Navigating Green Supply Chain Inertia: A Case Study of Sustainable Operations in Food and Beverage Small and Medium Enterprises

Abstract

The transition toward a green economy has intensified sustainability expectations across food and beverage supply chains, yet small and medium enterprises (SMEs) continue to encounter substantial barriers in adopting environmentally responsible practices. This challenge is particularly evident in Banyuwangi's souvenir industry, where the region's Green Tourism branding contrasts with the persistent dependence of local producers on conventional plastic packaging. This study explores how organizational inertia shapes the adoption of Green Supply Chain Management (GSCM) practices among food and beverage SMEs operating within the Banyuwangi souvenir cluster. Employing an exploratory multiple-case study design, data were collected through semi-structured interviews, field observations, and document analysis involving selected local producers and supply chain stakeholders. The findings reveal that green supply chain inertia is primarily driven by resource rigidity, reflected in limited financial capacity and restricted access to eco-friendly packaging suppliers, alongside routine rigidity embedded in long-established production practices. Rather than preventing organizational change entirely, these constraints stimulate frugal eco-innovation through hybrid packaging strategies and community-based waste-to-value initiatives that reduce environmental impacts while preserving business feasibility. The study extends the conventional corporate-centric perspective of GSCM by proposing a grassroots adaptation framework that demonstrates how sustainability transitions in resource-constrained SMEs emerge through incremental innovation, local collaboration, and practical operational adjustments rather than capital-intensive technological transformation. These findings provide both theoretical insights and practical directions for designing more inclusive green transition policies for local SME ecosystems.