The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu.

Monday, November 19, 2007

Strategic CSR - Measuring CSR

The article in the url link below demonstrates the social and economic value of providing consumers with the information they need to make educated purchase decisions (Special Cases of CSR: GM Labeling, p293):

“The system that Hannaford developed, called Guiding Stars, rated the nutritional value of the grocery items in the store on a scale of zero to three stars, with three representing the most nutritious products.”

Simplifying the complicated, non-standardized information on food labels into an easily identifiable three star rating format enables consumers to better match their purchases with their needs (perceived or real):

“After analyzing a year's worth of sales data, Hannaford found that customers tended to buy leaner cuts of meat. Sales of ground beef with stars on their labels increased 7 percent, and sales of chicken that had a star rating rose 5 percent. Sales of ground beef labeled with no stars dropped by 5 percent, while sales of chicken that had a zero-star rating declined 3 percent.  Similarly, sales of whole milk, which received no stars, declined by 4 percent, while sales of fat-free milk (three stars) increased 1 percent. Sales of fruits and vegetables, however, remained about the same as they did before the ratings were introduced. All fresh produce received stars.”

Interesting, however, is the low percentage of products that received a one star rating (the lowest recognition of some nutritional benefit) or better. Even more interesting would be to see a list of products that advertise themselves as “healthy” or “natural,” but which didn’t receive any stars:

“… when Hannaford ran its 25,500 products through the formula devised by its advisory board, many products that were marketed as healthful received no stars, usually because they had too much salt or sugar. Twenty-eight percent of the items in the store received one star or more.”

If more grocery stores were to implement such rating systems, my sense is that firms would quickly respond and the percentage of foods receiving a higher star rating would grow.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Store Chain's Test Concludes That Nutrition Sells
By ANDREW MARTIN
818 words
6 September 2007
The New York Times
Late Edition - Final
3
http://www.nytimes.com/2007/09/06/business/06grocery.html