‘The certificate doesn't taste like anything’: Perspectives of sustainability signaling in global supply chains

Multi-tier supply chains remain under pressure to communicate their sustainability credentials to stakeholders. Supply chain sustainability is a credence characteristic that poses challenges to signaling because the sustainability of a product cannot be verified upon consumption. Supply chains thus rely on the signaling mechanism of third-party certification to alert consumers to sustainability attributes. Despite the proliferation of sustainability certificates, we lack detailed understanding of whether certification is a functional signaling mechanism for credence characteristics in global food supply chains. This is the focus of our study, and we examine specifically Fairtrade, Rainforest Alliance, UTZ and Marine Stewardship Council certification. We conducted interviews with manufacturers and retailers and focus groups with consumers; there were a total of 52 participants. Our results demonstrate that manufacturers perceive the supply chain traceability offered through certification to be a market requirement but lack confidence in full information symmetry. Consumers are confused by multiple certificates, and as a result signal attention is limited and interpretation is distorted. From a theoretical perspective, in this credence characteristic context it appears to be the presence of the signal, rather than the quality the signal conveys, that is of importance to both manufactures and consumers. Our results suggest that companies and policy makers relying on certificates as sustainability signals need to focus attention on educating consumers about the meanings behind the labels. Such efforts can equip customers to distinguish the different levels of stringency and coverage associated with certification in order to inform their purchasing decisions.