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5.4 The Case of Sweden
Sweden is often categorized as a country leading sustainable agri-production in
many areas such as environmental awareness, animal welfare, low use of antibiotics
and access to high-quality natural resources (Bucht 2016). The Swedish Ministry of
the Environment presented as early as 2003 a vision for sustainable development
that strongly recommends all policy decisions take into account the longer-term
economic, social and environmental implications (Swedish Ministry of the
Environment 2003). This is a vision that applies to food producers in Sweden.
The OECD report regarding Innovation, Agricultural Productivity and
Sustainability in Sweden (OECD 2018) identifies Sweden as one of the earliest
OECD countries to raise awareness of environmental issues and develop environmental policies. The result has been that the negative environmental impact has
decreased, although agricultural production in Sweden has remained stable. OECD
(2018, p. 12) states that: “Swedish legislation, which reflects consumer and citizen
preferences, sets norms and standards for food safety, environment and animal welfare that is well above EU requirements in many areas of agriculture and horticulture. Swedish consumers and citizens have a high level of confidence for the
Swedish agricultural and food system”. The majority of Swedish agri-companies
regard social and environmental issues as part of their goals, besides economic revenue (Ulvenblad et al. 2019).
However, the agri-sector in Sweden is facing challenges as well. The Swedish
agri-sector has undergone significant structural changes in the last 20 years. The
surviving food producers have become larger through internal growth and/or mergers and acquisitions (Swedish Board of Agriculture 2018). Others have been forced
into subcontractor roles with diminished managerial influence on production goals
and activities. This power asymmetry, combined with low-quality business relationships, can lead to suboptimization of resources and a reduced capacity to identify
and satisfy consumer needs (Benton and Maloni 2005; Schulze-Ehlers et al. 2014).
Furthermore, some larger companies in higher positions in the food value chain may
not share smaller companies’ interest in social and environmentally sustainable
innovation. Even when such sustainable innovation (sometimes in response to consumer pressure) improves a product’s quality, these larger companies may be disinclined to adopt the innovations for use in their production activities, delivery systems
and product portfolios. They hesitate primarily because of fear of greater logistics
complexity and higher costs. In some instances, however, these structural changes
in the agri-sector have resulted in more cost-effective production and distribution
systems, although with survival and profit still greater concerns than social and
environmental issues. Thus, many stakeholders (e.g. consumers, consumer rights
organizations, the media and citizens) are asking for healthy food and more sustainable social and environmental innovation in the agri-sector.
This pressure from stakeholders combined with the situation with declining profits in spite of production efficiency and economies of scale has led many agricompanies to develop their business models towards sustainability and high-quality
products. Further, many agri-companies try to advance in the agri-value chain and
get closer to the final customer.
P.-O. Ulvenblad
5.4 The Case of Sweden
Sweden is often categorized as a country leading sustainable agri-production in
many areas such as environmental awareness, animal welfare, low use of antibiotics
and access to high-quality natural resources (Bucht 2016). The Swedish Ministry of
the Environment presented as early as 2003 a vision for sustainable development
that strongly recommends all policy decisions take into account the longer-term
economic, social and environmental implications (Swedish Ministry of the
Environment 2003). This is a vision that applies to food producers in Sweden.
The OECD report regarding Innovation, Agricultural Productivity and
Sustainability in Sweden (OECD 2018) identifies Sweden as one of the earliest
OECD countries to raise awareness of environmental issues and develop environmental policies. The result has been that the negative environmental impact has
decreased, although agricultural production in Sweden has remained stable. OECD
(2018, p. 12) states that: “Swedish legislation, which reflects consumer and citizen
preferences, sets norms and standards for food safety, environment and animal welfare that is well above EU requirements in many areas of agriculture and horticulture. Swedish consumers and citizens have a high level of confidence for the
Swedish agricultural and food system”. The majority of Swedish agri-companies
regard social and environmental issues as part of their goals, besides economic revenue (Ulvenblad et al. 2019).
However, the agri-sector in Sweden is facing challenges as well. The Swedish
agri-sector has undergone significant structural changes in the last 20 years. The
surviving food producers have become larger through internal growth and/or mergers and acquisitions (Swedish Board of Agriculture 2018). Others have been forced
into subcontractor roles with diminished managerial influence on production goals
and activities. This power asymmetry, combined with low-quality business relationships, can lead to suboptimization of resources and a reduced capacity to identify
and satisfy consumer needs (Benton and Maloni 2005; Schulze-Ehlers et al. 2014).
Furthermore, some larger companies in higher positions in the food value chain may
not share smaller companies’ interest in social and environmentally sustainable
innovation. Even when such sustainable innovation (sometimes in response to consumer pressure) improves a product’s quality, these larger companies may be disinclined to adopt the innovations for use in their production activities, delivery systems
and product portfolios. They hesitate primarily because of fear of greater logistics
complexity and higher costs. In some instances, however, these structural changes
in the agri-sector have resulted in more cost-effective production and distribution
systems, although with survival and profit still greater concerns than social and
environmental issues. Thus, many stakeholders (e.g. consumers, consumer rights
organizations, the media and citizens) are asking for healthy food and more sustainable social and environmental innovation in the agri-sector.
This pressure from stakeholders combined with the situation with declining profits in spite of production efficiency and economies of scale has led many agricompanies to develop their business models towards sustainability and high-quality
products. Further, many agri-companies try to advance in the agri-value chain and
get closer to the final customer.
P.-O. Ulvenblad