The FMCG industry is a dynamic, competitive and fast-paced industry and is described as the largest industry in the world (KPMG 2014:4). The FMCG industry predominantly consists of goods sold rapidly, consisting mainly of non-durable items consumed frequently and on a daily basis by customers (Mvubu & Naude 2016:274). It is one of South Africa’s most important prospering economic sectors for Gross Domestic Product (GDP) growth. In 2011, the FMCG industry sales surpassed a trillion rand for the first time. By 2016, this amount increased to R1.46 trillion (Statistics South Africa Report 2018). Large formal FMCG retailers account for 68% of South Africa’s market and informal small, medium and micro enterprises (SMMEs), such as ‘spazas’, small informal superette-style shops and mid-sized wholesalers, encapsulate the rest of the market share (Dicey 2016).

Profit margins of goods and services in the FMCG industry are typically low; therefore, competitive advantage is gained by selling large volumes to FMCG retailers (Mvubu & Naude 2016:274). Green et al. (2012:290) state that this intense competition between suppliers may also lead to suppliers being more committed to GSCM practices and initiatives set out by FMCG organisations, suggesting that the power asymmetry in this particular buyer–supplier relationship is skewed towards buyer organisations, that is, FMCG retailers. It also corroborates the findings of Sutton-Brady, Kamvounias and Taylor (2015:122), stating that the extremely condensed nature of the FMCG industry influences the buyer–supplier power imbalance.

Lacoste and Johnsen (2015:229) suggest that supplier performance in the FMCG industry is more process-driven, whereas supplier performance in other industries is more relationship-driven. However, Copeland (2013:423) suggests that strategic suppliers are often more eager to work with buyers on environmental initiatives, suggesting that buyer organisations are moving away from transactional supplier relationships and more towards strategic relationships with their key suppliers, thus focussing on environmental initiatives (Chkanikova 2016:478).

Categorising buyer–supplier relationships can be achieved by using the portfolio approach, as explained by Kraljic in the purchasing portfolio matrix (De Villiers, Nieman & Niemann 2017:33). Kraljic highlights buyer–supplier relationships to be considered as a strategic function of an organisation. The purchasing portfolio model guides organisations to form strategic relationships with a limited number of suppliers because of limited resources (Pagell et al. 2010:58–60). Based on this logic, it is not advisable to form strategic relationships with all suppliers, as this level of commitment is too vast and costly to maintain (Cao & Zhang 2011:164).

Kraljic’s model outlines that relationships differ because of the type of purchase or categories of spend. Allocating resources appropriately enhances purchasing performance (Pagell et al. 2010:57). Kraljic’s portfolio approach comes with challenging consequences when managing the environmental practices, as each situation with suppliers is unique. Both Chkanikova (2016:478–494) and Pagell et al. (2010:57–73) suggest that emphasis should be placed on environmentally aware sourcing decisions. Furthermore, companies should constantly evaluate their relationships with their suppliers and strategically consider the integration of green practices.

Another aspect of Kraljic’s model is complexity management. It can be key to maintain strategic relationships. Hence, complexity managed within and between organisations plays a vital role in the relationship (Mota et al. 2015:1). When enabling factors such as trust, transfer of information and clear goals are not aligned between organisations, complexity becomes evident (Nyaga et al. 2010:104). The Kraljic model states that suppliers should focus on building trust and commitment to contribute favourably towards improved performance and buyer satisfaction for the outcomes that buyers need to value (Meyer et al. 2017:1; Nyaga et al. 2010:101). In the context of this research, the services suppliers should offer to FMCG organisations should adhere to and jointly contribute to environmental initiatives.

Green supply chain management practices are supply chain management activities that attempt to conserve the integrity of the global environment. Therefore, projects may incorporate impact reduction activities, namely: (1) recycling, material purification and low-density packaging design; (2) environmental data gathering including vendors, products as well as processes; and (3) waste elimination processes such as biodegrading and incineration (Walker et al. 2008:75). Organisations can effectively leverage internal resources to track and monitor such environmental activities across all organisational functions using green supply chain integration (GSCI) (Wong, Wong & Boon-itt 2015:15).

Wong et al. (2015:14–15) explain that strategic collaboration and integration across internal resources form part of GSCM. Internal resources such as senior management, quality control and organisational functions, when integrated, use an integrated management system to support organisations in managing the environmental impact of their supply chain (Wong et al. 2015:15). Increasing customer demands motivate organisations to work and pinpoint innovative environmental solutions (Green et al. 2012:292; Peuckert 2014:77–94).

Walker et al. (2008:72) indicate that organisations may encounter more barriers to the drivers of environmental supply chain projects. Knowing the causes and effects of these drivers and barriers helps to emphasise the importance of GSCM practices in all buyer–supplier relationships. The internal drivers of the organisation that focus on environmental initiatives include the personal commitment of leaders, middle management, policy entrepreneurs and stakeholders (Walker et al. 2008:69–73). These internal drivers seek to reduce costs by reducing waste and pollution often leading to production efficiencies and quality improvements.

The external drivers of an organisation usually focus on environmental initiatives such as legislation, particularly when companies are proactively innovative in their approach to regulatory compliance. External competitors also act as drivers for GSCM projects for organisations to seek competitive advantage and improved performance (Walker et al. 2008:69–73). External drivers include an increase in public awareness, consumer demand for environmentally conscious goods and processes. Additionally, the influence of non-governmental organisations (NGOs) concerned with corporate ‘greenwash’ is an attempt to seem interested in protecting the environment (Walker et al. 2008:80).

The barriers identified are primarily external in nature and include cultural myopia, cost implications, level of corruption, government legislation and lack of incentives, customer ignorance, lack of education or knowledge, industry-specific barriers and technology (Niemann Kotze & Adamo 2016:977–1013). External barriers identified include lack of supply chain transparency, poor supplier commitment, lack of laws and policies and industry-specific barriers. According to Niemann et al. (2016:979–984), the barriers with the greatest effect are cultural, cost and government legislation. An organisation’s internal barriers focussing on environmental initiatives usually result in cost reductions at the expense of green practices. These include lack of management commitment and lack of buyer awareness (Mittal & Sangwan 2014:584).

This study applied a generic qualitative research methodology. This type of research aligns the study to identify an exploratory basis of opinions and perspectives of managers in buyer and supplier organisations (Plano Clark & Creswell 2015:289). It creates an understanding of participants’ opinions on a specific phenomenon (in this particular study being the dyadic buyer–supplier relationships) at a specific time (Percy, Kostere & Kostere 2015:78). Each participant of the study was interviewed once only to define the time horizon as cross-sectional (Babbie & Mouton 2001:93–95).

Six dyadic relationships were investigated, consisting of 12 organisations. One participant represented each respective organisation. A purposive sampling method was used to include homogeneous and snowball sampling. The use of purposive sampling for the study allowed the researcher to select specific buyer–supplier relationships and pertinent individuals to contribute to the topic.

Generic qualitative research includes the collection of qualitative data in semi-structured interviews. The collected data are analysed and the results are used to conclude the themes identified (Kahlke 2014:40). In Table 1, all the participants involved in this study are described where ‘B’ represents buyer organisations and ‘S’ represents supplier organisations. The respective colours indicate the dyadic linkages. Additionally, it is important to note that the participants were not merely buyers and sellers, but middle and top management that has a more holistic and strategic point of view of the respective organisations.

Semi-structured interviews were conducted. One of the advantages of conducting semi-structured interviews was that the researchers had more control over the information obtained (Creswell 2012:218). This provided flexibility to adapt and gather the required data (Rowley 2012:262). A discussion guide developed for the study’s research questions and available extant literature underwent a pre-test with a single individual. The pre-test helped the researchers to change the discussion guide to allow an easier understanding of the respective interviewees. All the interviews were audio-recorded and transcribed by the researchers within 7 days of the interview.

Thematic analysis was used to analyse the data gathered. Thematic analysis pinpoints, examines and records the themes of the gathered data (Braun & Clarke 2012:57). The researchers followed the guidelines of Braun and Clarke (2012:57–71) by familiarising themselves with the raw data which were examined from the audio recordings and the corresponding transcriptions. Codes were used from the literature and linked to the inductive codes, which were created from the data, to create a code list. Similar codes were grouped together to identify sub-themes. The researchers were all involved in the coding and analysis of the raw data. Researchers actively reviewed the perspectives and findings of the other researchers. This was done to increase the study’s trustworthiness and to decrease biased perspectives of any one researcher.

The criteria to ensure the trustworthiness of the study include credibility, dependability, confirmability and transferability (Polit & Beck 2012:584; Shenton 2004:64). Credibility entails that the findings of the study offer an accurate reflection of the state of the phenomenon in reality (Polit & Beck 2012:585). Voluntary participation and the confidentiality of participants guaranteed the use of reliable methods such as purposive sampling and thematic analysis (Polit & Beck 2012:584–585; Shenton 2004:64–69). Dependability was used to ensure that the findings were consistent and similar when the same context, participants and methods involved are in a replicated study (Polit & Beck 2012:585; Shenton 2004:71). The researchers ensured an in-depth and detailed description of the participants, context and methodology provided to create a well-defined path for future attempts to replicate the study.

Confirmability was used for the objectivity of the findings and the fact that they are not influenced by the researcher’s own ideals or frame of reference (Shenton 2004:64). To help improve confirmability, the researchers used clear audit trails that would ensure that the findings are a true reflection of the participants’ opinions. Transferability was also used for another setting or context (Polit & Beck 2012:585; Shenton 2004:67–71). A comprehensive explanation of the context of the qualitative study, as well as the discussion guide and interview protocol of the study, is provided.

The relevant Research Ethics Committee at the University of Pretoria approved the study. Each participant signed a consent form, giving voluntary consent for the interview. The researchers emphasised that the information gathered during the interviews will be treated as anonymous and confidential. To ensure that the participants were comfortable before and during the interview, the researchers reminded the participants that they might withdraw from answering a question.

The first research question identifies the predominant environmental initiatives within the South African FMCG industry. Table 2 summarises the predominant environmental initiatives discussed by participants.

Five participants discussed the reduction in plastics as a popular topic amongst buyer and supplier companies. The approach of correctly managing plastics through recycling or incineration varied between supplier and buyer companies, which are evident in the following quotes:

Three participants mentioned that the carbon footprint needs to be a predominant environmental initiative. Global warming has been a major topic over the last decade with greenhouse gasses and emissions stemming from CO₂ released by transportation and industry. Prior research conducted by Sundarakani et al. (2010:43) recommends that a significant effort needs to be made within organisations to reduce their carbon footprint. Refer to the exemplary quotes:

Waste management refers to recycling, cutting down on non-eco-friendly products and the correct disposal of materials regarded as waste (Walker et al. 2008:75). The participants regarded waste management as the predominant environmental initiative because they explained that it has a significant impact on the environment, as shown in the following quotes:

Two participants emphasised the importance of water management with regard to recycling. In South Africa, a country plagued with low levels of annual rain, the need for environmental initiatives is a major priority, as clear in the following quotes:

These findings are consistent with the extant literature on the benefits and performance impacts of environmental initiatives (Corbett & Klassen 2006; Murfield & Tate 2017; Walker et al. 2008).

In the initial stages of adopting the environmental initiatives, the conflict between the buyer and supplier organisations was evident. As relationships grew stronger, collaboration, trust and alignment reduced conflict, which is evident in the following quotes:

Nyaga et al. (2010:101–114) demonstrate the benefits within relationships such as information sharing, joint relationship endeavours and investments that lead to trust and commitment. In the process, trust and commitment lead to an increased level of satisfaction and performance, as shown in the following quotes:

Previous research suggests that transparency leads to improved performance between organisations and the findings of this study correlate with the extant literature. Suppliers often find themselves in a competitive environment leading to suppliers being more committed to environmental initiatives ultimately increasing the collaboration efforts between buyer and supplier organisations (Green et al. 2012:290). This is clear in the following quotes:

The findings of this study highlight that environmental initiatives have become part of the organisation’s culture, thus improving the organisation’s relationships and ultimately making them more strategic, as shown in the below quotes:

In addition, the findings suggest that the importance of strategic sourcing impacts buyer–supplier relationships when implementing environmental initiatives. This links with the research of Chkanikova (2016:478–494) and Pagell et al. (2010:57–73), emphasising environmental awareness of source decisions. This is clear in the following quotes:

Interestingly, the research found that suppliers use similar criteria when choosing to do business with buyers:

Butner et al. (2008:10) state that organisations in a buyer–supplier relationship consider how performance is affected when incorporating cost, quality and service with environmental standards. This study found that the cost, quality and service considered by organisations when balancing performance measures with environmental requirements are consistent with the findings of Butner et al. (2008:10). This is shown in the below quotes:

The second research question of the study focuses on the main issues facing an organisation implementing environmental initiatives. Table 3 provides a brief overview of the issues experienced by participants of organisations, clearly indicating the cost as a predominant factor when implementing environmental initiatives.

An organisation’s level of investment and the cost implications of environmental initiatives were identified as key influencers of GSCM. The challenges identified by Niemann et al. (2016:977–1013) included cost implication and lack of knowledge. The study also explained that one of the challenges is cost, as mentioned by one respondent:

Rahim et al. (2016:147) point out that an organisation’s success lies in its efforts to achieve sustainable operations. To address this challenge, organisations have realised the need for sustainable practices and the reduction of their environmental impact. Organisations need to invest greater efforts toward sustainable practices. This study also found sustainability to be a factor when implementing environmental initiatives, as expressed by the following quote:

This study identified the experience of organisations relating to the issues of commitment regarding environmental initiatives. Some participants mentioned this as one of the first issues experienced when implementing environmental initiatives:

When investigating the challenges regarding environmental impact, qualitative data gathered identify practicality as an issue, which was not found in previous studies. Buyer and supplier organisations may be capable of pursuing specific environmental initiatives. However, the low level of practicality-specific environmental initiatives is avoided, as stated in the following quote:

The final research question aimed to identify the benefits and drawbacks of environmental initiatives on buyer–supplier relationships. Peuckert (2014:77–94) and Green et al. (2012:292) point out that the competitive market drives suppliers to become more motivated to work with buyers, to pinpoint innovative environmental solutions. The findings of the current study confirm that organisations are collaborating to identify the best environmental initiatives, to help them sustain a competitive position in the market, which is evident in the following quote:

Production efficiencies and quality improvements are the result of internal drivers aiming to minimise cost by reducing waste and pollution (Walker et al. 2008:69–73). The findings of this study confirm that cost is reduced by reducing waste products, ultimately leading to the improvement of product quality, as clear from the below quotes:

Lastly, this research identified organisations experiencing longer planning times with regard to the environmental initiatives. This aspect was not identified in the literature review and it adds to the contributions of this study, as referred to in the following quotes:

This research sought to determine the predominant environmental initiatives between buyer and supplier organisations and investigated the benefits and drawbacks of environmental initiatives upon dyadic relationships. It was found that when implementing environmental initiatives, buyer–supplier relationships undergo friction. In the long-term, benefits justify the investment required when building strong relationships. In South Africa’s FMCG industry, buyer organisations included environmental initiatives as a key requirement in their supplier selection criteria.

Buyer and supplier relationships are built on high standards of quality and trust. They include providing high-quality goods and services, to be sustainable over the long-term. This study confirms that similar requirements were implemented both on the buyer’s and the supplier’s side. When investigating an organisation’s level of investment into green initiatives, the phrase ‘going green costs a lot of green’ is relevant to both buyer and supplier organisations. Investment includes the need for capital, skilled resources, research and development, labour requirements and training. These challenges may discourage buyer and supplier firms when developing and managing environmental initiatives.

In addition, the challenge of managing the organisation’s environmental impact involves two key elements, namely practicality and sustainability. When implementing environmental initiatives, both buyer and supplier organisations expressed concern regarding the risk involved, the level of commitment and investment required for specific environmental initiatives. This means that collaboration between the buyer and supplier needs to create a win-win situation. If this is not created, the environmental initiative will not be sustainable in the long run. The collected data suggested that both buyer and supplier organisations are aware of the environmental impact on the management of plastic, water and other waste. Buyers and suppliers need to become more susceptible to the use of supplementary products, in order to reduce the overall environmental impact of the organisation.

Benefits exist for both the buyer and supplier where collaboration is evident. The key lies in the strategic alignment of supply chains sharing information and resources proven to yield short-term and long-term benefits. The potential benefits include cost saving, improved quality and improved sales. The study found that long-term benefits are from strong buyer and supplier relationships earning trust. A high level of trust between the buyer and supplier proved to be a success factor when implementing environmental initiatives. The study also highlighted potential drawbacks to implementing environmental initiatives. It found that organisations do not feel the need to invest or procure substitute products when plastics are cheaper than alternative biodegradable solutions. A second drawback was an increase in planning time and time required to implement environmental initiatives. Although the South African FMCG market is highly competitive, not all organisations are willing to invest the time and money required to implement sustainable environmental solutions.

Firstly, the literature review identified that the buyer–supplier relationship becomes strategic when implementing environmental initiatives. Buyer organisations also integrate environmental initiatives into their supplier selection criteria. The research confirms the extant literature from a South African FMCG industry context. Secondly, the literature reviewed recognised issues on the implementation of environmental initiatives, namely cost implications, lack of knowledge and labour requirements. The findings indicate that these issues were consistent with the previous research findings. This study further contributed by investigating the predominant environmental initiatives from a South African FMCG industry context. The findings identified four environmental initiatives: waste management, plastic reduction, water recycling and carbon footprint. Lastly, the findings identified the implications of environmental initiatives on buyer–supplier relationships. Benefits included competitiveness, cost saving and improved product quality. Drawbacks included longer planning times and cost implications of implementation. The current study’s findings corroborate the implications found in a previous investigation by Murfield and Tate (2017:1319–1350).

This study has several implications for managers in buying and supplying organisations. Firstly, the findings regarding the implementation of environmental initiatives suggest that buyer and supplier organisations should increase their operational transparency before implementing environmental initiatives, to manage challenges. Both organisations need to understand the processes and objectives of all the parties involved. Secondly, suppliers need to be aware that implementing environmental initiatives with their customers could potentially strengthen their competitive position in the market. Therefore, buyer organisations should ensure their environmental strategies aligned with those of their suppliers, as buyer organisations are liable for the acts of their suppliers. Finally, it is difficult to manage the implementation of environmental initiatives, as both organisations need to collaborate and develop a measurement system specifically related to environmental initiatives. This will ensure effective management. Several organisations have already implemented measurements such as water usage, emissions and waste into their scorecards. These measurements serve as differentiators or order qualifiers.

There are several limitations of this study. Firstly, a cross-sectional time horizon only provides a snapshot of reality (Babbie & Mouton 2001:93–95). This is information gathered at one point in time between buyer and supplier organisations. It would be beneficial if a similar study is conducted, using a longitudinal time horizon, as it would provide more insights into how the relationships evolve over a long period. Next, this study was conducted within the FMCG industry, which is seen as a very broad spectrum. Future research should focus on other industries in South Africa in order to identify whether the general findings of this study are consistent across different industries. Lastly, participants may be hesitant to share negative experiences, especially if the experiences are sensitive in nature, when interviewing participants. Quantitative research, namely the use of surveys, specifically the anonymity thereof, could encourage participants to be more open when disclosing negative experiences.