Chapter 4: Building Social Capital into the Disrupted Green Coffee Supply Chain: Illy’s Journey to Quality and Sustainability

This chapter explores the reconstruction of the illy’s coffee supply chain in Brazil. The original supply chain was disrupted by fluctuating prices and inefficiencies and renovated based on network relationships between the focal company and the coffee growers. It describes the peculiar experience of illycaffe (an international coffee roaster based in Italy) in building social capital into its supply chain and resulting in a more sustainable network.

The chapter summarizes the development of different types of social capital and applies the concepts to understand illy’s journey towards quality and supply chain sustainability. The research design is consistent with theory elaboration from a single case study.

The chapter applies social capital theory to food commodity supply chains. The evolution to a more reliable and sustainable supply chain for illy’s Arabica coffee in Brazil suggests that supply chain relationships are a crucial asset for the focal firm, the local communities, and society at large. Results also show that developing such relationships might lead to better product quality, supply chain sustainability, and improved supply base capabilities.

The findings of this chapter contribute to the definition of a relational governance model for global food commodity supply chains. From a research standpoint, the empirical setting allows analyses of antecedents and consequences of different social capital components in the food supply chain. In addition, the case may help executives understand how to leverage supply chain relationships and identify a path to product quality and supply chain sustainability.