nina langen and monika hartmann

Nina Langen and Monika Hartmann

Chocolate Brands’ Communication of

Corporate Social Responsibility in

Germany

2

Firm’s intangible assets• Evaluation of and

• Loyalty

• Trust in the company

Stakeholders‘ responseFirm‘s CSR activities

Theoretical and empirical research reveals: Ethical branding can provide a critical point of differentiation

Relevance The Study Results

3

Stakeholders‘ response• Buy• Boycott

Firm‘s CSR activities• High level of complexity

• Credence attribute

Theoretical and empirical research reveals: Ethical branding can provide a critical point of differentiation


Information asymmetry

Signalling / Communication

4

Research Question


(How) do chocolate manufacturers communicate their

social and environmental engagement

to (which) stakeholders?






Chocolate: Relevance for CSR

• Most important producing country: Ivory cost

– 40 % of global cocoa production, 66 % of the cocoa processed in Germany

– Problems: deforestation, child labour, non-sustainable wages

• Companies producing chocolate

– Can influence environmental impact of cacao production

– Can change producers’ livelihood

Supply Side


• One of the most favoured luxury food in Germany 11.4 kg/person/year

consumed

• Second most important importer of cocoa after USA

• Surveys: German citizens Are strongly against child-

labour Care about externalities

and ecological production

Demand Side

Chocolate: Relevance for CSR

Supply Side


Demand Side

• Certification of cocoa is considered as

• an effective strategy to advance producers’ livelihood

• reduce environmental problems

• CSR activities of companies in the

chocolate industry can serve as important

differentiation strategy if communicated

Potential CSR communication channels• CSR reports

• Advertisement, in e.g. the store, print media, TV, radio, internet

• (Certified) labels on product packages, such as organic, Fair Trade

• Cause-related Marketing activities

Standard in Europe

Visible at the POS


http://www.fairtrade.org.uk/index.htm

8

What is Cause-related Marketing (CrM)

Marketing tool

where product purchase

leads to

target-oriented donations

regarding a

designated cause

which is

promoted on the product

by label


Study design1st Market analysis in 12/2011 (Pretest 12/2010) in Bonn• Complete inventory count of chocolate products

– Discounter: Aldi Süd, Lidl

– Full-range provider: Edeka, Real, Rewe

– Organic supermarket: Basic

– Organic store: Bergfelds

– Store: Kaufhof

• Focus: CSR communication on the products

2nd Web analysis in 01/2012 (Pretest in 01/2011)• Analysis of CSR communication on web pages of

– 6 retail brands – 10 organic/Fair Trade manufacturers brands– 31 conventional manufacturer brands


Primarily private brands

Only manufacturer brands

•1001 chocolate bars analyzed•293 if not considering different flavors

• 57 with CSR label (20 %)• 18 in conventional retail stores

=>Pretest 12/2010 – NONE•% of chocolate assortment with CSR-label

• Conv. : from 0 % (Aldi) to 13 % (Lidl)• Org.: 100 % (without organic label 46 %)

•CSR Labels on private as well as

manufactured brands•CSR label: Social and ecological 3rd party

certified production (organic, Fair Trade,

Rainforest Alliance, UTZ certified, others)

Market analysis 12/2011


Unweighted average price of chocolate bars in Euro/100 g in 2011 with and without CSR labels

AverageTotal

Price mark up CSR labeled

Discounter

Aldi Süd 0.71 ./.

Lidl 0.85 -0.15

Full product range supermarkets

Edeka 1.19 0.24

Rewe 0.93 0.64

Real 1.29 0.75

Kaufhof 2.37 0.12

Organic stores

Basic 2.81 ./.

Bergfeld’s 2.18 ./.

All stores 1.54 0.67

Results of the web analysis – selected brands

• Lindt & Sprüngli

– high-price chocolate, not available at the discount

• Ritter Sport

– medium priced, available at the discount as well as in full-range supermarkets

• Choceur

– low-price private chocolate brand only available at the discounter Aldi Süd


Brands selected - Lindt

• Lindt & Sprüngli is located in Kilchberg/Switzerland• Sales volume of EUR 1.9 billion in 2009• 7,409 employees• 100 g of chocolate cost EUR 2.20• The impression and brand image is high quality due

to Swiss production

Brands selected - Ritter Sport

• Ritter Sport is sited in Waldenbuch/Germany

• Sales of the company amount to EUR 274 Mio. in 2009

• 800 employees work for Ritter Sport

• 100 g of chocolate costs EUR 0.85

• The image is ‘dynamic’ which is influenced by advertisement and the chocolates quadratic form

Brands selected - Aldi Süd

• The home of Aldi Süd is Mülheim/Ruhr/Germany• Neither sales volumes nor number of employees reported• 100 g of chocolate of the private brand Choceur cost EUR

0.35• Aldi is the most trusted retail brand in Germany

16

Keyword Analysis

• To assess the chocolate manufacturers CSR communication

systematically the analysis started with the search for the

following keywords on the respective websites:

• Sustainability• Environment• Social• Responsibility• Health• Animal welfare

• Engagement • Company• Sponsoring• Charity• Activities


Results of the Keyword Analysis

KeywordBrand

Lindt Ritter Sport Choceur

Activities 37 25 0

Animal welfare 0 0 0

Charity 1 6 0

Company 30 52 1

Engagement 8 20 0

Environment 9 31 1

Health 6 36 0

Responsibility 21 19 0

Social 0 2 1

Sponsoring 0 0 0

Sustainability 9 6 1

Communication of CSR is of considerable greater relevance for Lindt and Ritter Sport compared to Aldi Süd

Web page analysis - Lindt


Web page analysis – Lindt: Assessment

• CSR information available on the website

• Very detailed

• Very comprehensive

• Covers all dimensions of CSR

• Company

• Not only member in some international organisations, such as the UN Global Compact and NGOs

• Also initiated own projects related to cocoa production

• Information only in English, except the annual CSR report


Web page analysis – Ritter Sport


Web page analysis – Ritter Sport: Engagement

• Ecology

• Enhancement of production processes

• Product package

• Logistics

• Energy seems to be an important field

• Energy efficiency measures presented

• Information given which energy is used in production process

• Awards mentioned, e.g. ‘Ökomanager des Jahres’, given to the CEO


Web page analysis – Ritter Sport: Details

• Long-term engagement in Nicaragua: small-farm cocoa production for Ritter Sport in a cooperative founded in 1990

– Comprehensive information provided regarding the cooperative and social implications for producer families

– A film also placed on the webpage

• Art sponsorship information:

• less detailed than information available for the other two issues

• Only shortly states that sponsorship of young artist is regarded as investment in future


Web page analysis – Ritter Sport: Assessment

• Engaged in all three dimensions of CSR• Ritter Sport is

• No member of international organisations concerned with issues such as child labour or sustainable production (or at least does not communicate this)

• Focuses its CSR activities on own initiatives, e.g. • Nicaragua engagement related to the sustainable

production of chocolate• Promotion of art in developed countries

• It remains unclear how much money is attributed to the projects


Web page analysis - Choceur


Web page analysis – Aldi: Assessment

• CSR info primarily provided regarding engagement for ecology

• Most of the activities have not only an effect for the environment but also for the profit of the company, e.g. the improvement of logistic reduces CO2 emissions and safes money

• Social dimension of Aldi’s CSR involvement mainly given by providing information on firm’s membership in international organisations (e.g. ILO) and initiatives (e.g. BSCI). Links all lead to anglophone webpages

The average German consumer might have difficulties to learn more about Aldi’s CSR engagement

• No specific engagement mentioned regarding the production of cocoa and chocolate


Summary: Web page analysis

• Considered brands provide information regarding CSR activities on web-pages

• Information differs considerably in amount, presentation, and CSR areas covered

– High-price brand Lindt & Sprüngli: engaged in various different projects to mitigate social and environmental problems related to cocoa production

– Medium-price chocolate brand Ritter Sport: as Lindt & Sprüngli. In addition engaged in projects related to art

– Low-price supplier Aldi Süd: reports no engagement with respect to cocoa production


40

Internet Analysis: Overall results• Most of the 47 companies communicate CSR related information

on their websites– Exceptions: e.g. Trumpf-Schogetten; Alpia, Feadora

• Considerable heterogeneity in form and amount of CSR related communication

• On average, most comprehensive by organic/Fair Trade manufacturer brands and least so by retail brands– Exceptions: Lidl and Rewe

• Cocoa production not always addressed on CSR sites

• Formality of communication– Highest by retailers (addressee: NGOs, etc.)

– Relative low by manufacturer brands (addressee: consumer)

• Neither price nor enterprise size seem to determine the level of CSR communication


Formality of communication Who is adressed?

• Stakeholder groups, e.g. activists and NGOs

• CSR communication in this respect might be primarily seen as reducing pressure from those groups thereby maintaining the ‘license to operate’

Further qualitative analysis, e.g. • Focus groups with consumers to gain insights into

consumers’ feelings when being informed about problems related to production of cocoa

• Expert interviews with managers could help to understand the motivation not to advertise CSR involvement directly to consumers


To sum up

Research Answer: Yes, more in the internet than on products,

form and level very heterogeneous






Open questions:• Which determinants can explain heterogeneity in CSR

communication?• How do stakeholders perceive CSR communication in the

chocolate sector and what are the influencing factors?• Better use scanner data?

Nina Langen and Monika Hartmann

Chocolate Brands’ Communication of

Corporate Social Responsibility in

Germany

Thank You

44

By working with a strict Code of Conduct , UTZ CERTIFIED sets stringent requirements for the farmers when it comes to the sustainable growing of coffee, cocoa and tea. Farmers are trained in the area of business skills, labor conditions and environmental protection, and their operational management is checked by independent third parties. The UTZ CERTIFIED traceability system subsequently guarantees that the raw materials have actually been grown and harvested in a responsible manner.

Number of chocolate bars sold in the market with and without CSR labels in 2011

Without label With CSR label

Considering different flavours

Not considering different flavours

Considering different flavours

Not considering different flavours

TotalOwn

brandTotal

Own brand

TotalOwn

brandTotal

Own brand

Discounter

Aldi Süd 14 13 10 9 0 0 0 0

Lidl 81 46 32 16 8 8 4 4

Full product range supermarkets

Edeka 171 3 71 1 4 0 4 0

Rewe 122 22 37 7 9 3 4 1

Real 220 25 56 9 12 0 5 0

Kaufhof 242 0 48 0 3 0 1 0

Organic stores

Basic 99 0 28 0 99 0 28 0

Bergfeld’s 52 0 11 0 52 0 11 0

Total over all stores

1001 109 293 42 187 11 57 5

Brand ManufacturerOr-ganic

Fair Trade Utz CertifiedRainforest Alliance

Other labelPoint of Sale

Bellarom

Lidl

X Lidl

FairGlobe X Lidl

Fin Carré X Auf dem Weg nach Morgen Lidl

Rewe Bio Rewe X X Rewe

Marabou

Kraft Foods

XRewe RealEdeka

Daim X Rewe

Cote d´or (Sensations)

XKaufhofEdeka

Hachez (Wild Cocoa de Amazonas 45% Cocoa) Bremer HACHEZ

Chocolade GmbH & Co. KG

Mit dem Kauf dieser Tafel retten Sie 6 m² Regenwald

Real

Hachez (Wild Cocoa de Amazonas 70% Cocoa)

wild gewachsener Cacao - Zertifiziert durch Regen-

waldinstitut e.V.Real

Sarotti Bio Sarotti X Real

Ritter Sport BioAlfred Ritter GmbH & Co KG X

Real, Edeka

Balisto Joghurt-Beeren-Mix

Mars GmbH X Edeka

Rapunzel Rapunzel X X Hand in HandBasic Bergfeld

Zotter Zotter X X Basic

Naturata Naturata AG X X Basic

Gepa GEPA X X Naturland Fair Basic

Schönenberger Swiss Choco Roc

Chocolat Schönenberger

X X Basic

Rio Napo Original Food GmbH X Geo schützt den Regenwald e.V. Basic

47

Internet Analysis – retail brands

• Six retail brands – Lidl, Aldi Süd, Rewe, Real, Edeka, dennree

• Language– German

• Most detailed information– Lidl and Rewe: adressing the society, environment (only

within Germany) and employees

• Cocoa production adressed– By none of the retail brands

• Addressee– CSR professionals and consumer

• Figures provided– No


48

Internet Analysis – organic/Fair Trade manufacturers brands• Ten brands • Language

– All German; Gepa: Spanish, English; Natudis; Pronatec, Rosengarten, Vivani: also English

• Most detailed information– Engagement for not only the local but also the global

environment– Fair communication and handling with suppliers addressed by 7

• Cocoa production addressed– By Gepa, Naturata, Rapunzel, Zotter

• Addressee– consumer, information provided in less formal manner compared

to the retailers

• Figures provided– Some, e.g. Rapunzel and the Hand in Hand projectRelevance The Study Results

49

Internet Analysis – manufacturer brands

• 31 brands • Language

– Extremes: Several: Milka, Ritter Sport, Zentis. No German: Marabou

• Most detailed information– No CSR info: Aero, Alpia, Feadora, Johan Lafer Confiserie

Collection, Lohmann, Piasten Schokolade

• Cocoa production addressed– By Balisto, Hachez, Milka, Ritter Sport, Valrhona

• Addressee– Consumer: more hands-on communication via interactive games,

music, films, photos, see Balisto, Cote D’or, Hachez, Marabou, Milka, Schogetten

• Figures provided– Milka; Hachez explains online their wild cocoa de Amazonas

charity promotion Relevance The Study Results

First insights and further research needs• Awareness in the chocolate sector regarding social and

environmental problems related to cocoa production • 20% of chocolate bars provide CSR related labels

(organic stores 50% if not counting bio-label)• Most companies communicate their CSR involvement on their

websites though to a considerable different degree

• Open questions:• What are the determinants that can explain chocolate firm’s

different efforts with respect to CSR and CSR communication.

• Which role plays CSR communication for stakeholders’ perception and decisions in the case of chocolate and what are the influencing factors.


nina langen and monika hartmann

Documents

analysis of csr communication

csr labels

study resultsone

study resultshow

study resultsstudy

study resultsunwei

chocolate manufacturers

chocolate industry