ROBERT GORDON UNIVERSITY

ABERDEEN BUSINESS SCHOOL

A Comparative Study of UK Beverage Companies' CSR and How It

Impacts Brand Loyalty

January 2024

By
 ABSTRACT

This study intricately explores the dynamic relationship between corporate social
responsibility (CSR) and brand loyalty within the UK beverage industry, with a specific focus
on three prominent entities: Coca-Cola UK, Nestle UK, and Belu Water. Employing a
comparative framework, the research systematically dissects the CSR initiatives, market size,
brand perception, and brand loyalty of each company, shedding light on their individual
strengths and limitations. In the case of Coca-Cola UK and Nestle UK, the analysis unveils
substantial market shares and well-established brand recognition. However, concerns
regarding health implications, environmental impact, and marketing practices cast a shadow
on their CSR efforts. Despite initiatives addressing water conservation, plastic reduction,
and community engagement, a perceived disconnection between image and reality fosters
skepticism, eroding genuine brand loyalty. In contrast, Belu Water presents a divergent
narrative. Focused on social impact and environmental responsibility, it nurtures a devoted
and loyal community driven by shared values. Its commitment to ethical sourcing, water
access initiatives through WaterAid, and transparent operations contribute to building trust
and fostering a meaningful connection with consumers. Nevertheless, challenges in scaling
its reach and premium pricing pose constraints on its market penetration. Ultimately, the
analysis underscores the nuanced nature of brand loyalty in the contemporary ethical
landscape. Empowered consumers, guided by evolving preferences, seek brands that align
with their values. Success lies not merely in CSR initiatives but in their seamless integration
with product quality, consistent marketing, and a sustained commitment to societal well-
being. For Coca-Cola and Nestle UK, the imperative is to move beyond greenwashing,
transparently address core concerns, and demonstrate tangible impact. Meanwhile, Belu
Water, exemplifying the potential of ethical branding, grapples with the challenge of
expanding without compromising core values or pricing itself out of reach. The research
concludes by emphasizing the evolving dynamics of consumer choice and the necessity for
brands to adapt their CSR strategies accordingly. Those authentically intertwining ethical
practices with quality products and genuine social impact are poised to secure lasting brand
loyalty in the ever-changing landscape of the beverage market.

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 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND

Today’s customer cares a lot about the type of beverage they consume. To the average

consumer, consuming a beverage is no longer about quenching thirst, it is crucial that a

beverage brand also reflects the customer’s ethical values (Hallak et al., 2022). Due to this

rise in ethical consciousness among UK consumers, companies must begin to factor

Corporate Social Responsibilities into their business strategy. The dynamic between a

customer's values and the products they patronize gets stronger daily (Hallak et al., 2022).

Therefore, in this study, we look at the relationship between CSR and Brand loyalty as it

pertains to the UK beverage market.

Over the years, the importance of CSR cannot be overstated, it is no longer a strategy

companies have to employ to appear moral. It has become an integral strategy consideration

for economic purposes (Hamza & Jarboui, 2022). It is obvious to most business leaders and

brands that CSR is beyond just philanthropy, it is a holistic approach that ensures a business

can fulfill its social and environmental responsibility. With consumers needing to buy

products that represent their values, CSR and its ethical obligations are woven into a

company’s brand identity.

The UK is home to several beverage brands with a presence outside the UK. Giants like

Nestle UK, Belu Water, Unilever, CocaCola, and many more are embracing CSR to help

drive their brand loyalty. According to (Evening Standard, 2012), Belu Water is one of the

few companies in the UK actively using its CSR goals to market its product. They were the

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first company to launch the first biodegradable plastic bottled water. Their social good is

integral to their business strategy. Their commitment to social issues is changing the

landscape for them in their water product category.

Nevertheless, the path to building lasting Brand loyalty using CSR has its challenges, and in

this study, we will be exploring numerous literatures on the subject. Consumers, do not want

empty gestures that look to appeal to their sentiments for the sake of marketing (Mohr et al.,

2001). Most consumers hate these types of misrepresentations of a company’s CSR initiative.

The demand and cultural expectations of the average British customer add a layer of nuance

to the relationship between CSR and Brand Loyalty.

In this study, the overall aim is to highlight specific ways through which UK beverage

companies can leverage CSR in developing loyalty to their brand. To achieve this aim, an

analysis will be conducted on three select beverage companies, the strategies they employ,

measuring their consumer’s perception, consumer behaviour, limitations, and challenges.

Finally, conclude by highlighting how best to incorporate CSR strategies to the benefit of a

company.

The finding of this study will help inform UK beverage companies as well as other global

beverage brands on how to identify CSR initiatives that will cultivate brand loyalty. By

revealing and detailing how CSR and brand loyalty work in the UK beverage market, this

study hopes to profess practical solutions to businesses looking to replicate similar strategies

with CSR.

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1.2 Research Aims and Objectives

The primary objective of this study is to identify and develop CSR strategies for building

brand loyalty by performing a comparative analysis of three beverage companies in the UK.

To achieve this objective, the sub-objectives are as follows;

1. Investigate Corporate Social Responsibility goals and its importance in the beverage

industry in the UK

2. Identify and highlight a set of CSR initiatives that impact brand loyalty in the

beverage industry

3. Identify metrics for evaluating brand loyalty

4. Develop CSR strategies that will measurably impact brand loyalty.

1.3 Key Research Questions

The main research question analyses to what degree a company’s Corporate Social

Responsibility (CSR) influences its brand loyalty in the UK beverage industry and what

factors contribute to that influence. To better understand the relationship between CSR and

brand loyalty, the following questions need to be examined;

● Do the regulations and culture in the UK influence the relationship between CSR and

brand loyalty?

● How do the CSR initiatives and performance of the UK beverage industry affect

brand loyalty?

● Do UK consumer's perceptions of a company’s CSR initiative affect brand loyalty?

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 ● To what degree does the perception of the beverage industry affect CSR initiatives

and brand loyalty?

● What CSR initiatives can help a beverage company in the UK cultivate brand loyalty?

With the following questions, this study will establish a clearer relationship between CSR and

brand loyalty. Also, it will be able to highlight how best to cultivate brand loyalty using CSR.

1.4 Research Rationale

The main aim of this research is to showcase the relationship between CSR and brand loyalty

and how best UK beverage companies can cultivate brand loyalty using their CSR initiatives.

Over the years, CSR has evolved into a marketing tool and effort of a company (He & Lai,

2012). As a result, this study will demonstrate how CSR can be used to cultivate brand

loyalty. Also, this research will highlight the best way to utilise CSR to meet consumer

demands.

In the quest to draw a relationship between CSR and brand loyalty, the UK beverage market

offers several unique opportunities to answer the research questions in this study. According

to data from Statista (2023), The UK beverage market is worth 12 billion pounds with the

potential to grow to 36 billion pounds in 2024. With that market size and UK consumer

preferences, it is crucial to investigate how CSR can help various brands stay competitive.

For most companies, the adoption of CSR is tied to their social reputation (Dapi & Agabu

Phiri, 2015). They would want to position themselves as a brand that cares about the social

issues of their customers. In the UK, there is no shortage of examples of brands whose CSR

efforts appeal to the average UK consumer sentiments. For example, BrewDog is vocal in its

advocacy for social justice, Belu Water takes its zero-plastic packing campaign seriously, and

companies like Innocent Drinks have a drink-with-purpose philosophy (Mohr et al., 2001).

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The UK beverage industry is home to a host of unique beverage companies ranging from

established soft drink brands like Coca-Cola, to craft beer innovators and those at the

forefront of water. This blend of companies makes for an interesting research focus on CSR

trends. In the beverage industry, there are always concerns about safety practices, regulations,

sustainability, and many more (Mohr et al., 2001.

There are numerous of research and literature on the subject of establishing the relationship

between brand loyalty and CSR. However, inconsistent findings on the factors that influence

that relationship call for more research. Also, according to Bhattacharya & Sen (2004) in

their study on the complexity of consumer reactions to CSR initiatives, one must never

assume that the relationship between CSR and brand loyalty is always positive. Hence, a

deeper understanding of CSR and brand loyalty can help companies avoid any negative effect

on their reputation.

Implications of this study’s findings should extend beyond the UK beverage industry. Its

benefits can be applied broadly to numerous businesses and brands in varying sectors dealing

with the ever-changing demands of socially conscious consumers. By providing more

insights into the relationship between CSR and brand loyalty, it will be possible for

companies to develop CSR initiatives that satisfy the social moral compass as well as meet

their business obligations for profits.

1.5 Company Selections Criteria and Justification

In picking the beverage companies to help establish the relationship between CSR and brand

loyalty, several factors like market share, CSR engagement, and diversity of products are

some of the justifications for their selection.

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In terms of market share and diversity of products, the biggest beverage company in the UK

is Cocacola. According to Statista 2023, Cocacola UK leads other beverage brands,

especially in the carbonated drinks section with an annual revenue of roughly 300 million

pounds. Also, with that number in sales revenue, it shows that Coca-Cola UK holds more

than 40% of the market share for non-alcoholic drinks sold in the UK. Hence, with such a

hold over the market, and the demand of consumers in the UK, it is crucial to study how

Coca-Cola UK approaches CSR and if their CSR efforts impact their brand loyalty.

Secondly, the next company to study is Nestle UK. Nestle is a unique brand as it ranks

among the top 10 food and beverage brands globally. In its beverage category, Nestle offers

products such as Milo, Nescafe, Nestea, NestleWater, and Nesquik. In terms of the diversity

of products, Nestle ranks highly in its offering. According to the Nestle company website, It

is home to more than 8000 brands. With such diversity and the need to remain a top food and

beverage company, it calls to question what their CSR initiative could be in a highly

regulated industry as well as society. The UK is known for its strict regulations and its

socially demanding consumer market. Therefore, in studying Nestle’s approach to CSR and

building brand loyalty across its numerous offerings, we can better establish the strength of

CSR and brand loyalty relationships.

The third company that will be examined in this study is Belu Waters. When it comes to

using CSR initiatives as part of a marketing strategy, there is no better company to observe

than Belu Water. The company’s numerous campaigns such as non-plastic packing and

donating its profit to charity (Evening Standard, 2012), are integral to how it positions itself

as a leading beverage company in the UK. In this study, Belu Waters will help highlight the

connection between CSR initiatives and how they can influence brand loyalty. Compared to

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the two giants, studying Belu Water can also provide indications of consumer perception of

CSR.

Finally, this research will help establish the sustainability of CSRs as a marketing strategy for

companies looking to appeal to a socially conscious consumer. It will help numerous

companies in the beverage industry better develop CSR plans that will endear them to the

public while simultaneously improving their balance sheet.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

In this section of the research, there will be an extensive examination of both CSR and brand

loyalty in the UK beverage sector. Also, it will be crucial to explore various literatures that

explore the relationship between CSR and brand loyalty and the factors that affect them. This

chapter will explore in detail the theoretical frameworks of CSR, the measure and assessment

of brand loyalty, gaps in the pieces of literature on the subject of brand loyalty and CSR, a

conceptual review of various studies on CSR and brand loyalty in the UK, and limitations of

the literature.

In the extensive review of literature about brand loyalty and CSR, an analytical and

comparative analysis framework will be established to answer the research questions of this

study. Additionally. The chapter will explore the importance of CSR as a marketing tool and

strategy, and how the development of CSR initiatives can double as a moral responsibility

business strategy without coming across as greenwashing to the consumer.

2.2 The Evolution of CSR

The concept of CSR did not emerge fully formed, it took many years and varying concepts to

arrive at what it has become today. The fact that CSR has grown in significance and

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importance forcing the world to come to an agreed-upon definition is a testament to its

progress (Hamza & Jarboui, 2022). The evolution of CSR is important as it showcases how

businesses rise to meet the social demands of their consumers.

The first recognisable definition of CSR is credited to Bown in his 1953 book titled “Social

Responsibility of the Businessman.” (Bowen et al., 2013). In the book, Bown defines social

responsibility as the duty of a businessman to pursue policies, objectives, and actions that are

representative of society’s values of the time.

However, for most studies, the first definition of CSR starts with Caroll’s 1979 study “A

three-dimensional conceptual model of corporate performance. ” Caroll defined CSR as the

legal, discretionary, ethical, and economic expectations that businesses have to fulfill to meet

society’s standards (Carroll, 1979). After 1979, with the evolving social, economic, and

environmental demands, the definitions of CSRs kept evolving. In a 2006 study, Dahlrud

analysed thirty-seven definitions of CSR (Dahlsrud, 2006).

Despite the numerous definitions of CSR available, the basic concept of why CSR exists

remains true. The purpose of CSR is for organisations and businesses to act responsibly in

ways that positively impact society environmentally, fairly, legally, economically, and

ethically (Hamza & Jarboui, 2022).

While there might not be one universally acceptable definition of CSR, there is no denying

that CSR is important to a company’s corporate culture. Any company that cares about its

brand image and consumers must indeed conduct CSR initiatives that appeal to consumer's

values (Hamza & Jarboui, 2022).

2.3 Why is CSR Relevant Today

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In today’s climate especially in the UK consumer market, the acceptable social requirements

and values are always shifting. Also, the presence of globalisation and digitalisation means

that social cause in any area quickly becomes a relevant issue and is capable of altering

consumer behaviour. More troubling is the fact that digitalisation can make a business’s CSR

contradictory in certain environments especially if there is a cultural undertone (Wang et al.,

2016).

As a result, with the complexities of evolving societal values and how it influences consumer

behaviour, more brands and businesses think of CSR strategically. Hence, more works of

literature are highlighting CSR as a strategic tool for business growth as well as the factors

that drive CSR strategy (Hamza & Jarboui, 2022).

A classic example of how CSR can be used strategically is in the case of Coca-Cola UK. In

The Break Free From Plastic movement's annual Brand Audit Report 2023, Cocacola was

cited as the biggest plastic polluter for the year 2022 Lydia (2022). Also, companies like

Greenpeace lead campaigns in the UK against beverage companies using plastics garnering

more than 1.5 million signatures (Greenpeace, 2022). In response to some of these public

outcry for sustainability, some companies will institute CSR strategies to counter the public

sentiments. In the case of Coca-Cola, they decided to invest roughly £20 million into a

company to produce biodegradable packaging material according to their CSR report of

2023. Similarly, such an approach has been shown to work as in a YouGov (2023) study,

78% of consumers in the UK are more likely to buy your product if it comes in a sustainable

packaging container.

The UK government's focus on environmental sustainability and responsible business

practices is driving increased regulations and legislation impacting the beverage industry

(HM Revenue & Customs, 2023). Initiatives like the plastic packaging tax or proposed

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deposit return schemes incentivize companies to adopt sustainable practices through

economic repercussions. Companies like Coca-Cola's PlantBottle or Lucozade Ribena's

100% recycled plastic bottles demonstrate proactive adaptation to evolving regulations.

In the contemporary UK beverage landscape, CSR is not just a trendy buzzword; it's a

strategic imperative. By embracing ethical practices, building trust with consumers, and

differentiating themselves in a competitive market, UK beverage companies can navigate the

dynamic landscape and ensure future success. The cited academic literature underlines the

increasing importance of CSR and its multifaceted benefits for companies operating in this

evolving market.

2.4 Key Dimensions of CSR

Corporate Social Responsibility (CSR) has evolved from a fringe concept to a core strategic

element for businesses navigating the complexities of today's world. In the dynamic

landscape of the UK beverage industry, understanding the key dimensions of CSR is crucial

for building sustainable success. This exploration delves into the multifaceted nature of CSR,

supported by relevant academic citations, highlighting its critical role for UK beverage

companies.

2.4.1. Environmental Sustainability

Minimizing environmental impact: Reducing carbon footprint, optimizing water usage, and

adopting eco-friendly packaging are fundamental aspects of responsible environmental

practices (Bhattacharya & Sen, 2004). Also, transitioning to renewable energy sources like

solar or wind power demonstrates a commitment to reducing carbon emissions and aligns

with consumer expectations (Mohr et al., 2001). Likewise choosing sustainable ingredients,

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minimizing food waste, and ensuring the ethical treatment of animals throughout the supply

chain are key aspects of environmentally responsible sourcing (Hsu & Matsunaga, 2014).

2.4.2 Ethical Labor Practices

Providing fair wages, ensuring safe working environments, and respecting workers' rights are

essential elements of ethical labor practices (Brammer & Pavelka, 2009). Openly

communicating supply chain practices and ensuring worker well-being through ethical audits

demonstrate a genuine commitment to ethical labor (Porter & Kramer, 2011). Supporting

local communities through employment opportunities, skills development programs, and

community initiatives fosters trust and goodwill (Cone/Porter Novelli, 2011).

2.4.3 Social Responsibility

Promoting public health and well-being: Supporting health initiatives, promoting responsible

alcohol consumption, and tackling issues like obesity through product innovation

demonstrate social responsibility (Bhattacharya & Sen, 2004). Supporting educational

programs, skills development initiatives, and promoting social justice aligns with consumer

values and contributes to positive societal change (Mohr et al., 2001). Engaging in

constructive dialogue on issues like climate change, water scarcity, or ethical labor practices

showcases a company's commitment to broader societal well-being (Hsu & Matsunaga,

2014).

2.4.4 Governance and Transparency

Implementing strong ethical guidelines, ensuring transparency in decision-making, and

preventing corruption are crucial aspects of responsible governance (Brammer & Pavelka,

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2009). Communicating CSR initiatives, progress on environmental and social goals, and

potential challenges builds trust and stakeholder engagement (Porter & Kramer, 2011).There

is a need to establish clear accountability mechanisms and actively engage with stakeholders

to foster trust and ensure CSR initiatives are aligned with societal expectations (Cone/Porter

Novelli, 2011).

2.4.5 Stakeholder Value and Brand Reputation

Stakeholder value and brand reputation can be summed up as follows;

● Building trust and loyalty: Genuine and effective CSR initiatives can foster trust and

loyalty among consumers, employees, and other stakeholders (Bhattacharya & Sen,

2004).

● Differentiation and competitive advantage: In a crowded market, CSR can be a

powerful differentiator, attracting environmentally and socially conscious consumers

and enhancing brand reputation (Mohr et al., 2001).

● Risk mitigation and long-term sustainability: Proactive CSR can mitigate risks

associated with negative environmental impact, labor controversies, or ethical

concerns, contributing to long-term business sustainability (Hsu & Matsunaga, 2014).

CSR is not a one-dimensional concept; it's a multifaceted approach encompassing

environmental sustainability, ethical labor practices, social responsibility, governance

transparency, and stakeholder value creation. By actively engaging with these dimensions,

UK beverage companies can build trust with consumers, differentiate themselves in the

market, and contribute to a more sustainable future. Embracing the full spectrum of CSR

allows companies to navigate the evolving landscape of the UK beverage industry and thrive

in the years to come.

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2.5 What is Brand Loyalty and Why is It Important

In today's dynamic marketplace, where consumers are bombarded with choices and

information overload, brand loyalty stands as a powerful differentiator. It's the emotional

bond that ties customers to a particular brand, driving repeat purchases, positive word-of-

mouth, and a willingness to defend the brand even in the face of challenges.

Brand loyalty can be defined as the "consistent positive behavioral attitude toward a brand"

(Yi & Keller, 2006). It manifests in customers consistently choosing a specific brand over its

competitors, even when faced with comparable alternatives (Oliver, 1999). This loyalty

transcends mere satisfaction; it encompasses a sense of connection, trust, and emotional

attachment to the brand's values and identity.

Building brand loyalty is crucial for companies seeking long-term success. Loyal customers

offer a multitude of benefits, including;

● Increased revenue and profitability: Loyal customers spend more and repurchase

more frequently, significantly impacting a company's bottom line (Reichheld, 1996).

● Reduced marketing costs: Acquiring new customers is expensive, whereas retaining

existing ones is significantly cheaper (Reichheld, 1996). Loyal customers require less

marketing outreach and readily advocate for the brand.

● Enhanced brand reputation: Positive word-of-mouth recommendations from loyal

customers significantly influence the purchasing decisions of others, bolstering brand

reputation and attracting new customers organically (Park et al., 1994).

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 ● Competitive advantage: In a crowded market, brand loyalty distinguishes a company

from its competitors, offering a protective shield against price wars and market

fluctuations (Day, 1994).

2.5.1 Cultivating Brand Loyalty

Cultivating brand loyalty requires dedication and strategic efforts. Here are some key factors

to consider:

● Delivering consistent value: Meeting and exceeding customer expectations

consistently, offering quality products and services, and keeping promises builds trust

and fosters loyalty (Oliver, 1999).

● Creating positive brand experiences: Every interaction with the brand, from pre-

purchase to post-purchase, should be positive and memorable. Personalized

experiences, responsive customer service, and proactive engagement foster

attachment (Lemon & Peters, 2006).

● Emotional connection: Brands that resonate with customers' values, aspirations, and

lifestyles create a deeper emotional bond, translating into loyalty (Blackett et al.,

2011). Authentic storytelling, community building, and social responsibility

initiatives can contribute to this connection.

● Building communities: Fostering a sense of community around the brand, through

loyalty programs, exclusive events, and online forums, reinforces the feeling of

belonging and strengthens customer commitment (Muniz & O'Guinn, 2001).

Brand loyalty is not just a metric; it's the fuel that powers sustainable business success. By

delivering consistent value, creating positive experiences, and building emotional

connections with their customers, businesses can cultivate loyal advocates who drive growth

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and secure their place in a competitive marketplace. Recognizing the power of brand loyalty

and investing in its cultivation is a strategic imperative for companies seeking to thrive in the

long run.

2.6 The Relationship between Brand Loyalty and CSR

In this section, we will explore studies that investigated the complex relationship between

CSR and Brand loyalty. The key findings of the various studies will allow us to highlight the

role CSR plays in cultivating brand loyalty as well as its limitations.

According to research by Araújo et al., (2023) on the effect of CSR on brand equity,

consumer satisfaction, and brand image, CSR initiatives positively impact both brand image

and brand equity consumers develop a more favorable perception of a company and its brand

when they engage in responsible practices such as environmental sustainability, ethical labor

practices, and social responsibility. It emphasizes the importance of CSR in building a

positive brand image and enhancing brand equity but also highlights the need for effective

communication and alignment with core offerings to directly impact customer satisfaction.

Companies can leverage these findings to design comprehensive CSR strategies that resonate

with their target audience and contribute to long-term success (Araújo et al., 2023).

Similarly, Jankovská's (2022) research offers valuable insights for companies looking to

leverage CSR and CRM (Cross-Relational Marketing) for marketing success. While

consumers recognize the value of responsible companies, they are also discerning and

skeptical. Companies must focus on genuine CSR efforts, align their causes and CRM

strategies, and communicate effectively to build trust and loyalty (Musova et al., 2022). By

doing so, they can unlock the potential of CSR and CRM to not only benefit society but also

achieve sustainable business growth.

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Fatma and Khan's research also offers a nuanced understanding of how CSR influences brand

loyalty. While a direct positive impact was observed between perceived CSR and brand

loyalty, the study identifies brand credibility and brand identification as intermediary factors

(Fatma & Khan, 2023). This suggests that CSR efforts influence these key factors first, which

then, in turn, contribute to stronger brand loyalty.

Strong CSR practices can boost green innovation performance, meaning companies become

more adept at developing environmentally friendly products and processes (Huo et al., 2022).

This further entices consumers to seek sustainable options. To win over eco-conscious

consumers, brands should prioritize authentic CSR initiatives aligned with their core values.

Communicating the impact of these efforts and focusing on building trust and loyalty are key

to success in the sustainable marketplace (Huo et al., 2022).

2.7 Measuring Brand Loyalty

Brand loyalty, the bedrock of sustained success in a competitive landscape, requires

meticulous measurement. But in today's dynamic marketplace, where fleeting trends and

fickle preferences reign, gauging the depths of consumer devotion presents a complex

challenge. This section explores key considerations and effective tools for measuring brand

loyalty, drawing upon insights from academic research.

Traditionally, purchase frequency and repurchase rates offered a reliable gauge of brand

loyalty (Day, 2010). Consumers consistently buying from the same brand suggested a strong

preference. However, in an era of diverse options and easy online switching, frequency can

be misleading. A customer might purchase different brands within the same category, diluting

the true picture.

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Moving beyond transactions, attitudinal measures provide deeper insights into loyalty's

emotional core. Brand image, perceived quality, and emotional attachment (Oliver, 1999)

offer valuable indicators. Measuring these through surveys, focus groups, and social media

analysis can reveal if consumers truly connect with the brand and hold it in high regard.

However, behavioral loyalty can diverge from attitudinal dispositions. A consumer might

hold positive views towards a brand but still be swayed by promotions or convenience for

occasional purchases. To bridge this gap, researchers advocate for behavioral intention

measures (Park et al., 2010). Asking about consumers' likelihood to recommend the brand,

repurchase in the future, or advocate for it provides a more reliable prediction of actual

behavior.

Technology offers powerful tools to enhance loyalty measurement. Customer relationship

management (CRM) systems track interaction history, revealing purchase patterns,

engagement levels, and sentiment expressed (Chen & Xie, 2008). This rich data, when

analyzed objectively, paints a detailed picture of customer behavior and loyalty nuances.

Net Promoter Score (NPS) has become a popular metric, gauging customer loyalty through

the simple question, "How likely are you to recommend this brand to others?" (Reichheld,

2003). By measuring the number of promoters (enthusiastic advocates) versus detractors

(dissatisfied critics), NPS offers a valuable benchmark for loyalty and actionable insights for

improvement.

It's crucial to remember that loyalty is not static; it's a dynamic continuum influenced by

various factors. Consumer expectations evolve, competitor landscapes shift, and external

events can disrupt preferences. Therefore, regularly measuring loyalty using a combination of

approaches is essential to gauge shifts and adapt strategies accordingly and accurately.

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In conclusion, measuring brand loyalty in today's market requires a multifaceted approach.

By combining traditional metrics with attitudinal measures, behavioral intentions, and data-

driven tools, brands can comprehensively understand consumer devotion and strategize

effectively to strengthen the bonds that drive sustainable success.

2.7.1 Brand Loyalty in the UK Beverage Industry

The UK beverage industry is swirling with competition, where loyalty bubbles up amidst a

constant churn of new flavors and trends. From the comforting warmth of a builder's tea to

the trendy tang of kombucha, understanding the complex currents driving brand loyalty in

this dynamic market is crucial for navigating its turbulent waters (Humphries & O'Sullivan,

2015). This section delves into the factors influencing consumer devotion to specific

beverage brands, offering insights for brands seeking to secure a loyal following.

Taste, the quintessential ingredient in any successful beverage, remains the bedrock of brand

loyalty (Keller, 2012). Consistent quality, whether it's the familiar comfort of Tetley's or the

adventurous allure of BrewDog's craft beers, builds trust and fosters repeat purchases (Lowe

& Shankar, 2004). However, price sensitivity varies across categories, with discount

supermarket own-brands like Aldi's "Lacroix" challenging loyalty by offering comparable

taste at a lower price point (Humphries & O'Sullivan, 2015).

Beyond taste, brands build emotional connections through compelling storytelling and

carefully crafted images. Cadbury's iconic "Dairy Milk" campaign tapping into childhood

nostalgia, or Innocent Drinks' focus on ethical sourcing and community engagement, all

contribute to an impactful brand image, fostering loyalty that goes beyond just the product

itself (Cone/Porter Novelli, 2011).

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Convenience, the sugar that sweetens the deal, plays a crucial role. Tesco's ubiquitous

presence, or the ease of online delivery platforms like Deliveroo, influence consumer choice

and brand visibility (Kumar & Venkatesan, 2015). Well-executed marketing campaigns, from

Coca-Cola's holiday-themed activations to Lucozade's celebrity endorsements, can also

nudge consumers towards loyalty, creating brand memories and incentivizing repeat

purchases (Lemon & Verhoef, 2016).

Brand loyalty in this industry isn't a monolithic concept; it exists on a spectrum. Inertia,

driven by habit and convenience, keeps consumers glued to their usual morning cuppa, while

strong emotional attachments bind them to brands like Twinings, synonymous with high tea

rituals (Dowling & Uncles, 1997). Understanding where your brand falls on this spectrum is

crucial for tailoring loyalty-building strategies.

To stay afloat in this turbulent market, brands must be flexible and adaptable. Knowing your

consumers, their preferences, and purchase triggers is essential for crafting relevant

messaging (Lemon & Verhoef, 2016). Regularly introducing innovative flavors and products,

like Pepsi Max's recent zero-sugar range, keeps consumers excited and caters to evolving

tastes (Keller, 2012).

Investing in experiential marketing, like Guinness's Storehouse in Dublin, creates engaging

experiences that go beyond traditional advertising and build brand memories (Lemon &

Verhoef, 2016). Implementing effective loyalty programs and personalized offers, like Costa

Coffee's app-based rewards, shows appreciation and incentivizes repeat purchases (Lemon &

Verhoef, 2016). Finally, embracing sustainability, like Innocent Drinks' commitment to

carbon neutrality, resonates with consumers increasingly concerned about environmental and

social responsibility (Cone/Porter Novelli, 2011).

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Brand loyalty in the UK beverage industry is not just about market share and profits; it's

about fostering long-term relationships with consumers, building trust, and becoming an

integral part of their daily lives. By understanding the complex factors influencing loyalty

and actively nurturing it, brands can navigate the turbulent currents of this dynamic market

and secure a refreshing future in the hearts and glasses of their loyal customers.

2.8 CSR Frameworks

In today's interconnected and fiercely conscious landscape, Corporate Social Responsibility

(CSR) has shed its buzzword cloak to become a strategic imperative for businesses yearning

to thrive (Husted & de Jong, 2016). Consumers prioritize ethical practices, environmental

consciousness, and genuine social commitment, demanding transparency and action from the

brands they engage with (Cone/Porter Novelli, 2011). Yet, navigating the intricate labyrinth

of CSR can be challenging, leaving many organizations yearning for a compass to guide their

journey. This section delves into the diverse world of CSR frameworks, unpacking their key

components, strengths, and limitations, and offering insights on selecting the perfect roadmap

for your company's unique path toward responsible sustainability.

A plethora of CSR frameworks illuminate the CSR landscape, each offering a unique

approach and guiding light. Some prominent frameworks to consider include;

2.8.1 The Triple Bottom Line (TBL):

Championing the harmonious balance between economic, environmental, and social

considerations (Elkington, 1997), the TBL provides a broad overview but can lack actionable

steps for implementation (Schaltegger et al., 2003). Triple Bottom Line (TBL) framework

shines as a beacon for organizations seeking both profitability and societal impact. Introduced

23
by John Elkington in 1997 (Elkington, 1997), the TBL advocates for balancing economic,

environmental, and social considerations in business decision-making.

This holistic approach challenges the traditional singular focus on financial results

(Schaltegger et al., 2003). Proponents argue that companies prioritizing environmental

sustainability (e.g., reducing resource consumption, minimizing pollution) and social

responsibility (e.g., ethical labor practices, community engagement) ultimately enhance

financial success by building trust, attracting talent, and mitigating long-term risks (Husted &

de Jong, 2016).

However, navigating the TBL's interconnected dimensions can be complex. Implementing

initiatives that benefit one bottom line while neglecting others can create imbalances and

stakeholder dissatisfaction (Schaltegger et al., 2003). Additionally, measuring and reporting

progress across all three dimensions presents challenges, requiring robust and transparent

metrics (GRI, 2023).

Despite these challenges, the TBL's potential for driving positive change is undeniable.

Numerous examples showcase the success of companies embracing the TBL model, such as

Unilever's Sustainable Living Plan and Patagonia's commitment to environmental activism

(Cone/Porter Novelli, 2011). These organizations demonstrate that balancing profits, people,

and planet is not only essential for long-term sustainability but also a driver of innovation and

brand loyalty.

The TBL serves as a powerful reminder that businesses operate within a broader ecosystem.

By integrating economic, environmental, and social considerations into their core strategies,

companies can create shared value for stakeholders, the environment, and society at large.

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While challenges exist, the TBL's guiding principles offer a valuable roadmap for responsible

and sustainable business practices in the 21st century.

2.8.2 The Global Reporting Initiative (GRI)

Offering standardized guidelines for reporting on sustainability performance, the GRI

enhances transparency and stakeholder trust (Global Reporting Initiative, 2023). However, its

complexity and resource intensity can overwhelm smaller organizations (Basiño et al.,

2015).Established in 2000, GRI offers a comprehensive framework for organizations to

report on their economic, environmental, and social impacts (Global Reporting Initiative,

2023).

This standardized framework provides a common language for businesses to communicate

their sustainability performance to stakeholders, building trust and fostering responsible

decision-making (Brammer & Pavelka, 2009). By outlining reporting requirements for areas

like greenhouse gas emissions, labor practices, and community engagement, GRI empowers

stakeholders to assess, compare, and engage with companies on their commitments to

sustainability.

However, the GRI's comprehensive nature can present challenges, particularly for smaller

organizations with limited resources (Basiño et al., 2015). Implementing and reporting

against the extensive GRI standards can be resource-intensive, requiring dedicated personnel

and expertise. Additionally, achieving meaningful stakeholder engagement with complex

GRI reports can be difficult, demanding clear and concise communication strategies.

Despite these challenges, the GRI's impact on transparency and sustainability across

industries is undeniable. Its standardized framework has spurred widespread adoption, with

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over 11,000 organizations from 121 countries reporting their sustainability performance using

GRI standards (GRI, 2023). This global reach encourages benchmark comparisons, best-

practice sharing, and continuous improvement in sustainability performance.

By shining a light on corporate social responsibility efforts, the GRI empowers stakeholders

to hold companies accountable and drive collective action towards a more sustainable future.

While limitations exist, the GRI's commitment to transparency and standardization remains a

cornerstone of responsible business practices in the 21st century

2.8.3 The Sustainable Development Goals (SDGs)

Aligned with the UN's 17 ambitious goals for addressing global challenges (United Nations,

2015), this framework provides a comprehensive roadmap for tackling social and

environmental issues. However, selecting and effectively localizing relevant goals requires

careful consideration (Griggs et al., 2013).The Sustainable Development Goals (SDGs),

adopted by the UN in 2015, offer a transformative roadmap for tackling poverty, inequality,

and environmental degradation (United Nations, 2015). These 17 interconnected goals,

ranging from eradicating poverty to combating climate change, provide a universal

framework for businesses to align their strategies with global challenges and societal well-

being.

Embracing the SDGs presents exciting opportunities for businesses. By integrating these

goals into their core operations, companies can innovate, generate shared value, and build

brand resilience (Griggs et al., 2013). For example, focusing on SDG 7, promoting affordable

and clean energy, might inspire a manufacturer to invest in renewable energy sources,

reducing carbon footprint and fostering environmental leadership.

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Yet, aligning with the SDGs also requires careful consideration. Selecting relevant goals that

resonate with a company's core values and expertise is crucial to avoid "SDG-washing" and

ensure genuine impact (Griggs et al., 2013). Moreover, effectively localizing global goals to

address specific regional and contextual challenges is vital for meaningful progress.

Despite challenges, the potential of the SDGs is undeniable. Numerous examples showcase

how businesses are driving positive change through SDG-oriented strategies. Unilever's

Sustainable Living Plan tackles social inequalities and environmental challenges aligned with

multiple SDGs, while Patagonia's activism on climate change demonstrates the power of

aligning brand purpose with the SDG agenda (Cone/Porter Novelli, 2011).

The SDGs remind us that business success is inextricably linked to societal well-being and

environmental sustainability. By embracing these goals as guiding stars, companies can pave

the way for a future where economic prosperity thrives alongside social justice and a healthy

planet. Embracing the SDGs is not just a responsibility, but an opportunity to be part of a

collective journey towards a more equitable and sustainable tomorrow.

2.8.4 The Stakeholder Theory

Emphasizing the needs and interests of all stakeholders, from employees and customers to

communities and environmental activists (Freeman, 1984), this approach fosters inclusivity

but can lead to conflicting priorities and challenging prioritization decisions (Mitchell et al.,

1997). The Stakeholder Theory emerges as a guiding principle, emphasizing the importance

of considering and balancing the interests of all players in corporate decision-making

(Freeman, 1984). This section delves into the core tenets of the Stakeholder Theory,

exploring its strengths, limitations, and potential applications in today's business landscape.

27
At its heart, the Stakeholder Theory advocates for moving beyond the traditional shareholder-

centric model. It challenges the notion that maximizing shareholder value is the sole purpose

of a corporation, arguing that businesses have a responsibility to all stakeholders who are

impacted by their decisions (Mitchell et al., 1997). This includes internal stakeholders like

employees and management, external stakeholders like customers and suppliers, and broader

societal stakeholders like environmental groups and local communities.

By embracing a stakeholder-centric approach, businesses can reap several benefits. Increased

trust and loyalty from stakeholders can lead to enhanced brand reputation, improved

employee engagement, and stronger community relations (Freeman et al., 2010).

Additionally, addressing the needs and concerns of diverse stakeholders can unlock

innovative solutions and mitigate potential risks, fostering long-term sustainability and

resilience (Mitchell et al., 1997).

However, navigating the labyrinth of stakeholder interests comes with its own set of

challenges. Identifying and prioritizing which stakeholders hold the most significant claims

on the corporation can be complex, leading to potential conflicts and trade-offs in decision-

making (Mitchell et al., 1997). Moreover, effectively engaging with all stakeholders,

especially those with seemingly opposing interests, demands significant resources and

communication skills.

Despite these challenges, the Stakeholder Theory continues to hold significant relevance in

the evolving business landscape. Emerging trends like corporate social responsibility and

sustainability emphasize the interconnectedness between business success and societal well-

being, aligning perfectly with the Stakeholder Theory's core principles (Husted & de Jong,

2016).

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Companies can apply the Stakeholder Theory in various ways to navigate this interconnected

world. Regularly conducting stakeholder mapping exercises to identify and prioritize key

stakeholders is crucial. Establishing open communication channels and incorporating

stakeholder feedback into decision-making processes can foster trust and collaboration.

Additionally, adopting transparent reporting practices that address the concerns of diverse

stakeholders can enhance accountability and build long-term trust.

In conclusion, the Stakeholder Theory offers a valuable lens for navigating the complex

relationships between businesses and their diverse stakeholders. While navigating the

intricacies of competing interests presents challenges, prioritizing stakeholder engagement

and fostering shared value creation can unlock new opportunities for sustainable success in

today's interconnected world. By embracing the Stakeholder Theory's principles, businesses

can build stronger relationships, mitigate risks, and contribute to a more equitable and

sustainable future for all.

Choosing the right framework is far from a "one-size-fits-all" endeavor. The optimal

roadmap depends on a constellation of factors specific to your organization:

● Organizational Size and Industry: Small businesses might benefit from the

simplicity of the TBL, while larger companies may require the comprehensive

reporting structure of the GRI. Additionally, industry-specific frameworks (e.g.,

Global Reporting Initiative - Sustainability Sector Disclosures) offer tailored guidance

and benchmarks (GRI, 2022).

● Strategic Priorities: Identifying your core values and sustainability goals helps

narrow down suitable frameworks. For instance, a company prioritizing climate action

29
 might find the SDGs related to renewable energy and clean water particularly

relevant.

● Stakeholder Engagement: Understanding and incorporating stakeholder perspectives

is crucial for crafting a successful CSR strategy. Frameworks that encourage

stakeholder dialogue, like the Stakeholder Theory, can be invaluable tools for

garnering diverse perspectives and building trust (Freeman et al., 2010).

● Resource Availability: Implementing complex frameworks like the GRI demands

significant resources and expertise. Choosing a framework aligned with your capacity

ensures effective implementation and avoids resource allocation challenges (Basiño et

al., 2015).

While frameworks offer valuable guidance, they are not magic wands that automatically

conjure up responsible business practices. Effective CSR goes far beyond mere compliance

with framework requirements. Here are some key considerations for a truly authentic and

impactful journey:

● Authenticity and Transparency: Genuine commitment to social responsibility

resonates more than mere box-ticking exercises. Transparency in CSR initiatives

builds trust and credibility with stakeholders (Brammer & Pavelka, 2009).

● Integration and Alignment: CSR should not be an isolated add-on; it needs to be

seamlessly woven into the fabric of the organization, aligning with core values,

business strategy, and everyday operations (Porter & Kramer, 2011).

● Continuous Improvement: CSR is a journey, not a destination. Regularly evaluating

and adapting your CSR approach based on feedback, data, and evolving stakeholder

expectations is essential for sustainable success (Brammer & Pavelka, 2009).

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Navigating the intricate labyrinth of CSR frameworks can be daunting, but with careful

consideration, strategic implementation, and an unwavering commitment to authenticity and

continuous improvement, businesses can find their North Star and illuminate a path toward

sustainable success. Choosing the right framework, aligning it with your unique constellation

of factors, and prioritizing genuine social responsibility will not only create shared value for

stakeholders, the environment, and society at large but also ensure your organization shines

brightly in the ever-evolving landscape of conscious business practices.

2.9 Gaps in the Research of CSR and Brand Loyalty

One key limitation lies in the difficulty of measuring impact. Quantifying the link between

CSR initiatives and brand loyalty is a complex challenge. Many CSR efforts focus on long-

term societal and environmental benefits, making immediate effects on consumer choice hard

to discern (Brammer & Pavelka, 2009). Additionally, isolating the influence of CSR from

other brand attributes like product quality and marketing campaigns further complicates the

analysis.

Furthermore, the perceived authenticity of CSR initiatives plays a crucial role in influencing

brand loyalty. Consumers have become increasingly skeptical of "greenwashing" tactics,

where companies engage in superficial CSR activities solely for public image enhancement

(Basiño et al., 2015). In these cases, CSR can backfire, damaging trust and undermining

potential loyalty gains.

Moreover, the heterogeneity of consumer values and perceptions poses another challenge.

While some consumers may be highly driven by ethical considerations and readily switch

brands based on a company's social responsibility record, others prioritize price, convenience,

31
or personal preferences (Husted & de Jong, 2016). This diversity in values makes it difficult

for CSR initiatives to have a universal impact on brand loyalty across all consumer segments.

Adding to the complexity, the effectiveness of CSR in building brand loyalty can vary based

on the industry and context. For instance, CSR might hold greater weight in industries like

food and beverage where ethical sourcing and sustainability concerns are more salient to

consumers (Cone/Porter Novelli, 2011). Conversely, in highly price-sensitive markets like

fast fashion, CSR's influence on brand loyalty might be marginal.

Finally, the gap between intentions and implementation can further weaken the CSR-brand

loyalty connection. Even well-intentioned CSR initiatives can fall short if not executed

effectively. Poorly managed projects, lack of transparency, and inconsistent communication

can dilute the positive impact of CSR on brand loyalty (Brammer & Pavelka, 2009).

In conclusion, the relationship between CSR and brand loyalty remains a complex and multi-

faceted phenomenon. While the potential for CSR to foster loyalty is undeniable, navigating

this turbulent water requires careful consideration of limitations and gaps. Focusing on

genuine, impactful initiatives, effective communication, and alignment with consumer values

are crucial for ensuring that CSR efforts effectively translate into lasting brand loyalty. By

bridging these gaps and fostering a robust connection between social responsibility and

consumer trust, businesses can chart a course towards a more loyal and sustainable future.

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 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 General Research Methodology Overview

This research delves into the Corporate Social Responsibility (CSR) practices of three

prominent beverage companies in the UK, employing a nuanced comparative content analysis

(CCA) to dissect their commitments, initiatives, and communication strategies. This

methodology transcends surface-level comparisons, uncovering the deeper structures and

narratives shaping their CSR efforts and its influence over brand perception and loyalty.

The key data source for this CCA lies in publicly available documentation from each

company, specifically:

● CSR reports: These official documents provide a bird's-eye view of each company's

stated CSR framework, priorities, and ongoing initiatives.

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 ● Sustainability reports: These offer detailed information on environmental impact

assessments, resource management practices, and long-term sustainability goals.

● Company websites: Analyzing dedicated CSR sections and related press releases

reveals communication strategies and messaging employed to engage stakeholders.

Through a rigorous CCA process, each set of documents will be systematically examined to

identify key themes, messages, and framing strategies employed by the companies in their

CSR communication.

3.2 Overview of the Three Beverage Companies in the UK

3.2.1 CocaCola UK Overview

Coca-Cola, the ubiquitous name synonymous with sugary refreshments, holds a unique

position within the UK beverage industry. Its iconic brand, alongside a diverse portfolio of

acquired brands, permeates supermarkets, restaurants, and convenience stores across the

nation. This section delves into the multifaceted landscape of Coca-Cola UK, exploring its

market share, portfolio, key challenges, and potential future directions.

Coca-Cola UK boasts a significant market share, claiming around 25% of the UK's overall

soft drink market (Statista, 2023). This dominance is fueled by the iconic Coca-Cola brand,

alongside established names like Fanta, Sprite, and Schweppes. However, Coca-Cola has

strategically diversified its portfolio, acquiring brands like Innocent Drinks (healthy juices

and smoothies) and Costa Coffee (coffee chain), catering to evolving consumer preferences

for healthier and more premium options (Humphries & O'Sullivan, 2015).

34
While Coca-Cola's core brands remain popular, the UK beverage market witnesses a shift

towards healthier alternatives. Consumers are increasingly concerned about sugar intake,

seeking low- and no-sugar options (Mintel, 2022). Coca-Cola has responded by introducing

Diet Coke, Coca-Cola Zero Sugar, and various sugar-free versions of its other brands.

However, concerns remain about the artificial sweeteners used in these alternatives,

prompting further innovation in natural sweeteners and sugar reduction technologies (Lowe

& Shankar, 2004).

Sustainability is another pressing concern for the beverage industry, with plastic waste and

water usage under scrutiny. Coca-Cola UK has implemented initiatives to address these

challenges, including introducing 100% recycled plastic bottles in some brands and investing

in water conservation technologies (Coca-Cola UK, 2023). However, critics argue that these

efforts are insufficient, urging further transparency and bolder action towards sustainable

packaging and water management (Brammer & Pavelka, 2009).

The digital age has transformed consumer behavior and marketing strategies. Coca-Cola UK

has embraced social media platforms and online advertising, engaging with consumers

through interactive campaigns and targeted promotions (Lemon & Verhoef, 2016). However,

navigating the ever-evolving digital landscape requires continuous adaptation, with a focus

on personalized experiences and ethical marketing practices (Keller, 2012).

Coca-Cola UK's future success hinges on its ability to adapt to changing consumer

preferences, societal pressures, and technological advancements. Several potential scenarios

emerge:

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 ● The Healthier Choice: Coca-Cola could further diversify its portfolio with healthier

options, leveraging its acquisition of Innocent Drinks and potentially venturing into

plant-based beverages.

● The Sustainable Revolution: Coca-Cola could become a leader in sustainable

packaging and water usage, setting ambitious goals and adopting innovative

technologies to minimize environmental impact.

● The Digital Pioneer: Coca-Cola could leverage its brand recognition and marketing

expertise to dominate the online beverage space, offering personalized experiences

and engaging consumers through interactive campaigns.

Coca-Cola UK's position in the UK beverage industry is both dominant and precarious.

While its iconic brands and diverse portfolio offer stability, the company faces challenges

from evolving consumer preferences, sustainability concerns, and a rapidly changing digital

landscape. By embracing innovation, demonstrating a genuine commitment to sustainability,

and adapting its marketing strategies to the digital age, Coca-Cola UK can secure its place as

a leader in the future of the UK beverage industry.

3.2.2 CocaCola UK CSR Policy and Efforts

Coca-Cola UK, like its global parent, navigates a complex landscape where sugary

refreshment collides with societal expectations for corporate social responsibility (CSR). This

section delves into Coca-Cola UK's CSR policy and efforts, uncovering areas of focus,

evaluating their effectiveness, and considering future directions amidst evolving

sustainability and health concerns.

36
Coca-Cola UK's CSR framework, "A Sustainable Business for a Better Future," prioritizes

three key areas: Planet, People, and Portfolio. Under the "Planet" pillar, the company aims to

reduce its environmental footprint through initiatives like water conservation, waste

reduction, and increasing recycled content in packaging (Coca-Cola UK, 2023). These efforts

align with broader societal concerns about resource depletion and plastic pollution,

potentially enhancing brand image and stakeholder trust (Cone/Porter Novelli, 2011).

However, some criticize the vagueness of targets and transparency shortcomings, questioning

the genuine commitment to sustainability goals (Brammer & Pavelka, 2009).

Shifting to "People," Coca-Cola UK focuses on community engagement and employee well-

being. Supporting community projects, volunteering initiatives, and promoting diversity and

inclusion are commendable strategies to fostering positive stakeholder relationships and

building brand loyalty (Husted & de Jong, 2016). However, critics point out the potential for

"greenwashing" or superficial engagement aimed primarily at public relations gains, urging

for deeper, long-term partnerships and demonstrable impact (Basiño et al., 2015).

Finally, "Portfolio" emphasizes innovation and adapting product offerings to evolving

consumer preferences. Coca-Cola UK has introduced low- and no-sugar variants like Coca-

Cola Zero Sugar and invested in healthier brands like Innocent Drinks, addressing concerns

about sugar consumption and diversifying its offerings (Humphries & O'Sullivan, 2015).

However, concerns remain about artificial sweeteners and the overall health implications of

sugary beverages, demanding continuous innovation towards truly healthy alternatives (Lowe

& Shankar, 2004).

Evaluating the effectiveness of Coca-Cola UK's CSR efforts remains a complex task. The

company cites achievements like reducing water use by 20% and increasing recycled plastic

37
content in bottles to 50% (Coca-Cola UK, 2023). However, independent verification and

long-term impact assessments are crucial to ensure genuine progress beyond mere public

relations exercises.

Looking ahead, Coca-Cola UK faces several challenges to strengthen its CSR posture.

Embracing bolder sustainability goals, particularly concerning plastic waste and water usage,

can demonstrate genuine commitment and contribute to a more circular economy (Kumar &

Venkatesan, 2015). Additionally, addressing health concerns through increased investment in

research and development for natural sweeteners and healthy beverage options can further

solidify the company's social responsibility.

Coca-Cola UK's CSR policy and efforts encompass various commendable initiatives

addressing environmental, social, and health concerns. However, concerns remain about

vagueness, transparency, and genuine commitment. By embracing bolder goals, prioritizing

independent verification, and fostering deeper stakeholder engagement, Coca-Cola UK can

navigate the complex terrain of CSR, ensuring a future where its fizz aligns with genuine

social responsibility.

3.2.3 CocaCola UK Brand Perception and Brand Loyalty

Coca-Cola UK's brand perception rests on a bedrock of nostalgia and positive emotional

associations. Childhood memories of ice-cold Coke at picnics, iconic Christmas adverts, and

a pervasive presence in popular culture solidify its emotional resonance (Keller, 2012).

However, this legacy is increasingly challenged by concerns about sugar content and health

implications, casting a shadow of perceived unhealthiness (Lowe & Shankar, 2004).

Navigating this duality, Coca-Cola UK has introduced low- and no-sugar variants, aiming to

retain positive brand feelings while addressing contemporary health anxieties.

38
Brand loyalty, the cornerstone of Coca-Cola UK's success, stems from a combination of

factors. Habit and convenience play a significant role, with Coke often constituting the

"default" option at supermarkets and restaurants (Humphries & O'Sullivan, 2015). However,

brand loyalty remains nuanced, contingent on factors like price sensitivity and evolving

consumer preferences. The rise of healthier alternatives and ethical beverage brands

challenges Coca-Cola UK's dominance, demanding sustained innovation and diversification

(Mintel, 2022).

To strengthen brand loyalty and address shifting perceptions, Coca-Cola UK must adopt a

multi-pronged approach. Transparency in its CSR efforts, particularly concerning

sustainability and water conservation, can bolster trust and counter-accusations of

"greenwashing" (Brammer & Pavelka, 2009). Engaging in collaborative marketing with

ethical brands like Innocent Drinks can further enhance perceptions of social responsibility

and attract health-conscious consumers (Kumar & Venkatesan, 2015).

Furthermore, embracing personalized marketing strategies and experiential campaigns can

deepen brand connections. Targeted online advertising, customized beverage options, and

interactive virtual experiences can foster a sense of individual value and engagement, further

cementing loyalty (Lemon & Verhoef, 2016).

The introduction of low- and no-sugar variants like Coca-Cola Zero Sugar addressed health

concerns, showcasing a commitment to consumer well-being. Simultaneously, partnerships

with ethical brands like Innocent Drinks demonstrated a willingness to adapt to the changing

landscape, earning respect from health-conscious consumers.

In conclusion, Coca-Cola UK's brand perception and loyalty exist in a dynamic interplay of

heritage, health concerns, and evolving consumer priorities. By understanding these nuances,

39
maintaining emotional resonance, embracing transparency and ethical practices, and

innovating to align with contemporary concerns, Coca-Cola UK can navigate the turbulent

waters of brand perception and secure lasting loyalty in the hearts of British consumers.

3.2.4 Nestle UK Overview

Nestle, the world's largest food and beverage company, holds a significant presence in the

UK market. From iconic brands like Nescafe and Milo to bottled water and healthier options

like Pure Fit, Nestle UK navigates a diverse beverage landscape. However, this seemingly

robust presence comes with its own set of challenges, particularly concerning Corporate

Social Responsibility (CSR). This essay delves into the complexities of Nestle UK's beverage

business, analyzing its market share, brand portfolio, and key CSR concerns.

Nestle UK boasts a strong market share, claiming over 10% of the overall UK soft drink

market (Statista, 2023). This dominance is fueled by established brands like Nescafe, the

UK's leading coffee brand, and Milo, a popular chocolate and malt drink. Nestle has also

strategically diversified its portfolio, acquiring brands like Viatamine, a fruit juice brand, and

expanding into bottled water with Buxton and Volvic (Humphries & O'Sullivan, 2015). This

diversification allows Nestle to cater to different consumer preferences and tap into growing

segments like healthy drinks and bottled water.

Nestle UK has implemented initiatives to address sustainability challenges, including

introducing recycled plastic bottles for some brands and investing in water conservation

technologies (Nestle UK, 2023). However, critics argue that these efforts are insufficient,

urging further transparency and bolder action towards sustainable packaging and water

management (Brammer & Pavelka, 2009). Additionally, concerns about Nestle's sourcing

40
practices and palm oil usage raise questions about its commitment to responsible

environmental stewardship.

Nestle UK can solidify its position as a responsible leader in the future of UK beverages by

embracing innovation, showcasing a sincere dedication to environmental and social

responsibility, and adjusting its marketing strategies to align with the demands of the digital

age. This approach will enable Nestle UK to successfully navigate the intricate beverage

landscape and emerge as a forward-thinking and conscientious industry leader.

3.2.5 Nestle UK CSR Policies and Efforts

Nestle UK, synonymous with household staples like Nescafe and KitKat, also navigates the

complex terrain of Corporate Social Responsibility (CSR) amidst shifting consumer values

and public scrutiny. Its "Creating Shared Value" (CSV) framework outlines three pillars:

nutrition, health and wellness, and environmental sustainability (Nestle UK, 2023). However,

the effectiveness of these efforts and their alignment with genuine social responsibility

remain debatable.

One key focus of Nestle UK's CSR is promoting healthier eating habits. Initiatives like sugar

reduction in some beverages and partnerships with organizations like Change4Life resonate

with the growing health consciousness of consumers (Miller & Buys, 2020). However, critics

point out the continued presence of sugary products in the portfolio and raise concerns about

marketing practices targeting children, questioning the genuine commitment to public health

(Nestle Critics, 2023).

On the sustainability front, Nestle UK emphasizes water conservation and plastic reduction.

Investing in water treatment technologies and increasing recycled content in packaging are

41
commendable steps (Nestle UK, 2023). However, concerns remain about the company's

overall water footprint and potential environmental damage caused by certain sourcing

practices, demanding greater transparency and concrete impact assessments (Brammer &

Pavelka, 2009).

Furthermore, Nestle UK faces accusations of greenwashing, where CSR initiatives appear

more as public relations exercises than genuine commitments to societal well-being (Basiño

et al., 2015). The lack of independent verification and measurable goals within CSR

programs fuels these concerns, highlighting the need for robust accountability mechanisms.

Moving forward, Nestle UK must prioritize tangible action over mere promises. Embracing

independent verification of CSR activities, establishing measurable goals with transparent

reporting, and addressing concerns about marketing practices and sourcing are crucial steps.

Building trust through genuine engagement with stakeholders and adapting to evolving

societal expectations will be key for Nestle UK to navigate the murky waters of CSR and

forge a path towards sustainable and responsible business practices.

3.2.6 Nestle UK Brand Perception and Brand Loyalty

Brand loyalty remains significant, particularly for established household names like Nescafe.

Habit and convenience play a role, with Nestle often the default choice in supermarkets and

cafes (Humphries & O'Sullivan, 2015). However, this loyalty is nuanced, susceptible to

factors like price sensitivity and the rise of ethical alternative brands (Mintel, 2022).

Concerns about sugar content and marketing practices targeting children chip away at the

traditional trust, demanding more sustainable and ethical brand practices (Nestle Critics,

2023).

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Nestle UK occupies a complex space in the British consumer mind. Its iconic brands, like

Nescafe and KitKat, hold a nostalgic charm woven into childhood memories and everyday

rituals. However, this positive brand perception faces challenges from evolving health

concerns, ethical controversies, and changing consumer preferences (Keller, 2012).

Nestle UK stands at a crossroads. By leveraging its brand legacy while adapting to

contemporary concerns, it can navigate the turbulent waters of brand perception and maintain

its loyal consumer base. Failure to do so, however, risks diluting the trust and nostalgia

associated with its iconic brands like Nescafe.

3.2.7 Belu Water Overview

Belu Water, a UK-based social enterprise, stands out in the crowded beverage landscape by

prioritizing environmental and social responsibility alongside refreshing hydration. Unlike

traditional bottled water companies, Belu operates with a distinct mission: "to change the way

the world sees and consumes water." This essay delves into the unique story of Belu,

examining its business model, impact efforts, and the challenges it faces in a market

increasingly focused on sustainability.

Belu's journey began in 2007 with a simple idea: offer high-quality, ethically sourced mineral

water while minimizing environmental impact and investing in water access for communities

in need. Founded as an environmental social enterprise, Belu diverges from traditional profit-

driven corporations by reinvesting 100% of its net profits into its "Impact" program,

partnering with the renowned charity WaterAid (Belu Water, 2023). This commitment to

social responsibility aligns with the growing consumer demand for ethical and sustainable

brands, resonating with environmentally conscious individuals seeking to make a positive

impact with their purchasing choices (Cone/Porter Novelli, 2011),

43
Belu's impact extends beyond simply offering ethically sourced bottled water. The company

champions sustainability throughout its operations, prioritizing recycled content in its bottles,

reducing water usage in its production process, and implementing carbon offsetting initiatives

(Belu Water, 2023). This holistic approach to environmental responsibility addresses

concerns about the plastic footprint of bottled water and aligns with broader societal goals for

a circular economy (Kumar & Venkatesan, 2015).

Furthermore, Belu actively engages in community initiatives, collaborating with local

organizations and schools to raise awareness about water scarcity and environmental issues.

These efforts foster positive brand perception and build trust with consumers who seek

brands aligned with their values (Husted & de Jong, 2016).

Belu Water stands as a pioneer in the beverage industry, demonstrating how a company can

prioritize sustainability, social responsibility, and quality products while navigating the

challenges of a competitive market. By embracing continuous innovation, strengthening

community partnerships, and ensuring transparency, Belu has the potential to become a

leading force in ethical and sustainable hydration, proving that refreshing the world can be

more than just a slogan, it can be a mission.

3.2.8 Belu Water CSR Policy and Efforts

Belu Water stands apart not just for its refreshing taste, but for its deeply integrated Corporate

Social Responsibility (CSR) policy. Unlike generic "greenwashing," Belu's efforts are woven

into its core identity, encompassing environmental sustainability, ethical sourcing, and social

impact.

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Holistic Environmental Stewardship: Belu goes beyond the typical "reduce, reuse, recycle"

mantra. Its bottles are crafted with high recycled content, minimizing virgin plastic usage

(Belu Water, 2023). Carbon offsetting initiatives address emissions, and innovative

partnerships focus on developing compostable or reusable packaging solutions (Brammer &

Pavelka, 2009). This holistic approach aligns with contemporary demands for circular

economy practices, resonating with environmentally conscious consumers (Kumar &

Venkatesan, 2015).

Ethical Sourcing and Transparency: Belu sources its water responsibly, ensuring fair

payment to communities and minimal environmental impact. Partnering with WaterAid

demonstrates a commitment to transparency and impact measurement, crucial for building

trust in the social enterprise model (Husted & de Jong, 2016). Belu doesn't shy away from

addressing the inherent environmental concerns of bottled water, actively engaging in open

dialogue and exploring more sustainable solutions (Cone/Porter Novelli, 2011).

Community Engagement and Empowerment: Belu goes beyond product-centric impact,

actively engaging with communities. Educational programs in schools raise awareness about

water scarcity and environmental issues, fostering responsible habits and creating conscious

consumers (Belu Water, 2023). This commitment to community empowerment distinguishes

Belu from purely profit-driven businesses, solidifying its brand loyalty among ethically-

minded consumers.

In conclusion, Belu Water's CSR policy isn't merely a marketing facade; it's the driving force

behind its success. By prioritizing environmental stewardship, ethical sourcing, and

community engagement, Belu proves that a refreshing business model can also be a force for

45
positive change, setting a high bar for ethical and sustainable practices in the beverage

industry.

3.2.9 Belu Water Brand Perception and Brand Loyalty

Belu Water holds a distinctive position in the consumer consciousness, with its brand identity

intricately crafted around notions of revitalizing hydration, social responsibility, and

environmental consciousness. This harmonious blend generates favorable connections with

ethical consumption, particularly appealing to an expanding group of consumers who

prioritize purpose-driven brands (Cone/Porter Novelli, 2011). The transparent approach of

Belu, coupled with its authentic dedication to the social enterprise model, reinforces this

positive image, instilling trust and cultivating loyalty among discerning consumers (Husted &

de Jong, 2016).

To solidify brand loyalty and overcome these hurdles, Belu can strategically leverage its

strengths. Focusing on community engagement activities and educational initiatives can

further reinforce its connection with conscious consumers (Belu Water, 2023). Embracing

innovation in sustainable packaging, such as compostable or refillable options, can address

concerns about plastic waste and align with its environmental mission (Kumar & Venkatesan,

2015). Ultimately, Belu's success hinges on its ability to maintain a consistent narrative,

balancing premium quality with ethical sourcing and tangible social impact. By

demonstrating that a refreshing drink can also be a force for positive change, Belu can foster

enduring brand loyalty and pave the way for a more responsible future in the beverage

industry.

3.3 Limitation of Cultivating Brand Loyalty with CSR Initiatives

46
While Corporate Social Responsibility (CSR) has become a cornerstone of modern

marketing, its effectiveness in cultivating lasting brand loyalty faces increasing scrutiny.

Beyond the initial "halo effect" generated by well-publicized initiatives, consumers are

becoming more discerning, demanding authenticity and tangible impact from brands that seek

their allegiance. Here, we delve into the limitations of relying solely on CSR as a loyalty-

building strategy:

1. Greenwashing Fatigue and Skepticism: Consumers are jaded by the rise of

"greenwashing," where companies exaggerate or misrepresent their sustainability efforts to

capitalize on ethical trends (Bhattacharya et al., 2023). Inconsistent actions or lack of

transparency quickly erode trust, leading to "CSR fatigue" and cynicism towards brands that

prioritize image over genuine impact (Brammer & Pavelka, 2019).

2. The "CSR Paradox": Overemphasizing CSR narratives can overshadow core product

attributes and quality, creating a perceived trade-off between ethics and functionality (Husted

& de Jong, 2021). Consumers ultimately seek reliable, functional products, and neglecting

these aspects while touting CSR can breed resentment and erode loyalty.

3. Value Disconnect and Misalignment: CSR initiatives that clash with a brand's core

values or target audience can appear disingenuous and fail to resonate (Keller, 2016).

Aligning CSR efforts with brand identity and consumer beliefs is crucial for creating a

meaningful connection and fostering genuine loyalty.

4. Price and Convenience Still King: While CSR attracts specific segments, brand loyalty

often hinges on fundamental drivers like price, convenience, and product quality (Mintel,

2023). Relying solely on CSR may not be enough to retain consumers in a competitive

market where these core drivers take precedence.

47
5. The Sustainability Challenge: Maintaining consistent CSR commitment over time can be

difficult, leading to inconsistent messaging and disillusionment among consumers who

expected sustained action (Cone/Porter Novelli, 2020). Long-term loyalty requires robust

sustainability strategies and genuine dedication to positive change, not just fleeting CSR

campaigns.

In today's conscious consumer landscape, CSR remains a valuable tool for attracting attention

and engaging specific segments. However, building robust brand loyalty requires a more

nuanced approach. Companies must focus on core product offerings, ensure alignment with

brand values, prioritize transparency, and avoid greenwashing tactics.

3.4 Summary Comparison of CocaCola UK, Nestle UK and Belu Water

COMPANY CSR MARKET BRAND BRAND

INITIATIVES SIZE PERCEPTION LOYALTY

Cocacola UK Plastic £5.6 billion Highly Very strong but

reduction and recognization shifting due to

water Leading share consumer concerns

Conservation in the soft drink Healthy on health and

segment concerns environment

Sugar reduction

in some of its

beverages Environmental

48
 concerns

Reducing

overall

environmental

footprint

Nestle UK Has a CSV £10.5 billion for Ethical and Very strong brand

framework both its food health concerns but dominance is

promoting and beverage are always threaten by

health, nutrition, outfit looming consumer values

and and lifestyle

environmental A major player

sustainability across

numerous

Recycling and product

water treatment segments

programs

Partners with

Change4Life

program on

health

Belu Water Invests 100% of £3 million in the Ethical right Weak but growing

its profit into bottle water due to its CSR

water niche with Premium price efforts

49
 accessibility growing

programs expectation Limited

distribution

Recycling and

Ethical sourcing Very healthy

of water and safe looking

brand

Used

biodegradable

packages

Runs programs

to educate

communities on

sustainability

A quick analysis of all three brands is as follows;

● Coca-Cola and Nestle hold significant market shares and brand recognition, but face

challenges in adapting their CSR initiatives to address concerns about health,

environmental impact, and marketing practices.

● Belu Water occupies a niche market with a differentiated CSR model focused on

social impact and sustainability. Its brand loyalty is strong among ethically-conscious

consumers, but limited market size and pricing may hinder broader reach.

50
3.5 Recommendations

● The long-term success of each company's CSR strategy will depend on its ability to

address consumer concerns, maintain transparency, and demonstrate tangible impact.

● Belu Water's model offers an alternative approach to CSR, prioritizing social impact

and building a loyal community, but challenges remain in scaling its reach and

competing in a broader market.

● The evolving landscape of consumer preferences and increasing focus on ethical

consumption make adaptation and continuous improvement crucial for all three

companies in terms of their CSR efforts and overall brand strategies.

CHAPTER FOUR

CONCLUSIONS AND FURTHER RESEARCH RECOMMENDATIONS

4.1 Preamble

In this final chapter of this research, a summary is presented, aiming to offer a comprehensive

overview of the prominent themes explored in the preceding chapters and clarifying their

significance concerning the study's goals and objectives. Additionally, this chapter scrutinizes

51
the conclusions drawn from the comparative evaluation, discussing the contributions of the

research study and its potential impact on the relevant area of study. It also provides

recommendations for future research endeavors

4.2 Conclusion

The main aim of this study is to analyse and highlight the relationship between corporate

social responsibility (CSR) and brand loyalty using three beverage companies in the UK. In

other to establish the main objective, four sub-objectives were added to help answer the

research questions posed by this study. While it is conclusively stated and highlighted

throughout this study that CSR goes beyond a company’s duty to society, it can also be used

strategically as a marketing tool. This study relied on existing works of literature on CSR

and brand loyalty to establish a relationship between both entities.

The intricate relationship between brand loyalty and CSR paints a complex picture across the

beverage landscape. Coca-Cola's and Nestle UK's established footholds are evident in their

market size and brand recognition. Yet, their reliance on traditional models in a shifting

ethical landscape poses significant challenges. Consumers increasingly prioritize health,

sustainability, and transparency, raising concerns about their sugar content, environmental

impact, and marketing practices. While their CSR initiatives address these concerns to an

extent, the disconnect between image and perceived reality fosters skepticism and limits

genuine brand loyalty.

Belu Water stands as a compelling counterpoint. By prioritizing social impact and

environmental responsibility at its core, it fosters a loyal community driven by shared values.

This loyalty, however, faces limitations due to its niche market and premium pricing.

52
Nonetheless, Belu's success demonstrates the potential of ethical and purpose-driven brands

to resonate with a growing segment of consumers, even in a competitive market.

Ultimately, success lies not in relying solely on CSR as a loyalty catalyst, but in strategically

integrating it with core product quality, consistent marketing, and long-term commitment to

societal well-being. Coca-Cola and Nestle UK must adapt their CSR efforts to address

fundamental concerns and demonstrate tangible impact beyond greenwashing. Belu Water

must navigate the challenge of scaling its reach without compromising its core values or

pricing its ethical positioning out of reach.

The future of brand loyalty in the beverage industry hinges on this evolution. Consumers hold

the power, and their choices will increasingly favor brands that not just quench their thirst,

but also quench their ethical yearning for a more sustainable and responsible world. Brands

that fail to recognize this will find their once-loyal supporters drifting towards those who

embody authenticity and positive impact. In this turbulent tide, only those who navigate the

currents of change with genuine purpose and commitment will secure lasting brand loyalty in

the years to come.

4.3 Limitations and Further Research

In this study, the paper was limited by the fact that data collection relies on third-party

publications of the various companies in the case study. As a result, it is hard to perform any

quantitive analysis on how best to measure the impact of CSR on brand loyalty. Also, noting

that brand loyalty does not just on factor of marketing where CSR as a marketing tool can be

objectively measure. Other factor such as pricing and historical relevance are also significant

in driving brand loyalty. Hence, this study recommend that in the future further research be

conducted on how directly link brand loyalty to CSR effort.

53
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