Supermarkets’ reputations: collaborative action is not bananas  

The UK’s supermarket retail sector is intensely competitive. Winning slivers of market share, gains in like-for-like sales, and unearthing reputation and brand advantage, determines both real and perceived success.

There are good reasons for this fierce culture of competition. The last thing customers need during a cost-of-living crisis are big food giants coming together to fix prices or to break key protections set out in commercial law.

Cut throat as it may be, competition brings huge benefits for consumers. In an inflationary environment, for example, many value its tangible impact on the price of staple consumer goods.

But over the past few years, some aspects of that competition have been changing. From fighting food waste through to green energy policies, we’ve seen signs that the big grocers are prepared to put competition to one side if there can be a clear benefit for the planet.

That makes this week’s news that British supermarkets are working together with the Fairtrade Foundation to create an inaugural buying coalition for ethically sourced bananas, coffee and cocoa, all the more significant.

The reason for the scheme, known as the Shared Impact Initiative, is climate change. The initiative would allow the creation of long-term (three-to-five year) contracts with farmers in South American and African countries, giving them the security of income to invest in practices that combat the impact of a warming planet, such as using organic fertilisers.

The enabler of the scheme is the CMA. Last November, the regulator issued its Green Agreements Guidance. In essence, this is an informal code which enables collaborative action, which previously would have been deemed anti-competitive, across industries which pertain to tackling climate change.

It is recognition that we are entering a new economic era, where a corporation’s ability to collaborate with external stakeholders to address shared, grand challenges needs to be delivered alongside a more traditional commercial strategy. This ability to be ambidextrous – both collaborative and conventional – will be a source of significant competitive advantage in the years to come as the impacts of climate change intensify with every increase in the concentration levels of greenhouse gases in our atmosphere.

It is responsibility of the Corporate Affairs team within an organisation to enable a corporate to thrive in this era. A business’s reputation with its external stakeholders will determine its ability to collaborate effectively with them to improve the health of the entire ecosystem in which it does business. Effective, long-term stakeholder relationships will create supply chains which are more adaptable to climate-related shocks, unearth innovative thinking and partnerships, help organisations meet the demands of incoming regulatory standards, and enable purposeful stories to be communicated to customers.

To succeed, Corporate Affairs teams need to build new muscles. In business school parlance, they need to know how to collaborate with their “ecosystem” in deeper ways than previously required, whilst maintaining their “egosystem” approach, using traditional communication and engagement tactics with stakeholders to support the delivery of their business-as-usual commercial plans.

There are three priorities to consider if you’re a modern-day Corporate Affairs Director.

Firstly, do you have the internal culture that enables effective external collaboration? If the Corporate Affairs team cannot effectively work with – for example – marketing, legal and risk functions, then it is highly unlikely to be well suited to collaborating in long-term partnerships with competitors and third parties.

Secondly, do you know how to harness the convening power of your brand? To collaborate effectively requires the ability to convene numerous stakeholders to diagnose and discuss how best to address grand challenges.

And lastly, do you have the skills and resource to spend more time nurturing collaborative initiatives? Ask anyone who has attempted to deliver a multi-stakeholder communications campaign, and they will tell you instantly that genuine, meaningful collaboration is difficult and requires high levels of openness, integrity and, often, uncomfortable compromises. Knowing how to do this at scale, and regularly, will demand the upskilling of corporate affairs teams to act increasingly as diplomatic forces for the organisation.

Climate change is the grandest of shared challenges. As Britain’s supermarkets’ collective buying scheme shows, it will require businesses to behave in collaborative ways that have not previously been required, putting an emphasis on Corporate Affairs teams to think about the strategic importance of their corporate reputation in a new light. The last thing we need is collaboration to promote cartel-like behaviour, but when it comes to the planet’s future health, it’s increasingly bananas not to behave as a Collaborative Corporate.

To download your copy of the Collaborative Corporate report, click here.