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European Journal of Economic and Financial Research ISSN: 2501-9430 ISSN-L: 2501-9430 Available on-line at: http://www.oapub.org/soc Volume 2 │ Issue 4 │ 2017 doi: 10.5281/zenodo.1009174 ETHICAL SOURCING TO ENSURE SUSTAINABILITY IN THE FOOD AND BEVERAGE INDUSTRY AND ELICITING MILLENNIAL PERSPECTIVES Jet Mbogai The University of Bolton, Bolton Business School: Fulfillment of PhD, Deane Road, Bolton, BL3 5AB, UK Abstract: Social responsibility, animal welfare, and environmental responsibility are essential practices in sustainably sourced products. The industry leaders in ethical sourcing and sustainable development are paving the way while the followers are lagging; how can the industry continue the upward trend in sourcing ethically and improving sustainability? Gaining brand loyalty and increase of sales while sourcing ethically and sustainably is the emphasis of this research, millennials as sample participants are projected to dominate the workforce by 2020. What are the millennials perspectives on integrating moral values to ensure ethical sourcing and sustainable development? Consumers are now more than ever aware of where products are sourced from, the treatment and living conditions of workers who grow the products, and the use of land without care of sustainability measures. The voluntary ethical sourcing can be linked to company who are moving towards caring for the environment and humanity thus ethical sourcing and maintaining the process has become essential and more especially the millennials who are the focus on this research are ferociously loyal to ethically sourced and sustainable brands. JEL: L60, L66, L15 N5, Q13, Q50, Q56, Q58, J43 M14, M16, D23, D83 Keywords: ethics, sourcing, food and beverage industry, sustainability, millennials Copyright © The Author(s). All Rights Reserved. © 2015 – 2017 Open Access Publishing Group 97 Jet Mboga ETHICAL SOURCING TO ENSURE SUSTAINABILITY IN THE FOOD AND BEVERAGE INDUSTRY AND ELICITING MILLENNIAL PERSPECTIVES 1. Introduction The food and beverage industry includes breweries; bottled beverages; dairy; meat and abattoirs processors; baked products; cereal and flour facilities among others; these industries integrate strategies that are motivated by consumers who embrace quality, value, availability, and diversity (Veolia, 2017). United States Census Bureau (2017) clocks the world population at 7,395,846,460 and United States population at 325,193,378; supplying ethically sourced products to the increasing population is ever challenging and industries should strategize to remain sustainable (Ellebrecht, 2016). The population is projected to increase from 9.5 to 13.3 billion by 2100 as projected by worldbank.org (see Appendix A); with projections that Africa will have the fastest growing region (see Appendix B); other following population growth occurring in countries such as India and others as shown in Appendix C; and a projected population of 400 million in Nigeria overtaking the United States as shown in Appendix D. To serve the increasing population the food and beverage industries have sought global sourcing to remain competitive and remain sustainable (Akkinepalli, 2012). Global sourcing has become prevalent and consumers are now aware of what takes place in procurement of products Kotabe, consumers won’t hold back retaliating in form of public demonstration, product boycotts, and even negative reviews online to deter other consumers from making future purchases. Ethical sourcing entails the procedure of ensuring that the procured products are attained in ethically and sustainably from making sure that all workers involved in the process aren’t mistreated and the actions taken are environmental friendly Lupo, , March 31; Mcavoy, 2016). Market leaders are taking steps to respond to consumers demand for ethically sourced products and unlike in the past where such practices were not publicized yet today all efforts taken are proudly announced to the public (Burrows, 2015). The industries source ethically to meet 3 important elements that include increase sales and gain brand loyalty, minimizing operation cost, and mitigation of risk Mcavoy, . Such industries’ tread carefully and should take extra steps in their evaluation and tracking suppliers to ensure the procurement process is ethical (Akkinepalli, 2012). Unethical sourcing is a topic that gets consumers all wired out; but are consumers willing to pay high prices for ethically sourced products? Consumers have a soft heart for ethically sourced products, would remain loyal to the respective companies, and some aren’t willing to pay extra (Lupo, 2015; Mcavoy (2016). The production and sale of goods today is being shaped by ethical sourcing and does have an impact on consumers’ purchases; thus, ethics and sustainable development have a European Journal of Economic and Financial Research - Volume 2 │ Issue 4 │ 2017 98 Jet Mboga ETHICAL SOURCING TO ENSURE SUSTAINABILITY IN THE FOOD AND BEVERAGE INDUSTRY AND ELICITING MILLENNIAL PERSPECTIVES direct correlation to improved brand image and cost reduction (Lupo, 2015; Mcavoy, 2016). Gaining brand loyalty and increase of sales while sourcing ethically and sustainably is the emphasis of this research; sourcing ethically comes with the challenge of increased cost and a hefty price tag for the consumer; research shows that 81% consumers are willing to make purchases from industries at embody ethics and sustainability and 98% consumers noted sustainability was important (Burrows, 2015; Schug, 2016). CNN reported that environment and social costs are at ultimate high as industries rely on reaping enormous profits while utilizing cheap labor and land especially in global platforms (Kottasova, 2014). Ethical sourcing and sustainability are core to brand loyalty (Burrows, 2015); Industry leaders in ethical sourcing and sustainability include Heineken, Starbucks, C & S Whole Grocers; CNN reported CocaCola, Nestle, Unilever; Jordan cereals; Twinings (Kottasova, 2014). The industry leaders in ethical sourcing and sustainable development are paving the way while the followers are lagging; how can the industry continue the upward trend in sourcing ethically and improving sustainability? Millennials are projected to dominate the workforce by 2020 (Hyder, 2016); what are the millennials perspectives on integrating moral values to ensure ethical sourcing and sustainable development? For viewing / downloading the full article, please access the following link: https://oapub.org/soc/index.php/EJEFR/article/view/222 European Journal of Economic and Financial Research - Volume 2 │ Issue 4 │ 2017 99