Successful Partnerships as Key Ingredient for Driving Growth in the Food Industry


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I wrote this blog as a summary for a session I attended at the 2012 Cracking the Nut Conference in Washington, DC. The blog was published on Microlinks in June 2012.

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Successful Partnerships as Key Ingredient for Driving Growth in the Food Industry

  1. 1. Successful Partnerships as Key Ingredient for Driving Growth in the Food IndustryJune 28, 2012Companies in the food sector are putting more energy into partnerships, explained John Mennel ofDeloitte during a session on “Partnerships: A Critical Success Factor for Expanding Markets” at the 2012Cracking the Nut conference in Washington, DC. This year’s conference focused heavily on private sectorinvolvement in financing agribusiness in developing countries. A large part of making finance work forsmallholder farmers is the cooperative efforts between the public and private sectors.Deloitte conducted a series of interviews with companies in the food sector to get a better sense of howthey are using global partnerships to not only promote growth in emerging markets, but drive their ownbusiness strategies. In fact, what Deloitte calls “strategic social partnerships” (SSPs) are not emanatingfrom companies’ corporate social responsibility units but directly from its operations. During theopening presentation, Mennel listed six leading practices that emerged from the Deloitte interviews: 1. Strategy – Companies are focusing on SSPs in a limited number of areas directly related to their core business goals. 2. Organization – A partnership culture is institutionalized throughout the company. 3. Business Cycle – SSPs are used specifically to enter new markets, drive growth, and manage risk. 4. Structure – Strong governance in the structure of partnerships is more sophisticated and growing in importance. 5. Branding – Marketing departments are leveraging SSPs as a way of reinforcing a company’s brand. 6. Measurement – Collecting evidence on investment, impact and business value is a central function of SSP engagement.After the overview of the key themes that emerged from the Deloitte interviews, representatives fromUnilever and Dole’s Dalé Foundation gave concrete examples of how their respective firms are engagingin SSPs. Through its sustainable living plan that is part of its corporate strategy, Unilever is buildinglonger term partnerships with suppliers by crafting joint business plans. Dalé is creating social programsin the banana industry in both Ecuador and Peru that benefit grower workers and their families.Unilever’s Dr. Christof Walter and Dalé’s Maria Eugenia Castro both said that their organizations decideto partner to fill gaps in particular competencies and to demonstrate credibility. For example, companiescan bring access to markets while NGOs can contribute technical expertise. When discussing howcompanies integrate SSPs into their business strategy, Nestle’s model was used as an example. Nestleoperates a “shared value board” with members from both inside and outside the firm. This board ischarged with generating ideas for SSPs which are then reconciled with individual business units. Viablestrategies are then approved and implemented by senior board members.The panel acknowledged there is still a lot the private and public sectors can learn from each other. Theyacknowledged that building successful SSPs is hard work and expectations have to be realistic abouthow much time it takes. Of the companies Deloitte interviewed, almost none said they felt like theywere getting measurement right. Issues such as whether to align the data collection period with
  2. 2. business cycles or some other longer time marker has made the measurement framework challenging.However, despite remaining challenges, companies in the food industry are seeing the business value inSSPs and are putting in the investment to forge long-term, impactful relationships.A large part of the discussion focused on what a successful partnership looks like. From this discussion, anumber of factors were identified: Three characteristics are absolutely essential: truth, transparency, and authenticity. Savvy companies do not start out with the intention to develop communities, but commit themselves to understanding how its way of doing business impacts particular communities. It’s critical for businesses to be very clear with their potential partners what each organization’s objectives are and what agendas they bring to the table. A clear roadmap for the partnership is needed at the very beginning of the relationship. The partnership should have the right level of support within the organization. Not every organization makes a good partner. A company needs to be very clear and honest about who it accepts as a partner and why.