Sustainability integration, digitization and firm competitiveness in food and beverages manufacturing firms in Kenya

Abstract

Kenya’s food and beverages manufacturing sector plays a vital role in the economy but struggles with weak competitiveness due to poor integration of environmental, social, governance, and digitalization sustainability. Food and beverage exports have remained stagnant at around 15% of total manufactured exports, limiting global competitiveness. This slow growth was driven by inefficiencies in operational processes, high energy costs, and restricted access to international markets due to stringent regulatory requirements. Thus, this study examined the impact of sustainability integration and digitization on firm competitiveness in the sector. Specifically, it explores environmental sustainability integration, social sustainability integration, governance sustainability integration, and digitalization sustainability integration. anchored in natural resource-based view theory, agency theory, contingency theory, and schumpeter’s theory of innovation, the study adopts a descriptive research design. The target population consists of food and beverage manufacturing firms in Kenya, with a census covering 248 firms. Data was collected using a structured questionnaire through the drop-and-pick method. Analysis involved was descriptive and inferential statistics, with findings presented in frequency tables and charts to provide insights into the role of sustainability and digitalization in enhancing firm competitiveness. The findings indicate that environmental sustainability integration is applied at a moderate level, with water conservation and efficiency measures showing stronger adoption, while pollution control remains weak. Social sustainability integration is partly achieved through fair wages and workplace safety, but limited attention to employee welfare and CSR weakens its overall impact. Governance sustainability integration shows progress in ethical leadership and accountability, yet gaps in regulatory compliance and consistent reporting limit its effectiveness. Digitalization sustainability integration benefits from IoT adoption, yet limited data-driven practices and inconsistency hinder its contribution to sustainable efficiency. The study recommended that firms integrate environmental, social, and governance sustainability with digitization to enhance competitiveness in the food and beverages manufacturing sector. Aligning digital tools with sustainability goals can improve operational efficiency, stakeholder trust, and ethical oversight when implemented through coordinated strategies.