Organic regional food distribution channels
New consumer demands on the regional food market
Berlin is estimated to be one of the largest markets for organic food in Europe with suppliers from all over the world and from different German regions, whereas the surrounding Brandenburg region accounts for a high share of agricultural land under organic farming (10.6% of agricultural area and 12.6% of the farms are run organically) (Statistik Berlin Brandenburg 2013). Therefore part of our research focusses on organic food production and distribution in the metropolitan region. Over the last years we observe a change in consumer demands on food. Driven by new awareness and fuelled by negative news related to the conventional food industry, often prices are not any more the central purchasing criteria, but changed consumer demands. Those feature particular in the request for food safety, transparency and social compliance of the production process. In response, commercial enterprises implement new product lines and marketing strategies, which are not anymore driven from the competition on price leadership but on the endeavour to win the single customer, and accordingly reveal stronger orientation on healthy high quality products. In this context, regional food production and distribution of food has gained a central role in the discussion on food supply in Germany. Herewith regional organic food does not only satisfy consumer demands through its regional origin, but also facilitates the profiling of retail on the market and the possibility to develop a competitive stand- alone feature.
Empirical evidence on organic regional food distribution channels
Distribution channels for organic food supply in Berlin are well established in specified organic stores and organic supermarkets but also in conventional retail and discounters. Usually, in order to offer a broad product range, the global agricultural system (GAS) is the provisioning source. In FOODMETRES a specific in-depth study analysed new distribution and marketing trends for regional organic food beyond classical marketing on-farm, on weekly markets or via producer groups. Face to face interviews were carried out in five companies (supermarkets and wholesalers) each holding between 1- 83 branches in Berlin-Brandenburg and offering 1,000-13,000 different organic products in their portfolio. Also six heading organisations, associations and campaigns were interviewed. Central questions concerned the understanding of motivation behind the decision to take up regional organic products, their significance for the commercial enterprises, activities and strategies for further development within the organic product line. It became obvious that all experts expected a very positive future market development for regional organic products, mainly due to rising consumer demands, but also as a means for better profiling the product line. The regional organic food market is shaped through certain commodity groups like fruit, vegetables, eggs and dairy products, for which the consumer expects high quality, transparency, freshness, but also shorter transportation distances and social aspects, and for which they are willing to pay higher prices. Chain organisation showed different organisation models, structures, pathways, and rather individual strategies. However, regional structures for organic food production are not yet sufficient to cover the demand. The increased efforts of conventional supermarkets to provide regional (conventional) products, can lead to an intensification of efforts of the specialized trade to claim regional organic as a unique selling feature, which can ultimately incentivize regional organic production on farms.
Contribution to shortening food supply chains
Regional marketing of food has been subject to extended research and its significance to shortening supply chains is proven consisting of various compounds: the reduction of food miles, i.e. transportation distances and related reduction of energy consumption and emissions; better traceability, leading to increased trust between consumers and producers; strengthened cultural identity through better awareness on regional production conditions and seasonality of consumption; economic benefits for smaller farmers and rural economy, e.g. in case of local processing (Ermann 2005).
Evidence from the empirical study underlined the complex motivations of consumers, retailers and traders. Professionals from the different distribution channels uniformly identified three advantages of short organic food supply chains: freshness of produce, short transportation distance, and social aspects. Consumers' willingness to pay higher price was also underlined. Main limitations also were identified: supply bottlenecks through small scale delivery structures, and structural deficiencies. They are the reasons why the regional organic food assortment is still limited to niche products.
Ermann, U. (2005): Regionalprodukte: Vernetzung und Grenzziehung bei der Regionalisierung von Nahrungsmitteln. Franz Steiner Verlag Wiesbaden GmbH. Stuttgart.