Essay on CSR- Koch Foods

Koch Foods is an international company that deals with food processing and distribution. For more than 30 years, the company has established an extensive operation to become one of the biggest poultry processors in the United States. The company’s contemporary facilities and capabilities enable it to commit to service and quality. Koch Foods is well-known for quality, and it does not compromise on that. For years, it has committed to providing products that exceed customers’ expectations. During the production process, consistency is maintained to produce meat products that customers deserve. With unmatched customer service, Koch Foods reacts quickly to market trends and changes in consumer needs with its excellent management structure and state-of-the-art facilities. However, the provision of quality products to customers is not enough for companies if they fail to invest in corporate social responsibility. To attract and retain customers, companies should show interest in the communities they serve. Being socially responsible can aid Koch Foods in growing its brand and image. Further, CSR empowers employees and boosts morale leading to enhanced productivity.

Koch Foods was ranked position 129 among the largest private companies in the US. It has revenues amounting to $3.6 billion and 14,000 total employees. Forbes also ranks the company among the most valuable. The company has continued to grow due to its financial stability. Chicken consumption in the US had seen growing popularity which has made Koch Foods grow significantly. Koch Foods’ biggest customers include Burger King and Walmart. The company also processes nuggets for big retailers Aldi and Kroger. Such large customers imply continued sales growth for the company, which contributes to further stability. Koch Foods aims to expand through acquisitions since it has sufficient capital resources; however, other market players have been reluctant to be bought out by major industry players. The company aims to diversify to other products like pork or beef. Koch Foods’ success cannot be doubted since it processes over 12 million chickens and also over 50 million pounds of ready-to-cook chicken. In January 2021, the media reported that Koch Foods was proceeding with its $16 million expansion project for its Gadsden poultry processing plant (Harris, 2021) This implies Koch Foods is financially stable to move ahead with growth projects and also finance its daily operations.

CSR in Koch Foods

The company’s perspective regarding its corporate responsibility and practices is based on animal welfare, safe food practices, and sustainability. Koch Foods takes high responsibility, care, and consideration when handling chickens. The National Chicken Council in the US established Animal Welfare Guidelines, which the company adheres to. Koch Foods has a well-developed internal monitoring program that entails quality assurance, processing operations, live production, and veterinary services (Koch Foods, n.d.). A certified third-party auditor ensures the company sticks to existing and new guidelines. Also, the company exhibits a commitment to the ethical treatment of its chickens. It produces its own feeds which meet FDA standards to ensure their birds are well fed and live stress-free and healthy. No hormones or steroids are used on the birds’ nutrition, and Koch Foods is careful about its suppliers since it screens the quality of ingredients from suppliers. On regular occasions, internal animal welfare audits are performed to further compliance. Besides, Professional Animal Auditor Certification Organization (PAACO) conducts annual audits on the company’s operations (Koch Foods, n.d.). The focus on animal welfare demonstrates that Koch Foods is socially responsible and is focused on ensuring animals are well treated. Koch Foods can build a positive business reputation by treating animals well, especially from the eyes of animal activists and vegetarians.

Besides being committed to the humane and ethical treatment of poultry, Koch Foods ensures safe food practices. High-quality poultry is delivered, and facilities are inspected by USDA regularly. Koch Foods operates under Sanitation Standard Operating Procedure (SSOP), and Hazard Analysis Critical Control Point (HACCP) plans and regulations. Its BRC Standards Certification ensures quality standard is maintained and the company can ensure protection to the final consumer through operational and safety criteria (Koch Foods, n.d.). Poultry is also prone to illness which can compromise quality. To respond to such cases, the flock is treated through antibiotics as directed by FDA regulations. Current Good Manufacturing Practices (CGMP) are strictly followed for quality control. In all regions of operations, Koch Foods adheres to local and state-mandated procedures and inspections. Furthermore, internal monitoring programs assist in providing security and safeguards in each area of operations to protect their chicken (Koch Foods, n.d.). Showing high concern to poultry is essential for Koch Foods since consumers want quality products. Ensuring the poultry is treated, and healthy delivers quality and shows the company is focused on the welfare of the end consumer.

The physical environment is a fundamental aspect of every business. In the modern business world, consumer trends are shifting to sustainability. Companies must respond to such trends by ensuring their production process takes into account the environmental aspect. Koch Foods believes its business success and sustainability are indistinguishably related. The company vigilantly protects water, air, and land resources (Koch Foods, n.d.). Koch Foods Sustainability in Action Program was developed to assist in guiding the company’s sustainability practices throughout different essential elements of its daily operations including supplier selection, waste management and recycling, process water conservation and efficiencies, transportation, carbon footprint reduction and energy use, and product packaging efficiencies. Koch Foods recycles all the water used in the production process. Product packaging materials are made using over 30% recycled materials. The company seeks to attain 100% from renewable resources. Currently, Koch Foods aims to redesign its packaging, which has minimized corrugate use by over 15% and would ultimately eradicate wax-coated boxes. Processing fryer oils are all recycled for bio-fuel conservation. Such moves to ensure environmental sustainability demonstrate the company’s concern for the physical environments which has enhanced its reputation in the poultry business.

Today, consumers want to know where the food they consume comes from, and how such foods affect the environment. Koch Foods has a great responsibility to the future of consumers. The company has focused on developing policies that consider environmental and social ramifications. Major areas of focus include a contribution to local communities by participating in environmental and economic aspects, improved health and nutrition by promoting balanced diets for obesity prevention, and promoting sustainability by supporting recycling, waste reduction, and reducing energy and water consumption. Further community contribution is exhibited through supporting local farmers and local agriculture. However, there is evidence the company failed to uphold compassion, respect, and dignity to other farmers. Koch Foods was accused of discrimination against black farmers. It also retailed against those who aired their views. From 2009 to 2015, Koch Foods reduced its black contract framers to zero from having four in Mississippi (Arnsdorf, 2019). USDA investigators revealed unjust discrimination against such black farmers.

From racial discrimination to employment discrimination, Koch Foods was sued by the US Equal Opportunity Commission for employee harassment and discrimination on the basis of race and national origin. In its Mississippi plant, workers were “subjected to touching and sexually suggestive comment, were hit, were charged money for normal everyday work activities” (Ford, 2019). To settle the lawsuit, the company paid $3,750,000 and other related reliefs in 2018 (McCarthy, 2019). Further, Koch Foods violated federal immigration law by using 161 undocumented workers in Fairfield Ohio in 2007. Koch Foods was charged $536,046 for the violation and commenced using E-verify to verify workers’ eligibility. However, in 2019, ICE raided its Mississippi operations and caught other 680 undocumented workers (Cooke & Rosenberg, 2019). Even though the company has been subjected to criticism regarding unfair work practices, it establishes mitigation policies like job fairs and E-verify to ensure workers meet employment criteria. Overall, Koch Foods has a reputable image from the eyes of outsiders.

Koch Foods products have been subjected to recalls due to undeclared allergens and misbranding. 743 pounds were recalled in 2019 after a customer reported incorrect labelling. Even though the company prioritizes customers, it had failed to declare known allergens, eggs, milk, and soy on the product label (Berry, 2019). However, the product presented no harm to consumers, but previous buyers were advised to dispose of such products. Koch Foods products continue to gain popularity across the globe, and increasing growth in poultry consumption may go well for the company and thereby manage to match some of its biggest competitors like Tyson Foods.

Implication

Koch Foods demonstrates financial stability in its years of operations; as a result, it makes a viable business partner. From the CSR scrutiny, it can be concluded that the company is socially responsible. Koch Foods has high regard for the environment through its sustainability measures and use of environmentally friendly packaging materials. The company is also committed to reducing air pollution, water pollution, and greenhouse gas emissions. Customers are paramount to Koch Foods, and the company strives to ensure high-quality products are provided. For example, when a customer reported unlabeled allergen, Koch Foods recalled such products immediately and warned customers against consumption. Further, products are manufactured using high standards as every stage of production is thoroughly assessed. Regulatory bodies have access to the facilities to ensure required production practices are observed. Koch Foods has invested in modern facilities to ensure high production standards. In addition to supporting local farmers, the company aims to ensure that its stakeholders are respected and shown the required dignity and compassion. However, the company was subjected to various controversies like sexual discrimination, discrimination based on race and origin, hiring undocumented workers. The company has instituted policies to resolve the hiring process through E-verify. Koch Foods also paid required fines by federal authorities and resolves to conduct job fairs and training to deal with issues of discrimination. Overall, Koch Foods appears an exceptional partner of CSR efforts continues to support its success.

References

Arnsdorf, I. (2019). How a Top Chicken Company Cut Off Black Farmers, One by One. ProPublica. Retrieved 18 June 2021, from https://www.propublica.org/article/how-a-top-chicken-company-cut-off-black-farmers-one-by-one.

Berry, R. (2019). Koch Foods recalls chicken due to unnamed allergens. Cincinnati.com. Retrieved 18 June 2021, from https://www.cincinnati.com/story/news/2019/07/18/koch-foods-recalls-chicken-due-unnamed-allergens/1773404001/.

Cooke, K., & Rosenberg, M. (2019). Allegations of labor abuses dogged Mississippi plant years before immigration raids. U.S. Retrieved 18 June 2021, from https://www.reuters.com/article/us-usa-immigration-koch-foods-idUSKCN1UZ1OV.

Ford, Z. (2019). ICE raids followed a massive sexual harassment settlement at Mississippi plants. Archive.thinkprogress.org. Retrieved 18 June 2021, from https://archive.thinkprogress.org/ice-raids-follow-massive-sexual-harassment-settlement-mississippi-plant-koch-foods-d95eb2720f67/.

Harris, X. (2021). $15.9 million expansion project in Gadsden adds 135 jobs. – News Break. News Break. Retrieved 18 June 2021, from https://www.newsbreak.com/news/2150848174252/15-9-million-expansion-project-in-gadsden-adds-135-jobs.

Koch Foods. Corporate Responsibility & Practices – Koch Foods. Koch Foods. Retrieved 18 June 2021, from https://kochfoods.com/our-company/corporate-responsibility-practices/.

McCarthy, W. (2019). Koch Foods settles $3.75 million discrimination lawsuit. wlbt.com. Retrieved 18 June 2021, from https://www.wlbt.com/2019/08/09/koch-foods-settles-million-discrimination-lawsuit/.