The adoption of Voluntary Sustainability Standards (VSS) and value chain upgrading in the Brazilian coffee production context

Abstract

With the spread of sustainable thinking, people have come to recognize that profitability is not the only element for the long-term success of businesses. Of equal importance is the issue of the use of natural resources and people's living conditions. Within this realization, consumers' interest in knowing the implications of their consumption is increasing through information on how products and services are produced. This increasingly leads organizations to seek to differentiate their brands through Voluntary Sustainability Standards (VSS). In this context, the aim of this paper is to present a taxonomy of value chain upgrading types through VSS adoption by farmers. Empirical evidence to test the proposed framework is presented focusing on the adoption of the 4C system by coffee farmers in Brazil. Although all five types of upgrading were identified in the field research, most of the improvements can be characterized as environmental. Furthermore, the results indicated that the adoption of the 4C standards was an upgrading form for farmers to enhance the coffee production process, as well as to control management activities within the production unit. The paper is innovative in integrating and proposing a framework for the value chain by adding value through VSS. It also empirically applies the proposed framework in the context of the Brazilian coffee chain.