Sustainability aspects in a dairy cooperative'sbusiness model : The case of Arla Foods AB

Abstract: Problem: Recently, the demand for more sustainable farming and production has increased due to climate changes and the decreasing biodiversity. Furthermore, in Sweden, more and more milk producers are facing bankruptcy because of the present situation in the dairy industry which also demands social responsibility towards them. Therefore, dairy companies need to embed sustainability into their business model. Previous literatures indicate that sustainable business models which integrate sustainability into organization could maintain and increase profitability and at the same time ensure social and environmental capital in the future. However, there is still a lack of information and empirical data on the scope of how sustainability is embedded into a business. Purpose: to increase understanding of sustainability in dairy company and what sustainability aspect might be important to embed into their business model. Theoretical Framework: The theoretical framework is developed for the purpose of this research. It discusses the definition of Business model and Sustainable business model. Also, two sustainable business model canvases that could be used as analyzing tools to investigate an organization and its operational activities which are presented and compared. This part focuses on presenting framework and explanation of Flourishing business canvas which will be implemented in the analysis. Methodology: The study approaches on a qualitative study of an extreme case where parts of empirical data has been collected from interviews with the case company, the rest of empirical data has been gathered from the case company’s CSR reports and their annual reports. The case company is working with sustainability in their business. Conclusion: As findings of purpose and research question, Arla have embedded sustainability into their business model, however they still need to develop further in their work with sustainability to benefit more from their business model. The case company has embedded all three main contexts of sustainability: economic, social and environmental contexts. However, the focus is more on the financial context. Limitation: The findings need more investigation of other dairy companies to be generalized. Furthermore, this thesis only investigated the current business model.