Findings from Qualitative and Quantitative Stages
For our project, we decided to research the sustainability of the wine industry as it applies to environmental issues, stakeholder engagement and innovation management. We plan to analyze the initiatives/measures undertaken by the wine industry on sustainability, the drivers and cost for sustainable practices, and barriers to implementing said sustainable practices. We also plan to research what could be learned from international practices and the influence of stakeholder engagement on the industry.
Although the wine industry may evoke relaxing images of the countryside, it is a major international industry. Wine industry is a sector within the food industry – mainly producing a fermented grape, fruit or berry-based alcoholic beverage known as wine. The origins of wine itself are extensive and debatable, but one could place the origin dates between 4500 to 6000 BC. Over the past two decades, the international wine trade has seen substantial growth. Over the course of the 1960s, 10% of global wine production was exported, while in the 1990’s that figure reached 15% (Mariani et al., 2012). By the year 2000, that figure was 25%, followed by 30% in 2010 (Mariani et al., 2012). For instance, over the past two decades New Zealand has experienced a winery boom with a 173% increase in the number of wineries (Gabzdylova et al., 2009). However, with climate change occurring before our very eyes, today’s consumers want to see more environmental accountability and sustainability from companies from all industries. Due to pressure from governments, environmental groups, various stakeholders, and consumers, the wine industry as a whole is progressively adopting organic wine farming, sustainable processing, and sustainable business practices for a better future for the rest of us (Ouvrard et al., 2020).
Sustainability is becoming a key aspect of wine industry, as evidenced by the attention paid to this concept by the academia, institutions, and associations (Santini et al., 2013). In order to obtain and, later, sustain a competitive advantage, wine industry must gain stakeholder interest, trust, and buy-in. Winemaking has not changed significantly in the last 7,000 years and certain changes may be necessary for continued stakeholder engagement (Carpenter & Humphreys, 2019).
Within the boundaries of the industry that has spanned centuries, innovation and competitive advantage may lie in developing a more sustainable business. Environmental issues are paramount to a healthy business. According to research, most important wine industry stakeholders are owners, shareholders, customers, wholesalers, and the community (Gabzdylova et al., 2009). This means that the wine business needs to be a sustainable business to benefit and not harm the community, while maintaining the quality product that customers are looking to buy, without driving the costs up for the owners. Our research will look to identify whether this is indeed possible, while clarifying the best practice of doing so. According to Pucci et al, 2018, stakeholders are paramount to firms’ innovative process. Identifying which mechanisms can potentially improve sustainability will create value for wine business and all of the involved stakeholders.
Problems to Solve
According to Elkington, J from the “Enter the Triple Bottom Line”, sustainability refers to as “the triple bottom line”, where environmental and social responsibilities have to fit with
economic goals, in order to “create value for a company and society” (Elkington, 2004). Some wine businesses adopt more sustainable practices voluntarily, while others may have to comply with regulatory processes, yet the common goal is the same – improve stakeholder engagement, maintain or improve profits, and continue to gain market share. With a great variation in sustainability practices across the globe, there may already exist tried and true principles to guide various business, which our study hopes to delve into. In addition, existing evidence regarding the cost and benefit analysis of sustainable ways of running a wine business is quite conflicting (Pomarici et al., 2015). We plan to shed more light on this with our study.
There are three problems that our study will aim to solve. Firstly, we would like to find which specific sustainability practices should be adopted by wineries around the world. Secondly, we aim to find out whether these practices can be implemented without increasing operational costs. Thirdly, we hope to seek information on whether improving sustainability will influence stakeholder engagement by making a particular business a more desirable employer, and/or a good neighbor, and whether increasing sustainability will cause a particular business to be more profitable by increasing its market share.
Our research aims to find whether the wine industry can implement sustainability practices that produce quality products for the consumer while not increasing operating costs. We will also look at the best practices to do this. We intend to use a mixed-method research approach to get both qualitative and quantitative data. We can use a systematic literature review by performing keyword searches in academic databases focusing on wine, sustainability, stakeholder engagement, and innovation management. We will also use business journals focused on the wine industry. We will review quantitative data from companies’ financial statements within the industry to see how implementing these practices has influenced financial performance, industry statistics, and reports, and if possible, public perception surveys/polls to determine if sustainability practices factor into buying practices.
Despite the burgeoning research pertaining to the wine industry, environmental strategies and management practices regarding adoption of sustainable methods remain unclear. This paper highlights why the wine industry should adapt and normalize measures that will provide positive influence on environment and stakeholder engagement, by means of innovation management and without raising cost of operations. Corporate social responsibility, transparent reporting, and suitable communication technologies are the critical aspects of stakeholder engagement. According to Ghassim& Foss (2020), stakeholders in the current wine companies are no longer the people who own shares or significant portions of the industry. In contrast, they include any party that can influence the actions or get influenced by the colleagues or staff’s activities to help the industry move forward.
Innovation management tends to involve continuous improvement. Wine industry as a whole should strive for improvement in sustainable operations, while focusing on high-quality output, customer satisfaction, and better environmental performance (Ghassim& Foss, 2020). Achieving tremendous innovation practices depends on workplace conditions and the impact on the realization of productivity when configuring human resources, technology, and physical infrastructure. Therefore, improving company culture and higher employee satisfaction, achieved
with adoption of more sustainable practices, should help each particular company become more competitive.
Lastly, global environmental issues also have an impact on the wine industry. Any disputes existing over ecological problems tend to be of great interest to companies, governments, and people (Shams et al. 2020). In the current society, matters of depletion of natural resources tend to be among the most relevant challenges humanity faces. Therefore, the wine companies need to enact joint efforts to establish an efficient environmental policy, in order to stay relevant in the ever-changing political, business, and environmental climate.