Agriculture Reference
In-Depth Information
2.2 Sustainability, local food, and organics
Nowadays, sustainability is becoming one of the main social issues in the business field.
Pressure from investors, cuttings on production costs (eg. Walmart), development of a
positive image, and being able to charge more for organic foods is prompting large grocery
chains to go sustainable (Saha and Darnton, 2005). The issue of sustainability is also
analyzed by Jones et al. (2001), concluding that corporate social responsibility in the food
retailing industry is translated in terms of support for local food producers, fair trade,
healthy eating, commitment to organic products, and help for the local community. For
many consumers, the support of local farmers is considered a socially responsible behaviour
and partially reflects the belief that OF is locally grown (Hughner et al., 2007). An increasing
number of organic shoppers emphasize that local foods and sustainability are in direct
relation with their motivation to buy organic food (Zepeda and Deal, 2009).
Environmentally conscious consumers are willing to pay a much higher price for
sustainable products such as organic and locally-produced foods as ethical considerations
are becoming important factors in their decision making process. This encourages
organizations to embody corporate social responsibility. It is important to state that there are
two sets of consumers: hardcore OF consumers and regular OF consumers (Hamzaoui and
Zahaf, 2009). The latter type of consumer is seen as a consumer that buys OF for health or
taste reasons, while the former is depicted as an active consumer buying OF for
environmental and ethical reasons, along with some health reasons. In other words, the
hard-core consumer is commited to the environment whereas the regular consumer is
commited to personal health.
It is important to note that despite the fact that organics have gone mainstream, there is a
new trend amongst hard-core consumers regarding the rapid growth of “industrial
organics”. This trend is based on a viral and emergent discontent among consumers
regarding how the organic food system is evolving (Bean and Sharp, 2011). The main critics
are not related to the key elements in the current definition of organics. On the contrary,
these concerns are directly related to some economic, environmental and social ideals such
as production systems, size of the operations, distribution systems and channels, and capital
intensity. The by-product of this situation is what Bean and Sharp (2011) call alternative
food systems (AFS). They examine two pathways for achieving sustainability, and propose a
comparison among different types of local and organic food consumers in terms of attitudes
about food, agriculture and the environment. This helps to understand alternative food
consumer's preferences and how these preferences create new demand in the market.
Hence, AFS are seen as sustainable and economically, socially, and environmentally more
viable than standard systems. Innovative food systems, such as local farmers' markets, are
based on low-carbon food distribution systems and could be also classified as AFS. The slow
food movement is another good example of AFS.
3. Supply side factors
3.1 Channels of distribution
The organic food industry is steadily moving from niche markets, e.g., small specialty shops,
to mainstream markets, e.g., large supermarket chains (Jones et al., 2001; Tutunjian, 2008).
Ten years ago the bulk of OF sales were made in specialty stores (95%) while the remaining
5% were realized in mainstream stores. Nowadays, the trend has been reversed (Organic
Monitor, 2006). In some countries, distributors are promoting their own line of OF products
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