THESIS

Understanding sustainability in the coffee industry

Prepared by Melanie Schaefer

Advised by Prof. Saonee Sarker

May 2, 2016
 CHAPTER 1

INTRODUCTION AND RESEARCH PROBLEMS

Sustainability has evolved from a relatively unknown topic thirty years ago to a

major focus of all industries and parts of life today. The influence of stakeholder theorists

has “extend[ed] the view of a firm’s constituents beyond the direct representatives and the

shareholders,” making sustainability the collective goal of companies, governments, NGOs,

and consumers (Brockhaus et al. 2013). Factors “including supply and demand

characteristics surrounding energy consumption, an increased understanding of the

science relating to climate change, and greater transparency concerning both the

environmental and the social actions of organizations” have led to the increased discussion

of sustainability within all industries (Carter and Easton 2011). Additionally, the recent

focus on climate change and the adverse effects that greenhouse gases like carbon dioxide

have on the environment has encouraged focus on resource-use efficiency and reduction.

Sustainability in general focuses on the “triple bottom line: the intersection of

environmental, social, and economic performance” and finding the optimal strategies to

maximize the benefits for all stakeholders (Carter and Easton 2011). The idea of

sustainability has moved to logistics as well, where the implementation is slowly catching

on. Sustainable logistics is an implementation of sustainability and corporate social

responsibility strategies. A formal definition of sustainable logistics synthesized from both

sustainability and CSR definitions by Carter and Rodgers (2008) is “the strategic,

transparent integration and achievement of an organization’s social, environmental, and

economic goals in the systemic coordination of key inter-organizational business processes

for improving the long-term economic performance of the individual company and its

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supply chains.” The end goal of sustainable logistics is to reduce the social and

environmental impacts of the logistics industry in order to preserve the earth’s resources

for future generations while creating long-term profitability for the company.

The coffee industry is truly global, with its producers and consumers spanning

nearly every continent. Although coffee can only be grown in certain climates near the

equator, such as the Amazon region or the Indonesian Gayo region, it is consumed by

people around the world. The largest coffee consuming country in the world is the United

States, followed by Brazil, which is also the world’s largest producer of coffee. Generally, US

coffee importers or corporations purchase green coffee from producers in coffee-growing

regions, which they then roast and grind for consumption by the end consumer. Some of

the multinational corporations that purchase the largest volumes of green coffee are Sara

Lee and Nestle, but coffee is also purchased by a variety of importers who sell coffee to

smaller coffee shops and companies. The long distances between producer and consumer

in the coffee industry make it incredibly dependent on transportation, which leads to an

opportunity for the implementation of sustainable practices to reduce the environmental

impact from coffee logistics.

Although the coffee industry ships millions of pounds of coffee beans around the

world each year, sustainability certification standards focus on reducing the environmental

and social impact of coffee production, without addressing the environmental impact of

transportation. Coltro et al. (2006) estimate that Brazil alone, as the world’s largest

producer of coffee, exports “approx. 30 million bags of coffee beans” each year. The largest

consumer of Brazilian coffee, and coffee in general, according to Kolk (2010) is the US “with

between 15 and 20% of world consumption.” Sustainable coffee makes up a relatively small

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part of the coffee consumed, with “Certified coffee account[ing]for approximately 8% of all

coffee imported into the US in 2006.” Certified coffee refers to any coffee certified as

socially or environmentally sustainable by an independent third party, such as Fair Trade

or Utz Certified. However, certification standards do not account for the sustainability of

transportation of coffee. Due to the large scale of the coffee industry, the environmental

impact of shipping coffee between Brazil and the US should not be ignored.

Sustainability has begun to permeate all sectors, industries, and parts of life.

Research into sustainability in the logistics industry has focused mainly on minimizing CO2

emissions from various modes of transport and increasing energy efficiency. Bauer et al.

(2009) and Fagerholt et al. (2009) both discuss strategies to reduce transportation

emissions, through running fewer services and optimizing speed, respectively. Ramanathan

(2005) advocates using rail transportation over road transportation to reduce energy

consumption. These are some sustainable logistics strategies that could be implemented in

the coffee industry to reduce its environmental impact.

Previous studies have identified many factors that affect engagement in sustainable

logistics practices, such as proper incentives to promote sustainability (Porteous et al.

2014), consumer demand for sustainability (Bitzera et al. 2008), transparency in company

commitment to sustainability (Raynolds et al. 2006), and collaboration between all

stakeholders (Brockhaus et al. 2013, Ehrgott et al. 2013). However, a comprehensive

understanding of the cumulative effects of these factors is missing. With this my research, I

aim to find out which, if any, of these factors are prompting coffee importers to engage in

sustainable logistics practices in the coffee industry are between the Amazon and the US. I

will investigate if there are some factors that are more influential than others in the

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adoption of sustainable logistics practices and what the optimal combination of factors is to

maximize transportation efficiency.

RQ1: What factors are prompting coffee importers between the Amazon and the US to

engage in sustainable logistics practices and how efficient are these practices?

CHAPTER 2

REVIEW OF THE LITERATURE ON SUSTAINABLE COFFEE LOGISTICS

In order to understand the current state of research into sustainable coffee logistics,

I conducted a literature review of both theoretical and practical articles on sustainable

logistics and sustainability in the coffee industry. Using the keywords “sustainable

logistics”, “coffee logistics”, “sustainable coffee”, “fair trade coffee”, and “coffee life cycle

assessment”, I reviewed forty-seven articles from nine accredited logistics and

development journals. First, I wanted to understand the theoretical underpinnings of

sustainable logistics practices and their origins. Then, I began to focus specifically on the

coffee industry and the current research into sustainable logistics and practices within the

industry. I searched life cycle assessment in the coffee industry to understand measures

used to calculate resource use and environmental impacts of the entire coffee industry,

from bean to cup.

In order to organize the articles so I could better identify trends in the current

research, I created a table ordering important aspects from each paper. The most useful

aspects to identifying trends were the columns in which I identified the success factors, the

dependent variable, methodology, and region of each study. Using these columns and the

article summaries I prepared, I was able to group similar articles into certain trend groups

and to understand the focus of the current research. I also was able to identify which

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research methods and focuses would be best suited to my research goals. My literature

review highlighted the following trends in current research:

1. Focus on sustainable production only

Currently, the focus of research in sustainable coffee logistics is primarily on

sustainable production. Adams and Ghaly (2006) suggest improvements such as effective

use of resources, alternative use of by-products, and efficient operational design to improve

sustainability in the Costa Rican coffee industry, but the focus of their field investigation is

on the processing and production systems, without accounting for the transportation of the

coffee. Similarly, in their discussion of the Indian opposition to the “Common Code for the

Coffee Community”, Neilson and Pritchard (2007) focus solely on the producers and the

adverse economic effects this standard had on their efforts towards sustainability. Jaya et

al. (2014) also focus on the production of sustainable coffee in the Indonesian Gayo coffee

supply chain. They solely examine how the farmers’ efforts can increase the sustainability

index of the Gayo coffee supply chain. Viere et al. (2007) use the more complete measure of

Life Cycle Assessment to evaluate the sustainability of a Vietnamese coffee exporter, but

they exclude transportation from their study because it was outsourced to another entity.

2. Sustainable coffee production standards

Although “the market share of sustainable coffee is still limited” (Kolk 2013, p. 325),

there has been significant research into the environmental impact of several sustainable

production standards, such as Fair Trade, Organic, and Shade-grown. Several studies have

been done comparing sustainable certification standards. Kolk (2013) discusses the history

and differences between the four main independent coffee monitoring standards, Fair

Trade, Organic, Rainforest Alliance, and Utz Certified. Similarly, Raynolds et al. (2006)

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compare the five major private certifications in the coffee sector, Organic, Fair Trade,

Rainforest Alliance, Utz Kapeh, and Shade/Bird Friendly, and analyze their expansion,

governance structures, environmental and social standards, and market position.

MacDonald (2007) examines Fair Trade and Starbucks CAFE practices, which she

concludes have reached the first degree of empowerment, which is the “realization of

producer and worker well-being.” Giovannucci and Ponte (2005) examine NGO’s efforts

towards promoting sustainability, with a particular focus on the impact of Fair Trade

coffee. They conclude that Fair Trade is the most sustainable in terms of farmer livelihood

because it guarantees a certain price to producers in order to bear some of the costs of

their sustainability efforts.

3. Focus on Fair Trade coffee certification standard

Research on Fair Trade in the coffee industry, which has been the most frequently

studied certification standard, focuses on social sustainability. Raynolds (2002) focuses on

how Fair trade coffee creates a more egalitarian supply network between Northern

consumers and Southern producers. Later research into Fair Trade coffee networks by

Raynolds et al. (2004) studies how producers can be successfully integrated into Fair Trade

networks and discusses both the positive short term impact higher prices have for

producers and the long term capacity building nature of Fair Trade networks.

4. Sustainable coffee primarily in Central America

The geographic focus of current research is mainly Central America, specifically

Nicaragua, Costa Rica, and Guatemala. Courville (2004) uses a case study of Mexican and

Costa Rican coffee supply chains as the basis of her research into sustainability indicators.

Adams and Ghaly (2006) conducted two studies into the Costa Rican coffee industry, one

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into maximizing sustainability and the other into determining barriers to sustainability

within the industry. MacDonald (2007) conducted a global study of the coffee industry’s

certification standards, with a specific focus on Nicaragua. Both Cuadra and Björklund

(2005) and Cuadra and Rydberg (2006) also use Nicaragua as the focus of their studies into

the energy efficiency of coffee production and processing. Raynolds et al. (2006) studies

Fair Trade coffee networks in Mexico, Guatemala, and El Salvador, while Lyon (2009)

focuses on sustainable coffee certification in Guatemala.

5. Emissions reduction and energy efficiency as measures of effectiveness

The predominant measures of effectiveness that current research into sustainable

logistics uses are carbon emissions and energy consumption. Bauer et al. (2009) and

Fagerholt et al. (2009) both use emissions reduction as the predominant measure to

determine the sustainability of logistics. Similarly, Danesin and Linares (2013) also define

sustainability in terms of CO2 emission reduction. Ramanathan (2005) uses energy

consumption to differentiate between the sustainability of different modes of

transportation. Cuadra and Björklund (2005) use both energy use and ecological footprint

to assess the sustainability of tropical crops in Guatemala. Emissions reduction and energy

efficiency and use are both commonly used measures of sustainability because they are

easier to quantify, measure, and regulate than qualitative measures.

Gaps in current research

The above review highlights some of the key areas already researched in the area of

sustainable logistics. I was able to identify several gaps in the current research after

completing the literature review that I would like to fill with my research. There is little

understanding of the entire coffee logistics chain from production to consumption,

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especially in the areas of shipping and transportation of coffee. Because of the large volume

of coffee that is shipped between the Amazon region and the US and the significant

environmental impact transportation has, I believe this is an area that requires further

research. Current certification standards that label coffee as sustainable do not account for

sustainable transport. I believe that if the entire coffee logistics process, from production to

consumers’ cups, is not sustainable then it is being misrepresented to consumers. Although

coffee production is the most visible piece of the coffee industry, transportation accounts

for more fuel and energy consumption, depending on where it is shipped.

The Amazon coffee region, including Brazil and Colombia, has received little

attention, although Brazil is the world’s largest producer of coffee, accounting for about a

third of the world’s coffee supply. Brazil is also the largest supplier of coffee to the US, the

world’s largest consumer of coffee. There is a significant amount of coffee traded between

the Amazon and the US, which has not been researched.

Additionally, collaboration and interactions between government, corporation, and

NGO initiatives to improve sustainable logistics practices have not received much attention.

None of these stakeholders can act in a vacuum to improve sustainable logistics, as NGO

policy influences both government and company policies and vice versa. Additionally,

improving sustainability in all sectors, not solely logistics, is too big and broad a task to be

undertaken by just one stakeholder with one set of goals and resources. In order to make a

larger scale difference with my research, I plan to focus on the interaction between various

stakeholders to promote sustainable logistics initiatives.

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 CHAPTER 3

RESEARCH MODEL & HYPOTHESES

Sustainable logistics and its specific forms

In my research, I will use eco-efficiency to measure the current sustainability of each

company’s logistics practices. Eco-efficiency, which measures economic efficiency in terms

of resource use and its environmental impacts, has not been used yet as a measure of

effectiveness in sustainable coffee logistics research. The eco-efficiency indicator is defined

by the United Nations ESCAP as “the efficiency of economic activity both in terms of

consumption and production (resource-use) and its corresponding environmental impacts”

(Eco-efficiency Indicators, 2009). Eco-efficiency accounts for both environmental costs and

economic output, in a quantifiable formula that divides the value of a product by the

economic impact of that product. It is a more complete measure than emission reduction or

energy consumption because it assumes that in our current world there will not be a point

in which we are able to completely reduce carbon emissions or energy dependency.

However, in these imperfect conditions, eco-efficiency is a measure which can help

improve sustainability of products to the best of our abilities by using resources more

efficiently. Eco-efficiency accurately captures the interests of both planet and profit in the

CSR terminology, understanding that corporations will act in their own interest to improve

profits, but that there is an optimal strategy that will allow them to do this while also

creating less environmental impact.

The optimal indicators to take into account when measuring eco-efficiency differ

between industries. In my research, I plan to focus on the transportation of coffee between

the Amazon region and the US, so I will use indicators similar to the transportation

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industry. For the transport sector, fuel intensity measured as J/GDP is the best indicator for

resource use intensity and CO2 intensity measured as t/GDP is the best indicator for

environmental impact intensity (Eco-efficiency Indicators, 2009). Instead of measuring

these indicators using GDP as the monetary output, I will use Sales because I am measuring

within eco-efficiency within companies rather than within an entire industry. In order to

make the results of my research easier to interpret, I will measure the eco-efficiency of a

typical bag of coffee rather than the eco-efficiency of the entire company’s practices. This

will allow me to differentiate between different shipping methods and sustainable logistics

practices that companies are using between the Amazon and the US. Some companies

source coffee from a variety of places, not just the Amazon region, so calculating the eco-

efficiency of their entire practices would make the data less relevant to my research goals.

This research model takes stakeholders’ interests in the environmental

sustainability of the coffee logistics industry into account, rather than just the shareholders.

I hypothesize that companies responding to external and internal influences for

sustainability in their logistics practices will have higher eco-efficiency than those who

simply focus on the bottom line. As previous research has shown, focusing on sustainability

is economically beneficial to companies in the long-term, if they are willing to wait for a

return on their investment. I believe that identifying the greatest influences on the

efficiency of sustainable logistics in the coffee industry can lead to collaboration between

stakeholders to optimize these practices.

Figure 1 (see Figures and Tables) details the complete research model I will use to

assess sustainable logistics in the coffee industry.

[Insert Figure 1 about here]

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Hypotheses

After reviewing the current literature on sustainable logistics in the coffee industry,

I have identified several factors that affect the effectiveness of sustainable logistics

practices. I believe that both internal and external factors exist that motivate a company to

implement sustainable logistics practices efficiently. These factors all interact to motivate a

company to focus on developing sustainable logistics practices. The International Business

Report published by Grant Thornton (2014) corroborates this hypothesis; “Most

sustainability programs start with pressure from stakeholders — consumers, stockholders

or governmental bodies.” However, some factors may be greater motivators than others,

which I aim to identify with my research. I also aim to identify the optimal combination of

internal and external factors that leads to the most efficient practices. The external factors I

will investigate are perceived consumer demand for sustainability and pressure from

governments and NGOs in the form of incentives or penalties. The internal factor I will

investigate is the company culture of sustainability. I will assess the effectiveness of each

company’s sustainable logistics practices using the measure eco-efficiency, which assesses

economic efficiency in terms of resource use and its environmental impacts.

1. Perceived consumer demand for sustainability

The first external factor I will investigate, perceived consumer demand for

sustainability, is the company’s perception of the emphasis its consumers put on

sustainability while choosing which coffee to consume. Consumers generally have a

hierarchy of attributes they desire in a product that they use to make purchasing decisions.

Some factors other than sustainability that could influence a coffee consumer’s purchasing

decisions are price, quality, and taste. I postulate that companies who believe that

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sustainability is high on their consumers’ decision-making hierarchy will have more

efficient sustainable logistics practices as a way of catering to their consumers demands.

These companies will likely use certifications and other sustainability statements on their

packaging and on their company websites as a means of indicating to their focus on

sustainability to their consumers.

Within perceived consumer demand for sustainability, I will focus on three areas

that use the most resources within coffee the coffee industry: production, processing, and

transportationHowever, I believe that companies that perceive a high consumer demand

for sustainably processed and shipped coffee will have more eco-efficient sustainable

logistics practices because they will be motivated to make all parts of their logistics process

sustainable. I hypothesize that perceived consumer demand for sustainability will be a

significant factor in determining the efficiency of a company’s sustainable logistics

practices.

H1: Perceived consumer demand for sustainability will affect the eco-efficiency

of companies’ sustainable logistics.

2. Pressure from governments and NGOs

The second external factor that can play a role is pressure from governments and

NGOs, and the incentives and penalties that governments and NGOs place on companies to

encourage sustainable logistics practices. Both previous psychology and logistics research

have identified incentives as better motivators for continued compliance with rules than

penalties. However, current research into incentives and penalties within sustainable

logistics focuses mostly on firms increasing suppliers’ compliance with their internal

sustainability initiatives. I aim to discover if pressure from third parties to increase

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sustainability is a significant factor in increasing the efficiency of a company’s sustainable

logistics practices.

Government and NGO incentives and penalties can come in many different forms.

Incentives from NGOs generally come from independent standards, such as Fair Trade or

Organic, which they define and certify. Compliance with certain certification standards

allows companies to advertise this on their packaging and their websites, which will attract

sustainability-focused consumers to purchase their products over others and to have a

better image of the company. As NGOs have no formal authority over companies, their

penalties usually come in the form of bad press, which in turn influences consumers’

perceptions of the company and affects their decision to purchase. NGOs such as

Greenpeace have made it their mission to investigate and expose companies that they

believe are adversely affecting the environment or the welfare of disadvantaged

populations. NGOs have the ability to affect a company’s revenues by either encouraging or

discouraging consumers from purchasing their products.

On the other hand, governments have more formal authority over companies and

therefore more formal incentives and penalties that they are able to enforce. Government

incentives usually come in the form of subsidies encouraging certain practices, such as

using energy efficient vehicles for transportation, or increased business with the company

if they are a government supplier or contractor. Government penalties are placed on

companies when they do not comply with certain laws established by the government, such

as limits on carbon dioxide emissions. However, some companies will choose to receive a

penalty for non-compliance because the dollar amount represented by the penalty is less

severe than the costs they would incur by complying, especially if they are a large

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multinational corporation will billions of dollars in revenue. For this reason, government

penalties are usually not effective unless they severely impact a company’s bottom line. I

hypothesize that pressure from governments and NGOs, especially in the form of

incentives, will be a significant factor in determining the eco-efficiency of a company’s

sustainable logistics practices.

H2: High pressure from governments and NGOs will affect the eco-efficiency of

companies’ sustainable logistics.

3. Company culture of sustainability

The internal factor that I will investigate, a company culture of sustainability, I

define as the degree to which a company considers sustainability while making business

decisions. This is closely related to transparency, which is when a company is willing to

disclose its resource use and sustainability practices openly, but focuses more on what a

company actually does rather than what it says it does. As sustainability has permeated

more research and media discussions, companies in all industries have published

corporate social responsibility statements detailing their commitment to environmental,

social, and economic sustainability, but there has been no research into how these

statements affect actual company practices. For this reason, I will investigate if the

company is internally focused on sustainability rather than examining what they report to

their investors.

The measure of company culture of sustainability is qualitative rather than

quantitative, similar to the perceived consumer demand for sustainability. It is also a

subjective measure, based on the perception of the respondents from each company.

However, some general characteristics of a company culture of sustainability might be

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having an employee designated to manage sustainability certification or company

willingness to sacrifice short-term gains for long-term sustainability. Other indicators of a

company culture of sustainability would be company efforts not to simply comply with

regulations but to be innovators in sustainable logistics practices. The degree of emphasis

placed on sustainability in making business decisions will vary from company to company

and likely be demonstrated in a variety of ways, but I hypothesize that a more prominent

company culture of sustainability will lead to greater efficiency in sustainable logistics

practices. Similarly, a company culture that ignores sustainability or simply acknowledges

sustainability in writing will have less efficient logistics practices.

H3: A culture of sustainability will affect the eco-efficiency of companies’

sustainable logistics.

4. Collaboration between stakeholders

The last factor I will investigate, collaboration between stakeholders, is a new

measure I have devised to understand the degree to which collective stakeholder efforts

are aligned towards the same goals and how these stakeholders work together to

implements sustainable logistics practices. Previous studies have examined the effects

individual stakeholder efforts have on the implementation of sustainability initiatives, but

as none of these stakeholders acts in a vacuum immune to the influences of the others, I

want to understand how they interact with each other. Collaboration within supply chains

has been identified by Brockhaus et al. (2013) as the ideal and is defined as “at least two

companies working jointly for an extended period of time on sustainability initiatives and

collaboratively improving their performance.”

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 Instead of focusing on collaboration within the supply chain, I want to research a

similar principle within the broader economy in which a company operates. I will examine

how stakeholders, including the company, governments, NGOs, and consumers, work

together on sustainability initiatives and how closely their goals are aligned with each

other in pursuit of these initiatives. I hypothesize that situations in which all stakeholders

work together towards sustainability initiatives and have the same end goals will result in

more eco-efficient sustainable logistics practices within the company. Conversely, I

hypothesize that situations in which all stakeholders have different goals and are working

separately in achieving them will result in less eco-efficient sustainable logistics practices. I

believe that, more than each individual stakeholders’ efforts, collaboration will be the most

influential factor to predict the eco-efficiency of a company’s sustainable logistics practices.

The pursuit of sustainability is such an enormous and resource-consuming task that I

believe all stakeholders must participate in to achieve it.

H4: Collaboration between stakeholders will lead to companies implementing

more eco-efficient sustainability initiatives.

CHAPTER 4

RESEARCH METHODOLOGY

Survey Design

I used a survey methodology to test the research model developed and discussed

earlier. I asked survey questions that targeted each factor I am investigating in conjunction

with questions that assessed the eco-efficiency of each company to better understand how

each of these factors affects eco-efficiency. I based my survey questions on questions asked

in previous studies to assess similar factors and added my own measure to understand

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how stakeholder collaboration affects the efficiency of sustainability initiatives. I structured

my questionnaire to first ask qualitative questions about the factors and then ask specific

quantitative questions to assess eco-efficiency. I kept all identifying information

confidential so respondents would not inflate their company’s sustainability efforts and

successes. My goal was to identify industry trends in sustainable logistics and determine

how to achieve the most successful practices, not single out specific companies.

1. Measuring pressure from governments and NGOs

To measure pressure from governments and NGOs, I divided the questions into two

categories, one to measure government pressure and one to measure NGO pressure. The

resources available to governments and NGOs differ, as does their formal authority, so I

expect to see differences in the types of penalties and incentives they are able and willing

to offer to encourage sustainable logistics practices. This differentiation between

governments and NGOs will also allow me to obtain results that show which external

stakeholders are most effective with certain corrective actions. It will also allow me to

understand which external stakeholders are currently the most active in promoting

sustainability within the coffee industry. I anticipate that the results will show more

involvement of NGOs in promoting sustainability through incentives.

As a basis for my questions about penalties and incentives, I used the study done by

Porteous et al. (2014) on improving suppliers’ social and environmental compliance. One

important aspect of this study that I will use in my research is differentiation based on the

severity of the penalties given. In order to more accurately capture the process in which

penalties are given, Porteous et al. (2014) introduce the aspect of a warning followed by a

corrective action into the options given to respondents. Within the available responses I

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will include in my questionnaire, I will mirror this aspect and differentiate between the

government giving a warning to a company, followed by a fine and the government giving a

fine on the first violation with no warning.

2. Measuring perceived consumer demand for sustainability

To measure perceived consumer demand for sustainability, I again divided the

questions to measure the size of consumer demand and how perceived consumer demand

influences company decisions to implement sustainability initiatives. First, I want to

understand how much consumer demand for sustainability respondents believe currently

exists. Then, I want to understand if they make decisions to increase the sustainability of

their company’s practices based on their perception of consumer demand. According to

research by Grant Thornton, customers have the power “to protest against companies

which pursue socially unacceptable practices…by sourcing alternative products and

services from competitors with stronger ethical credentials” which has led to consumer

demand becoming an increasingly important factor in companies’ decisions to implement

sustainable business practices (Corporate Social Responsibility: Beyond Financials, 2014).

Therefore, I believe that companies that perceive high consumer demand for sustainability

will allow this perception to influence their decisions about sustainable practices.

I also divided consumer demand into three categories: consumer demand for

sustainable transportation, consumer demand for sustainable production, and consumer

demand for sustainable processing in order to gain a deeper understanding of how

companies allocate their sustainability focus. As previously stated, sustainable production

within the coffee industry has received my more academic and media attention than

sustainable transportation or processing, so I want to understand how this extra focus has

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affected perceived consumer demand. I expect that companies will perceive more

consumer demand for sustainable production, which will influence their decision making

process and the efficiency of their sustainable logistics practices. Based on these results, I

will be able to identify which areas consumers should demand more sustainability in order

to affect company decisions.

3. Measuring company culture of sustainability

To measure company culture of sustainability, I based my questions on Grant

Thornton’s 2014 survey entitled The State of Sustainability at Food and Beverage

Companies. Through this survey, Grant Thornton identified that a “successful sustainability

initiative starts with involvement of the C-suite and key stakeholders,” so in addition to

measuring the extent to which companies make decisions based on sustainability, I also

included measures of senior management involvement in sustainability initiatives (Nelson

2014). Leadership values directly influence the decisions individual employees make, as

they are more likely to choose an alternative that supports what others at the company

belive. Another important finding from Grant Thornton that I incorporated into my survey

to measure company culture of sustainability was the phrasing that focusing on

sustainability is “the right thing to do” (Corporate Social Responsibility: Beyond Financials,

2014). I feel that this phrasing captures the underlying idea of a culture of sustainability,

one in which all employees share the idea that it is their moral obligation to focus on

sustainability.

4. Measuring collaboration between stakeholders

To measure collaboration between stakeholders, a new measure which I devised to

capture the collective efforts of multiple stakeholders towards increasing sustainability, I

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based my questions on research done by Brockhaus et al. (2013). One important part of

collaboration towards sustainability goals identified by Brockhaus et al. is that it “requires

a relationship with a high degree of trust,” so I incorporated questions about the trust

between the company and other stakeholders when formulating sustainability initiatives. I

also included questions to assess the current state of collaboration within the coffee

industry, to see if collaboration is currently occurring between stakeholders. If there are

few or no occurrences of current collaboration within the coffee industry, I believe the

clarifying questions about trust and aligned goals will identify why this is the case. I expect

to find that stakeholders whose goals are aligned and who trust each other will be more

likely to have successfully collaborate than those who have disparate goals and do not trust

each other.

5. Measuring eco-efficiency

In order to measure my dependent variable, the eco-efficiency of each company’s

sustainable logistics practices, I divided the questions into two categories aimed on

assessing resource use intensity and environmental impact intensity, the two building

blocks of eco-efficiency. According to the United Nations ESCAP (2009), “The application of

eco-efficiency indicators in the business sectors is usually based on the ratio of product or

service value to environmental impact,” so I will be using the following equation to

calculate eco-efficiency: Sales of coffee / (CO2 emissions + Fuel consumed). As previously

identified, fuel intensity and CO2 intensity are the two primary indicators used to calculate

eco-efficiency within the transport sector. Therefore, I included questions aimed at

assessing both the fuel consumption and the carbon emissions of each company. As my

monetary input, I am using sales, so I included a question about the revenue that the

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company makes per bag of coffee. After receiving this data, I will need to combine it to

calculate the eco-efficiency of each company as a new variable. Table 1 (see Figures and

Tables) summarizes the survey questions I have prepared to study each factor and the

dependent variable, eco-efficiency.

[Insert Table 1 about here]

Data Collection

I took four approaches to gathering the data for this study to test my hypotheses

about sustainable logistics in the coffee industry. First, I distributed my survey in the

LinkedIn Coffee Importers/Exporters group. Second, I contacted coffee importers

individually to obtain interview responses to my survey questions. Third, I distributed the

survey via Amazon Mechanical Turk. Fourth, I interviewed employees at Charlottesville

coffee shops and distributed a consumer survey to University of Virginia students. The

complete timeline of my research can be seen in Figure 2. The aim of my survey was to

understand the effects the four main stakeholders in the coffee industry, companies,

governments, NGOs, and consumers, and collaboration between stakeholders have on the

eco-efficiency of sustainable logistics. I asked questions relating to each of the stakeholders,

collaboration between stakeholders, and the calculation of eco-efficiency. The complete

survey, created using SurveyMonkey, can be seen in Appendix 1.

[Insert Figure 2 about here]

My original plan was to distribute my survey to the LinkedIn Coffee

Importers/Exporters group because the group has 3,045 members. I conservatively

estimated a 3% response rate to my survey, which would have yielded a sample size of 100

coffee importers and exporters. However, after three distributions of the survey via the

Schaefer 22
LinkedIn group, I only received one incomplete response. There are three reasons why I

believe this approach to gathering data did not work. First, the size of the LinkedIn group is

too large for it to be considered a community that people are using to form connections.

Members of the group are not very active, likely because they believe they will not make

any meaningful connections through the group. Also, the large size of the group probably

leads to the bystander effect, where people believe that in a large group someone else will

step in to help so they do not need to. Second, the LinkedIn group includes people who are

not all coffee importers and exporters. Originally, I thought that the description of the

group as a forum “for those interested in the business to seek advice and otherwise learn

from the experts” would be helpful in gathering data because the members would want to

help others learn. However, this also means that the group is not entirely made up of coffee

importers and exporters, but also others like me who are simply interested in the business.

This reduced the number of possible respondents to my survey. Third, LinkedIn is

primarily a resource for people searching for jobs or growing their professional networks.

Although I initially believed this would be beneficial for my study because I would be

networking with experts, I underestimated how LinkedIn’s purpose would affect members’

willingness to participate in my study. It is likely that members saw the survey but did not

respond because they were otherwise occupied with job searching or networking at the

time and did not want to take fifteen minutes to fill out a survey.

My second approach to gathering data for my survey was to contact and interview

thirty coffee importers that I had previously identified imported coffee from the Amazon

region into the United States. Using each importers website, I found a phone number or

email that I used to contact them and ask if they would be willing to fill out my survey or

Schaefer 23
have a short phone interview with me. I received no responses to my emails and my calls

were deferred because respondents did not have time to answer my questions. Although

this method of searching for respondents was more personal, I believe my status as a

student and time constraints led to receiving no responses. I explained my research project

and the confidentiality of the responses when I contacted each respondent, but I believe

that they did not trust me enough to want to respond. Additionally, I contacted each

respondent based on email and phone numbers I found on their websites, which were

intended for people making business inquiries. Therefore, respondents were working when

I contacted them and were much more likely to take fifteen minutes to interact with a client

than help with research, especially because they were small to medium sized importers

who had to manage many client relationships with a small staff.

My third approach to gathering data was to administer my survey via Amazon

Mechanical Turk. I input the survey into Mechanical Turk and allowed for twenty

responses to the survey, with each respondent compensated $0.25 for their participation. I

specified in the description for the survey that respondents should work or had worked in

the coffee industry, although I did not specify in what capacity (producer, importer,

exporter, distributor, or local coffee shop). I received no responses to my Mechanical Turk

survey. I believe this lack of responses is because Mechanical Turk does not have many

respondents involved in the coffee industry as part of its sample.

My fourth approach to gathering data for this study, which was the most successful,

was to switch the focus of my survey to Charlottesville coffee shops and couple this

interview data with consumer research obtained from University of Virginia students. I

conducted interviews at seven Charlottesville coffee shops, ranging from national chains to

Schaefer 24
local shops. I verbally administered my survey to each of them and asked other clarifying

questions as the interview progressed. This approach led to qualitative insights, although

the quantitative data I obtained was limited by the respondents’ lack of knowledge of their

complete supply chain. My questions addressing transportation within the coffee supply

chain were not able to be answered by most respondents, although they had valuable

insights into consumer demand and leadership contributions to sustainability initiatives.

Due to this limitation, I was not able to obtain data to help me calculate eco-efficiency.

However, I was able to obtain the price each company sells a 1lb bag of coffee for, to see if

an increased focus on sustainability affected coffee prices in any way.

I also distributed an additional survey using SurveyMonkey to sixty-one University

of Virginia students who consume coffee to supplement the consumer data I obtained in the

interviews. The questions in this survey aimed to test the congruence between coffee shop

perceptions of consumer demand for sustainability and actual consumer demand. The main

themes the questions focused on included respondents’ knowledge of sustainability

certification standards, their demand for sustainability, their perceptions of the origin of

their coffee, and the frequency with which they consume coffee. The complete consumer

perception survey can be seen in Appendix 2.

CHAPTER 5

RESULTS

Coffee Shop Results

Seven Charlottesville coffee shops participated in interviews administered in person

at their businesses. These coffee shops ranged from national chains to local shops. The

majority of the companies interviewed were small, with 85.71% of companies having

Schaefer 25
either 1-19 or 20-49 employees. The majority of the companies only distribute coffee in the

Southeast region of the United States, specifically within Charlottesville. Respondents to

the survey were employees, managers, or owners, depending on the size of the company

and availability constraints. Although this sample cannot be generalized to the entire

coffee industry because of the heightened presence of local shops in the sample, I believe it

can help with understanding sustainability in small businesses.

In order to investigate H1, H3, and H4, I ran regression analyses to demonstrate the

affect each of the stakeholders has on the implementation of sustainability initiatives.

Because I was not able to obtain data to calculate eco-efficiency as a measure to compare

the sustainability of companies, I used the adherence to NGO sustainability certification

standards (Sustainability Standards) as a proxy for the intended dependent variable.

Although this measure is not a perfect representation of a company’s sustainability

commitments across the world, because as one respondent pointed out, it takes “5% of an

African farmer’s revenues to get Organic certified” because their farms are so small, I

believe that generally this variable shows a company’s commitment to and awareness of

sustainability. Although not all respondents agreed that sustainability certification

standards are accurate measures of a producer’s sustainability, they believed that these

standards have had a positive impact on the industry as a whole by raising awareness of

sustainability. Some respondents even trained their employees in the meaning of each

certification standard, so even if they are not always perfect, they are still helpful in

communicating with consumers.

The first regression I ran was to test H1, the effect perceived consumer demand has

on the implementation of sustainability initiatives. The complete regression for H1 can be

Schaefer 26
seen in Appendix 3. As previously stated, I used Sustainability Standards as the dependent

variable and consumer expectations of the company to focus on sustainability issues

(Consumer Expectations) and the extent public perception is the reason for implementing

sustainability initiatives (Public Perception) as the independent variables. Surprisingly, the

model was significant even with the small sample size of seven respondents, with a

Significance F of 0.048. Both Consumer Expectations and Public Perception were correlated

with Sustainability Standards, with P-values of 0.027 and 0.020, respectively. The model

had a R Square of 0.780, meaning that 78% of the variance in Sustainability Standards can

be explained by the independent variables. However, Consumer Expectations has a

negative relationship with Sustainability Standards, likely because most companies have

already implemented these initiatives although they do not perceive much consumer

demand for them. This led me to conclude that although the model is significant, consumer

demand for sustainability initiatives is not the main reason why companies implement

them. Therefore, although I accept H1, I conclude that consumer demand only has a

moderate effect on companies’ implementation of sustainability initiatives and that other

factors are more important.

The second regression I ran was to test H3, the effect company culture has on the

implementation of sustainability initiatives. The complete regression for H3 can be seen in

Appendix 4. I used Sustainability Standards as the dependent variable and level of

agreement with the statements “focusing on sustainability is the ‘right thing to do’” (Right

thing to do), sustainability initiatives will lead to long term benefits (Long Term Benefits),

senior managers are involved in creating sustainability initiatives (Management

Involvement), and the extent sustainability is considered when making business decisions

Schaefer 27
(Sustainability Considered) as the independent variables. With a sample size of seven, the

model was close to being significant with a Significance F of 0.091 and a R Square of 0.953.

Because it looked like the small sample could be affecting the significance of the model, I

scaled the data so that the sample size was 98. With the scaled data, the model became

significant with a Significance F of 5.02E-61 and a R Square of 0.953. All the independent

variables were significant. This result led me to conclude that a company culture of

sustainability has a large effect on the implementation of sustainability initiatives and

accept H3. Company culture is a much more significant factor in the sustainability of a

company than perceived consumer demand.

The third regression I ran was to test H4, that collaboration between stakeholders

leads to more sustainable company practices. The complete regression for H4 can be seen

in Appendix 5. Once again, I used Sustainability Standards as the dependent variable and

company collaboration with other stakeholders to develop sustainability initiatives

(Stakeholder Collaboration), the extent to which stakeholder and company goals are

aligned (Goals Aligned), and the extent to which the company trusts other stakeholders

when developing initiatives (Stakeholder Trust) as the independent variables. Although the

model had a R Square of 0.676, it was not significant. Again, I believed the problem

originated from the small sample size, so I ran the regression again with a sample size of

98. With the larger sample size, the model was significant with a Significance F of 6.22E-23

and the same R Square as the original model. All the independent variables were

significant, although Stakeholder Trust had a much larger coefficient than the other

variables. I ran the model again with only Stakeholder Trust as the independent variable

and the model was significant with an R Square of 0.563. This led me to conclude that

Schaefer 28
collaboration between stakeholders leads to more sustainable company practices and

accept H4, while acknowledging that Stakeholder Trust is the most important indicator of

the success of collaboration between stakeholders.

I was not able to test H2, the effect pressure governments and NGOs have on the

implementation of sustainability initiatives, qualitatively because all respondents indicated

no incentives or penalties from NGOs or the government to encourage sustainability.

However, discussions during interviews with respondents allowed me to reject H2, at least

within my sample of small businesses, because respondents were implementing

sustainability initiatives without pressure from NGOs or the government.

Consumer Perception Results

Although my study originally only used perceived consumer demand as an

independent variable, I wanted to gauge actual consumer demand for sustainability to see

how accurate respondents were in their consumer perceptions. I noticed respondents

reporting relatively low levels of consumer demand for sustainability, so I wanted to see

firsthand what consumer demand was because I had hypothesized in H1 that it would

affect companies’ implementation of eco-efficiency. Sixty-one University of Virginia

students responded to the Consumer Perception survey administered through

SurveyMonkey. These respondents ranged in age from 18 to 29, with a median age of 21. Of

the respondents, 34.43% had taken a class related to sustainability at the University of

Virginia, and 65.57% had not. The majority of respondents were infrequent to moderate

consumers of coffee, with 47.54% consuming 0-3 cups of coffee per week and 31.15%

consuming 4-7 cups per week. Additionally, the majority of respondents were infrequent

customers at coffee shops, with 78.69% buying coffee from coffee shops 0-3 times per

Schaefer 29
week. Although this sample is not representative of the general population, I believe it is

still relevant to my research because the respondents are likely the same consumers who

frequent the coffee shops interviewed in the first part of my study.

An Analysis of Variance (ANOVA) showed significant differences in consumer

familiarity with sustainability certification standards, importance of attributes when

choosing coffee to purchase, and expectation of stakeholder sustainability focus. Complete

ANOVA results can be seen in Appendix 6. Respondents were asked about their familiarity

with each of five coffee certification standards (Fair Trade, Organic, Utz Certified, Shade

Grown, and Rainforest Alliance) on a seven-point Likert scale ranging from “Not familiar at

all” to “Very familiar”. The differences between their familiarity with these standards were

significant with a P-value of 2.21E-19. Respondents were most familiar with Organic, with a

mean response of 4.26. 14.75% of respondents indicated they were “Very familiar” with

Organic, higher than any other certification standard. After Organic, respondents were

most familiar Fair Trade, with a mean response of 4.13, and Rainforest Alliance, with a

mean response of 3.03. Respondents were least familiar with Utz Certified, with a mean

response of 1.49. 83.61% of respondents indicated they were “Not familiar at all” with Utz

Certified. Respondents were also not very familiar with Shade Grown, with a mean

response of 1.82 and 70.49% of respondents indicating they were “Not familiar at all” with

Shade Grown.

An ANOVA also indicated significant differences between the importance of

attributes when purchasing coffee, with a P-value of 2.35E-15. Respondents were asked to

indicate on a seven-point Likert scale the importance of five attributes (Price, Taste,

Sustainability, Quality, and Brand) to them when choosing which coffee to purchase,

Schaefer 30
ranging from “Not important at all” to “Very important”. Respondents indicated that the

most important attribute to them when choosing which coffee to purchase was Taste, with

a mean response of 5.98. 39.34% of respondents indicated Taste was “Very important”

when choosing which coffee to purchase. Respondents also placed high importance on

Quality and Price, with mean responses of 5.44 and 5.39, respectively. After Taste, Quality,

and Price, respondents placed importance on Sustainability, with a mean response of 4.38.

Respondents placed the least importance on Brand, with an mean response of 3.56 and

21.31% of respondents indicating Brand was “Not important at all” to them when

purchasing coffee.

A third ANOVA indicated significant differences between the focus on sustainability

that consumers expect from stakeholders, with a P-value of 3.64E-4. Respondents were

asked to indicate their expectations of each of six stakeholders (Coffee Producers, Coffee

Distributors, Coffee Roasters, Coffee Shops, Governments, and NGOs) to focus on

sustainability on a seven-point Likert scale from “I do not expect it at all” to “I always

expect it”. Respondents indicated that they expected NGOs to focus on sustainability the

most, with a mean response of 5.54, and 34.43% of respondents indicating “I always expect

it”. After NGOs, respondents indicated they expect Coffee Producers, Coffee Shops, and

Governments to focus on sustainability, with mean scores of 5.44, 4.97, and 4.82.

Respondents expect the least focus on sustainability from Coffee Distributors and Coffee

Roasters, with mean scores of 4.38 and 4.56, respectively.

In order to understand what factors lead consumers to focus on sustainability, I

conducted two regression analyses. The complete regression analyses can be seen in

Appendix 7. The first regression analysis I conducted to test whether frequency of coffee

Schaefer 31
consumption affects focus more on sustainability. I used the importance respondents place

on sustainability when choosing which coffee to purchase (Importance of Sustainability) as

the dependent variable and the standard (8oz) cups of coffee the respondent drinks in a

typical week (Cups of Coffee) and the amount of times respondents purchase coffee from a

coffee shop in a typical week (Purchase Coffee) as the independent variables. The

regression was not significant, with a Significance F of 0.60. Neither Cups of Coffee or

Purchase Coffee was a significant predictor of Importance of Sustainability.

The second regression analysis I conducted to test whether education affects focus

on sustainability. Once again, I used Importance of Sustainability as the dependent variable

and respondents’ familiarity with each of the five sustainability certification standards

(Fair Trade, Organic, Utz Certified, Shade Grown, and Rainforest Alliance), as well as the

dummy variable indicating whether or not a respondent had taken any sustainability

classes at the University of Virginia (Sustainability Classes) as the independent variables.

Although the model was significant with a Significance F of 0.0038, none of the

independent variables had significant P-values. The independent variables that were the

closest to being significant, with P-values of 0.095 and 0.111, were respondents’ familiarity

with Utz Certified and Fair Trade. When I ran a regression analysis using only Utz Certified

and Fair Trade as independent variables, the model was significant with a Significance F of

1.91E-4 and P-values of 0.029 and 0.002, respectively. This model has an R Square of 0.26,

meaning Utz Certified and Fair Trade familiarity can explain 26% of the variance in

Importance of Sustainability. This result led me to conclude that knowledge of all

sustainability standards is not an equal predictor of Importance of Sustainability, but

knowledge of some standards, such as Utz Certified and Fair Trade is correlated with

Schaefer 32
Importance of Sustainability. Respondents with higher familiarity with Utz Certified and

Fair Trade are more likely to place higher importance on sustainability when choosing

which coffee to purchase.

CHAPTER 6

CONCLUSIONS

The coffee supply chain is fragmented, causing a knowledge gap between producers

and ultimate distributors, as well as between distributors and consumers. The knowledge

gap was the one main challenge I encountered throughout my research. Companies only

know about the part of the supply chain that they own. Generally, companies that own

roasting or importing as well as selling to the consumer knew more about their supply

chain than companies that received beans from a roaster. However, the transportation

between the producer and the importer and the importer and the roaster are gaps for

almost every respondent. The one fact I learned about transportation is that coffee beans

travel the final leg of the journey to the coffee shop in diesel trucks, like most food

products. Likewise, consumers only know what companies tell them, which usually is not

much. Some shops I went into listed the origin of each of their different beans and the

certification standards they adhere to; some did not. Greater transparency and information

sharing among companies involved in the coffee supply chain would lead to less

information loss and would have provided more data for my research, especially data that

would have been helpful in calculating eco-efficiency.

Government involvement in regulating sustainability in the coffee industry is

limited. In terms of regulating environmental sustainability of local businesses, the

government is not very involved. None of the respondents could identify any incentives or

Schaefer 33
penalties given to them by the government to encourage sustainable business practices.

One respondent said that the local Charlottesville government had been involved in testing

the electrical efficiency of their store, but that was only per the request of the company,

which did not have the resources to conduct the tests itself.

Consumers do not know or care much about sustainability. Even students at the

University of Virginia, a liberal institution, do not consider sustainability first when

choosing which coffee to consume. Consumers are more likely to consider taste, price, and

quality before they consider the sustainability of their consumption choices. I believe this

lack of knowledge about sustainability is because consumers only know what companies

choose to tell them about the coffee they are consuming. If companies do not share

information about their sustainability practices, consumers are not willing to put in the

effort to seek out this information.

Creation of sustainability initiatives is voluntary and comes from company

leadership and beliefs. Across all survey respondents, it became clear that a company

culture of sustainability is very important in creating sustainability initiatives. If the

owners and the managers of a company are not committed to sustainability, it will not

happen. There is very little external pressure from stakeholders wanting companies to

implement sustainability initiatives. The successes in implementing sustainable practices

can mostly be attributed to the internal motivation of companies doing what they believe is

right.

Companies accurately predict consumer demand for sustainability. Between the two

studies, it became clear that companies understand consumer preferences and demand.

Consumers indicated a low level of demand for sustainability, which was echoed in the

Schaefer 34
responses from coffee shops. Although there is low demand for sustainability among

consumers, companies indicated that when they publicize their sustainability efforts,

consumers recognize and appreciate them. For many consumers, sustainability is an added

bonus of coffee if they like the taste, price, and quality. Likely, this is because participation

in sustainability is voluntary, so consumers have not come to expect it from companies the

way they expect good tasting coffee and competitive prices.

Education about Utz Certified and Fair Trade could help increase consumers’

demand for sustainability. Both familiarity with Utz Certified and Fair Trade were

correlated with Importance of Sustainability, which familiarity with other certifications

standards was not. I propose that sustainability classes at the University of Virginia and

other institutions focus on teaching students about these two standards if they want to

change their coffee consumption behavior.

Future Directions

I believe that the information in this study, while helpful for providing a better

understanding of sustainability in general in the coffee industry, could be expanded upon

by finding respondents with information that could lead to calculations of eco-efficiency. A

quantitative understanding of the coffee industry would be helpful in finding places for

companies to improve their sustainability practices. However, greater transparency within

the coffee supply chain would need to be present to obtain quantitative measures of

sustainability.

Schaefer 35
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 FIGURES AND TABLES

Figure 1: Hypothesized factors that affect the eco-efficiency of sustainable logistics

Perceived consumer
demand for sustainability

Collaboration Eco-efficiency of
Pressure from
sustainable
governments and NGOs between
logistics
stakeholders
Company culture of
sustainability

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 Table 1: Measure definitions and survey questions to assess each measure

Measures Definition References Survey Questions

Does your company adhere to any NGO sustainability certification standards?
Which incentives does your company receive for adhering to NGO sustainability certification
standards?
The incentives and penalties that Which penalties does your company receive for not adhering to NGO sustainability certification
Pressure from
governments and NGOs place on Porteous et al. standards?
governments and
companies to encourage (2014) Does the government regulate the sustainability practices of your company?
NGOs
sustainable logistics practices. Which incentives does your company receive for complying with government sustainability
regulations?
Which penalties does your company receive for not complying with government sustainability
regulations?
To what extent do you feel that consumers expect your company to focus on sustainability issues?
To what extent is public perception of your company the reason for implementing sustainability
Grant Thornton,
initiatives?
The company’s perception of the Corporate Social
Perceived How much consumer demand do you believe there is for your company to implement sustainable
size of consumer demand for Responsibility:
consumer demand transportation practices?
sustainable products and Beyond
for sustainability How much consumer demand do you believe there is for your company to implement sustainable
business practices. Financials
production practices?
(2014)
How much consumer demand do you believe there is for your company to implement sustainable
processing practices?
Does your company believe that focusing on sustainability is "the right thing to do"?
Grant Thornton,
Does your company believe that the implementation of sustainability initiatives will lead to long-term
Corporate Social
The degree to which a company benefits?
Company culture Responsibility:
considers sustainability while Are your company's senior managers involved in creating and implementing sustainability initiatives?
of sustainability Beyond
making business decisions. To what extent is sustainability considered in your company when making business decisions?
Financials
(2014) Do your company's senior managers voice a commitment to sustainability in your company's business
practices?
The degree to which collective To what degree do you feel that the goals of your company's sustainability initiatives are aligned with
stakeholder efforts are aligned the goals of governments, NGOs, and consumers?
Collaboration
towards the same goals and how Brockhaus et al. Has your company worked with other companies, governments, NGOs, or consumers to develop
between
these stakeholders work together (2013) sustainability initiatives?
stakeholders
to implements sustainable To what degree does your company trust the input of other companies, governments, NGOs, or
logistics practices. consumers when developing sustainability initiatives?
What is the average retail price that your company sells a bag of coffee for?
Indicator of economic efficiency What modes of transportation does your company use in the shipping of coffee from your production
measured in terms of resource facilities in the Amazon region (Brazil, Colombia) and your warehouses in the United States?
use and its environmental About how many miles does your coffee typically travel in diesel trucks between its production
UNESCAP,
impacts. Within transportation, facilities and your company's warehouses?
Eco-efficiency
Eco-efficiency fuel intensity and carbon About how many miles does your coffee typically travel on container ships between its production
Indicators
emission intensity are the most facilities and your company's warehouses?
(2009)
informative resource use and About how many miles does your coffee typically travel on trains between its production facilities and
environmental impact your company's warehouses?
indicators, respectively. How much fuel does the transportation of your coffee from your production facilities to your
warehouses consume?

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Figure 2: Timeline of data collection efforts

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 APPENDICES

Appendix 1: Complete coffee shop survey created with SurveyMonkey

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Appendix 1: continued

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Appendix 1: continued

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Appendix 1: continued

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Appendix 1: continued

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Appendix 2: Consumer perception survey distributed via SurveyMonkey

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Appendix 2: continued

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Appendix 3: Regression results for H1

Regression Statistics
Multiple R 0.88313015
R Square 0.77991886
Adjusted R Square 0.6698783
Standard Error 1.46216655
Observations 7

ANOVA
df SS MS F Significance F
Regression 2 30.30542 15.15271 7.087557604 0.048435706
Residual 4 8.551724 2.137931
Total 6 38.85714

Standard
Coefficients Error t Stat P-value
Intercept -1.82758621 1.939023 -0.94253 0.399288599
Consumer Expectations -3.65517241 1.068966 -3.41935 0.026796046
Public Perception 6.55172414 1.759635 3.723344 0.020414921

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Appendix 4: Regression results for H3

Regression Statistics
Multiple R 0.976464361
R Square 0.953482648
Adjusted R Square 0.860447945
Standard Error 0.950665919
Observations 7

ANOVA
df SS MS F Significance F
Regression 4 37.04961 9.262403 10.24868 0.090870839
Residual 2 1.807531 0.903766
Total 6 38.85714

Standard
Coefficients Error t Stat P-value
Intercept -14.4853556 3.599076 -4.02474 0.056548
Right thing to do -2.47698745 1.272187 -1.94703 0.190906
Long Term Benefits 3.280334728 1.455201 2.254214 0.152903
Management Involvement 2.372384937 0.423814 5.597697 0.030463
Sustainability Considered -0.21757322 0.379071 -0.57396 0.623938

Regression Statistics
Multiple R 0.976464361
R Square 0.953482648
Adjusted R Square 0.951481902
Standard Error 0.52163349
Observations 98

ANOVA
df SS MS F Significance F
Regression 4 518.6946 129.6736 476.5635 5.01821E-61
Residual 93 25.30544 0.272101
Total 97 544

Standard
Coefficients Error t Stat P-value
Intercept -14.4853556 0.527794 -27.4451 2.23E-46
Right thing to do -2.47698745 0.186563 -13.277 3.44E-23
Long Term Benefits 3.280334728 0.213401 15.37169 2.84E-27
Management Involvement 2.372384937 0.062151 38.1712 1.3E-58
Sustainability Considered -0.21757322 0.05559 -3.91391 0.000173

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Appendix 5: Regression results for H4

Regression Statistics
Multiple R 0.822296354
R Square 0.676171294
Adjusted R Square 0.352342587
Standard Error 2.048011906
Observations 7

ANOVA
df SS MS F Significance F
Regression 3 26.27408 8.758028 2.088052 0.280423386
Residual 3 12.58306 4.194353
Total 6 38.85714

Standard
Coefficients Error t Stat P-value
Intercept -0.167216722 4.34502 -0.03848 0.971719
Stakeholder Collaboration 0.754675468 0.826383 0.913227 0.42846
Goals Aligned -0.887788779 1.087913 -0.81605 0.474242
Stakeholder Trust 1.765676568 0.775989 2.275387 0.10739

Regression Statistics
Multiple R 0.822296354
R Square 0.676171294
Adjusted R Square 0.665836335
Standard Error 1.368967682
Observations 98

ANOVA
df SS MS F Significance F
Regression 3 367.8372 122.6124 65.42564 6.22222E-23
Residual 94 176.1628 1.874073
Total 97 544

Standard
Coefficients Error t Stat P-value
Intercept -0.16721672 0.776227 -0.21542 0.829905
Stakeholder Collaboration 0.754675468 0.147631 5.111898 1.67E-06
Goals Aligned -0.88778878 0.194353 -4.56792 1.49E-05
Stakeholder Trust 1.765676568 0.138628 12.73675 3.49E-22

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Appendix 5: continued

Regression Statistics
Multiple R 0.75
R Square 0.5625
Adjusted R Square 0.557942708
Standard Error 1.574536969
Observations 98

ANOVA
df SS MS F Significance F
Regression 1 306 306 123.4286 6.28314E-19
Residual 96 238 2.479167
Total 97 544

Standard
Coefficients Error t Stat P-value
Intercept -1 0.489473 -2.04302 0.043792
Stakeholder Trust 1.5 0.135015 11.10984 6.28E-19

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Appendix 6: Complete consumer perception ANOVA results

SUMMARY
Groups Count Sum Average Variance
Fair Trade 61 252 4.131148 4.815847
Organic 61 260 4.262295 4.463388
Utz Certified 61 91 1.491803 1.620765
Shade Grown 61 111 1.819672 2.31694
Rainforest Alliance 61 185 3.032787 4.965574

ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 398.2098 4 99.55246 27.37588 2.21E-19 2.40174
Within Groups 1090.951 300 3.636503

Total 1489.161 304

SUMMARY
Groups Count Sum Average Variance
Price 61 329 5.393443 2.475956
Taste 61 365 5.983607 1.88306
Sustainability 61 267 4.377049 3.138798
Quality 61 332 5.442623 2.35082
Brand 61 217 3.557377 3.784153

ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 230.2951 4 57.57377 21.11592 2.35E-15 2.40174
Within Groups 817.9672 300 2.726557

Total 1048.262 304

SUMMARY
Groups Count Sum Average Variance
Coffee producers 61 332 5.442623 2.717486
Coffee distributors 61 267 4.377049 3.372131
Coffee roasters 61 278 4.557377 2.784153
Coffee shops 61 303 4.967213 2.865574
Governments 61 294 4.819672 3.01694
NGOs 61 338 5.540984 2.252459

ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 66.59016 5 13.31803 4.698066 0.000361 2.23906
Within Groups 1020.525 360 2.834791

Total 1087.115 365

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Appendix 7: Regression results for consumer perception survey

Regression Statistics
Multiple R 0.13280501
R Square 0.01763717
Adjusted R Square -0.0162374
Standard Error 1.78599097
Observations 61

ANOVA
df SS MS F Significance F
Regression 2 3.321571 1.660785 0.520661 0.596878195
Residual 58 185.0063 3.189764
Total 60 188.3279

Standard
Coefficients Error t Stat P-value
Intercept 3.93421053 0.542028 7.25832 1.08E-09
Cups of Coffee 0.19784151 0.266496 0.742382 0.460852
Purchase Coffee 0.05644589 0.445361 0.126742 0.899583

Regression Statistics
Multiple R 0.53924336
R Square 0.29078341
Adjusted R Square 0.21198156
Standard Error 1.57271439
Observations 61

ANOVA
df SS MS F Significance F
Regression 6 54.76262 9.127103 3.690058 0.003817929
Residual 54 133.5652 2.473431
Total 60 188.3279

Standard
Coefficients Error t Stat P-value
Intercept 2.61433655 0.501003 5.218202 2.95E-06
Fair Trade 0.28718879 0.177153 1.621138 0.110813
Organic -0.1156339 0.173589 -0.66614 0.508159
Utz Certified 0.29425504 0.172946 1.701431 0.094614
Shade Grown 0.06938232 0.155401 0.446471 0.657042
Rainforest Alliance 0.14138236 0.140983 1.002836 0.320413
Sustainability Classes 0.2183013 0.460876 0.473666 0.637648

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Appendix 7: continued

Regression Statistics
Multiple R 0.50564501
R Square 0.25567687
Adjusted R Square 0.23001056
Standard Error 1.5546193
Observations 61

ANOVA
df SS MS F Significance F
Regression 2 48.15108 24.07554 9.961573 0.00019102
Residual 58 140.1768 2.416841
Total 60 188.3279

Standard
Coefficients Error t Stat P-value
Intercept 2.55616248 0.45666 5.597522 6.22E-07
Fair Trade 0.31037299 0.093405 3.322871 0.001547
Utz Certified 0.36109995 0.161008 2.242749 0.02875

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