Coke’s ‘Ethical Reputation’ Leads F&B Industry

February 11, 2008

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The food & beverage industry is consolidating its ethical record thanks to labor and environmental initiatives, but it has to fight hard to demonstrate the social utility of its products, according to the Covalence Food & Beverage Industry Report 2007 (extract) published today by Geneva-based ethical reputation research firm Covalence.

The food & beverage industry is progressively closing the gap with leading industries (pharmaceuticals, technology hardware, automobiles & parts and banks). It currently occupies the fifth position in the EthicalQuote reputation ranking comparing ten industries. In 2007, food & beverage showed the second best progression, just between technology hardware and automobile & parts.

In the end of 2007, Unilever shows the best EthicalQuote score in the food & beverage industry (calculated starting in 2002), followed by Starbucks and Diageo, while Coca-Cola and Nestle occupy the last positions. From January to December 2007 Coca-Cola, Unilever, Starbucks, PepsiCo and Nestle show the best progressions, while Archer Daniels Midland, Sara Lee and Cadbury Schweppes occupy the last positions. Results expressing the reported performance of companies place Coca-Cola in first position out of 16 Food & Beverage companies, followed by Starbucks, Nestle, and Unilever.

From 2004 to 2006, the ethical progress of food & beverage companies has mostly been due to social and labor initiatives: e.g. social sponsorship, community investments and fair trade programs. In 2007, the F&B industry experienced a powerful shift towards environmental concerns, as did most industries and society at large (climate change). Charts show a shrinking of social and human related criteria (28. Product Social Utility, 40. Human Rights Policy and 27. Product Human Risk) in favor of environmental criteria (26. Environmental Impact of Production and 32. Waste Management). Major positive environmental issues have been dealing with Water, Packaging, Climate change and Energy.

The biggest risks are linked to products. The positive impact of food & beverage products is less discussed compared to what can be observed in other industries such as pharmaceuticals. While life-saving drugs greatly fit into corporate citizenship programs, sodas, candies or bottled water are perceived to be further away from the satisfaction of basic human needs. Simultaneously, their negative dimensions are more discussed: product safety, obesity, packaging, child marketing.

The non-essential image of F&B products is a CSR challenge. Bottled water, candies and frozen dinners incarnate rich countries’ lifestyle. How can they, the report asks, match with basic social issues such as poverty, access to water, hunger, health, hygiene, or sanitation?

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