A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Nguyen, Giang N. T.; Sarker, Tapan Article Sustainable coffee supply chain management: A case study in Buon Me Thuot City, Daklak, Vietnam International Journal of Corporate Social Responsibility (JCSR) Provided in Cooperation with: CBS International Business School, Cologne Suggested Citation: Nguyen, Giang N. T.; Sarker, Tapan (2018) : Sustainable coffee supply chain management: A case study in Buon Me Thuot City, Daklak, Vietnam, International Journal of Corporate Social Responsibility (JCSR), ISSN 2366-0074, Springer, Cham, Vol. 3, Iss. 1, pp. 1-17, http://dx.doi.org/10.1186/s40991-017-0024-x This Version is available at: http://hdl.handle.net/10419/217410 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ www.econstor.eu Nguyen and Sarker International Journal of Corporate Social Responsibility International Journal of (2018) 3:1 DOI 10.1186/s40991-017-0024-x Corporate Social Responsibility ORIGINAL ARTICLE Open Access Sustainable coffee supply chain management: a case study in Buon Me Thuot City, Daklak, Vietnam Giang N. T. Nguyen1 and Tapan Sarker2* Abstract This paper aims to analyze and discuss the evolution towards sustainable coffee supply chain and its management in Vietnam. Coffee is a major agricultural export commodity of Vietnam with the export value accounts for 3% of national GDP in 2014 and provides a livelihood for approximately 2.6 million people. However, the sector is facing enormous challenges as the current farming methods and processing infrastructure have been unsustainable resulting in many catastrophic impacts on the environment such as deforestation and soil degradation that have the potential to lead to a decrease in the quality of coffee beans. Using a case study in Buon Me Thuot City, Daklak, Vietnam, the paper analyses the key factors influencing the sustainable coffee supply chain management in Vietnam. Our analysis confirms that although productivity is high, and farmers have positive experiences in this sector, sustainability issues are emerging. For instance, the farmers have experienced soil erosion and a lack of water and as such are now more willing to incorporate sustainability initiatives in their production and processing. Keywords: Coffee supply chain, Sustainability, Case study, Vietnam Introduction decrease in yields, increase in insect pests and diseases Coffee is a major agricultural export commodity of on crops (Schmitter et al. 2010). Many researches con- Vietnam with the export value accounts for 3% of firms that the rural poor dwellers are one of the most national GDP in 2014 and provides a livelihood for ap- vulnerable residential group to environmental deterior- proximately 2.6 million people (Vietnam Customs 2015). ation as their livelihoods mainly depend on natural Following Brazil, since 2000 Vietnam has continuously resources (Dasgupta et al. 2003). A meta-analysis of been the world’s second-largest exporter of coffee, typic- (Rahmann 2011; Bennett and Franzel 2013) states that ally to EU and US markets, which shows a positive out- the level of biodiversity in sustainable farms (such as or- look for the future of this sector (Marsh 2007). However, ganic farms, fair-trade farms) is higher than conventional numerous challenges need to be overcome in order to farms. Sustainable farming is cost-effective system that make it happen. Currently, less than 10% of Vietnamese have significant impacts on poverty alleviation, sustain- coffee is grown sustainably, compared with 75% in Latin able development in under-developed nations around America (Mistiaen 2012). With the increase in global the world (Kilcher 2007). According to (Crowdera and market requirements, the competitiveness of Vietnamese Reganold 2015; Nemes 2009; Ramesh et al. 2010), sus- coffee is being threatened. For example, people still use tainable farms provide farmers with higher economic many unsustainable farming methods such as monocul- profitability by 22 to 35% compare to others thanks to tures, burning of crop residue, poor fertility manage- higher yields and price premiums of sustainable prod- ment, tillage, etc. which results in many catastrophic ucts. Therefore, sustainability will need to be compre- impacts on the environment – such as deforestation and hensively addressed in coffee production to improve the soil degradation – have the potential to lead to a uses of natural resources for human needs without dam- aging the environment (Nguyen and Yapwattanaphuna * Correspondence: [email protected] 2015). Also, sustainable approach enables farmers to use 2Griffith Business School, Griffith University, Brisbane, Queensland, Australia their knowledge and skills more effectively. However, the Full list of author information is available at the end of the article © The Author(s). 2018 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. Nguyen and Sarker International Journal of Corporate Social Responsibility (2018) 3:1 Page 2 of 17 factors impact on farmers’ adoption to a new sustainable Literature review: Sustainable supply chain agricultural practice vary widely from farmers’ percep- management tion, the characteristics of the new practice to resource Interest in sustainable supply chain management has in- endowments, socio-economic status, demographic char- creased significantly in both academic research and in- acteristics, and access to institutional services (Negatu dustrial practices since the minimisation of the adverse and Parikh 1999). The government is aiming to reach impacts of human activities and the maintenance of sus- 65% of sustainable coffee production by 2018, which will tainable social development have become central help to preserve the environment, improve the living concerns globally (Beamon 1999; Prokesch 2010). First, standards of the farmers and ensure a steady coffee sustainability is defined as the capability to meet current supply for food processors (Mistiaen 2012). demands without compromising the ability of future Hence, the purpose of this paper is to study the current generations to meet their needs (World Commission on situation of the supply chain of Vietnamese coffee in Buon Environment and Development 1987). Linking the three Ma Thuot City, Dak Lak Province, Vietnam, to examine pillars of sustainability and supply chain management the issues related to the development of sustainable coffee means managing a complete supply chain life-cycle, and to build up a logistic model that will explain the cor- from product design, procurement, logistics, knowledge relation between those factors and the decision to join the management, marketing, and operations to return and sustainable coffee program. This study also propose some disposal, with the explicit considerations of sustainable suggestions to increase the competitive advantages of the development factors such as economic, environmental commodity, as well as to help coffee farmers to be more and social elements (Kolk and Tulder 2010; Morali and flexible in a constantly changing market. Searcy 2012). A sustainable supply chain is essential This research investigates the opinions of local for competitiveness with regard to price, quality, farmers through quantitative surveys. Qualitative in- dependability, flexibility and responsiveness (Markley terviews are also used to interview 23 local collectors and Davis 2007). and the staff of five famous large coffee manufactur- Over the last few decades, many companies have put ing companies to provide an overview of the situ- notable financial investment in socially and environmen- ation. SPSS was used to analyse the data and run the tally responsible business but the real contribution of logistic regression model. The data were complemen- these investment to the economic performance has been ted by documentary analysis, including internal data a matter of controversy (Carter and Easton 2011; and interview documents. Hoejmose and Adrien-Kirby 2013). Zhu and Sarkis The paper provides empirical research about the (2007) pointed out that the