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Organic food as an emerging market: personal determinants of consumption, supply governance and retail strategies

Joris Aertsens (UGent)
(2011)
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(UGent) and (UGent)
Organization
Abstract
The organic sector can be considered an emerging market. Production and consumption of organic food have grown strongly during the last twenty years, but still the market share remains low, with about 3% of the overall food consumption within the EU-27 in 2008. The small size of the sector results in a high cost structure. Upscaling will result in economies of scale. The PhD indicates the main barriers that slow down growth at the demand and supply side. For a lot of consumers most important barriers are the (perceived) high prices and lack of availability of organic food. These barriers are partly due to a suboptimal organisation of the supply. Conversion to the organic sector demands specific investments. In an emerging sector with a lot of uncertainty this conversion can be facilitated by providing more certainty to the newcomers. Therefore compared to the conventional sector, ceteris paribus, a more thorough cooperation and stronger agreements between supply chain actors will be beneficial for the organic supply. A difficulty is that the organic supply chains at the same time have to provide flexibility to be able to adapt to unforeseen shocks that are more frequent in this small emerging market. A possible strategy is to develop a stable cooperation with some chain partners, combined with more loose contacts with other (often foreign) partners. The PhD provides interesting case studies of success and failure of supply organisation in the organic sector. They show that retailers can play a very important (leading) role in the development of organic supply chains. They have the means and can bear the risk of investing in some of these chains. They can provide the necessary trust to their suppliers to also make sometimes irreversible investments. Such a leading strategy may be a good strategic choice for retailers to improve their image as providers of high quality food. There may also be first mover advantages in this emerging sector, where the supply of organic products is a “scarce resource” and binding suppliers can be valuable.
Keywords
organic, supply chain organisation, theory of planned behaviour, transaction cost economics, new institutional economics, retailer, theory of reasoned action

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Citation

Please use this url to cite or link to this publication:

Chicago
Aertsens, Joris. 2011. “Organic Food as an Emerging Market: Personal Determinants of Consumption, Supply Governance and Retail Strategies”. Ghent, Belgium: Ghent University. Faculty of Bioscience Engineering.
APA
Aertsens, J. (2011). Organic food as an emerging market: personal determinants of consumption, supply governance and retail strategies. Ghent University. Faculty of Bioscience Engineering, Ghent, Belgium.
Vancouver
1.
Aertsens J. Organic food as an emerging market: personal determinants of consumption, supply governance and retail strategies. [Ghent, Belgium]: Ghent University. Faculty of Bioscience Engineering; 2011.
MLA
Aertsens, Joris. “Organic Food as an Emerging Market: Personal Determinants of Consumption, Supply Governance and Retail Strategies.” 2011 : n. pag. Print.
@phdthesis{1258273,
  abstract     = {The organic sector can be considered an emerging market. Production and consumption of organic food have grown strongly during the last twenty years, but still the market share remains low, with about 3\% of the overall food consumption within the EU-27 in 2008. The small size of the sector results in a high cost structure. Upscaling will result in economies of scale. The PhD indicates the main barriers that slow down growth at the demand and supply side. For a lot of consumers most important barriers are the (perceived) high prices and lack of availability of organic food. These barriers are partly due to a suboptimal organisation of the supply. Conversion to the organic sector demands specific investments. In an emerging sector with a lot of uncertainty this conversion can be facilitated by providing more certainty to the newcomers. Therefore compared to the conventional sector, ceteris paribus, a more thorough cooperation and stronger agreements between supply chain actors will be beneficial for the organic supply. A difficulty is that the organic supply chains at the same time have to provide flexibility to be able to adapt to unforeseen shocks that are more frequent in this small emerging market. A possible strategy is to develop a stable cooperation with some chain partners, combined with more loose contacts with other (often foreign) partners. The PhD provides interesting case studies of success and failure of supply organisation in the organic sector. They show that retailers can play a very important (leading) role in the development of organic supply chains. They have the means and can bear the risk of investing in some of these chains. They can provide the necessary trust to their suppliers to also make sometimes irreversible investments. Such a leading strategy may be a good strategic choice for retailers to improve their image as providers of high quality food. There may also be first mover advantages in this emerging sector, where the supply of organic products is a {\textquotedblleft}scarce resource{\textquotedblright} and binding suppliers can be valuable.},
  author       = {Aertsens, Joris},
  isbn         = {9789059894440},
  keyword      = {organic,supply chain organisation,theory of planned behaviour,transaction cost economics,new institutional economics,retailer,theory of reasoned action},
  language     = {eng},
  pages        = {XI, 219},
  publisher    = {Ghent University. Faculty of Bioscience Engineering},
  school       = {Ghent University},
  title        = {Organic food as an emerging market: personal determinants of consumption, supply governance and retail strategies},
  year         = {2011},
}