Dairy Firms Research Articles

Firm-level capabilities and response to a negative export shock: 2014 Russian embargo on the West

This paper investigates the resources and capabilities that determine firm-level adjustments after a sudden unexpected closure of a major export market. We focus on the effects of the 2014 Russian embargo on Western food exporters using the example of Estonian firms. The paper applies a novel multimethod approach consisting of Study I quantifying the embargo effect on the trade diversion of firms that had exported embargoed goods to Russia, and Study II conducting a multiple case study into three dairy exporters highly affected by the embargo. Study I employs a difference-in-difference model with matched exporters of embargoed goods as treatment. Study II builds on extensive document analysis that serves as input for interviews with the CEOs of the sample dairy firms. We find that pre-shock productivity is on average a good predictor of post-shock firm trade diversion (Study I), however, we specify that the key firm-level resources and capabilities necessary for successful post-shock adjustments might not be reflected in the standard quantitative productivity level measures (Study II). We conclude that key firm-level resources and capabilities for embargo-resilience are the quality of exporting experience, competitive product-market matching, absorptive capacity, and managerial vision and empowerment.

A Case Study on Brand Personality and Consumer Loyalty in India's Booming Dairy Industry

India's dairy industry is witnessing significant growth, driven by factors such as rising disposable incomes, evolving consumer preferences, and the emergence of foreign brands. As the market expands, establishing a strong brand image becomes essential. This research focuses on assessing the brand personality of AMUL, a prominent player in the Indian dairy market, and its influence on consumer loyalty. Utilizing a structured questionnaire administered to respondents in Coimbatore District, this study measures consumers' attitudes towards AMUL, its brand personality. Through exploratory factor analysis, four key dimensions of AMUL's brand personality viz., activity, simplicity, responsibility and emotionality are identified. The findings reveal a positive correlation between brand personality and consumer attitude, indicating the importance of personality in brand perception. The study underscores the importance of aligning branding efforts with consumer preferences and suggests strategies for AMUL to enhance its brand image and brand personality. By leveraging these insights, AMUL and other dairy firms can effectively engage consumers, strengthen brand equity, and sustain market competitiveness in India's dynamic dairy landscape.

Industria láctea en Costa Rica: desafíos y oportunidades para su desarrollo sostenible

This article addresses the contemporary status of the dairy industry in Costa Rica, emphasizing the challenges and opportunities it presents for its evolution. A thorough analysis of the industrial structure, production, employment generation, and the dynamics of exports and imports in relation to preferential tariff fluctuations is conducted. During the study period, a significant increase in Costa Rican dairy production is highlighted, and notable challenges are pinpointed, including tariff changes under the Central America Free Trade Agreement (CAFTA) and heightened competition with global dairy firms. Nevertheless, the vast potential for establishing market differentiators and capturing niche segments in this industry is underscored. The importance of institutional backing and the execution of strategies, designed in synergy between public and private sectors, is accentuated. The study’s outcomes suggest that the competitiveness of the dairy sector, both locally and internationally, is crafted through the amalgamation of efforts in pursuit of a favorable environment. The article concludes with recommendations aimed at amplifying industry competitiveness and advocating sustainable growth.

WORKING CAPITAL MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF DAIRY PROCESSING FIRMS IN KENYA

The significance of the dairy sector in Kenya’s economy cannot be over emphasized. This is because the sector contributes 4% of the national gross domestic product and 19% of the agricultural gross domestic product for an economy that heavily relies on agriculture. Working capital plays a critical role in the success of commercial entities. This study sought to determine the effect of working capital management practices on the financial performance of dairy processing firms in Kenya. The general objective of the study was to determine the effect of working capital management practices on financial performance of dairy firms in Kenya. The specific objectives of the study were to establish the effect of inventory management practices, debtor’s management practices, creditors’ management practices and cash management practices on financial performance of dairy firms in Kenya. The theories that guided the study are; Keynesian liquidity preference theory, Cash Conversion Cycle theory, Stewardship theory, Risk return trade-off theory and Transaction Cost Economics Theory. The study population comprised the 221 dairy processing firms classified as major and mini processors by the Kenya Dairy Board. Stratified random sampling technique was used to select a sample size of 69 firms for the study. Self-administered structured questionnaire was used for data collection. A pilot study was conducted to test for the validity and reliability of data measuring instruments. Descriptive statistics namely mean, variance and standard deviation, and inferential statistics namely, correlation, simple and multiple regression was used for data analysis. The results of the analysis were presented using tables. The diagnostic tests to be performed in the study included Normality, Linearity and Multi - collinearity. A statistical package for social sciences software was used to aid the data analysis. Results indicated that inventory management was a key predictor of financial performance. Results indicated that debtor’s management practices were a key predictor of financial performance. Correlation outcomes of the results showed that credit management, and cash management had a positive and statistically significant relationship with the financial performance of dairy firms in Kenya. The regression results showed that cash management and creditors management have a direct positive effect on the financial performance of dairy firms in Kenya. The study recommended that Dairy Firms directors should develop a policy on credit collection detailing the policies and practices to be followed by the Dairy Firms. To enhance their accounts receivables and remove bad debts while boosting sales and inventory turnover, farm owners should rigorously follow up on debts, assess consumers before providing debts, give incentives for early debt payments, and build a solid debt management strategy. Dairy Firms may generally keep the standard payment interval longer than the average collection period to limit receivables payments for short-term needs, lowering finance expenses.

Value of certification in collective reputation crises: Evidence from Chinese dairy firms

Collective reputation crisis incidents imply considerable negative within-sector spillovers. Understanding how to reduce such negative spillovers is crucial for industry development, especially in the food industry where information is asymmetric. As certification is an important tool to reduce information asymmetry in product quality, it’s role in reducing such spillovers needs to be discussed systematically. First, we use an analytical model to reveal the effects and mechanisms by which certification helps dairy firms resist the negative spillovers of collective reputation crises. Next, we study the effects of certification in the context of a large-scale dairy scandal in China. Using firm-level microdata, we empirically analyze the effects of adopting certification on improving innocent firms’ return on capital. The results show that in the year of the scandal, the return on capital of firms without certification was significantly negatively affected while that of firms with certification was not affected. In the wake of the scandal, adopting certification helped dairy firms effectively improve their return on capital, but these effects diminished over time. In addition, the effects are larger for firms with lower established reputations, such as new and non-state-owned dairy firms.

The “milky ways”: emerging sustainable business models for sustainable value creation in the dairy industry

PurposeThis study aims to analyse the components of sustainable business models (SBMs) in the dairy industry, in relation to firm-relevant organisational features (size, ownership structure and production process) and through the lenses of the business model framework and the sustainable value exchange matrix (SVEM). This contribution proposes a taxonomy of emerging SBMs and sustainable value creation in the dairy industry.Design/methodology/approachThis research makes use of a multiple case study approach, with cases selected in collaboration with industry experts. The selected firms are highly committed to sustainability transition. Results are drawn from qualitative data obtained from in-depth interviews and secondary sources. The interpretation phases, initially based on open coding, have been enriched by applying the components of business models (BMs) frameworks and the SVEM, and the analyses have been enhanced through an additional interpretative workshop with experts.FindingsThe authors related the BMs characteristics of some typical dairy firms transitioning to sustainability, using SBM components and taxonomies emerging in the literature, based on the formalisation of sustainability practices, the scope of operations, and the degree of integration of the three dimensions of sustainable value. These findings led to the discovery of three types of SBM in this dairy industry, referred to as “Milky Ways”.Originality/valueThis paper contributes to the scant literature on sustainability in dairy firms, highlighting the different paths followed by small and medium-sized enterprises (SMEs), cooperatives and large companies in remoulding their business models towards sustainability and thus achieving sustainable value creation.

Sustainable Supply Chain Management Practices in the Dairy Industry: A Comparative Study of Leading Dairy Firms and Future Research Directives

The Indian dairy industry is one of the fastest growing industries in the world which employs millions of farmers directly and also participates more than five per cent in the economy as well. As the industry continues to expand there is a growing need to adopt sustainable practices in the supply chain to minimize negative impact on the environment and society and ensure viability. The present research aims at examining the supply chain management practices of the two leading dairy firms -Amul and Danone. The study relies primarily on secondary sources like peer-reviewed journals, authentic websites and reports. A case study-based approach has predominantly been used to compare two leading firms in the dairy industry with respect to sustainable practices across the supply chain. Key aspects such as the scale of dairy production, technology adoption, pricing, traditional supply chain management, artificial intelligence in sustainable supply chains and logistics management in select dairy firms have been critically reviewed for comparison purposes. The study identified the various problems and challenges being faced by the Indian dairy industry. The study found that Amul and Danone both have focused on sustainable and green practices. However, Danone’s ability to incorporate and enable technology has helped in improving efficiency across the supply chain making the chain sustainable. On the other hand, Amul lacked the adaptation of emerging technologies across its supply chain. The study suggested the exploration of artificial intelligence that might help in achieving a sustainable supply chain in Indian dairy firms.

Sustainable Performance Assessment towards Sustainable Consumption and Production: Evidence from the Indian Dairy Industry

The current global economic status quo is widely seen as unsustainable in the food sector. The field of sustainability science is still rather fragmented, covering a wide range of techniques and issues, despite the large number of publications in this area. Due to population growth, the food supply chain (FSC) and farmers have to produce more food. The UN estimates that one-third of edible food is wasted, producing greenhouse gases. A balance must be struck between company operations and social, environmental, and economic activities for sustainable development of the FSC. To assist FSC organizations in managing sustainable advancement, this study created a methodology for the assessment of sustainable performance. We provide a sustainable assessment system using a fuzzy analytic hierarchy process, fuzzy VIKOR, and fuzzy TOPSIS. Our research framework evaluated the sustainability of three cooperative-society-run Indian dairy firms. Our study gives environmental criteria the highest weight (0.33) and social criteria the lowest (0.16), with economic reasons (0.306) and business operations (0.204) falling in the middle. Supply chain costs, on average, are given the highest weight, and capacity utilization, the lowest weight. Three dairy industries are ranked (DPI3, DPI1, and DPI2) based on sustainable performance. By modifying the maximum set utility value and validating VIKOR results with TOPSIS, we have checked the robustness of this performance assessment tool. This research aids dairy businesses in achieving several Sustainable Development Goals, including sustainable production and consumption, through the regular assessment of their sustainable performance.

A new fuzzy DEA network based on possibility and necessity measures for agile supply chain performance evaluation: A case study

With respect to the necessity (Nec) measure, suggesting by Dubois and Prade, there is a dearth of any procedure or formula to deal with equality chance constraints. Therefore, this study attempted to introduce (Nec) and possibility (Pos) equality constraints in a real-case network non-oriented slack based model problem via agile supply chain (ASC) theory. The efficiency of different levels of agility of a dairy supply chain (SC), using a new fuzzy network Date Envelopment Analysis slack based model (FNDEA-SBM) on the basis of (Pos)/(Nec) measures, has been measured in this paper. The measurement took place in a multi-stage process. Since the agility features were rather qualitative in nature, the measures were likely to be delineated subjectively using linguistic expressions and fuzzy data. The application of (Pos)/(Nec) measures and different confidence levels made decision makers capable of getting information of all efficiency and sub efficiency scores through optimistic-pessimistic lenses and taking appropriate decisions on the basis of different optimistic-pessimistic points of view and confidence levels. The validity of the suggested approach was demonstrated through a real-life case study related to Iranian top twenty dairy firms. The results indicated the success of the suggested approach and computations were straightforward.

Life Cycle Based GHG Emissions from Algae Based Bioenergy with a Special Emphasis on Climate Change Indicators and Their Uses in Dynamic LCA: A Review

Life cycle-based analysis is a key to understand these biofuels’ climate benefits. This manuscript provides a state-of-the-art review of current biofuel production, primarily through algae-based routes. Standalone biofuel production has an unfavorable environmental and energy footprint. Therefore, industrial symbiosis is required to reduce the environmental impacts of biofuel. The availability of waste heat, CO2, renewable energy, and colocation of other industries, especially renewable energy and dairy firms, have been demonstrated beneficial for producing biofuel through the algal route. Dynamic life cycle assessment (DLCA) issues were discussed in detail. DLCA is one of the highlighted areas of the Life Cycle Assessment (LCA) paradigm that can improve the applicability of climate change indicators used in the LCA. Various climate change indicators, global warming potential (GWP), global temperature change (GTP), and climate tipping point (CTP) were discussed in detail. Special emphasis was given to waste-based bioenergy production and its LCA as this route provided the lowest GHG emissions compared to the other bioenergy production pathways (e.g., from energy crops, using lignocellulosic biomass, etc.). The use of LCA results and modification of life cycle inventory (e.g., modification in the form of the regional energy mix, dynamic Life Cycle Inventory (LCI), etc.) was another highlight of this study. Such modifications need to be incorporated if one wants to improve the applicability of LCA results for net zero target analysis.

Da li postoji veza između duga i profitabilnosti - primer industrije mleka u Srbiji

This paper analyzes if there is a relationship between debt and profitability in the dairy sector in Serbia. The research analyzed the period from 2017 to 2021, on a sample of all 16 large and medium dairy companies. Large and medium companies cover around 90% of total dairy production in Serbia. The Generalized Method of Moments (G.M.M.) is used to analyze the effect of debt indicator DR on the profitability ROA. Analyzed is if there is a linear relationship between two indicators and then a nonlinear one. Results showed that there is a linear and negative impact of debt indicators on the profitability of the observed dairy firms. Results showed that the nonlinear relationship is not statistically significant. Both models show the positive impact of company size and growth potential on profitability, while tangibility and inflation do not have a significant impact.

Application of novel technologies to reach net‐zero greenhouse gas emissions in the fresh pasteurised milk supply chain: A review

This review assesses the potential of three novel technologies (3‐nitrooxypropanol, ultraviolet C light cold pasteurisation and biochar) to reduce the carbon footprint produced by the fresh milk supply chain at global level. In addition to the adoption of these technologies: (i) new policies should enhance the development and implementation of international standards to optimise the quality and safety of such technologies whilst facilitating their traceability; (ii) dairy firms and technology start‐ups should benefit from worldwide emissions trading systems to limit technology implementation costs; and (iii) consumers could participate in the net‐zero challenge by adopting easy‐to‐apply sustainable practices, thus reducing their milk carbon footprint.

Application of Value Stream Mapping for Lean Operation: An Indian Case Study of a Dairy Firm

In recent times, there has been greater awareness of safety issues, emerging risks and challenges in food supply chain. To this effect, transparency, traceability and information flow have become mandatory to minimize waste in the farm to fork supply chain. Furthermore, value stream mapping is well known for detecting and reducing waste in manufacturing by streamlining value-added (VA) activities, minimizing the non-value-added but essential (NVAE) activity, and removing non-value-added (NVA) activities. The processing time of milk collection, processing, storing and supplying dairy products is obtained from the dairy firm located at Rewari, Haryana (North India). With the help of the processing time of each step, we calculated the lead time for the dairy supply chain. A diagram depicting the process is created to represent the operation’s current status known as current stream map. VA, NVAE and NVA activities are identified inside and between each process, depending on its time and resource consumption. The process is evaluated for the possibility of significantly reducing and simplifying it to the minimum possible steps. By decreasing waste, the process throughput speed increases, and the lead time for the dairy supply chain decreases. Implementing the lean tool reduces lead time by approximately 34.79%.

Go green! Measuring the factors that influence sustainable performance

This study examines the GHRM practices and the transformational leadership specific to environmental sustainability of Pakistan's dairy industry. It also investigates the mediating role of pro-environmental behaviour in the relationship of GHRM practices, The environmental-specific transformational leadership, and sustainable behavior. Additionally, the study examines the moderating role of the pro-environmental attitude between GHRM practices and The environmental-specific transformational leadership. The target population consists of employees working in dairy organizations of Pakistan. A simple random sampling technique was used for data collection. A survey questionnaire method was used to collect data; after data screening a total of 430 responses were subjected to SEM for analysis. The findings indicated that the GHRM practices play a significant role in improving employee environmental and sustainable behavior. The environmental-specific transformational leadership positively affects the pro-environmental behaviour of employees, but its impact on sustainable performance is insignificant. In addition, GHRM practices and environmental-specific transformational leadership have been shown to indirectly contribute to sustainable performance through environmental behavior. The pro-environmental attitude moderates the effect of GHRM practices and environmental-specific transformational leadership on pro-environmental behavior, and pro-environmental behavior leads to sustainable performance. This study is one of the rare attempts to examine the integrated impact of GHRM practices and environmental-specific transformational leadership on pro-environmental behavior and sustainable performance in the domain of environmental management. It explicitly offers insights into the literature by developing a mechanism to improve sustainable performance through GHRM practices and environmental-specific transformational leadership in the dairy industry. The findings of this study have postulated that a package of GHRM practices and environmental-specific transformational leadership is needed to build pro-environmental behavior and foster sustainable performance. It can help managers in their effort to build environmental friendly behavior under the lens of a pro-environmental attitude that facilitates sustainable performance. Aligned to cope with the increasing environmental concerns of the dairy industry, this study proposes that managers would support specific transformational environmental leadership along with green discipline by raising pro-environmental behaviour under the lens of a pro-environmental attitude for the implication of environmental policies to achieve sustainable performance of dairy firms.

Product Innovation and Export Strategy: An Application to French Dairy Firms

Product Innovation and Export Strategy: An Application to French Dairy Firms

Commodity risk in European dairy firms

Abstract We apply a multivariate mixed-data sampling (MIDAS) conditional quantile regression technique to understand the dairy commodity exposure of European dairy firms. Leveraging a theoretically sound hedonic dairy pricing framework, we show that our approach is able to identify both market and operational risk. Profit margins for butter and milk price are particularly important for operational performance. Additional tests are provided, including an application of MIDAS quantile on a period of amplified dairy market risk. Our approach thus allows dairy firms to gain new perspectives on the significant risks posed by the current structure of dairy production in Europe.

Corporate social responsibility reporting in the food industry—Comparison of co‐operatives and investor‐owned dairies

AbstractCorporate social responsibility (CSR) has become a central issue in the dairy industry. While it is well established that each company in a chain contributes to that chain's CSR, the role of co‐operatives as a predominant organizational form has been understudied. Due to specific characteristics of co‐operatives, one may hypothesize that these member‐based dairies put a higher value on sustainability than investor‐owned dairy firms. No previous study deals explicitly with the contents of CSR reports in the dairy industry, differentiating between co‐operative and investor‐owned dairies. We adapt an existing set of criteria to examine CSR reports from 13 German dairies and complete the picture by analyzing their websites. A comparison of formal, quality‐related, and content‐related criteria suggests that co‐operative dairies report in a higher quality and more extensively about sustainability. The results provide first insights into organizational form‐specific differences in sustainability reporting. Our findings highlight areas in which dairy companies can become more sustainable.

Alternative dairy firms raise funds

Alternative dairy firms raise funds

Factors driving indebtedness among small- and medium-sized dairy companies

PurposeWe developed a model to demonstrate how multiple interrelated aspects of a firm influence its recourse to third-party financing, which frequently depends on the characteristics of each food production chain.Design/methodology/approachWe conducted an empirical research on a relevant sample of small- and medium-sized Italian dairy firms. Our research methodology is inspired by the grounded theory (Glaser and Strauss, 1967).FindingsOur findings illustrated that firm indebtedness is the result of intertwined variables, linked to different firm dimensions, including growth, financial structure and economic dynamics.Research limitations/implicationsA portion of the analysed phenomenon is not explained using the sample and econometric tools.Practical implicationsThere are practical implications for the decision-makers in a firm (in particular, the managers and the shareholders) as the model allows to evaluate the influence of a set of mutually interdependent firm variables for the indebtedness level.Originality/valueFirst, we considered the recourse to third-party financing within the context of the systems theory (Millová and Blatný, 2015) and from the perspective of linked causes and mutually connected variables. Second, our research focussed on a well-defined food chain and on features of firms operating in this context. Last, our model considered the impact of the recent economic crisis, which motivated us to review the existing models.

Comovement of dairy product futures and firm value: returns and volatility

This study investigates the exposure of dairy firm stock prices to the prices of dairy product futures, in terms of returns and volatility, from May 2013 to April 2018. Stock price returns are regressed against an index of the futures price returns to four dairy products – milk, cheese, butter and dry whey – to isolate the effects of the dairy futures price returns. Dairy product futures price returns are found to be significant in the regression in the first three years of the sample period, with a mean coefficient of −0.024. Using the Diebold‐Yilmaz volatility spillover method of forecast error variance decomposition, we show that the volatility of the four dairy product futures accounted for an average of 5.49 per cent of the volatility of dairy stock prices. These results suggest that the prices of dairy firms have minimal exposure to dairy product futures prices. This has implications for dairy firms and investors, who seek to understand volatility and returns in the dairy products and the stocks they trade in, and for policymakers, who seek to control or mitigate undesirable dairy product price volatility.