*4.4. Production*

From the commodity wholesaler, the products are transported to the producer (Company D). Company D produces confectioneries for its own labels, but also for labels from other trading companies as a contract manufacturer.

Sustainability standards are mainly implemented to be able to sign contracts with organic labels: "It is quite clear [ . . . ] these decisions [to produce a sustainable product] are, after all, always economically driven." (IP4). Ecological improvement processes, such as packaging optimization, are driven by economic considerations. Company D does not set its own environmental sustainability targets.

Contracts with customers include details on packaging, delivery terms, quality levels, penalties, insurances, and pricing. According to IP4, there is hardly any exchange of information on a personal level between the producer and their partners: "There is a contract; we have to establish the ability to deliver. At that point, the friendly relationship [ . . . ] stops." (IP4). IP4 states that "facts dominate purchasing and no[t] personal preference[s]" (IP4). Due to the formal nature of Company D's business relationships, there is no significant difference in the cooperation with long-term partners compared to new partner companies.

Contracts are supplemented by production standards, which the company needs in order to sell produced food in certain countries. Additionally, some products are certified and produced according to kosher, organic, or fair-trade conditions. When purchasing raw materials, Company D watches out for certain certificates, such as the RSPO label for sustainable palm oil: "[ . . . ] environmentally conscious purchasing or certificate-driven purchasing" (IP4) is important to fulfill customers' sustainability expectations.

IP4 sees producers generally under high pressure to respond to customers' demands. Trading companies are in the position to choose from many contract manufacturers and can thus use their market power to depress prices and dictate contract terms: "[ . . . ] retailers already have a high power." (IP4). Company D sees itself in a price war with the retail companies: "[ . . . ] they present themselves as the advocate of the end customer." (IP4).
