Kellogg 'most reputable' US consumer firm thanks to vocal sustainability efforts, says expert
The Reputation Institute conducted its annual RepTrak survey – speaking to 50,000 members of the American public in the first quarter of 2015 on their views about consumer companies. The survey covered seven business dimensions: products/services, innovation, workplace, governance, citizenship, leadership and performance.
The Kellogg Company jumped 10 spots from 2014, securing the position as America’s 2015 most reputable consumer company. A handful of other food firms made it into the top 10: Campbell Soup Company placed fourth; Hershey Company sixth; and Kraft Foods eighth.
Brad Hecht, chief research officer at the Reputation Institute, said Kellogg’s success was predominantly down to business beyond its product portfolio.
“Kellogg’s expanded on a number of impressive sustainability and product-based initiatives in 2014, and was vocal in the marketplace about these initiatives.”
For example, the company implemented water reuse projects in all its plants and also committed to using 100% timber-based packaging either from recycled content or certified sustainable sources.
The company also announced last year it would provide aid to women farmers and workers around the world as part of its sustainability efforts.
Out of all companies in the top 50 list, he said Kellogg had improved the most in consumer perceptions of a company as ethical, fair and transparent.
Hecht said for other companies to evolve in the eyes of a consumer, it was not enough to just ‘talk’ about efforts beyond product development - products and services only accounted for about 30% of reputation.
“It is the combination of both the appropriate actions and initiatives – that are woven into a company’s business model – with the effective communication of these actions that will positively impact reputation,” he said.
While the products/services dimension remained the most important, he said the CSR dimensions of workplace, citizenship and governance had become increasingly important in recent years, particularly for food and beverage, consumer and retail sectors.
“The key is for each firm to understand which of the seven drivers of reputation have the most significant impact on reputation within the specific industry, and therefore, which to focus on both from a strategic and communications perspective. In the food and beverage space, the top three drivers of reputation are products/services, governance and citizenship – in that order,” he said.
For every 5-point increase in reputation, he said companies would see an 8.6% increase in consumer willingness to recommend the company and its products, but also buy products themselves.
Society efforts versus cost
Hecht said consumers were increasingly conscious as the global economy recovered from the financial crisis.
“Consumers are becoming more and more conscious of not only the quality and cost of products they buy, but also the values and social relevance of the firm that stands behind them.
“…In 2015, who a company is and the benefit the company provides to society is far more important to its stakeholders than the quality or cost of its product,” he said.