399-1417.

Ayuso, S., Rodriguez, M. A., & Ricart, J. E. (2006). Responsible competitiveness at the “micro”

level of the firm: Using stakeholder dialogue as a source for new ideas: A dynamic

capability underlying sustainable innovation. Corporate Governance, 6(4), 475-490.

Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to

develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56.

Boons, F., & Berends, M. (2001). Stretching the boundary: the possibilities of flexibility as an

organizational capability in industrial ecology. Business Strategy and the

Environment, 10(2), 115-124.

Bourlakis, M., Maglaras, G., Aktas, E., Gallear, D., & Fotopoulos, C. (2014). Firm size and

sustainable performance in food supply chains: Insights from Greek SMEs. International

Journal of Production Economics, 152, 112-130.

Bradsher, K. (2008). The Food Chain, a New, Global Oil Quandary: Costly Fuel Means Costly

Calories. New York Times, January 19, 2008. Retrieved from http://www.nytimes.com

Brown, S. (1999). Retro-marketing: yesterday's tomorrows, today!. Marketing Intelligence &

Planning, 17(7), 363-376.

32

Bukeviciute, L., Dierx, A., Ilzkovitz, F., & Roty, G. (2009, September). Price transmission along

the food supply chain in the European Union. In 112th seminar of the European Association

of Agricultural Economists (pp. 3-6).

Carrillo-Hermosilla, J., Del Río, P., & Könnölä, T. (2010). Diversity of eco-innovations:

Reflections from selected case studies. Journal of Cleaner Production, 18(10), 1073-1083.

Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder

management. Toronto: Nelson Education.

Carter, C. R., & Rogers, D. S. (2008). A framework of sustainable supply chain management:

moving toward new theory. International Journal of Physical Distribution & Logistics

management, 38(5), 360-387.

Castellano, S., Ivanova, O., Adnane, M., Safraou, I., & Schiavone, F. (2013). Back to the future:

adoption and diffusion of innovation in retro-industries. European Journal of Innovation

Management, 16(4), 385-404.

Chesbrough, H. (2010) ‘Business model innovation: opportunities and barriers’, Long Range

Planning, 43(2/3), 354–363.

Christensen, C. (2013). The innovator's dilemma: when new technologies cause great firms to fail.

Harvard Business Review Press.

Day, R. M. (1998). Beyond Eco-Efficiency: Sustainability as a Driver for Innovation. World

Resources Institute Sustainable Enterprise Initiative, Washington.

De Boer, J., & Aiking, H. (2011). On the merits of plant-based proteins for global food security:

marrying macro and micro perspectives. Ecological Economics, 70(7), 1259-1265.

De Marchi, V. (2012). Environmental innovation and R&D cooperation: Empirical evidence from

Spanish manufacturing firms. Research Policy, 41(3), 614-623.

DEFRA. (2006). Food Security and the UK: An Evidence and Analysis Paper. Food Chain Analysis

Group, DEFRA, London.

33

Del Río González, P. (2009). The empirical analysis of the determinants for environmental

technological change: A research agenda. Ecological Economics, 68(3), 861-878.

Di Stefano, G., Gambardella, A. & Verona, G. (2012). Technology push and demand pull

perspectives in innovation studies: Current findings and future research directions. Research

Policy, 41(8), 1283-1295.

ECSIP. (2016). The competitive position of the European food and drink industry. Retrieved 21

April 2016 from

http://ec.europa.eu/growth/sectors/food/competitiveness/studies/index_en.htm

EU Standing Committee on Agricultural Research (no date). Website,

http://ec.europa.eu/research/scar/index.cfm?pg=home, last accessed on 21 April 2016.

European Commission (no date). Website, http://ec.europa.eu/environment/eussd/escp_en.htm, last

accessed on 21 April 2016.

Fooddrink Europe. (2015). 2013-2014 Data & Trends of the European food and drink industry.

Retrieved from

http://www.fooddrinkeurope.eu/uploads/publications_documents/Data_Trends_of_the_Euro

pean_Food_and_Drink_Industry_2013-20141.pdf

Foresight. (2011). The future of food and farming: Challenges and choices for global sustainability.

London, UK: Government Office for Science.

Foster, C., & Green, K. (2000). Greening the innovation process. Business Strategy and the

Environment, 9(5), 287.

Fritz, M., & Schiefer, G. (2008). Food chain management for sustainable food system development:

a European research agenda. Agribusiness, 24(4), 440-452.

Garnett, T. (2011). Where are the best opportunities for reducing greenhouse gas emissions in the

food system (including the food chain)? Food Policy, 36, S23-S32.

34

Gerbens-Leenes, P. W., Moll, H. C., & Uiterkamp, A. S. (2003). Design and development of a

measuring method for environmental sustainability in food production systems. Ecological

Economics, 46(2), 231-248.

Global Commission on the Economy and Climate. (2014). Better growth, better climate: the new

climate economy report. Washington, DC, United States: World Resources Institute.

Godfray, H. C. J., Beddington, J. R., Crute, I. R., Haddad, L., Lawrence, D., Muir, J. F., ... &

Toulmin, C. (2010). Food security: the challenge of feeding 9 billion people. science,

327(5967), 812-818.

Grafé‐Buckens, A., & Hinton, A. F. (1998). Engaging the stakeholders: corporate views and current

trends. Business Strategy and the Environment, 7(3), 124-133.

Gulati, A., Minot, N., Delgado, C., & Bora, S. (2007). Growth in high-value agriculture in Asia and

the emergence of vertical links with farmers. In Johan F. M. Swinnen (Ed.), Global supply

chains: how the globalization of food systems and standards affects rural development and

poverty (pp. 98-108). CAB International.

Gustavsson, J., Cederberg, C., Sonesson, U., Van Otterdijk, R., & Meybeck, A. (2011). Global food

losses and food waste. Food and Agriculture Organization of the United Nations, Rom.

Hall, J., & Vredenburg, H. (2003). The challenge of innovating for sustainable development. MIT

Sloan Management Review, 45(1), 61.

Hansen, E. G., Grosse-Dunker, F., & Reichwald, R. (2009). Sustainability innovation cube—a

framework to evaluate sustainability-oriented innovations. International Journal of

Innovation Management, 13(4), 683-713.

Hart, S. L. (1997). Beyond greening: Strategies for a sustainable world. Harvard Business Review,

75(1), 66–76.

Hartmann, M. (2011). Corporate social responsibility in the food sector. European Review of

Agricultural Economics, 38(3), 297-324.

35

Horbach, J. (2008). Determinants of environmental innovation—new evidence from German panel

data sources. Research Policy, 37(1), 163-173.

Horbach, J., Rammer, C., & Rennings, K. (2012). Determinants of eco-innovations by type of

environmental impact—The role of regulatory push/pull, technology push and market pull.

Ecological Economics, 78, 112-122.

Horn, C., & Brem, A. (2013). Strategic directions on innovation management-a conceptual

framework. Management Research Review, 36(10), 939-954.

Jelsma, J. (2003). Innovating for sustainability: Involving users, politics and

technology. Innovation: The European Journal of Social Science Research, 16(2), 103-116.

Kammerer, D. (2009). The effects of customer benefit and regulation on environmental product

innovation: Empirical evidence from appliance manufacturers in Germany. Ecological

Economics, 68(8), 2285-2295.

Khanna, M., Deltas, G., & Harrington, D. R. (2009). Adoption of pollution prevention techniques:

the role of management systems and regulatory pressures. Environmental and Resource

Economics, 44(1), 85-106.

Laperche, B., & Picard, F. (2013). Environmental constraints, Product-Service Systems

development and impacts on innovation management: learning from manufacturing firms in

the French context. Journal of Cleaner Production, 53, 118-128.

Lawrence, F. (2013). Horsemeat scandal: Timeline. The Guardian. Retrieved 17 April 2016 from

http://www.theguardian.com/uk/2013/may/10/horsemeat-scandal-timeline-investigation

Linton, J. D., Klassen, R., & Jayaraman, V. (2007). Sustainable supply chains: An

introduction. Journal of Operations Management, 25(6), 1075-1082.

Lockton, D., Harrison, D., & Stanton, N. (2008). Making the user more efficient: Design for

sustainable behaviour. International Journal of Sustainable Engineering, 1(1), 3-8.

Loucanova, E., Parobek, J., & Kalamarova, M. (2015). Retro-Innovation and Corporate Social

Responsibility. Studia Universitatis ,,Vasile Goldis” Arad–Economics Series, 25(4), 1-10.

36

Maloni, M. J., & Brown, M. E. (2006). Corporate social responsibility in the supply chain: an

application in the food industry. Journal of Business Ethics, 68(1), 35-52.

Marsden, T., Murdoch, J., & Morgan, K. (1999). Sustainable agriculture, food supply chains and

regional development: editorial introduction. International Planning Studies, 4(3), 295-301.

Martin, M. (1994). Managing innovation and entrepreneurship in technology-based firms (Vol.

20). New York: John Wiley & Sons.

Montabon, F. L., Pagell, M., & Wu, Z. (2015). Making Sustainability Sustainable. Journal of

Supply Chain Management, 52(2), 11-27.

OECD: Organisation for Economic Co-Operation and Development. (2005). Oslo Manual.

Guidelines for Collecting and Interpreting Innovation Data. Third Ed. Paris: OECD

Publishing.

Pagell, M., & Shevchenko, A. (2014). Why research in sustainable supply chain management

should have no future. Journal of Supply Chain Management, 50(1), 44-55.

Pagell, M., & Wu, Z. (2009). Building a more complete theory of sustainable supply chain

management using case studies of 10 exemplars. Journal of Supply Chain Management,

45(2), 37-56.

Piketty, T. (2014). Capital in the 21st Century. Cambridge: Harvard University Press.

Piore, M. J., & Sabel, C. F. (1984). The second industrial divide: possibilities for prosperity. New

York: Basic Books.

Pullman, M., & Wu, Z. (2012). Food supply chain management: economic, social and

environmental perspectives. London: Routledge.

Rennings, K. (2000). Redefining innovation—eco-innovation research and the contribution from

ecological economics. Ecological Economics, 32(2), 319-332.

Saccomandi, V. (1999). Economia dei mercati agricoli, il Mulino.

Sahal, D. (1981). Patterns of technological innovation. Reading, MA: Addison-Wesley.

37

Sarkis, J., Cordeiro, J. J., & Brust, D. A. V. (2010). Facilitating sustainable innovation through

collaboration. Dordrecht, Netherlands: Springer.

Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: the

role of business model innovation for corporate sustainability. International Journal of

Innovation and Sustainable Development, 6(2), 95-119.

Schaltegger, S., & Wagner, M. (2011). Sustainable entrepreneurship and sustainability innovation:

categories and interactions. Business Strategy and the Environment, 20(4), 222-237.

Schmidhuber, J., & Tubiello, F. N. (2007). Global food security under climate change. Proceedings

of the National Academy of Sciences, 104(50), 19703-19708.

Sharma, S., & Henriques, I. (2005). Stakeholder influences on sustainability practices in the

Canadian forest products industry. Strategic Management Journal, 26(2), 159-180.

Sharma, S., & Vredenburg, H. (1998). Proactive corporate environmental strategy and the

development of competitively valuable organizational capabilities. Strategic Management

Journal, 19(8), 729-753.

Smith, B. G. (2008). Developing sustainable food supply chains. Philosophical Transactions of the

Royal Society of London B: Biological Sciences, 363(1492), 849-861.

Steurer, R., Langer, M. E., Konrad, A., & Martinuzzi, A. (2005). Corporations, stakeholders and

sustainable development I: A theoretical exploration of business–society relations. Journal

of Business Ethics, 61(3), 263-281.

Stout, L. A. (2012). The shareholder value myth: How putting shareholders first harms investors,

corporations, and the public. San Francisco: Berrett-Koehler Publishers.

Strong, K. C., Ringer, R. C., & Taylor, S. A. (2001). THE* rules of stakeholder satisfaction (*

timeliness, honesty, empathy). Journal of Business Ethics, 32(3), 219-230.

Stuiver, M. (2006) Highlighting the retro-side of innovation and its potential for regime change in

agriculture. In T. Marsden and J. Murdoch (Eds.), Between the global and the local:

38

confronting complexity in the contemporary agri-food sector vol. 12. Rural Sociology and

Development Series (pp. 147–175). Amsterdam: Elsevier.

Tornatzky, L. G., Eveland, J. D., & Fleischer, M. (1990). Technological innovation: definitions and

perspectives. The Processes of Technological Innovation, 9-25.

UN. (2013). World population Prospects, the 2012 Revision. New York. United Nations.

USDA. (2016). “Ag and Food Sectors and the Economy.” Retrieved 10 April, 2016 from

http://ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/ag-and-food-

sectors-and-the-economy.aspx

Utterback, J. M. (1996). Mastering the dynamics of innovation: How companies can seize

opportunities in the face of technological change. Long Range Planning, 6(29), 908-909.

Validi, S., Bhattacharya, A., & Byrne, P. J. (2014). A case analysis of a sustainable food supply

chain distribution system—A multi-objective approach. International Journal of Production

Economics, 152, 71-87.

Van Kleef, J. A. G., & Roome, N. J. (2007). Developing capabilities and competence for

sustainable business management as innovation: a research agenda. Journal of Cleaner

Production, 15(1), 38-51.

Verganti, R. (2008). Design, Meanings, and Radical Innovation: A Metamodel and a Research

Agenda. Journal of Product Innovation Management, 25(5), 436–456.

Verganti, R. (2009). Design driven innovation. Boston: Harvard Business School Press.

Walker, S. (2014). Designing sustainability: Making radical changes in a material world. London:

Routledge.

Wheeler, T., & von Braun, J. (2013). Climate change impacts on global food security. Science,

341(6145), 508-513.

Williamson, O. (1995). Organization theory: From Chester Barnard to the present and beyond.

New York: Oxford University Press.

39

Worley, C. G., Feyerherm, A. E., & Knudsen, D. (2010). Building a collaboration capability for

sustainability: How Gap Inc. is creating and leveraging a strategic asset. Organizational

Dynamics, 39(4), 325-334.

Zanoni, S., & Zavanella, L. (2012). Chilled or frozen? Decision strategies for sustainable food

supply chains. International Journal of Production Economics, 140(2), 731-736.

Zavanella, L., & Zanoni, S. (2009). A one-vendor multi-buyer integrated production-inventory

model: The ‘Consignment Stock’ case. International Journal of Production Economics,

118(1), 225-232.

40

Fig. 1. Components and Relationships in the Agri-Food Supply Chain