SME Strategic Leadership and Grouping as Core Levers for Sustainable Transition—New Wine Typology

Consumer choices are largely influenced by sustainability, necessitating SMEs from the agri-food sector to strategically address sustainability and innovate their business models. Nonetheless, the challenge for such sustainable leadership lies in maintaining an equilibrium between innovation, sustainability, and financial performance. This study examined how strategic leadership fosters sustainability-oriented innovation within SMEs exemplified by the wine industry. A survey involving 354 German wineries served to analyze a multi-dimensional concept of innovation clusters (early adopters, pragmatists, pioneers, skeptics, conservatives), type of innovation, sustainability orientation, strategic ambitions, and business performance. Exploring the adoption of fungus-resistant grape varieties (FRV) allowed investigating how sustainability transitions to meet EU Green Deal targets are shaped by strategic groups involving strategic positioning and innovation clusters. There was a correlation between stronger sustainability orientation with greater innovation (Means up to 4.39). As per the findings, it was observed that high scores (p < 0.001, η2 = 0.144–0.160) in market and process innovation were obtained by early adopters and pioneers. These innovation champions excel in economic and social sustainability (p < 0.001) but nonetheless were found to be financially underperforming (Means 1.97–2.18). Innovations that were applied enhanced innovation scores (η2 = 0.128) but did not improve immediate performance. The strongest performance (Mean 2.60) was reported by skeptics though they fared poor in terms of sustainability and innovation. It was also noted that early adopters and pioneers (44–45%) were leading in FRV adoption, while a lag was observed within premium-oriented organizations. These insights may motivate SMEs in their quest for strategic sustainability and allow fine-tuning political and societal measures to achieve a sustainable transition and quantified Green Deal ambitions. It was concluded that long-term positioning was improved by sustainability-driven innovation, however, it would involve short-term performance trade-offs for SMEs. Political support should motivate the sustainable leadership champions to also safeguard profitability.