Cracking the Nut 2012: Forging successful partnerships in the food industry

Companies in the food sector are putting more energy into partnerships, explained John Mennel of Deloitte during a session on “Partnerships: A Critical Success Factor for Expanding Markets” at the 2012 Cracking the Nut Conference in Washington, DC. This year’s conference focused heavily on private sector involvement in financing agribusiness in developing countries. A large part of making finance work for smallholder 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 how they are using global partnerships to not only promote growth in emerging markets, but drive their own business strategies. In fact, what Deloitte calls “strategic social partnerships” (SSPs) are not emanating from companies’ corporate social responsibility units, but directly from its operations. During the opening 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.

Success Factors

A large part of the discussion focused on what a successful partnership looks like and a number 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 is 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.

After the overview of key themes that emerged from the Deloitte interviews, representatives from Dole’s Dale Foundation and Unilever gave concrete examples of how their respective firms are engaging in SSPs. Through the sustainable living plan that is part of its corporate strategy, Unilever is building longer term partnerships with suppliers by crafting joint business plans. Dale is creating social programs in the banana industry in both Ecuador and Peru that benefit grower workers and their families. Unilever’s Dr. Christof Walter and Dale’s Maria Eugenia Castro both said that their organizations decide to partner to fill gaps in particular competencies and to demonstrate credibility. For example, companies can bring access to markets while NGOs can contribute technical expertise. When discussing how companies integrate SSPs into their business strategy, Nestle’s model was used as an example. Nestle operates a “shared value board” with members from both inside and outside the firm. This board is charged with generating ideas for SSPs which are then reconciled with individual business units. Viable strategies 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. They acknowledged that building successful SSPs is hard work and expectations have to be realistic about how much time it takes. Of the companies Deloitte interviewed, almost none said they felt like they were getting measurement right. Issues such as whether to align the data collection period with business cycles or some other longer time marker has made the measurement framework challenging. However, despite remaining challenges, many companies in the food industry recognize the business value in SSPs and are putting in the investment to forge long-term, impactful relationships.