Governance, innovation and sustainability: an exploratory study on French wine co-ops

French wine co-ops are major operators in the wine sector and represent around 40% of the average national output (20 million hl). However, whereas this dominant position, over the last 25 years, more than 40 % of them have disappeared (source: French Wine Co-ops Union), essentially by merger, but also by liquidation, leading to massive vineyard uproot- ing, namely in South of France. Thus, we can wonder whether this poor evolution is linked to strategy and governance failures, or to a lack of capacity to innovate and adapt to challenges? Paradoxically, co-ops can be seen either as lacking innovation and adaptability to changing environments, or capable of adopting innovations to remain competitive. In fact, the wine sector has pioneered in the valorisation of the territory's specificities, namely thanks to wine co-ops: 40% of French Protected Denomination of Origin (PDO) and 70% of French protected geographical indication (PGI) are rooted in these organizations. In this context, governance, innovation and sustainability are considered as some of the main prospective challenges of these human-sized organizations. This leads us to our research question: What is the impact of wine co-op governance on innovation and sustainability? Agricultural co-op governance and performance have been widely studied, mostly through the lens of the agency the- ory (Franken and Cook, 2019). However, a lack of adapted governance indicators, reflecting the co-op governance complexity, persists (Saïsset, 2020). Moreover, Saïsset and Codron (2019) showed that a new multi-paradigmatic the- oretical perspective (TCE, stakeholder and cognitive theories of the firm) must be deepened. As far as innovation is concerned, it is generally analysed on the basis of the knowledge and innovation economy. But, it can be more relevant to analyse innovation as a collective learning process involving interactions between stakeholders to capture and pro- duce new knowledge (Temri et al., 2015). Although literature on business innovation and corporate social responsibility is increasing, research on co-ops' technological innovation is less explored and namely on the wine sector (Nazarro et al., 2015). Many research works deal with the effect of corporate governance on innovation (Belloc, 2012) and some recent studies point out the potential effect of digital innovation on members' involvement in agricultural co-op decision making (Duvaleix-Tréguer et al., 2019). Furthermore, Saïsset and Codron (2019) showed that hybrid forms of gover- nance (TCE and cognitive approach) influence the sanitary and phytosanitary management of apple production and consequently, their upstream sustainability. Nevertheless, measuring sustainability performance is challenging because there is no common tool, suitable to all types of organizations and industries, but adapted model can be proposed for agricultural co-ops (Marcis et al., 2019). For our study, we met 4 wine co-ops and a wine co-op technical service provider organization (ICV). We ran 9 semi- structured interviews with professionals, including the Chairman and the Manager of each co-op, as well as the technical manager of ICV. We also collected internal data and external information. All these qualitative data led us to analyse the characteristics of each co-op concerning governance, innovations and sustainability and the link between the three concepts. Studying the different characteristics of governance (structure and process), innovation (upstream/downstream, techno- logical/organizational) and sustainability (starting approach or comprehensive standards), we found that different ways of governance (e.g, centralization/decentralization, formal/informal aspects, importance of Chairman-Manager tandem) can affect the types of innovation and their sustainability level. More precisely, we pointed out that governance is characterized by the importance of vine grower members /wine co-op relationships (information, communication, knowledge flow) and cognitive gap or convergence between Chairman- Manager / BoD / members, as well as stakeholders' involvement and decentralization of control. These modalities lead to various effects on innovations and sustainability, allowing us to design a beginning typology of the wine co-ops' situation in France. We thus distinguished 4 ideotypes of wine co-ops from the very traditional, centralized and not very innovative one to the ongoing decentralized and sustainability innovative (namely in terms of management) one. This exploratory study paves the way for future researches concerning a larger qualitative survey analyzing interactions between wine co-op governance, innovation and sustainability.