The functioning of the Swedish food system from a consumer perspective

1
The functioning of the Swedish food system from a consumer
perspective
By Solveig Wikström & Maria Frostling-Henningsson, Stockholm University,
School of business.
It is well documented that what consumers express as important regarding food
is far from coherent with their actual choice of food (Grunert & Kristensen, 1992;
Bjerke, 1992; Connors et al. 2001; AC Nielsen, 2006). This gap between consumers’
expressed intentions (goals), on one hand, and their actual choice, on the other hand,
signals problems for the consumers. This gap causes difficulties also for food
retailers and food producers because they can’t trust the market signals from the
consumers. This state indicates a deficient functioning of the food market. Moreover,
it is a well documented fact that peoples’ food intake is responsible for many of
today’s serious illnesses (WHO 2003). There are many possible explanations for the
mismatch between consumer intentions and actual choice concerning food
consumption. Some explanations are imbedded in the consumers’ own domain, such
as scarcity of time and limited knowledge relevant for choosing the right products.
Other explanations are imbedded in the food retailers’ and producers’ domains. For
instance, food producers and retailers are often criticized for poor product quality,
misleading or unclear information and aggressive marketing, which complicate
consumers’ choice of food and indirectly impede the quality of their food
consumption. It is a paradox that this mismatch occurs in societies with highly
educated and generally well informed consumers, and with food supply that is more
abundant with varieties than ever before. There is today no good explanation of this
apparent paradox.
Naturally, food production and food consumption have been extensively
researched by a multitude of disciplines and from a variety of perspectives: technical,
health, medical, nutrition, safety, culinary, economy, as well as from ethical,
religious, social and identity perspectives (see e. g. European Commission). However,
each research project deals with limited aspects of the food area. Food consumption,
for instance, may focus on eating ceremonies (Wallendorf and Arnould 1991), or the
eating habits among elderly consumers (Brembeck et al, 2005; Brembeck et al. 2006)
or among children (Johansson, 2006). Other research projects address eating-habits in
the Nordic countries (Grunow et al., 1998), and food provisioning in the public sector
in England (Edwards, Engström and Gustafsson, 2007; Edwards, Hartwell, Reeve and
Schafheitle, 2007; Hartwell, Edwards and Beavis, 2007). Likewise, there is an
abundance of research dealing with food production, marketing and information
provision of food (Grunert and Willis 2007), structural changes, competition and
market power (Reed and Clark 2000).
Aim of the study
In reality, all these aspects have bearings on an understanding of the food
system. However, to comprehend how different elements of the complex food system
influence food consumption, it is important to examine the working of the system as a
whole. This study will try to do that starting with exploring certain characteristics of
the main actors –food producers, retailers/wholesalers and consumers – and with the
issue how their organizational routines and activities influence food consumption.
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Theories on actor networks and consumer value creation will guide this research. To
get relevant empirical data, we collect information from several representatives of the
food system – including a large retail chain, its suppliers (represented by four food
producers) and consumers represented by a panel of 35 households from the retailer’s
customer base.
Theory framework
We will apply a network perspective to conceptualize the relations between
consumers, retailers and producers. The characteristic features of a “network
approach” are the focus on the “actors” and the relationships between them
(Gummesson 2002; Håkansson et. al. 2004). A market network can be defined as a
group of actors (firms and/or consumers) which interact (cooperate) in an activity
promoting value creation. The cooperation may concern quite different activities. In
the case of the food system the cooperation may, for instance, deal with buying, sale,
product development, production processes, information acquisition, or lobbying.
Such a network approach highlights the interdependence of actors. In the network
approach, market exchange is combined with direct interaction between cooperating
actors. This means that the distinct boundaries characteristic for market transactions
are blurred by network relations as a result of alliances, joint ventures, etc.
Consequently, the actors are influenced by and influence each other directly in a long
term perspective, not only through market transactions, but also via non-market
relations.
Another important characteristic of a network relates to how value is created.
While value creation and innovation has traditionally been considered the supplier’s
responsibility, value is increasingly perceived as originating from interaction and cooperation
between the actors in the network (Wikström and Normann 1996; Normann
and Ramirez, 1998; Wikström 1996a; Gummesson 2002; Håkansson et al. 2004). In a
similar vein, Porters’ (1985) value chain has increasingly been substituted by the
concept of value creating network or “value stars” (Wikström and Normann 1996;
Normann and Ramirez, 1998). Distributors and other intermediaries are highly
involved in innovation and value creation (Håkansson et al. 2004). Moreover, endusers
do not just consume, they also directly influence the nature of the offering and
take an active part in the value creation – an aspect extensively brought to the fore in
modern marketing literature (Dabholcar, 1990; Kelley et al., 1990; Gummesson 1995;
Lengnick-Hall, 1996; Wikström 1996b; Grönroos, 2000; Prahalad and Ramswany,
2004; Vargo and Lusch, 2004). An additional observation is that the offerings are not
just tangible products that can be inspected and evaluated. Other aspects such as
reputation, service and interactions also matter.
We will also keep other network characteristics in mind in our analyses of the
organizing and performance of the food system (see e.g. Latour 1990, 2005; Callon
1998; Law 2001; Kjellberg 2001; Charniawska and Hernes 2005; Feldman and
Pentland 2005). Actors have projects, and goals/interests – things they want to
accomplish. For instance, consumers are interested in finding the “right” products
when they shop for food, i.e. products that contribute to the goals concerning their
food consumption. Retailers are supposed to supply products and services that offer
maximum value for the consumers. Producers are engaged in developing products
and services that are supposed to fit both consumes’ and retailers value creation.
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Moreover, actors pursue their goals by a bundle of activities aggregated in
organizational routines. Those routines are manifest in recognizable patterns of
interdependent actions carried out by several actors (Feldman and Pentland 2005).
The organizational patterns typically appear in the shape of value creating
constellations (Normann and Ramirez 1998). Further, organizational routines can be
viewed as having two parts: a “manifest part” and a “performative part”. The manifest
part is about a formulated policy exhibited in a story/narrative for how the activities
should be pursued. For instance, in the case of a consumer, the manifest part may
imply that the consumer is a “green shopper”, largely going for vegetables. In the
case of a firm, the manifest part may imply that the firm should be consumer oriented.
The other part, the “performative” part consists of specific activities by which the
manifest policy is performed. For instance, the consumer may try hard to actually get
vegetables for the meals, and the firm may work hard to test its new products on a
consumer panel before the products are launched in the market. The coherence of the
manifest and performative aspects of the actors’ policies and routines can be taken as
one of the criteria for a well functioning network. Lack of correspondence signals
deficiencies in the network. Following this network perspective implies that we
should explore how consumers, retailers and food producers, describe (manifest) both
their policies and routines and the way they perform their expressed routines in real
action
Empirical methodology
We use a case-study methodology to generate data concerning the complex
food system. The case consists basically of three groups of actors: (i) a large retail
grocery chain (Axfood), (ii) a set of customers of the retail firm representing different
categories of consumers, and (iii) four producer firms serving as suppliers to the retail
firm (Lantmännen Axa, Atria, Findus and Santa Maria kryddor), chosen to represent
different product areas.
The consumer study, guided by theories on social psychology and sociology of
culture (Levi-Strauss, 1978; Fürst, 1988; Corrigan, 1997; Östberg, 2004)), explores how
consumers’ intensions and visions are materialized in the actual execution of actions, and
how they perceive the eventual gap between goals and actual behavior – and how they deal
with this gap. In-depth interviews with a panel of 35 households, representing different
demographic categories, provide the data. Additional data are collected from shopping
receipts and from a so-called shop-along approach, a process according to which the
researchers follow the consumers in the store while shopping. Data collection and analyses
follow established procedures for qualitative research (Thompson et al. 1989; Strauss and
Corbin, 1990; Spiggle, 1994; Frostling-Henningsson, 2003; Wikström, 2005), using an
interpretive approach. The data analysis is supposed to identify both manifest patterns of
consumers’ ambitions (expressed goals) and patterns of actual choice of food (performative
choice).
Data on retailers’ and producers’ organizational routines (manifest and performative)
as well as actions are also collected with a broad approach. A central issue in data
acquisitions is how the interaction with the other actors in the food network affects their
organizational routines in the case of product development and marketing. First, what are
the retailers’ and producers’ policies for interacting with the consumers, and how are the
activities accomplished? Second, how do retailers and food producers interact with each
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other, i.e. what are their expressed policies for this interaction and how are the policies
manifested in actions?
The analysis of firms’ interaction with the consumers will be based on data on
consumers collected by firms such as sales statistics, market research, observations, and/or
trend reports. We will also take notes on the conclusions that firms actually draw from the
data about the consumers’ goals, as well as how the consumers’ goals are met. Data about
organizational routines and their materialization will be collected in different ways. Policies
and organizational routines will be discussed at the recurrent workshops, where field notes
from the discussion are taken. Further, individual interviews with employees responsible for
the different activity areas will be held. Some of the interviews will be held as open
discussions, others as structured interviews suitable for comparison between the firms.
Internal documents will provide complementary data.
Data collection and analysis in summary
Following the “actor network approach” we explore how the characteristics of the
food producers, retailers and consumers – and their organizational routines and activities –
influence food consumption. As emphasized above, the influence from the three actor
groups is direct as well as indirect as depicted in figure 1. Media and organizations related
to the food area are not included in the study besides when referred to by the main actors as
representing restrictions or support in their goal directed activities.
Figure 1. How consumers, retailers and food producers influence the food consumption.
Each actor group is directly dependent on the other actor groups when pursuing
its tasks. The organization of this interdependence, we hypothesize, is of paramount
interest. As recent literature indicates, when the interdependence, besides market
transaction, takes the form of interaction and co-operation, it may substantially
increase the consumer value of the food consumption. In the analyzes, it is important
to identify which activities and routines within different actor groups that support,
respectively mitigate, the generation of consumer value, as measured by the
consumers’ realizations of their goals and visions.
Food
consumption
Food producers’
routines for their
goal oriented
activities
Consumers’
routines for their
goal oriented
activities
Retailers’
routines for their
goal oriented
activities
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Contributions
Previous research on food consumption, food quality, eating habits and its determinant
has mainly addressed special actors and/or specific issues of the food system. However,
each different piece – actors, activities and artifacts – are related and influence the outcome.
Hence, this study attempts to look at the food system as a whole using an actor network
framework. The focus will be on the interdependence, interaction and cooperation between
the three main actors of the food system.
Studies of production and marketing systems that encompass consumers as actors
within the system are scares. Thus, including the consumers in the study of the food system
should generate conceptual knowledge for developing the network theory. Another
contribution is methodological. Utilizing a case - study method and a network approach for
exploring the functioning of the food system is a fresh approach hopefully providing a
methodological contribution. The case-study method – based on close and long term
cooperation with a set of retail and food producer as well as a panel of consumers – ensures
access to deep data. Doing empirical research in areas sensitive to firms could otherwise
cause problems. Long term interaction with a consumer panel also generates new and
important data.
The study also contributes to the theory of consumer value creation in a network
context. Finally the study may have managerial implications. Firms and consumers as well
as different consumer representatives, should benefit from an improved understanding of
how the problems related to food consumption are created, what the roots of the problems
are, and how the problems may be mitigated/resolved.
Time schedule and financing
This study is an extension of the ongoing study of consumers’ choice of food as part
of their everyday life. As mentioned above, the consumer study focuses on the gap between
consumers’ expressed wants and their actual choice, and how this gap can be understood.
The ongoing consumer study is a two years project ending in late 2008. The consumer study
will be used as input in the study on the functioning of the food system. As a consequence,
the study of the food system is scheduled for only two years.
Different research councils and the firms included in the research are funding the
project on equal bases.
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