Journal of Entrepreneurship, Management and Innovation (2026)

Volume 22 Issue 4: 5-24

DOI: https://doi.org/10.7341/20262241

JEL Codes: O32, O44

Magdalena Marczewska, Ph.D., Assistant Professor, University of Warsaw, ul. Szturmowa 1/3, 02-678 Warszawa, Poland / Visiting Researcher, Imperial College London, South Kensington Campus, London, SW7 2AZ, United Kingdom, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Ravi Shankar Audichya, M.A., Research and Technical Specialist, University of Warsaw, ul. Szturmowa 1/3, 02-678 Warszawa, Poland, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Christopher L. Tucci, Professor of Digital Strategy & Innovation, Imperial College London, South Kensington Campus, London, SW7 2AZ, United Kingdom, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

PURPOSE: This paper explores how small- and medium-sized enterprises (SMEs) and adjacent actors in the European food sector navigate the dual imperatives of digital transformation and sustainability. While policy and academic discourse increasingly frame these agendas as complementary under the “twin transition,” limited research explores how resource-constrained food companies and adjacent actors perceive, prioritize, and operationalize their integration, especially given the sector's reputation for slow adoption of new technologies. The paper addresses this gap by investigating the complementarities, tensions, and trade-offs shaping the relationship between digitalization and ecological objectives at the firm level. METHODOLOGY: Adopting an exploratory qualitative design, the study draws on 21 semi-structured interviews with representatives from SMEs and adjacent ecosystem actors in the European food sector. Using the Gioia methodology, data were analyzed inductively through first-order coding, second-order themes, and aggregate dimensions, enabling the development of empirically grounded insights into strategic priorities, organizational barriers, and managerial practices. FINDINGS: The results reveal a conditional and reciprocal relationship between digital transformation and sustainability. Digital technologies, such as IoT monitoring, traceability platforms, and precision agriculture systems, are widely perceived as enablers of sustainability by enhancing efficiency, transparency, and regulatory compliance. Sustainability commitments, in turn, shape digital adoption by directing investment toward technologies that support ecological objectives. However, resource scarcity, fragmented regulations, skill deficits, and organizational resistance act as significant barriers, often forcing companies to prioritize one agenda over the other. Moreover, digitalization can introduce new ecological risks, such as electronic waste or higher energy consumption, complicating the assumption of automatic complementarity. IMPLICATIONS: Theoretically, the study advances an exploratory map that positions digital transformation and sustainability as mutually influential but contingent processes shaped by institutional pressures, sectoral structures, and resource availability. For practice, it highlights the importance of strategic leadership, cross-functional collaboration, stakeholder engagement, and workforce training to overcome barriers and realize synergies. ORIGINALITY & VALUE: The originality of this research lies in its specific focus on European food sector and adjacent ecosystem actors, offering preliminary but empirically grounded insights into the “twin transition” under resource-constrained conditions in a relatively conservative sector.

Keywords: agri-food sector, SMEs, digital transformation, sustainability, ESG, European food sector, sustainable digitalization, green transition, food supply chains, digital traceability, qualitative research, Gioia methodology, digital sustainability, circular economy, Industry 4.0.

INTRODUCTION

The dual pressures of digital transformation and sustainability have become defining challenges for contemporary organizations. Across industrial sectors, firms are expected to reduce their environmental footprint while simultaneously adopting digital technologies that enhance efficiency, transparency, and competitiveness. At the European policy level, this alignment is articulated through the “twin transition” agenda, which explicitly links digitalization and sustainability within the Green Deal and the Digital Decade strategy (Muench et al., 2022; Benedetti et al., 2023). While this framing suggests complementarities, the practical integration of digital and sustainability objectives is far from straightforward, particularly for small and medium-sized enterprises (SMEs). This is further aggravated in the relatively conservative food sector, which is known to have slow uptake of innovations and technologies (World Economic Forum, 2018).

These two imperatives – digitalization and sustainability – are often presented as mutually reinforcing, yet for SMEs, the interplay between them is still difficult to navigate. Limited financial resources, workforce constraints, and fragmented regulatory environments force SMEs to make difficult choices in allocating scarce resources, constraining their ability to advance both objectives simultaneously (Drempetic, Klein, & Zwergel, 2020; Elia, Solazzo, Lerro, Pigni, & Tucci, 2024; Hanelt, Bohnsack, Marz, & Antunes Marante, 2021; Nadkarni & Prügl, 2021; Warner & Wäger, 2019; Zhao et al., 2018; Zumente & Bistrova, 2021).

In this study, digital transformation is defined as a strategic, organization-wide process through which firms leverage digital technologies to fundamentally reshape processes, value creation, and competitive positioning (Hanelt et al., 2021; Nadkarni & Prügl, 2021). This goes beyond isolated digital adoption, which refers to the implementation of specific tools (e.g., IoT sensors, traceability software), and instead encompasses structural, cultural, and strategic renewal. Importantly, for resource-constrained SMEs operating in structurally conservative sectors, digital transformation is best understood as an incremental and staged process rather than a discrete organizational event. The adoption of specific digital tools represents the initial and most observable phase of this journey – a necessary precondition through which firms begin to build the data infrastructure, organizational capabilities, and managerial learning that can, over time, enable deeper structural and cultural renewal. This study therefore examines digital transformation as it manifests in its early stages, which is precisely where the majority of SMEs in the European food sector currently operate. Sustainability, in turn, is understood as the integration of environmental, social, and governance (ESG) objectives into business strategy and operations (Drempetic et al., 2020; Zhao et al., 2018), with a primary focus on environmental aspects. In the context of the food sector, sustainability particularly involves resource efficiency, emissions reduction, waste minimization, regulatory compliance, and transparent supply chains.

While digital transformation and sustainability have each attracted substantial scholarly attention, they have largely evolved as parallel streams of research. Digital transformation studies have focused on strategic and technological renewal, dynamic capabilities, and business model change (Elia et al., 2024; Nadkarni & Prügl, 2021; Hanelt et al., 2021; Warner & Wäger, 2019). Sustainability research, by contrast, has examined environmental performance, ESG metrics, and responsible governance practices (Zhao et al., 2018; Drempetic et al., 2020; Zumente & Bistrova, 2021). More recently, emerging scholarship under the label of the “twin transition” has begun to connect these domains, demonstrating links among digitalization, energy efficiency, eco-innovation, and circular economy practices (Montresor & Vezzani, 2023; Tabares et al., 2025; Falcke et al., 2024). However, three important gaps remain.

First, much of the existing empirical evidence is based on macro-level analyses or studies of large corporations. We know considerably less about how SMEs operating under resource constraints interpret and manage the relationship between digital transformation and sustainability in practice, and how relevant actors in their ecosystems perceive it. Second, the dominant narrative emphasizes complementarities, often portraying digital technologies as enablers of sustainability. Fewer studies explore the tensions, trade-offs, and unintended consequences that may arise, such as financial crowding-out effects or environmental costs associated with digital infrastructure. Third, sector-specific conditions, such as for the food sector, remain insufficiently theorized. The structural characteristics of an industry may shape how digital and sustainability agendas interact, yet these contextual mechanisms are rarely examined in depth.

The European food sector offers a particularly relevant setting for addressing these gaps. It is one of Europe’s largest manufacturing sectors, and it plays a major role in employment, economic growth, and trade, while also being resource-intensive and subject to strict regulation (FoodDrinkEurope, 2020). Its long and complex supply chains, demanding environmental standards, and rising consumer expectations for transparency make the integration of digital transformation and sustainability both urgent and difficult. SMEs are the dominant actors in this sector (Eurostat, 2025a, 2025b), and they often lack the financial and organizational capacity of larger firms to manage digital transformation and/or transitions toward sustainability effectively (Abel-Koch et al., 2019; European Investment Bank, 2021; Kilimis et al., 2019; Menon & Shah, 2020; Pfister & Lehmann, 2021; Sufian et al., 2021). These conditions make it challenging for smaller firms to pursue both digital transformation and sustainability simultaneously. Rather than assuming automatic synergy, it is necessary to understand how SMEs in this sector prioritize investments, allocate resources, and cope with competing demands.

This paper does not claim that the interdependencies between digitalization and sustainability have been overlooked altogether. Instead, it advances a more precise argument: how resource-constrained SMEs in a structurally complex and conservative sector perceive, prioritize, and operationalize the integration of digital transformation and sustainability, and under what conditions complementarities turn into tensions.

To investigate this gap, the study addresses the following research questions (RQs):

RQ1: What are the strategic priorities for digital transformation and sustainability for companies in the European food sector?

RQ2: To what extent are digital transformation and sustainability considered competing or complementary priorities?

RQ3: What are the major enablers and barriers for integrating both priorities into companies’ strategies?

RQ4: What are the managerial implications for supporting digital transformation and sustainability initiatives?

To answer these questions, the paper presents findings from an exploratory qualitative study comprising 21 semi-structured interviews with representatives of food SMEs and adjacent actors in the European food sector. Using the methodology of Gioia et al. (2013), the research develops an empirically grounded understanding of how managers navigate complementarities, trade-offs, and institutional pressures associated with the twin transition.

The study contributes to the literature in three ways. First, it advances a food industry-specific perspective on the twin transition by proposing a robust, contextually grounded explanation of how managers in resource-constrained food-related firms make sense of the relationship between digitalization and environmental sustainability. Second, it highlights the contingent nature of complementarities, showing how resource scarcity, regulatory fragmentation, and supply chain structure influence outcomes. Third, it provides sector-specific insights into the food sector, a context in which sustainability pressures are particularly salient and digital infrastructure is increasingly indispensable.

The paper is structured as follows. The next section reviews the literature on digital transformation, sustainability, and their emerging interconnections within the twin transition discourse. The methodology section outlines the research design, sampling strategy, and analytical procedures. The results section presents empirical findings, followed by a discussion of theoretical and managerial implications. The paper concludes by summarizing contributions, acknowledging limitations, and outlining directions for future research.

LITERATURE REVIEW

Digital transformation in SMEs

Digital transformation is increasingly recognized as a fundamental driver of organizational change, reshaping not only processes but also strategic orientations and competitive dynamics. While early perspectives framed digital transformation primarily as the adoption of IT solutions to improve efficiency, more recent research highlights its broader strategic implications. Elia et al. (2024) present digital transformation as a process that redefines internal operations, value delivery, and ecosystem interactions, while Nadkarni and Prügl (2021) emphasize its technological underpinnings. Hanelt et al. (2021) expand on this perspective, identifying digital transformation as a journey encompassing strategy, structure, and culture.

For SMEs, the digital transformation journey is challenging. Unlike large corporations with access to capital and talent, SMEs often operate under conditions of resource scarcity. Research consistently shows that SMEs lag in digital maturity, facing barriers such as limited financial resources, a lack of digital skills, and restricted access to external funding (Abel-Koch et al., 2019; European Investment Bank, 2021; Kilimis et al., 2019). Even when motivated to pursue digital initiatives, SMEs struggle with fragmented supply chains and workforce resistance, complicating the implementation of new technologies. Successful transformation, therefore, not only depends on technology adoption but also on enablers such as strategic agility, leadership commitment, and cross-functional collaboration (Teece, 2018; Warner & Wäger, 2019).

Importantly, Warner and Wäger (2019) characterize digital transformation not as a one-time event but as an ongoing process of strategic renewal, one that unfolds iteratively as firms sense opportunities, seize resources, and reconfigure their capabilities over time. For SMEs operating under conditions of resource scarcity, this process is necessarily gradual. Rather than pursuing a simultaneous structural, cultural, and technological overhaul, resource-constrained firms tend to begin by adopting specific digital tools, incrementally building the organizational foundations from which broader transformation can emerge. In this sense, tool adoption and digital transformation are not categorically distinct phenomena but represent different stages along a common developmental trajectory. This staged understanding is particularly relevant in the European food sector, where conservative organizational cultures and limited financial slack constrain the pace and scope of transformation, making incremental digital adoption the practical entry point into a longer-term transformative process.

Sustainability in SMEs

In parallel, sustainability has become a defining concern for organizations, with environmental, social, and governance (ESG) practices forming the cornerstone of responsible business. The ESG framework captures how firms address carbon emissions, social inclusivity, and governance transparency, offering a multidimensional approach to sustainability assessment (Zhao et al., 2018; Drempetic, Klein, & Zwergel, 2020; Zumente & Bistrova, 2021). For SMEs, sustainability is both an opportunity and a constraint. On one hand, SMEs’ flexibility and entrepreneurial orientation position them to experiment with innovative sustainable practices. On the other hand, financial and human resource limitations hinder their ability to invest in large-scale environmental and social initiatives (Pfister & Lehmann, 2021).

Recent empirical work suggests that sustainability practices in SMEs are shaped not only by external stakeholder expectations but also by internal structural characteristics, particularly firm size. Evidence indicates that firm size can influence how effectively stakeholder pressure is translated into the adoption of circular economy practices and into measurable economic and environmental performance outcomes. Smaller firms may experience strong normative and market pressures to engage in sustainability initiatives, yet their limited resource base can restrict the scope and depth of implementation. In contrast, relatively larger SMEs may possess greater organizational slack, managerial specialization, and absorptive capacity, enabling them to operationalize sustainability demands more systematically (Ahmadov et al., 2025). These findings underscore the heterogeneity within the SME category and highlight the importance of considering firm-level contingencies when examining sustainability strategies.

The European food sector exemplifies these dynamics. It is simultaneously resource-intensive and heavily regulated, requiring firms to comply with diverse environmental standards and consumer expectations for transparency. Long and fragmented supply chains exacerbate sustainability challenges, while regulatory heterogeneity across EU member states creates additional compliance burdens (Menon & Shah, 2020; Sufian, Abdullah, Ateeq, Wah, & Clements, 2021). For SMEs in this sector, sustainability is no longer optional: it is a strategic imperative shaped by both external pressure and internal recognition of its importance to long-term competitiveness (FoodDrinkEurope, 2020).

Interdependencies between digital transformation and sustainability

Although digital transformation and sustainability have traditionally been studied as separate domains, emerging research, focusing primarily on the approaches of larger companies, points to important interdependencies.

The idea of the twin transition, also known as twin transformation, reinforces this integrated perspective by explicitly linking the digitalization and sustainability agendas (Muench et al., 2022). At the policy level, the European Commission promotes the twin transition through the Green Deal and the “Path to Digital Decade,” encouraging countries and firms to pursue digital and green objectives simultaneously (Benedetti et al., 2023; Tabares et al., 2025). Empirical studies confirm these links: digital adoption is positively correlated with energy efficiency across European economies (Benedetti et al., 2023), while firms investing in digital technologies are more likely to adopt environmentally friendly practices and reduce emissions (Montresor & Vezzani, 2023).

Recent conceptual work proposes a “digital-sustainability ecosystem” framework, positioning digital transformation and sustainable innovation as mutually reinforcing processes embedded in broader networks of actors, technologies, and institutional arrangements. Rather than viewing digitalization as a firm-level initiative in isolation, this perspective highlights the interdependencies among organizations, platforms, knowledge flows, and regulatory structures that jointly shape sustainability outcomes. By framing digital and sustainable innovation within an ecosystem logic, the framework underscores that successful integration depends not only on internal capabilities but also on coordination across stakeholders and alignment within the wider socio-technical environment (Florek-Paszkowska & Ujwary-Gil, 2025).

Industry-specific evidence further highlights how these interdependencies materialize. In manufacturing, digitalization supports resource-efficient production processes but also requires new workforce capabilities in resilience, technical, and digital skills (Trevisan et al., 2024). In agriculture, tools such as precision farming, AI-driven analytics, and blockchain-enabled food supply chain monitoring allow for more efficient use of natural resources while enhancing transparency (Myshko et al., 2024). Similar patterns emerge in urban planning and energy management, where AI and IoT applications improve monitoring and efficiency (Damioli et al., 2025). Recent research on living lab approaches to urban biodiversity management highlights the importance of integrating scientific expertise, technological tools, and experiential stakeholder knowledge in advancing sustainable innovation. Rather than treating technology as a standalone solution, this perspective emphasizes collaborative experimentation and co-creation across institutional boundaries (Najda-Janoszka et al., 2025).

Nevertheless, tensions persist. SMEs may face financial trade-offs, with resource scarcity forcing them to prioritize either digitalization or sustainability at the expense of the other. Challenges such as the digital divide, limited financing, and organizational resistance remain significant (Benedetti et al., 2023; Faggian et al., 2025; Tabares et al., 2025). Moreover, regulatory uncertainty across industries and regions hampers integration (Brueck et al., 2025). Moreover, digital transformation itself can create contradictions, such as the generation of e-waste, undermining ecological goals. If structural characteristics condition the extent to which SMEs can respond to stakeholder pressure through circular economy practices, it is reasonable to expect similar boundary conditions in the integration of digital transformation and sustainability (Ahmadov et al., 2025).

Towards an integrated perspective

Taken together, the literature paints a complex picture of digital transformation and sustainability in SMEs: theoretically complementary but practically constrained. The twin transition offers a strategic framework to address these dual goals by embedding digitalization and sustainability within broader organizational and policy agendas (Chatzistamoulou, 2023; Toșa et al., 2024). From a circular economy perspective, Industry 4.0 technologies facilitate reuse, recycling, and resource optimization, reinforcing sustainable consumer behavior and competitive positioning (Findik, Tirgil, & Özbuğday, 2023).

While digital transformation has the potential to be a key enabler of sustainability, SMEs often lack the capacity to fully realize these synergies. Similarly, while sustainability imperatives can accelerate digital adoption, they can also amplify existing pressures on already resource-constrained firms. This paradox reflects a critical research gap. Despite growing scholarly interest, empirical insights into how SMEs perceive, prioritize, and integrate these dual goals remain limited, especially in context-specific sectors such as the European food industry

METHODOLOGY

This study seeks to address this gap by providing preliminary exploratory evidence based on qualitative interviews with food-sector SMEs and adjacent ecosystem actors in Europe. By investigating the complementarities, tensions, and managerial trade-offs in integrating digital transformation and sustainability, the research advances theoretical understanding while offering practical insights for SMEs navigating these dual transitions under conditions of constraint.

Research design

Given the exploratory nature of the research and the need to capture in-depth managerial perspectives, semi-structured interviews were chosen as the primary data collection method. This approach allows for flexibility in questioning while ensuring comparability across interviews. The choice of qualitative methods aligns with calls to investigate complex, underexplored interdependencies between digital transformation and sustainability through rich, context-specific data (Gioia et al., 2013).

The study is positioned as preliminary and exploratory, aiming to develop insights inductively rather than test predefined hypotheses. The findings thus contribute to theory-building and provide a foundation for further in-depth empirical investigations. It is important to note that the study examines digital transformation as it is experienced and enacted by SMEs in the European food sector at present. Consistent with Warner and Wäger’s (2019) conceptualization of digital transformation as an ongoing and iterative process, the data capture firms at varying stages of this journey, many of whom are in the early, tool-adoption phase that precedes deeper structural and cultural renewal. This is not a limitation of the study’s scope but rather a reflection of reality in the sector: for resource-constrained food SMEs, incremental digital adoption is the observable and strategically meaningful manifestation of digital transformation under conditions of constraint. The findings should therefore be interpreted as capturing digital transformation in its early and intermediate stages, providing empirically grounded insight into how this process begins and what shapes its trajectory.

Sampling and participants

Interviews were conducted with 21 representatives from the European food sector. Table 1 presents more details about the sample. Participants were selected using purposeful and theoretical sampling to ensure variation in digital maturity, sustainability engagement, company size, and international scope. The final sample comprised 11 food producers, 8 food-industry-specific digital solutions providers, 1 consultancy, and 1 food system-focused investor. Within each organization, we sought to interview the person most knowledgeable about the focal issues of digitalization, sustainability, and firm development. In most cases, this was a founder, CEO, CTO, chairperson, or head of innovation/sustainability, that is, an individual with direct strategic visibility. In cases where the interviewee did not occupy the highest formal hierarchical position, the participant was selected because s/he was the most directly involved in the relevant transformation processes and could provide first-hand insight into operational and organizational changes central to the study. Thus, roles such as marketing lead/account executive, quality control analyst, agronomist, or business development specialist were not treated as equivalent sources of firm-wide strategic authority, but as key informants for specific transformation activities and firm experiences. During data analysis, we interpreted interview material with careful attention to informant seniority and organizational role, distinguishing between statements reflecting firm-level strategic direction and those reflecting operationally grounded perspectives. We started with interviewing SMEs, however in the process we were pointed towards additional informants, who supplemented the arguments raised by SMEs with additional, relevant content and comments and allowed to see the wider perspective of the analyzed phenomenon. The sample was drawn from the EIT Food network, and, as the interviews progressed, was extended through snowball sampling. This approach of running interviews in iterations and engaging with important informants from food SMEs’ entrepreneurial ecosystem provides the opportunity to explore perspectives on digital and sustainable transformation, the key elements of “twin transition,” from multiple points of view in the food system, providing insights into different strategic orientations and organizational experiences, while remaining grounded in the shared context of SMEs in the European food industry.

Table 1. Sample characteristics

Company	Established	Workforce	Area of operation	Interviewee’s roles in the company	Years of experience in the food sector
Food industry digital solutions provider 1	2016	6	Digital food trading platform	CEO	29 years
Food industry digital solutions provider 2	2021	7	Food safety biosensors for the agricultural industry	CTO and Founder	9 years
Food industry digital solutions provider 3	2018	4	Digital soil sensor solution for farmers	CEO	10 years
Food industry digital solutions provider 4	2020	7	Digital agri-tech - AI based image analysis for early detection of plant stress in farm	CEO & Co-founder	27 years
Consultancy 1	2009	40	BI, data and tech consulting for food industry	Marketing Team Lead & Account Executive	4 years
Food producer 1	2023	2	Fructose free fruit-based products	CEO	3 years
Food producer 2	2017	72	Insect based food	Head of Innovation Projects and Sustainability	21 years
Food producer 3	2021	9	fungal protein	CEO	4 years
Food producer 4	2022	4	Precision fermentation	CEO	16 years
Food producer 5	2023	2	Circular Food - Fungal	CEO	20+ years
Food industry digital solutions provider 5	2019	15	Agricultural supply chain digital optimisation	CEO & Founder	20 years
Food industry digital solutions provider 6	2023	15	Shelf life prediction and extension technology	CEO & Co-founder	7 years
Food industry digital solutions provider 7	2016	18	Mobile health-promoting gamification solution	Co-founder	8 years
Food producer 6	2018	16	Circular Food - Flour from brewery spent	CEO	20+ years
Food producer 7	1953	150	Juice production	Quality Control Analyst	3 years
Food producer 8	2014	28	Sugar reduction technology	Former CEO / Chairman of BOD	11 years
Food industry digital solutions provider 8	2021	5	Using satellite data to facilitate wine plantations	CEO	1 year
Investor	1999	-	Angel Investor in agri-food startups	Angel Investor	15+ years
Food producer 9	2022	3	Soil microbiome-based farm insights and productive predictions for farmers	CEO	12+ years
Food producer 10	1999	49	Tomato pulp	Agronomist	10 years
Food producer 11	2023	9	Chocolate alternatives	Business Development Specialist	5 years

Source: Own elaboration based on collected data.

Data collection

Data collection involved 21 semi-structured interviews conducted between April 2025 and October 2025, one per representative in the sample. Each interview lasted between 60 and 90 minutes, and was conducted in the English language in a semi-structured fashion with four key sections covering general information about the company, their awareness of digital transformation, the process followed at the organization to identify and incorporate digital technologies in their business, and how they perceive the relationship between sustainability and digital transformation. The interviewers used a standard questionnaire (attached as a supplementary file in Appendix 1) as a guide for the interview and often contextualized the questions to elicit and probe the interviewee’s perspectives on the aforementioned key themes. The interviews were conducted virtually on Zoom, with one person interviewed at a time. The Zoom transcription function was used to generate a transcript of the interview, which was later checked and formatted by the interviewer for further analysis. Approximately 1,400 minutes of recorded material, resulting in about 800 pages of transcripts, were generated from the interviews.

The interview analysis protocol covered the four overarching research questions mentioned in the Introduction, designed to capture strategic orientations, interdependencies, challenges, and managerial practices. The semi-structured format enabled participants to elaborate freely, while ensuring that key dimensions of digital transformation and sustainability were consistently addressed across interviews.

Data analysis

Data analysis followed the methodology of Gioia et al. (2013), which emphasizes rigorous, inductive coding while retaining the richness of participants’ voices. The process unfolded in three stages (Figures 1-3):

1. First-order coding: Interview transcripts were coded line-by-line to capture informant terms and phrases. Codes reflected participants’ views on strategic priorities, perceived conflicts, enabling technologies, and barriers.
2. Second-order themes: First-order codes were clustered into broader categories, representing more abstract concepts such as resource constraints, regulatory pressures, digital tools for transparency, and organizational resistance.
3. Aggregate dimensions: Second-order themes were then organized into higher-level dimensions that align with the study’s research questions. These dimensions provide the foundation for theorizing about the relationship between digital transformation and sustainability in SMEs.

This iterative approach ensured that the coding process remained grounded in empirical data while enabling theoretical abstraction. Regular cross-checks between authors were conducted to enhance reliability, and coding consistency was achieved through iterative refinement.

RESULTS

Figures 1, 2, and 3 present the preliminary data structure derived from the analysis for the first three research questions, respectively, each illustrating how the raw data were organized into increasingly abstract categories.

Strategic priorities for digital transformation and sustainability

This preliminary exploratory research reveals a nuanced and complex relationship between digital transformation and sustainability within SMEs in the European food sector. This is particularly evident in the 1st-order concepts section of the data structure (Figures 1-3). While digitalization is widely understood as a critical enabler of sustainability, the relationship between the two is neither linear nor unidirectional. Instead, it is characterized by complementarities, mutual influences, and tensions that stem largely from SMEs’ structural constraints and the fragmented institutional environment in which they operate.

As shown in Figure 1, this interpretation was inductively derived from the interview material. At the level of informant language, participants spoke about traceability, measuring impacts, monitoring carbon emissions, improving irrigation, and reducing waste. These statements were first coded into 1st-order concepts and then grouped into the 2nd-order themes of “Tracking progress on sustainability or associated targets,” “Internal sustainability is attached to efficient housekeeping and office-environment,” and “Digitalization enables efficient resource and supply chain management, thereby enabling sustainability.” Together, these themes underpin the aggregate dimension “Digitalization is an enabler for sustainability goals.” This makes clear that digitalization was not framed by respondents as an end in and of itself, but rather as valuable because it helps firms pursue sustainability in more concrete, measurable ways.

Across the interviews, digital transformation emerged as a strategic priority primarily because of its perceived role in enabling sustainability. Participants consistently described digital tools as essential to achieving ecological objectives, whether by optimizing resource use, enhancing traceability, or meeting increasingly stringent regulatory demands. Technologies such as precision agriculture systems, IoT-enabled monitoring devices, and digital supply chain platforms were widely cited as indispensable for reducing waste, improving efficiency, and ensuring compliance with environmental standards. For example, the adoption of traceability platforms not only improved compliance with regulatory standards but also met consumer demands for transparency, thereby enhancing brand reputation and market competitiveness. Similarly, smart irrigation systems were identified as technologies that simultaneously reduced water consumption, improved yields, and lowered operating costs.

At the same time, sustainability strategies were found to influence the digitalization agenda. Companies that articulated clear commitments to ecological goals, such as carbon neutrality or water conservation, often adopted digital technologies specifically to support these aims. For instance, producers prioritizing reductions in carbon emissions reported investing in digital carbon accounting systems that allowed for accurate monitoring and reporting of environmental impacts. In this sense, sustainability serves as a guiding principle, shaping the direction of digital transformation efforts and embedding digital adoption within broader environmental and social commitments. External stakeholders (including customers, regulators, and investor) play a decisive role in reinforcing this dynamic. Regulatory requirements for traceability and labeling, as well as consumer expectations for transparent information about production processes, compel SMEs to implement digital solutions that might otherwise have been deprioritized.

Figure 1. Interview analysis for addressing the first research question

Source: Own elaboration based on collected data.

The coding in Figure 2 also underlines this point. Several interviewees did not describe digital transformation and sustainability as competing agendas at all, but instead as mutually reinforcing. Their statements were grouped into the 2nd-order themes “DT and Sustainability are complementary, DT is an enabler to sustainability” and “DT enables consumer-driven sustainability,” which together formed the aggregate dimension “DT and Sustainability are complementary, not conflicting.” This is important because it shows that, for many firms, sustainability does not merely benefit from digitalization. It also gives digital investments meaning and direction.

Going back to Figure 1, it also shows that external actors shape this relationship. Interviewees referred to customer expectations, packaging choices, transparency demands, and the pressure to communicate sustainability credibly. These statements were grouped into the 2nd-order theme “Consumers influence uptake of sustainability initiatives,” which fed into the aggregate dimension “External stakeholder influence sustainability goals.” This suggests that sustainability priorities are not formed internally alone, but are shaped in interaction with customers and other external stakeholders.

However, the research also revealed tensions that complicate this alignment. A central source of conflict arises from the financial limitations that are endemic to SMEs. The high costs of implementing advanced digital solutions often force companies to choose between investing in digitalization and pursuing sustainability initiatives. This trade-off becomes particularly acute when external funding is unavailable, leaving SMEs to prioritize immediate operational needs over longer-term ecological goals. In this context, complementarities between digital transformation and sustainability are aspirational but not always achievable in practice.

Figure 2 also shows that complementarity was not unconditional. Interviewees also described situations in which the two priorities could come into tension because of scarce resources, short-term operational demands, or the cost of implementation. These accounts were grouped into the 2nd-order theme “No conflict in terms of strategy, however, limited funding/resources could lead to conflict,” which formed the aggregate dimension “Resources/funding constraint may lead to conflicting situations.” This indicates that the main source of tension was not an inherent contradiction between the two goals, but rather the limited capacity of SMEs to invest in both simultaneously.

Moreover, digitalization introduces challenges that may undermine sustainability itself. Several participants pointed to the problem of electronic waste generated by outdated digital hardware. This paradox illustrates how initiatives designed to support ecological goals can inadvertently contribute to environmental degradation if not accompanied by appropriate waste management strategies. Thus, while digital transformation can be a powerful enabler of sustainability, it can also create new ecological risks that require proactive management.

This paradox is captured directly in Figure 2. Statements about electronic waste and the material footprint of digital equipment were grouped into the 2nd-order theme “Generation of digital waste could be conflicting to sustainability, however, it would be essential,” which then informed the aggregate dimension “Generation of digital waste is contradictory to sustainability.” This adds an important nuance to the findings: digitalization was largely seen as supportive of sustainability, but not as environmentally neutral in and of itself.

Figure 2. Interview analysis for addressing the second research question

Source: Own elaboration based on collected data.

Enablers and barriers to integrating digital and sustainable transformations

The findings also shed light on the factors that enable or obstruct the integration of digital transformation and sustainability within SMEs. Financial resources emerged as the most critical enabler and, simultaneously, the most severe barrier. While investment in digital tools is essential for advancing sustainability goals, the financial strain of acquiring and maintaining such tools often proved prohibitive for SMEs. External funding was described as difficult to secure, leaving firms dependent on incremental adoption strategies that limit transformative change.

A second significant barrier is the lack of digital skills and infrastructure. Many SMEs in the food sector rely on traditional practices, and the expertise required to integrate digital technologies effectively is not readily available. When internal skills are lacking, companies often turn to external consultants, but this reliance introduces sustainability challenges of its own, as outsourcing expertise can be costly and unsustainable over time.

Figure 3 shows that this barrier had two distinct components. One was captured in the 2nd-order theme “Lack of internal skills and expertise in the company,” which came from 1st-order concepts such as workforce limitations, low internal capacity, and the need for external expertise. The other was captured in the 2nd-order theme “Identification and deployment of appropriate digital infrastructure,” which reflected problems related to sensors, data centers, cloud systems, and selecting the right tools. Together, these formed the aggregate dimension “Lack of digital skills and infrastructure.” This suggests that SMEs struggled not only with using digital tools but also with choosing, connecting to, and embedding them effectively.

Figure 3. Interview analysis for addressing the third research question

Source: Own elaboration based on collected data.

The research also revealed organizational barriers. In several cases, digital transformation initiatives lacked clear ownership within companies, resulting in fragmented approaches that hindered integration with sustainability strategies. Cross-functional collaboration was often absent, with digital and sustainability activities pursued in silos. Resistance to change—both within organizations and amongst external stakeholders such as suppliers and distributors—was another recurring theme. Suppliers operating on tight profit margins were often reluctant to adopt digital tools without demonstrable short-term benefits, while employees and managers within SMEs expressed skepticism about the immediate value of new technologies.

The same pattern appears in Figure 3 for organizational issues. Interviewees spoke about long supply chains, uncertainty about who is responsible for what, and the need for greater cross-functional collaboration. These statements were grouped into the 2nd-order theme “Difficulty of implementation due to organizational issues, such as long and complicated supply chains and lack of cross-functional collaboration,” which then led to the aggregate dimension “Lack of organizational collaboration and accountability.” This shows that barriers to twin transition were not only technical, but also structural and coordination-related.

Figure 3 further shows that resistance was interpreted at a broader level as a stakeholder problem. Raw interview statements about employees resisting change, traditional actors being skeptical, and customers or farmers questioning the relevance of digital tools were grouped into the 2nd-order theme “Resistance from external stakeholders/customers,” which then informed the aggregate dimension “Resistance from stakeholders.” This suggests that the twin transition is shaped not only by internal readiness, but also by the willingness of external actors to engage with new digital and sustainability practices.

Finally, regulatory and institutional factors exacerbate these challenges. Participants highlighted the uncertainty created by inconsistent and fragmented regulations across European countries. For example, labeling requirements for sustainable food products vary widely between member states, generating administrative burdens for SMEs engaged in cross-border trade. Moreover, the lack of standardized digital protocols and sustainability metrics makes benchmarking difficult and hampers collaboration across supply chains. The structural characteristics of the food industry—long and fragmented supply chains involving multiple stakeholders—further magnify these difficulties. Even when downstream firms invested in advanced digital tools, upstream suppliers frequently relied on paper-based systems, creating bottlenecks in data flow and undermining the effectiveness of digital platforms.

Here again, Figure 3 presents data indicating that interviewees referred not only to fragmented regulation, but also to inconsistent definitions of sustainability, problems of data standardization, and greenwashing concerns. These were grouped into the 2nd-order theme “Lack of standardization in sustainability and digitalization-related regulations,” which then formed the aggregate dimension “Unclear regulatory environment.” This indicates that firms were not simply reacting to too many rules, but to a broader lack of clarity about how sustainability and digital performance should be defined, measured, and compared.

Despite these challenges, the findings underscore the significant potential of technology to enhance sustainable business practices in SMEs. Precision agriculture tools, such as drones and soil sensors, were widely reported to deliver both ecological and economic benefits by reducing fertilizer and water usage while improving crop yields. In processing and manufacturing, digital monitoring systems facilitated real-time tracking of energy consumption and carbon emissions, enabling firms to identify inefficiencies and comply with environmental regulations. Within logistics, digital cold chain management systems were highlighted as particularly impactful, reducing food spoilage during transport and thereby decreasing waste while improving profitability.

These examples demonstrate that, when effectively integrated, digital transformation can yield simultaneous financial and ecological benefits. Importantly, companies that successfully aligned digitalization with sustainability reported measurable improvements in efficiency and competitiveness, suggesting that integrating these domains can provide SMEs with a pathway to long-term resilience. Table 2 presents the synthesis of the findings of this research.

Table 2. Synthesis of findings on digital transformation and sustainability in European food SMEs

Dimension	Findings
Strategic Priorities	Digital transformation (DT) is widely considered as an enabler for achieving sustainability goals. Sustainability strategies may have an influence on DT. External stakeholders (such as customers, regulatory bodies, etc.) have influence on sustainability strategies that may trickle down to digital transformation strategies.
Complementarity vs. Conflict	DT and sustainability are complementary; sustainability strategies influence DT. Shortage of resources/funding may create conflicts between the two, and demand prioritization. Generation of e-waste related to digitalization initiatives could be contradictory to sustainability goals, and demands that waste management strategies be in place.
Enablers and barriers of DT and Sustainability	Financial limitations/lack of funding. Lack of digital skills and infrastructure. Lack of cross-functional collaboration and ownership of DT initiatives in an organization. Resistance from stakeholders, such as investors, Board members, management, employees, and customers. Unclear regulatory requirements. Lack of larger standardization of digital tools/protocols.
Managerial Implications	Balance resources between sustainability and DT to prevent conflicts. Cross-departmental collaboration for effective implementation. Digital tools to meet sustainability and regulatory reporting needs. Standardization of data/digital tools and regulations to improve reporting and reduce greenwashing. Apply design thinking or UX to create user-friendly digital tools. Invest in workforce training to close digital skill gaps. Align sustainability and digitalization with customer expectations.

Source: Own elaboration based on collected data.

DISCUSSION

The study shows that digital transformation and sustainability evolve as mutually reinforcing processes. Digital technologies helped SMEs improve efficiency, reduce waste, and comply with regulations, while sustainability commitments often shaped which digital tools were adopted, from traceability platforms to carbon accounting systems. This reciprocal relationship suggests that digitalization is not only a driver of operational improvement but also a means of advancing ecological goals, while sustainability itself acts as a catalyst for digital adoption. In this way, the findings extend existing research by framing the two trajectories as interdependent and institutionally embedded rather than as isolated or linear developments (cf. Elia et al., 2024; Hanelt et al., 2021; Zhao et al., 2018; Drempetic et al., 2020).

A further finding of theoretical relevance concerns the nature of digital transformation as it manifests in resource-constrained SMEs. While the literature defines digital transformation as encompassing structural, cultural, and strategic renewal (e.g., Hanelt et al., 2021), the empirical evidence from this study predominantly captures firms in the early, tool-adoption phase of this process, suggesting that for SMEs in the European food sector, incremental digital adoption is the practical and observable entry point into a longer transformation journey. Under conditions of resource scarcity, firms cannot pursue wholesale organizational reconfiguration simultaneously with sustainability transitions; they begin by adopting tools that deliver immediate operational and ecological benefits, gradually building the capabilities, data infrastructure, and organizational learning that enable deeper transformation over time. This staged understanding extends Warner and Wäger’s (2019) conceptualization of digital transformation as an ongoing process of strategic renewal by demonstrating how resource constraints shape the pace and sequencing of that renewal in SMEs.

At the same time, integration was marked by tensions and trade-offs. SMEs often struggled with limited resources, forcing difficult choices between digital and sustainability investments, and some initiatives even created new ecological risks, such as electronic waste (Abel-Koch et al., 2019; European Investment Bank, 2021; Dąbrowska et al., 2022). Fragmented regulations, the lack of standardized metrics, and technological mismatches along supply chains added further barriers (Pfister & Lehmann, 2021; Dethine et al., 2020; FoodDrinkEU, 2020). Despite these obstacles, cases of successful alignment showed clear ecological and economic benefits. Leadership, workforce training, and stakeholder engagement were decisive in navigating uncertainty, highlighting the importance of managerial agency and dynamic capabilities in turning complementarities into durable synergies (Teece, 2018; Warner & Wäger, 2019). This supports Warner and Wäger’s (2019) argument that digital transformation is an ongoing process of strategic renewal, but extends it by demonstrating how sustainability imperatives reshape the content and direction of that renewal in SMEs.

Theoretical implications

The findings of this preliminary study provide several important implications for theory, particularly in advancing scholarly understanding of the interdependencies between digital transformation and sustainability in SMEs and adjacent actors in the European food sector. While both domains have been extensively studied in isolation, this research contributes to bridging two previously parallel streams of literature. More specifically, it advances a contingency-based understanding of twin transitions by identifying an exploratory map of firm-level mechanisms and constraints through which complementarities are enabled or undermined.

The results extend existing conceptualizations of digital transformation by situating them firmly within the broader context of sustainability. Previous research has largely examined digital transformation as a technological and organizational phenomenon, emphasizing its role in reshaping operations, business models, and ecosystem interactions (Elia et al., 2024; Hanelt et al., 2021; Nadkarni & Prügl, 2021). Our findings suggest that digital transformation in the European food sector cannot be fully understood without considering its sustainability dimension. This positions sustainability as an integral part of how companies conceptualize and prioritize digital transformation. In contrast to ecosystem-level conceptualizations such as the digital-sustainability ecosystem framework (Florek-Paszkowska & Ujwary-Gil, 2025), which emphasize systemic coordination, our study highlights the internal organizational tensions and resource allocation dilemmas that condition participation in such ecosystems.

By emphasizing this interdependence, the study challenges purely technology-driven accounts of digital transformation and aligns with recent perspectives that highlight the role of strategy, managerial agency, and organizational culture in digitalization (Warner & Wäger, 2019). It also underscores the importance of external drivers, such as regulatory bodies, investors, and consumer expectations, in shaping digitalization agendas. In this sense, digital transformation in the food sector is not only a process of technological adoption but also an adaptive response to institutional pressures and sustainability imperatives. This supports institutional interpretations of the twin transition (Muench et al., 2022) but adds empirical depth by showing how institutional pressures are filtered through resource constraints and supply chain realities.

Similarly, the findings expand theoretical discussions on sustainability by illustrating how digital technologies act as levers for ecological and social performance. The ESG framework, widely used in sustainability research (Zhao et al., 2018; Drempetic, Klein, & Zwergel, 2020; Zumente & Bistrova, 2021), has traditionally focused on corporate outcomes such as carbon reduction, inclusivity, and governance transparency. This study contributes by demonstrating how these outcomes are mediated by digital tools, suggesting that digitalization should be viewed as a pathway through which ESG goals can be operationalized in practice.

At the same time, the research reveals contradictions that challenge overly optimistic accounts of digitalization’s role in sustainability. This aligns with recent calls to examine digital transformation as a socio-technical transformation with both positive and negative implications (Dąbrowska et al., 2022). However, whereas Dąbrowska et al. (2022) theorize these contradictions conceptually, our findings document how companies concretely experience them in budgeting decisions, hardware replacement cycles, and supply chain coordination failures. By bringing attention to these contradictions, the study broadens sustainability theory to account for the ecological costs of digitalization and emphasizes the need for more nuanced frameworks that recognize trade-offs alongside synergies.

Another key theoretical implication is the value of applying resource-based perspectives to the study of digital transformation and sustainability. While much of the literature views these areas as parallel strategic goals that firms should pursue together (Hanelt et al., 2021), this study shows that SMEs and adjacent actors in the European food sector often face barriers due to limited financial and human resources, as well as fragmented institutional contexts. As a result, the need to prioritize between digital and ecological investments emerges as a central challenge. This finding reinforces Teece’s (2018) dynamic capability argument but underscores that capability development itself is resource-dependent and uneven across SMEs.

This finding extends resource-based theories by showing how resource scarcity shapes the strategic trade-offs faced by SMEs and adjacent actors in the European food sector. It also highlights the importance of dynamic capabilities, such as strategic agility, cross-functional collaboration, and workforce upskilling, in addressing these tensions (Teece, 2018; Warner & Wäger, 2019). By integrating digital transformation and sustainability into the realities of sector-specific constraints, the study contributes to a more context-sensitive perspective that questions models developed primarily by large corporations.

Towards an integrated theoretical framework

Taken together, these insights point to the need for an integrated theoretical framework that treats digital transformation and sustainability not as separate or sequential processes but as interdependent and, at times, contradictory transformations. Existing systematic reviews of digital transformation (Hanelt et al., 2021; Nadkarni & Prügl, 2021) and sustainability (Drempetic et al., 2020; Zumente & Bistrova, 2021) highlight the growing importance of both domains but rarely engage with how they intersect in practice. The findings from this study suggest that their relationship is best understood as a dynamic co-evolution shaped by institutional pressures, organizational resources, and technological capabilities.

Specifically, the results suggest three theoretical refinements. First, digital transformation should be conceptualized as both an enabler and a potential disruptor of sustainability, capable of delivering ecological efficiencies while simultaneously introducing new environmental risks. Second, sustainability should be understood not only as a strategic goal but also as a driver of digital adoption, shaping the technologies firms prioritize. Third, integration of digital transformation and sustainability should be theorized as contingent on contextual factors, including resource availability, regulatory environments, and supply chain and organizational structures.

Managerial implications

The findings offer practical guidance for managers aiming to balance digital transformation and sustainability in SMEs and adjacent actors in the European food sector. Strong leadership proved essential to preventing either area from being neglected. Effective strategies included careful allocation of scarce resources and fostering cross-functional collaboration, which helped break down silos and ensured that digital initiatives complemented sustainability objectives rather than competing with them. Workforce training was also highlighted as crucial for closing digital skill gaps, building a culture of adaptability and innovation, and reducing resistance to change.

Participants further stressed the importance of transparent communication with stakeholders. Aligning digital and sustainability strategies with consumer expectations allows managers to meet regulatory requirements, create market value, and build trust. Engaging proactively with regulators and industry associations was also seen as vital for navigating fragmented sustainability standards and digital regulations, while advocating for greater standardization to reduce administrative burdens and the risks of greenwashing.

Overall, the findings suggest that SMEs in the European food sector should adopt a holistic approach to integrating digital transformation and sustainability. Despite challenges such as limited resources and regulatory complexity, opportunities for synergy exist. When managers take a proactive, collaborative, and stakeholder-focused approach, they can align digitalization with sustainability to lower costs, increase efficiency, and strengthen both ecological and financial resilience.

Implications for future research

This study highlights the need for future research to move beyond treating digital transformation and sustainability as parallel trajectories and instead examine their dynamic interplay and co-evolution in greater depth. As an exploratory investigation, the present research maps patterns, tensions, and managerial interpretations within SMEs and adjacent actors in the European food sector, providing an empirical foundation for more theory-driven inquiry in subsequent stages.

Comparative research across sectors and countries would deepen understanding of contextual boundary conditions. The food industry is characterized by fragmented supply chains, traceability requirements, compliance pressures, cold-chain dependencies, and regulatory heterogeneity; however, industries with different structural features may exhibit alternative integration dynamics. Cross-industry and cross-national studies would clarify how sector-specific institutional and value-chain configurations shape the twin transition in SMEs, thereby strengthening contextualized theorizing.

Moreover, longitudinal studies are needed to track how organizational strategies evolve over time as technologies mature, regulations tighten, and consumer expectations shift. This perspective could illuminate not only paths of successful integration but also instances of failure, lock-in, or unintended consequences.

Future research should also pay closer attention to paradoxical outcomes. The ecological costs of digitalization, such as e-waste, energy-intensive infrastructures, or rebound effects, remain underexplored but are central to understanding the true sustainability implications of digital transformation. Integrating socio-technical and ecological perspectives would enable a more balanced assessment of how SMEs can navigate the complexities of the twin transition under conditions of constraint.

Finally, future research should build on the exploratory insights of this study by adopting a more explicit theoretical framing to move from observed themes to mechanism-level explanation. Two particularly promising lenses emerge from the present findings. A dynamic capabilities perspective under institutional constraints could explain how SMEs sense, seize, and reconfigure resources around sustainability/digital complementarities in highly regulated, resource-constrained environments (cf. Teece, 2018; Warner & Wäger, 2019). Alternatively, a paradox or complementarity lens could theorize about the persistent tensions and trade-offs identified here, examining how managers respond to competing short-term financial pressures and long-term sustainability imperatives. Such approaches would enable future qualitative theorizing to specify constructs, mechanisms, and expected relationships more explicitly.

By advancing in these directions, future research can build on the exploratory foundation established here and develop more formalized theoretical models of the twin transition in SMEs.

CONCLUSION

This exploratory study discussed how SMEs in the European food sector navigate the dual pressures of digital transformation and sustainability. The findings structured answers to the four research questions guiding this research.

Regarding strategic priorities, the evidence shows that digital transformation and sustainability share common goals and are often seen as mutually reinforcing. Digital tools help firms reduce waste, optimize resource use, and meet growing regulatory and consumer demands for transparency. At the same time, sustainability strategies shape digitalization, pushing firms to adopt technologies that support carbon neutrality, water conservation, and ethical sourcing. Thus, digital transformation was not described as an isolated modernization effort, but as strategically intertwined with ecological goals.

In relation to whether digital transformation and sustainability are perceived as complementary or competing priorities, the evidence points to a conditional pattern. Interviewees frequently described both agendas as mutually reinforcing at a strategic level. However, at the operational level, complementarities were constrained by financial limitations, skill shortages, and regulatory complexity. Resource scarcity often necessitated sequencing or prioritization decisions. Thus, while complementarities were visible, they were neither automatic nor uniformly realized across firms.

Regarding enablers and barriers, the findings identify leadership commitment, cross-functional collaboration, workforce development, and stakeholder engagement as key enablers. Yet, the research also highlights the barriers that make integration difficult in practice. Financial constraints, shortages of digital skills, fragmented regulations, and the operational complexity of long supply chains force companies to make trade-offs between digital and ecological priorities. In some cases, digital initiatives even create new ecological problems, such as electronic waste. These challenges demonstrate that integration is not automatic, but requires deliberate managerial effort and supportive institutional frameworks.

The study contributes to the literature by showing that digital transformation and sustainability must be understood together, as interconnected strategies rather than parallel agendas. It emphasizes that, while complementarities exist, SMEs in the European food sector face real resource and capability constraints that shape the extent to which integration can be pursued. Addressing these barriers will require coordinated efforts: managers must balance scarce resources and foster collaboration, policymakers must reduce regulatory fragmentation, and industry stakeholders should promote standardization and knowledge sharing.

Importantly, because the study is based on qualitative interviews, the findings rely on managers’ own accounts of their practices and priorities. Such accounts may be influenced by self-selection and by a tendency to present the organization in a favorable light, particularly given the strong normative expectations surrounding sustainability. Although multiple informants and iterative coding procedures were employed to enhance credibility, the study relies primarily on interview data and does not incorporate systematic triangulation with performance metrics or archival sustainability records. Accordingly, the results should be viewed as context-specific patterns derived from the data, offering interpretive insight rather than definitive or generalizable causal conclusions.

Overall, the findings point to the need for tailored approaches that reflect the realities of SMEs in the European food sector. Balancing digital innovation with sustainability practices is not only a strategic imperative but also a pathway to long-term resilience and competitiveness. By aligning ecological responsibility with technological advancement, companies can better position themselves to thrive in an environment defined by both digital and green transitions. While the findings do not claim universal applicability, they provide a foundation for more theory-driven, comparative investigations of the twin transitions at the firm level.

Acknowledgment

Research funded by the Polish National Agency for Academic Exchange (NAWA) under the Bekker NAWA Programme, grant number BPN/BEK/2023/1/00398/U/00001.

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Appendix 1

Supplementary file 1: Interview Questions

Section 1: General information

1. Company name
2. Number of employees (Organizational and functional)
3. Year of establishment
4. Area of operation
5. Position of the interviewee
6. Years of work experience (overall and functional)

Section 2: Awareness on DT

1. Digital transformation, what do you understand this to mean?
2. How have you seen food industry companies approach digital transformation, overcome the challenges, and benefit?
3. What have been, or will be, the steps for digital transformation at your company?
4. What challenges has your company faced or anticipated to see during your digital transformation?
5. What benefits has your company seen, or expects to see, as a result of your approach towards digital transformation?
6. How has digital transformation changed the business model/processes/operations of your company?
7. What are the human resource management strategies your company has implemented to support your approach towards digital transformation?
8. Are there any other strategies in place at your company to help facilitate digital transformation? Please elaborate.
9. What are the major barriers your company has faced when it comes to your digital transformation?
10. What are characteristics of the food sector which resonate closely with digital transformation?
11. In performing digital transformation at your company, which capabilities were found to be crucial for success?

Section 3: Process of incorporating DT in the organization

1. How does your organization identify and leverage new opportunities (including those related to digital transformation, new markets, new technologies)?
2. How is your organization monitoring and evaluating technological advancements and market shifts?
3. What processes are employed to understand and fulfill customer needs? Can digital transformation support this? Has it? How?
4. What mechanisms are in place to track competitors’ responses to market changes and digital transformation of businesses?
5. To what extent does the current digital strategy influence the sensing phase?
6. How does your organization explore opportunities beyond its existing market and knowledge base? Is digital transformation helpful in this respect?
7. Who within your organization is involved in the sensing phase? Is participation open to all interested employees?
8. What actions are taken once a digital transformation opportunity is recognized?
9. How are decisions made regarding digital development, investment allocation, technology adoption, and knowledge acquisition?
10. Describe your company’s decision-making process and protocols related to digital initiatives.
11. How does your organization assess and respond to competitors in the digital landscape?
12. How do opportunities related to digital transformation identified in the sensing phase, reshape your current business model? Is the model characterized by stability or agility? Can you provide examples?
13. How frequently does your organization adapt its structures, processes, and practices in response to digital opportunities?
14. In your previous business model how did you create value for customers? How does your company generate value now after digital transformation?
15. How does your organization try to prevent bias, delusion and hubris in the decision-making process related to introducing digital transformation?
16. How did the resource base of your company change to perform digital transformation? How were the resources reallocated? Was it necessary to obtain any additional resources to meet your company’s goals?
17. Does your organizational culture encourage experimentation and learning from failure? Did this support or hinder digital transformation?
18. How does your organization support entrepreneurial endeavors in the digital transformation domain?
19. What drives your current organizational structure in the digital context, and is it deemed optimal? Why or why not?
20. Describe your current decision-making structure in the digital transformation efforts. Is it decentralized, centralized, or hybrid?
21. What strategies does your organization employ to avoid stagnation in the digital sphere?
22. How does your organization seek to maintain its competitive advantage in the digital landscape?

Section 4: Sustainability & DT

1. To what extent are digital transformation and sustainability considered competing priorities for your company? Examples?
2. To what extent are digital transformation and sustainability seen as complementary long-term goals for your company? Examples?
3. What are the most severe challenges of and barriers to integrating both digital transformation and sustainability your company’s’ strategies?
4. What are the main drivers, outcomes, and sources of success achieved through combining digital transformation and sustainability goals?
5. How does your company manage digital transformation and sustainability in order to be successful? What are the differences in these strategies and their implementation? What might be changed to be more successful?
6. What are specific features/competences/capabilities of your company that facilitate or hamper digital and sustainable transformation?

Note: This questionnaire was used as a guide to drive the semi-structured interviews, and the questions were sometimes modified to suit the conversation.

Biographical notes

Magdalena Marczewska, Ph.D., is a faculty member at the Faculty of Management, University of Warsaw, and a Visiting Researcher at Imperial College Business School. She specializes in strategy, with a focus on innovation, technology management, and sustainable growth. Her work bridges academic research and business practice: alongside her scholarly activities, she supports startups as an Innovation Coach and has previously held leadership roles in SMEs. She has led and contributed to research projects for organizations including the European Commission, Polish Ministry of Environment, World Intellectual Property Organization, Polish Patent Office, and Polish National Science Center. Her international experience includes visiting and fellowship appointments, among others, at Imperial College Business School, the University of Glasgow, and the University of Ferrara.

Ravi Shankar Audichya is a seasoned specialist thriving at the intersection of food systems innovation, biotechnology, and sustainable entrepreneurship. As a Research and Technical Specialist at the Faculty of Management, University of Warsaw, he plays a key role in empowering student entrepreneurs through the EIT Food Inspire Programme. With more than nine years of international expertise spanning fermentation, industrial enzymes, and alternative proteins, he now extends his impact globally through his work with GFI India, fostering the development and accessibility of fermentation-derived proteins toward a more sustainable and equitable food future.

Christopher L. Tucci is Professor of Digital Strategy & Innovation at Imperial Business School, Interim Vice Dean of Education for the Business School, and Co-Director of Education for I-X, Imperial’s university-wide initiative on artificial intelligence, machine learning, data, and digital. He was the Founding Dean of NEOM University’s College of Business & Innovation and previously served as Professor of Management of Technology and Dean of the College of Management at EPFL. His research focuses on digital innovation, business model transitions, crowdsourcing, Internetworking, and organizational change. He has published in leading journals including Academy of Management Review, Strategic Management Journal, Management Science, and Research Policy. He has also held leadership roles in the Academy of Management and the Strategic Management Society.

Author contributions statement

Magdalena Marczewska: Conceptualization, Methodology, Software, Validation, Formal Analysis, Investigation, Resources, Data Curation, Writing - Original Draft, Writing - Review and Editing, Supervision, Project Administration, and Funding Acquisition. Ravi Shankar Audichya: Investigation, Data Curation, Formal Analysis, Writing - Original Draft, Writing - Review and Editing, and Visualization. Christopher L. Tucci: Conceptualization, Supervision, Validation, Writing - Review and Editing.

Conflicts of interest

The authors declare no conflicts of interest.

Citation (APA style)

Marczewska, M., Audichya, R. S., & Tucci, C. L. (2026). Sustainability and digital transformation in the European food sector: Interdependencies, challenges, and strategy. Journal of Entrepreneurship, Management and Innovation, 22(4), 5-24. https://doi.org/10.7341/20262241

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Received 1 September 2025; Revised 3 March 2026, 18 April 2026; Accepted 27 April 2026.

This is an open-access paper under the CC BY license (https://creativecommons.org/licenses/by/4.0/legalcode).