Catalytic events have reshaped how food companies address corporate social responsibility, said Nick Fereday, senior analyst with RaboResearch.
“Before the COVID-19 pandemic, many food companies, both large and small, were already responding to calls to become a greater force for good in society, recognizing that the pursuit of profit could not be the sole purpose or only priority of a corporation,” Fereday wrote in his July Talking Points newsletter.
Fereday is a founding member of CFI’s Consumer Trust Insights Council, a roundtable of thought leaders in food and agriculture who provide perspective on emerging trends in the food system. In his report, Fereday noted that before the pandemic, larger food companies primarily focused social responsibility on addressing the climate crisis. But that has changed.
“The impetus to become a purpose-led company has accelerated this year as a result of two ‘catalytic events’ – the pandemic and #BlackLivesMatter, while also having to deal with the existential threat of a global recession,” he said.
“For the longest time, company executives have talked about wanting to get closer to their consumer, to understand them better and rebuild trust. Although not in a way they expected, the terrible events of 2020 provide a chance for these companies to do just that in a meaningful way, and inaction – not doing something – now runs the greater risk.”
Most companies have long understood that they exist for a purpose and their mission statements usually reveal what, how and why they do what they do.
“For quite some time, big food and beverage companies have been under pressure, increasingly made irrelevant by new brands that appeal to younger generations with whom they had lost trust. In addition to tapping into consumer demand for health and wellness, convenience, etc., of relevance here, they were often backed up by a strong mission statement that promoted a wider social and environmental agenda,” Fereday said.
During the pandemic, companies have pivoted to focus on social concerns, he said, attempting to show empathy and do the right thing by supporting their communities and ensuring the health and safety of their employees.
“Examples we have seen include companies increasing wages, safety measures and benefits (such as free meals and transportation) for employees in factories and distribution centers, greater flexibility in how staff work, donating to food banks and food delivery organizations, supporting business partners across the supply chain, including extending payment terms,” Fereday said.
The second catalytic event has been in response to the police killing of George Floyd and the subsequent #BlackLivesMatter protests, in which companies have been swift to make their voices heard. Examples of action taken include making public declarations denouncing racism and injustice, retiring brands that perpetuate racial stereotypes and suspending spending on social media.
“For the past few years, the larger food companies have been on a mission to try to reconnect and understand their consumers better, to create a relationship and regain their trust. Although not in a way they expected, the terrible events of 2020 provide a chance for these companies to do just that in a meaningful way and rise above criticisms of opportunism and virtue signaling,” Fereday said.