Partnering for inclusive business in food provisioning

Partnering

for

inclusive

business

in

food

provisioning

Greetje

Schouten

and

Sietze

Vellema

Thisreviewaimstounravelhowpartneringprocessesrelateto processesofinclusioninthecontextoffoodprovisioning.In foodprovisioning,inclusionhastwokeydimensions:the inclusionof(low-income)consumerstoincreaselevelsoffood security,andtheinclusionofsmallholderproducerstopromote inclusiveeconomicgrowth.Thisreviewdiscussesboth dimensionsandshowsthatthetandemofinclusivebusinesses andpartneringprocessesreconfiguringthetermsunderwhich socialgroupsatbothsidesoftheagri-foodchainareincluded islargelyunchartedterrain.Thepaperendswiththree promisingareasforfurtherresearch,whichrequireafurther integrationofdifferentliteraturesandperspectives.

Addresses

1_{PartnershipsResourceCentre,RotterdamSchoolofManagement,} ErasmusUniversity,BurgemeesterOudlaan50,3062PA,Rotterdam, TheNetherlands

2_{KnowledgeTechnologyandInnovationGroup,WageningenUniversity} andResearch,Hollandseweg1,6706KN,Wageningen,TheNetherlands

Correspondingauthors:Schouten,Greetje(schouten@rsm.nl), Vellema,Sietze(sietze.vellema@wur.nl)

CurrentOpinioninEnvironmentalSustainability2019,41:38–42

ThisreviewcomesfromathemedissueonThemeTBC-inclusive business

EditedbyNickyPouw,SimonBushandEllenMangnus

Received:12July2019;Accepted:09October2019

https://doi.org/10.1016/j.cosust.2019.10.004

1877-3435/ã2019TheAuthors.PublishedbyElsevierB.V.Thisisan openaccessarticleundertheCCBYlicense(http://creativecommons. org/licenses/by/4.0/).

Introduction

Thegrowinginterestininclusivebusinessintheagro-food

sector is exemplaryfor the desire to combine increasing

levelsof foodsecuritywithacceleratedprocesses ofinclusive

economicgrowth[1,2,3].Whilemostorganizationsworking

inthefieldofinclusivebusinesshavetheirowndefinitionof

theconcept,itseemstoatleastentailcreatinganetpositive

developmentimpactthrough afinanciallyprofitable

busi-nessmodel[4].Inclusivebusinessesthusaimtocombine

profitmakingwithsocietalimpactandareclaimedto

con-tributetopovertyalleviationwhileatthesametimecreate

new entrepreneurialandinnovationopportunities[5].

Inclu-sivebusiness;however,israrelyperformedinisolationand

usuallyentailscollaborativeeffortswithotheractors.Hence,

the suggested synergy between business interests and

development goalsseemstobe contingent onpartnering

processes.Debatesoninclusionaswellasonpartnerships

run the risk to assert positive normative connotations to these

concepts.Theobjectiveofthispaperisthereforetopresenta

literaturereviewinordertocarefullyunpacktherelationship

between partnering and inclusive business in analytical

ratherthannormativeterms.

Literature conceptualizing inclusive business assumes a

necessarylink with processes of partnering in two ways.

Firstly,inthefieldofbusinessstudies,manyauthors

accen-tuate the role of cross-sector collaboration as a crucial

conditionforthecreation andoperationof inclusivebusiness

modelsthatcontributetobroadersocietalgoals[6–9].

Part-nering with actorsfrom civilsociety and/orgovernments,

allowsforanintegrationofpublicgoalsintocommercially

viablebusinessmodels[10].Secondly,fromanissue-driven

perspective,manypractitionersandacademicsalikeargue

that addressingcomplex societalchallenges such asfood

securityandinclusiveeconomicgrowth,requires

collabora-tiveprocessesbetweendifferentsectorsofsociety[11,12].

From the 1990s onwards, partnerships have consistently

beenpartofdevelopmentpolicies[6,13–15].Bycombining

theuniqueresourcesandcapabilitiesofbusinesses,NGOs

and/orpublicactors,developmentoutcomescanbe

deliv-ered,whichexceedthoseofanyonesectoractinginisolation

[16].Globalpolicyframeworksreflectthisassumed

neces-sity of cross-sector collaboration; the 17th Sustainable

Devel-opment Goal (SDG) set bythe United Nations aims to

‘strengthenthemeansofimplementationandrevitalizethe

globalpartnershipforsustainabledevelopment’[17].This

perspective assumes that partnerships are essential for

involving business in sustainable systemic change.

How-ever,whetherandhowthisworksislargelyunknown.

Inthis article,we thereforereview literature to unravel

howcross-sectorpartneringrelatestoprocessesof

inclu-sionin the context offood provisioning. In food

provi-sioning, inclusion has two key dimensions: 1. of

(low-income) consumers at thedownstream end of the

agri-foodchainto ensureaccessto affordableand

nutri-tious food; and 2. of (smallholder) producers at the

upstream end of the agri-food to induce processes of

inclusive economic growth. This review discusses both

dimensions and aims to identify how the tandem of

inclusive businesses and partnering plausibly modifies

orreconfigures thetermsonwhich marginalizedgroups

atbothsides oftheagri-foodchainareincluded.

Inclusion

of

low-income

consumers

The literature review shows that partnerships between

government are expected to improve business

respon-siveness to customer needs in Bottom-of-the-Pyramid

(BoP) contexts andconsidered crucialfor commercially

successfulandscalablemarketingstrategiesofabusiness

[5,18].However,research alsosignifies thatinclusionof

low-income consumers is not easy, largely due to the

informal natureof BoPmarketsandchallenging

institu-tional contexts, and that ‘an alarming number of BoP

initiatives have failed, have been converted to

philan-thropicprograms,orhaveachievedonlymodestsuccessat

averyhighcost’[19,p.163].Thissuggeststhatinclusion

atthedownstreamsideoffoodprovisioningentails

insti-tutional work by partners and cannot rely solely on

marketingstrategiesfor novelproducts.

Business literature zooming in on the role of business

attributes astrong transformativecapacity to leadfirms

and equallyunderlines theimportanceof partneringfor

inducingnewinstitutionsenablinginclusionofBoP

con-sumers [9]. From this perspective, partnerships are

considered to be instrumental for redirecting business

strategies towards the marketsaccessed by low-income

consumers, for creating legitimacy and for embedding

business strategies in specific local contexts [5]. In the

contextoffoodprovisioning,partnershipsinboth

indus-trialized [20] and developing countries [21] are also

expected to playakeyregulatory andcoordinating role

inmanagingfoodsafetyhazards.Policyframeworkstend

to reinforce the assumed synergy between the public

interest and businesslogics, especiallyof supermarkets

and largeretailcompanies[22].

Thisperspectivesuggeststhatleadfirmsarethe

control-ling agentsinfoodmarkets. Someresearchshifts

atten-tion to other commercial actors thanmultinational lead

firms,namelymicro,smallandmedium-sizedenterprises

(MSMEs) [19].Rosca et al. [24] examined asampleof

134 such MSMEs, which theypresent as key

organiza-tionalactorsforinclusionandlocaldevelopmentas

con-nectorsofglobalandlocalsupplychains.MSMEsengage

either directly in BoP inclusion with the support of

partners or approachinclusion indirectlybyoutsourcing

ittootherpartners–forexample,amicro-entrepreneurial

distributionnetworkmanagedbyNGOs.Theyconclude

that regardless of the inclusion mechanism, MSMEs

collaboratedcloselywithbothbusinessandnon-business

partners.Roscaetal.[24]arguethat‘BoPconsumers’can

beintegratedatanylinkofthevaluechain.Wethink,this

isexemplaryfortheBoPliterature,inwhichpeoplewith

low-incomesareconceptualizedprimarilyas consumers,

irrespectiveoftheirroleinthevaluechain.Thisshowsan

emphasis on the perspective of companies selling

pro-ductsto theseactors.

The literature on inclusivebusiness in relation to

low-incomeconsumersfocusesalmostexclusivelyonthelogic

ofthebusinessmodelofanindividualfirm[25]andmuch

less onthe enfoldingprocess of inclusion and

develop-mental outcomes. Consequently, emphasis of

partner-shipsisonconnectingbusinesspropositionsandproduct

developmenttargetinglow-incomeconsumers.However,

we know from practice-oriented literature that daily

practices of these consumers take place in realities of

food provisioning in open markets, by street vendors,

small-scale retail and other types of businesses [23,26].

Thisliteraturethereforeproposestofocusonthewebof

interrelatedpracticesofintermediarytradersandretailers

[27–29]. Situating and comparing access to food in a

varietyof realfoodmarketsenablesacontextual

under-standing of the terms on which inclusive business

practices make nutritious and healthy food accessible

for low-income consumers. Thorpe and Reed [30], for

example,relatethecapacityofbusiness-ledpartnerships

tosafeguardaccesstohealthyandnutritiousfoodtothe

logisticalarchitectureoffoodprovisioning,whichis

espe-ciallyaconcernforruralconsumers,andtheabilityamong

consumerstopayareasonablepriceinaspecificmarket.

Moreover,thefitoffoodproductsanddistribution

prac-ticeswithdailyconsumptionbehaviorsareofkey

impor-tance.Hence,inclusionoflow-incomeconsumersinfood

provisioninginvolvesmoredimensionsthanthebusiness

modelof afirmalone.

Inclusion

of

smallholder

farmers

Despitehavingadominantroleintheagri-foodsectorin

developingeconomiesandbeingcoretothesupplyofraw

materialstofirmsdownstreamthechain[31],smallholder

farmers(SHFs)generallyhaveamarginalizedpositionin

agri-food chains. We therefore review to what extent

literatureunpacksthetermsonwhichtheyareincluded

infoodprovisioning.SHFsproducegoodsandservicesfor

subsistence and commercial markets, mainly based on

family labor and limited access to land [32].

Business-NGOpartnershipsindevelopingcontextsoftenfocuson

organizingvaluechainrelationsbylinkingmarginalized

smallholder farmers (SHFs) to lead firms as a way to

increase farmers’access to technology,inputs and

mar-kets, assuming increased incomes and food security

[1,32,33].Thesetypesofcollaborationinvolvedifferent

actorsinasupplychain,includingproducersandbuyers,

NGOs and/orgovernmental organizations to foster

pro-cessesofinclusivedevelopment[32].However,

partner-shipsdonotnecessarilyleadtobettertermsofinclusion,

as they often have been reported to have difficulties

ensuring inclusion of marginalized stakeholders

them-selves [33]. This type of inclusive business approach

mightevenleadtogrowing(gender)inequalities;

unbal-ancedsharingofrisks,costsandbenefits;lossof

decision-making power;and biodiversityloss [32,34].

Often contractfarmingisusedasaninstrumentin

part-nerships to forge commercial relationships between

smallholder farmers and a firm, in which produce is

as pre-financing of inputs [3]. According to a recent

systematic review, SHFs canindeed benefit from

con-tractual arrangements in terms of increasing incomes;

however,thepoorestfarmersarerarelyincludedinthese

arrangements[3].However, positiveincomeeffectsdo

notguaranteesatisfactionamongSHFsincludedin

part-nerships.Thorpe[35]findsthatasenseoffairnessofthe

arrangementsby SHFs is crucialand that if procedural

justiceisabsent,farmerscanexercisetheiragencytoexit

ortoneglectproceduresforeffectivecoordination,which

resultsinaninefficientvaluechainandsuboptimal

out-comesforallpartners.

Thisshowsthat,whileinclusivebusinessisoften

under-stoodintermsofsmallholderinvolvementincommercial

agriculture[36],inclusion initself, isneithergoodnor

bad; it is dependent on the actual terms of condition

underwhichpeopleareincludedwhetheritisbeneficial

for SHFs to beincluded in avalue chain.‘Ill-designed

collaborative models may establish unfair relations,

involve coerced participation, create dependence on

one buyer, or push disproportionate risk onto

smallholders’[36,p.5].Currently,we seeanemerging

literatureaimingtoassessthetermsofinclusionforSHFs

in collaborativebusinessmodels[35,37,38]. Anygains

forSHFs, employeesandotheraffectedpeopledepend

on the actual process and terms of inclusion [36].

Vermeulen and Cotula [37] identified four dimensions

of inclusion, which Chamberlain and Anseeuw [39]

recently elaboratedand refined. Thesefour aspects —

ownership, voice, risk, and reward — are closely

inter-linkedand allowforanintegraland processual

perspec-tiveoninclusiveness.Ownershipdealswith thequestion

who ownswhatpart of thebusiness,andassets such as

land and processing facilities. The second is voice: the

ability of marginalized actorsto influence key business

decisions,includingweightindecision-making,

arrange-ments for review and grievance, and mechanisms for

dealing with asymmetries in information access. The

thirdone is risk, including commercial (i.e. production,

supply and market) risks, but also wider risks such as

politicalandreputationalones.Thefourthonedealswith

thedistributionofreward:thesharingofeconomiccosts

andbenefits,includingpricesettingandfinance

arrange-ments. This operationalization makes a more nuanced

understanding possible of the actual conditions under

which and processesthrough whichSHFs areincluded

inbusinesspractices.

Conclusion

From this review we derive three main conclusions,

whichprovide ingredients for afuture researchagenda.

Firstly,literatureontheinclusionof low-income

consu-mers tends to focus on business models of lead firms,

reflectingastrongfocusonformalizedarrangementsand,

accordingly, emphasizing the role of partnerships in

ensuring inclusion as such. At the same time, we see

anemergingliteraturegroundedindevelopmentstudies,

interestedinacontextualizedassessment oftheprecise

terms on which actors (notably SHFs) are included in

business practices, and thus qualifying the process of

inclusion, rather than treating inclusion as an in or out

affair. Cross-fertilization of these two literatures could

alsocontributetoamorenuancedunderstanding ofthe

termson which low-income consumers are included in

foodprovisioning.Thiswouldallow foradeeper

under-standingofhowpartneringshapesthetermsofinclusion

atbothendsof thevaluechain.

Secondly, distinct bodies of literature focus either on

inclusion upstream or downstream of the chain.

How-ever, in food provisioning these two dimensions are

interrelated and pose possible tensions for inclusive

businessand thepartneringprocesses underlyingthese

[40]. Economic growth among producers might be at

odds with the provision of affordable food products in

low-incomemarkets.Consequently,afocus onsituated

business practices and the possible alignment thereof

offers more space to recognize potential paradoxes

between the terms of inclusion at different ends of

thevaluechain andunravelhowensemblesof

interde-pendentbusinesspractices,ratherthanbusinessmodels,

mediate these terms. Unravelling this configuration of

business practices implies an assessment of both the

terms of inclusion of suppliers of food and the terms

ofinclusionofpurchasersoffoodaswellastheinclusion

ofmarginalizedstakeholdersinotherpartsofthevalued

chain. Theimplication forcross-sector partnering isto

navigatethemessyand open-endedprocesses

underly-ingthealignmentbetween enterprisessourcing,

aggre-gating, trading and/or transforming food, smallholder

farmersandmicro-entrepreneurs supplyingraw

materi-als,andwholesalersandretailersarrangingaccesstofood

fordifferentgroupsofconsumers.Thissetsthestagefor

enhancing our understanding of the contribution of

partneringprocesses tosystemicchange [41].

Thirdly,the literature acknowledges theimportance of

partnering processes for inclusive development.

How-ever,thecapacitiesofandprocesseswithinpartnerships

toshapeorreconfigurethetermsofinclusionatbothends

ofthevaluechainremainslargelyblackboxed[40],which

entails the integration of multiple theoretical

perspec-tives[42].Thereviewobservedabiastowardspartnering

withleadfirmsandcollaborationembeddedinintegrated

agri-foodchains.Ourinterestinpartneringand

inclusive-nessintheeverydayrealitiesoffoodprovisioningsetsthe

agendaforamoreprofoundwayofintegratingprocessual

perspectivesincross-sectorpartnership literaturewitha

contextualunderstandingoftermsofinclusioninaligned

businesspractices. Weconsiderthis necessaryfor

asses-singwhetherandhowpartneringprocessesinfluenceand

reshape theterms on which upstream and downstream

Conflict

of

interest

statement

Nothing declared.

Acknowledgements

Theauthorswouldliketothankthespecialissueeditorsandtwo anonymousreviewersfortheirconstructivereviewsandsupport.Moreover, theauthorswouldliketothankthe2SCALEprogram,fundedbytheDutch MinistryofForeignAffairs,forthefinancialsupportofthisresearchandfor providingreflectionspace.

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