Executive Summary

Cooperate Social Responsibility (CSR) has become one of the most important pillars of success in the global business. The strategy allows the organization to improve society’s wellbeing while remaining accountable for their actions. In this paper, a literature review approach is used to evaluate the current CSR strategy of Hitchhiker’s Beverage Company.

The report begins by reviewing the significant trends in the F&B industry. The analysis seeks to develop an understanding of the reasons for which Hitchhiker’s Beverage Company should shift its focus toward CSR/sustainability concerns. Additionally, the essay includes an evaluation of the business’key sustainability issues and CSR strategy as well as those of its two competitors (PepsiCo, Inc. and Starbucks, Inc.).

The findings suggest that companies in this sector have a broad market base for their products. However, consumers’ perception, expectations, and consumption habits are taking new shifts. Therefore, beverage organizations have to understand and meet consumers’ new preferences. Moreover, F&B firms are currently focusing on natural ingredients instead of artificial colors and flavors(Hitchhiker’s Lemonade, 2018).

On the other hand, water conservation and potential ecological impacts of business activities were found to be Hitchhiker’s Beverage’s most critical sustainability issues. Thus, the company has adopted an “all-natural craft” strategy that focuses on the use of natural ingredients in beverage production(Hitchhiker’s Lemonade, 2018). Moreover, Hitchhiker’s Beverage recycles its wastes. Collectively, the CSR strategy has enabled Hitchhiker’s Beverage to stay relevant in the competitive beverage market.

Introduction

Cooperate Social Responsibility (CSR) has become one of the most important pillars of success in the global business. The strategy allows an organization to improve society’s wellbeing while positioning itself to be accountable for its actions as it attempts to meet stakeholders’ needs. Accordingly, for corporations that seek to achieve a high-value consumer brand,CSR initiatives are a core part ofbusiness activities (Chandler, 2016).Hitchhiker’sofferings, for instance, have a strong influence on consumers’ health since the products are directly consumed by buyers(Hitchhiker’s Lemonade, 2018).Therefore, the company has to prove its commitment to CSR endeavors.

Impetus

Major Trends

The change in consumers’ perception, expectations, and consumption trend is one of the most critical shifts in this industry. According to Ndichu and Barras (2018), many Canadians tend to spend a significant part of their incomes on beverages owing to the sustainability, health, value, and the convenience, which drive their choices. However, Chandler (2016) writes that such buyers expect to be supplied with functional and fortified foods that benefit their physical strength and promote gut health.

On the other hand, to respond to thenew trend, Canada’s F&B companies seek out to provide healthful ingredients and formulations to meet consumers’ clean label demand and expectations. For example, Hitchhiker’s Beverage tries to impact society by offering products that give consumers a sense of comfort and nostalgia.

Why Firms Need to Shift to CSR

Organizations in the F&B sector need to shift toward Corporate Social Responsibility for several reasons. First, throughout the world, consumers explicitlyexpect businesses to address environmental and social concerns by operating responsibly. A 2015 research conducted by Cone Communications, for instance, found out that 91% of consumers believe firms should do more to society thanmake profits. Therefore, to remain appealing in the eyes of buyers, attracts and retains investors, boosts employee engagement, and improves public image, Hitchhiker’s Beverage is obligated to stay socially responsible.

Moreover, the majority of today’s consumers expect organizations to take accountability in their own lives. For example, according to the Cone Communications’ report,84% of global consumers strive to purchase products and services from companies, which are environmentally and socially responsible. The findings are consistent with those of 2013, which demonstrated that 90% of consumers favor responsible products and services.

Overall, the CSR strategy is critical toHitchhiker’s Beverage Company as it influences all elements of its businessoperations. Consumers want to purchase products from organizations on which buyers can rely (Ashton, Richards, Galatsanou&Bollman, 2014).At the same time, talented and productive employees that Hitchhiker Company needs for its over500 locations across Ontario expect to work with an employer that upholds CSR. Thus, to satisfy the stakeholder groups, Hitchhiker’s Beverage Company has to contribute to society and create value.

Competitive Analysis

Canada is demographically diverse and geographically vast. However, for companies to succeed in the country’s F&B industry, they must develop and implement appropriate market-specific strategies (Ashton et al., 2018).Similarly, as outlined by Chandler (2016), an effective CSR strategy remains a boon to brand affinity and reputation for companies in all sectors of an economy. Indeed, companies in Canada’s F&B industry know the role of CSR strategy in fostering lasting brand loyalty and creating a sustainable competitive advantage.

Hitchhiker’s Beverage Company’s top competitors in terms of CSR include PepsiCo, Inc. and Starbucks, Inc. The former is an American globally traded firm whose beverage products are enjoyed by millions of consumers in different countries (CSR Profile of PepsiCo., 2018).At the heart of its “Performance with Purpose” mission, PepsiCo seeks to offer financial value to its stakeholders by incorporating sustainability into its business strategy. Additionally, the organization is committed to achieving its core objectives by impacting society and the environment positively. The firm seeks to reduce the impacts of its business operations on the environment besides supplementing consumers’ health by offering nutritious foods and beverages (CSR Profile of PepsiCo., 2018).PepsiCo, Inc. also provides support to employees and the community where it operates. The steps position the companyfor long-term sustainable growth.

Starbucks, on the other hand, is a well-known beverage firm that primarily specializes in coffee products. The company operates more than 20,000 stores that are distributed across 60 nations. According to its official website, Starbucks CSR strategy is grounded on three pillars, namely: Environment, Ethical Sourcing, and Community (Starbucks, 2018).

First, to leave a positive impact on Canadian communities, Starbuck engages in ethical sourcing to support peoples’ success. This helps to ensure the long-term sustainability of the firm’s premium services (Starbucks, 2018).Additionally, the company is devoted to offering responsibly manufactured products that are sustainable and ethically purchased. Moreover, the organization fosters a better future for farmers by adopting a holistic approach to ethical sourcing of superior quality coffee.

Key Sustainability Issues

Hitchhiker’s Beverage Companyfaces many sustainability opportunities and challenges. One of the most important of these critical issues is water conservation. Primarily, the company uses water in its production processes to heat and cool Cold Tea and Lemonade products(Hitchhiker’s Lemonade, 2018).Accordingly,the company has to identify new ways to conserve a large amount of water produced during manufacturingto increase sustainability.

In addition to the inherent need for water conservation, the ecological impact of Hitchhiker’s Beverage Company’s business activities is a crucial sustainability concern. Although the firm’s products have not had any significant influence on people, itsgrowing transportationneeds for beverage productscould cause adverse impacts on the environment(Hitchhiker’s Lemonade, 2018).However, for the five years, Hitchhiker’s Beverage has been operating, the organization believes that the environmental impact of its business activities has been positive.

CSR Strategy

Hitchhiker’s Beverage Company’s Corporate Social Responsibility encompasses several vital principles. These include emphases on healthy ingredients, recycling, efficient manufacturing, and charitable contribution.First and foremost, the business gives back to the community by donating to charitable organizations. Itcorporates with not-for-profit agencies to offer services aimed at improving community welfare in Ontario.

Secondly, the group focuses on natural ingredients as opposed to artificial colors and flavors.The organization manufactures its beverages using real natural fruit purees instead of chemicals.The choice of natural ingredients harmonizes with the UN’s goal for “sustainable development and lifestyle harmony with nature” (Hitchhiker’s Lemonade, 2018). Moreover, the organization’s emphasis on “all-natural craft” demonstrates the firm’s commitment to meeting consumers’ demand for healthy ingredients.

Moreover, Hitchhiker’s Beverage Company aims to comply with the United Nation’s Standards to significantly decrease the number of illnesses and deaths due to the consumption of toxic chemicals by humans. For this reason, the company has developed “all-natural” products without using chemicals and preservatives.With this strategy, the business is thriving in giving people healthy and safe beverages. Furthermore, the exclusion of artificial sweeteners and chemical preventives allows Hitchhiker’s Beverage to provide consumers with products that have wholesome natural ingredients.

Additionally, Hitchhiker’s Beverage Company is committed to reducing the impacts of beverage production activities on the environment. The firm implements this CSR strategy throughefficient manufacturing and recycling of wastes. For example, at Hitchhiker’s Beverage, wastes are minimized by the use of paper labels, glass bottles, and tin lids that are completely recyclable.

Conclusion

In sum, Hitchhiker’s Beverage Company’s current CSR strategy is essential to its continued success. The company’s commitment to its corporate social responsibility adds value by allowing its products to remain appealing in the eyes of buyers. Moreover, the firm has been succeeded to retain the loyalty and custom of its stakeholders by adopting CSR strategies, which match stakeholder values and expectations with corporate operations. Thus, Hitchhiker’s Beverage Company’s current CSR strategy is arguably its most potent differentiator.

References

Ashton, W., Richards, G., Galatsanou, E., &Bollman, R. (2014). Food & beverage processing industry growth pathways to 2020. Brandon, M: Rural Development Institute. Retrieved from www. brandonu.ca/rdi/files/2011/02/RDI-Food-Processing-Report-2014.pdf.

Cone Communications. (2015). 2015 Cone Communications/Ebiquity Global CSR Study.

Chandler, D. (2016). Strategic corporate social responsibility: Sustainable value creation. Sage Publications.

CSR Profile of PepsiCo. (2018). CSRwire. Retrieved from http://www.csrwire.com/pages/about_us 

Hitchhiker’s Lemonade interview questions. (2018).

Ndichu, J. &Barras, R. (2018). Canada food & beverage industry: trends and opportunities. (n.d.) Alliance Experts. Retrieved from https://www.allianceexperts.com/en/knowledge/countries/america/the-food-and-drink-industry-in-canada/

Starbucks. (2018). Starbucks CSR Strategy. Starbucks.com. Retrieved from https://www.starbucks.com/responsibility/sourcing.

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