Sustainable Procurement in British Dairy Supply Chain

Purpose – Dairy industry has several negative environmental impacts while continuous decline of number of British farmers in the supply chain questions the overall sustainability of the UK dairy supply chain. The research aims to explore the promotion of sustainable development in the British dairy sector and its supply chain through specific objectives, which are: to identify the current penetration level of different sustainability practices on dairy farming and milk purchasing; to investigate drivers, barriers and benefits of implementing sustainability practices in dairy sector; to identify different supply chain types existing in dairy sector and their implications to sustainability performance. Design / methodology / approach – questionnaire survey was used to collect data from dairy producers and dairy processors. 43 and 53 valid questionnaires returned from dairy producers and dairy processors, respectively, were used in the analysis. Findings – Social sustainability requirements received highest penetration level in sustainable procurement practices, while GHG emission requirements received lowest level of penetration. The most important driver for processor implementing sustainable procurement practices is company’s reputation and brand image, barrier is economic reasons, benefit is the creation of competitive advantage. The research also identified two major types of SC structure operating in the British dairy sector, Type A (farmer – processor - customer) and Type D (farmer and processor –- customer). Type D SC is advantageous to implement sustainability practices and achieved high sustainability performance. Practical implications –Improving sustainability performance throughout dairy supply chain needs continuous financial inputs. It would be very helpful to establish dairy sustainability accreditation and labelling scheme. Originality / value – This work is the first research so far which examined the penetration level of 15 environmental and social sustainability practices in dairy farming and milk sourcing, also identified drivers, barriers and benefits of implementing these practices. Financial incentive, information transparency and lead firm pressure can affect the coupling / decoupling of primary and secondary agency role in dairy supply chain.