Kellogg: A Partnership Under Fire (pdf abstract)
Purchase the full report on GlobaLens (Case study # 1-429-378)– published 02/2014, 16 pages.
Developed by: Nancy Gephart (’14), Stephen Ahn (’15), Jennifer Bowe, and Julia Winfield under the supervision of Andrew Hoffman
DESCRIPTION: The Kellogg Company has made aggressive changes to its policy for the sourcing of palm oil for its products since 2011. In addition, since 2008 Kellogg has been a corporate member of the Roundtable on Sustainable Palm Oil (RSPO), an organization and certification scheme that promotes sustainable production of palm oil. Considering Kellogg’s commitment to sustainable palm oil, corporate executives and shareholders were less than pleased when the World Wildlife Fund (WWF) released a report in June 2013 that accused a Kellogg partner, Wilmar International, of illegally sourcing and producing palm oil in Southeast Asia. In September 2012, Kellogg had entered into a joint venture with Wilmar, the largest producer of palm oil in the world, in an attempt to expand its cereal and snack food business in China. This case was written under the supervision of Andrew Hoffman, director of the Erb Institute, by graduate students Nancy Gephart, Stephen Ahn, Jennifer Bowe, and Julia Winfield at the University of Michigan.
TEACHING POINTS:
- After reading and discussing this case, students should be able to:
- Understand the challenges and opportunities that arise when corporations attempt to balance expansion into emerging markets with sustainability.
- Consider the extent to which Kellogg is accountable for Wilmar’s actions and how, if at all, Kellogg should respond to the allegations against its joint venture partner.
- Evaluate the role of sustainability certifications in the global marketplace, particularly those of RSPO, and whether the RSPO is effective at carrying out its mission.
- Understand the difficulties that often arise in corporate partnerships and the risks that a company must consider in choosing a strategic partner.