Underdog or high-flyer. How
sustainable entrepreneurs aim to shape
the food industry.
Underdog or high-flyer. How sustainable entrepreneurs
aim to shape the food industry.
MSc Entrepreneurship Master Thesis
Leonie Martha-Louise Schäfer VU: 2619042 / UvA: 11831820
Supervisor: Dr. Karen Verduijn
Application Date: April 1st, 2018 Submission Date: July 1st, 2018
Content
Content ... III List of Tables ... V List of Figures ...VI Preface ... VII Abstract ... VIII
1. Introduction ... 1
2. Theoretical Framework ... 4
2.1. Sustainable Entrepreneurship ... 4
2.2. Forms of Sustainable Entrepreneurship ... 5
2.3. Sustainable Business Models ... 8
2.4. Opportunity Development ... 10
2.5. Drivers of Sustainable Entrepreneurship ... 11
2.6. The Food Industry ... 15
2.7. Presuppositions ... 16
3. Methodology ... 17
3.1. Research Method and Design ... 17
3.2. Case description ... 19
4. Within-case Analysis ... 21
4.1. Case 1 – Pastazeit ... 21
4.2. Case 2 – True Popcorn ... 26
4.3. Case 3 – Tony’s Chocolonely... 31
4.4. Case 4 – KoRo ... 36
5. Cross-case Analysis ... 41
5.1. Discussion ... 41
5.2. Results and Implications ... 44
Bibliography ... 48
Appendix ... 58
Interview Guide ... 58
List of Tables
Table 1: Overview case initiatives ... 19
Table 2: Overview Pastazeit ... 25
Table 3: Overview True Popcorn ... 30
Table 4: Overview Tony's Chocolonely ... 36
List of Figures
Figure 1: The relationship between environmental direction and market effect ... 6
Figure 2: Sustainable business models ... 8
Figure 3: Factors influencing intentions towards sustainable entrepreneurship ... 14
Figure 4: European food industry ... 15
Figure 5: Forms of sustainable Entrepreneurship case distribution ... 42
Preface
The following thesis ‘Underdog or High-flyer. How sustainable entrepreneurs aim to shape the food industry.’ wants to give deeper insights into sustainable entrepreneurship in the food industry by presenting four case initiatives that aim to change the food industry in a greener and more transparent direction. The thesis was written to obtain the degree Master of Science in Entrepreneurship from the Universiteit van Amsterdam and Vrije Universiteit Amsterdam. I started researching possible topics in this direction for my master’s thesis after working in the food industry and having a personal interest in sustainable food movements. With the help of my supervisor Dr. Karen Verduijn I was able to phrase a research question that I can identify myself with. This thesis addresses a topic that is underestimated, slowly gaining more attention, laying the foundation for new concepts and very important to me personally.
I want to express a special thank you to my supervisor Dr. Karen Verduijn for her exceptional guidance and support throughout the whole process of writing my thesis. Without her help, feedback and interest in the topic, the thesis would not have taken the shape it did. I want to thank the four companies, Pastazeit, True Popcorn, Tony’s Chocolonely and KoRo. Without their willingness to answer my questions and taking the time to open up about their motivations and their extraordinary business concepts to me, it would not have been that much fun, interesting and informative to dive deeper into the theoretical concepts of sustainable entrepreneurship. I also wish to thank my parents, my sister Leslie-Alina and my friends for their moral support and for always being there for me.
Thank you all for always keeping me motivated and pushing me to create something that I am proud of.
The copyright rests with the author, who is solely responsible for the content of the thesis, including mistakes. Both universities cannot be held accountable.
I hope you enjoy reading the thesis.
Leonie Schäfer
Abstract
This thesis helps to give more profound insights into sustainable entrepreneurship in the food industry. Entrepreneurship literature suggests different forms and business models of sustainable entrepreneurship that serve a niche or mass market. The business models either have the goal to make the existing world more sustainable or to create a new and more sustainable world. The opportunity development process is a constellation of the four components person, process, press, and product. The component person considers the motivations of entrepreneurs, which, in the case of sustainable entrepreneurs, are a combination of entrepreneurial motivations that can be distinguished into push and pull factors and ecopreneurial motivations. Scholars propose that sustainable entrepreneurs have stronger social, ethical and environmental values than ‘normal’ entrepreneurs and are agents of change. This goes hand in hand with the intention model, that examines personal, situational and cultural factors that influence individuals’ intentions to pursue sustainable entrepreneurship. The food industry consists of various actors, that are all part of the supply chain. Even though products become more standardized, many consumers demand healthier, greener and more sustainable alternatives. Finally, the theoretical concepts were applied by conducting four in-depth case studies about sustainable food initiatives from Germany, the Netherlands, and Austria. This provides insights into intentions and motivations of sustainable food entrepreneurs. Furthermore, it is analyzed which type of sustainable entrepreneurship and business model the case initiatives adopt.
1. Introduction
Environmental issues around the world are increasing dramatically. As a consequence of these issues, sustainability is a topic that is becoming more important than ever. Quinn (1971) already predicted environmental improvements to be the ‘next big industry’, as the demand for a cleaner environment and a better way of life is rising. Therefore, new markets could be developed. More and more entrepreneurs start to recognize opportunities that create unique value to customers and generate profit (Jolink & Niesten, 2015; Cohen & Winn, 2007; Dean & McMullen, 2007) At the same time they aim to improve “local and global social environmental conditions” (Cohen & Winn, 2007, p. 31).
Consumers are becoming more conscious of what they buy (Laroche et al., 2001). Cohen and Winn (2007) believe that market imperfections contributed to the deterioration of the environment. However, they also create opportunities that are the basis for a new model of entrepreneurship, called sustainable entrepreneurship. Several sectors, such as natural foods, renewable energy, and green building, are part of the environmental degradation (Dean & McMullen, 2007). The World Commission on Environment and Development (WCED) defines sustainability as a competence to “meet the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987, p. 16).
Sustainable entrepreneurship is defined as opportunities that recognize, create and exploit future goods and services, which lead to “economic, psychological, social, and environmental consequences” (Cohen & Winn, 2007, p. 35; Dean & McMullen, 2007). Sustainable ventures face additional challenges, since their solutions and innovations are supposed to give sustainable alternatives and replace unsustainable options (Cohen & Winn, 2007). There are several ways how a company can act ‘green’. A business can be based on a green idea or could have become green throughout its development process (Isaak, 2002). Furthermore, either the product or the process can be green (Walley & Taylor, 2002).
Various terms exist for entrepreneurs active in sustainable entrepreneurship, such as the ‘environmental entrepreneur’, the ‘green entrepreneur’ or the ‘eco-entrepreneur’ (Schaper, 2002). All terms describe entrepreneurs who started green-green businesses, have economic interests, and did not start their company as non-profit organizations (Isaak, 1998; Walley & Taylor, 2002). Isaak (2002) “suggests that ecopreneurs pursue social and ecological goals by means of profit-oriented businesses” (Walley & Taylor, 2002, p. 38). Green entrepreneurs are the ones who shape their businesses with their personal and ecological values, which are manifested within the company (Schaltegger, 2002; Kirkwood & Walton, 2011). Furthermore,
there are several forms and business models of sustainable entrepreneurship. Schaltegger (2002) distinguishes alternative actors, bioneers and ecopreneurs, which e.g. differ in the market they serve (Schaltegger, 2002). Jolink & Niesten (2015) present four types of business models the subsistence model, the income model, the growth model and the speculative model. The models vary in their sustainable attitude and whether they have money as an end or as a means (Jolink & Niesten, 2015). An important role in the decision whether to start a business or not is the opportunity recognition process that consists of five phases (Hansen et al., 2012). Widely studied topics in entrepreneurship research are the intentions and the motivation of entrepreneurs and ecopreneurs. Shane, Locke & Collins (2003) argue that human motivation has a significant influence on entrepreneurial processes. Entrepreneurial motivation can be divided into push and pull factors (Hakim, 1989; Kirkwood & Walton, 2014). Koe & Majid (2014) propose a model that is a continuation of the two most popular models, which are the entrepreneurial event model (EEM) and the theory of planned behavior (TBP). In this model situational, personal and cultural factors have an influence on the intentions (Koe & Majid, 2014). However, research mainly focuses on the intentions of an individual in the starting phase of their business, only little research has been done on how intentions affect the growth of a company.
As above-mentioned, the food- and drink industry represents one sector, affected by the growing demands of more sustainable products (Dean & McMullen, 2007). According to the European Commission, the industry represents the biggest sector in the EU regarding added value and jobs. The sector has changed from a supply-driven to a demand-driven system, where the focus is on making goods available at the lowest possible price, without paying attention to the long-term sustainability of current food production trends (European Commission).
Despite that fact that the food industry is such an important industry in the economy, there is not a lot of literature about sustainable entrepreneurship in the food industry. There is some research about Fair Trade movements and sustainable developments, but there is a lack of publications about the intentions and drivers behind founding a company in this sector. Another topic that did not get a lot of attention so far is how entrepreneurs want to change and reinvent the industry, what they want to achieve with their venture, and which actions they undertake to accomplish their goals. Therefore, the thesis shall answer the following question:
‘How sustainable entrepreneurs aim to shape the food industry.’
In this thesis, the drivers, intentions, and visions of the sustainable food entrepreneur will be considered. This shall give suggestions on how the sustainable entrepreneur wants to
shape and reinvent the food industry with his / her products and company. Furthermore, the thesis will investigate which position the case initiatives occupy, if they are an underdog active in a niche market, or a high-flyer that serves the mass market. Therefore, there will be four in-depth case studies about sustainable food initiatives from Europe. The four case studies will be about the companies Pastazeit from Austria, True Popcorn from Germany, Tony’s Chocolonely from the Netherlands and KoRo from Germany. One part of the information for the case studies will be obtained by interviews with employees or founders from the companies. To get a broad overview of the companies, articles, interviews, reports and more sources will be taken into consideration. The four case initiatives will be analyzed by using the Eisenhardt (1989) method. The thesis aims to contribute to existing sustainable entrepreneurship and ecopreneurship literature in various ways. First, it shall add value to the literature, by giving insights into the intentions of sustainable food entrepreneurs, throughout the life cycle of the business. As above-mentioned, current literature focuses on intentions of green entrepreneurs in the starting phase of their business, but not in later stages. Second, the thesis shall present how motivations of sustainable entrepreneurs affect the growth aspirations of their companies, the positioning of their companies and the business model they adopt. Third, it shall provide researchers with deeper understandings of the sustainable food industry. The thesis especially aims to give an overview of how sustainable entrepreneurs want to change and shape the food industry, by introducing sustainable products and raising awareness on environmental degradation.
The thesis will start with the theoretical framework, which will explain sustainable entrepreneurship, forms of sustainable entrepreneurship, business models, the opportunity development process and will go on with the entrepreneurial and ecopreneurial intentions and motivations, as well as the drivers of sustainable entrepreneurship. Furthermore, the food industry will be described. After the theoretical framework, the methodology will follow, which includes an explanation of the used method and a description of the four cases. Following this, the cases will be analyzed and discussed, to see, which intentions the entrepreneurs have, which actions they undertake to shape and change the food industry and which business model they apply. This section will include implications and the discussion. The last part will contain limitations of the study, further research suggestions, and the conclusion.
2. Theoretical Framework
Sustainability is becoming more important every day. Therefore, entrepreneurs start to exploit opportunities that help to stop environmental destruction and aim to find innovative solutions to solve these problems (Cohen & Winn, 2007). Sustainable entrepreneurs usually provide the market with greener alternatives to already existing products (Kirkwood & Walton, 2014; Sharma & Kushwaha, 2015). The following chapter of the thesis will cover the current state of literature about sustainable entrepreneurship, forms of sustainable entrepreneurship, sustainable business models, the opportunity development process and drivers of sustainable entrepreneurship, including entrepreneurial and ecopreneurial intentions and motivations. At last the food industry will be described. The explained theoretical constructs shall be the basis for the case studies, as well as the analysis and discussion.
2.1. Sustainable Entrepreneurship
To define sustainable entrepreneurship and delineate the phenomenon from ‘classic’ entrepreneurship, it is necessary to have a closer look at what sustainability is (Cohen & Winn, 2007). The World Commission on Environment and Development (WCED) first defined sustainability as the capability to “meet the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987). Quinn already argued in 1971 that sustainability might be ‘the next big industry’, which could offer various opportunities to create revenues and make profits, while at the same time solving environmental challenges (Jolink & Niesten, 2015).
For the concept sustainable entrepreneurship exist a variety of definitions. Cohen & Winn (2007) expand Venkataraman’s (1997) definition of entrepreneurship by adding the term environmental and determine “sustainable entrepreneurship as the examination of how opportunities to bring into existence ‘future’ goods and services are discovered, created, and exploited, by whom, and with what economic, psychological, social, and environmental consequences.” (Cohen & Winn, 2007, p. 35). Several scholars argue that sustainable entrepreneurship is a reaction to market failures and resulting from this, entrepreneurs exploit opportunities (Cohen & Winn, 2007; Pastakia, 1998). The four market imperfections suggested by Cohen & Winn (2007) are inefficient firms, externalities, flawed pricing mechanisms and imperfectly distributed information.
Sustainable entrepreneurship is also defined as founding a venture, that has sustainability as its core principle (Kirkwood & Walton, 2011; 2014). A lot of sustainable
companies offer greener alternatives to existing products (Kirkwood & Walton, 2014; Sharma & Kushwaha, 2015). It describes the art of balancing sustainable innovations with success in the marketplace and generating profits. Sustainable entrepreneurs design products and services that “reduce environmental impacts and increase the quality of life” (Schaltegger, 2002, p. 46). Furthermore, they want to make sustainable, innovative and environmentally friendly products known to a broad group of people (Zu, 2014; Schaltegger & Wagner, 2011; Sharma & Kushwaha, 2015). As entrepreneurship starts with the individual, sustainable entrepreneurship often has personal, social and environmental preferences and values as a basis, which reflect on the goals and visions of the venture (Schaltegger, 2002; Schaltegger & Wagner, 2011).
2.2. Forms of Sustainable Entrepreneurship
Several terms exist for sustainable entrepreneurship, e.g., environmental entrepreneurship or green entrepreneurship (Schaper, 2002). Furthermore, different forms of sustainable entrepreneurship can be distinguished, which will be explained in the following section. The most important forms are alternative actors, bioneers, and ecopreneurs (Schaltegger, 2002). Whereas ecopreneurship is a widely researched topic, the other two forms are less represented in literature. There are companies that simply incorporate environmental solutions into their business, but do not have sustainability as their key concept. These two forms, environmental management, and environmental administration, will be omitted in this thesis, as the focus lies on sustainable entrepreneurs. Schaltegger & Petersen (2001) defined the five different types of sustainable entrepreneurship or rather sustainable behavior within a company in a diagram. The overview is shown in Figure 1. It explains the relationship between the environmental direction of a company with its market effect.
2.2.1. Alternative Actors
Alternative actors are serving the alternative scene, which means entrepreneurs active in this scene try to establish an alternative culture in comparison to the conventional economy, by emerging out of the ordinary and building cultures, without hierarchies and industrial production(Schaltegger, 2002; Conti, 1984). The focus is on individuality and craftsmanship. Therefore, the environmental effect is not in the center of attention, as mass production would be against the principles of alternative companies. Peer consumers are the primary target group. Furthermore, personal goals are more important than market goals. Revenues are only necessary to secure the personal lives of the actors (Schaltegger, 2002).
2.2.2. Bioneers
Bioneers, which is a combination of the word bio and pioneer, are entrepreneurs who specialize in a market niche and act on particular customer preferences (Kotler, 1998; Schaltegger, 2002; Schaltegger & Wagner, 2011). A standard way to become a bioneer would be to start as an alternative actor and enter the commercial market later. Schaltegger (2002) defines bioneers as “suppliers driven by environmental invention […] – they play the role of a pioneer by opening new paths of environmental development in markets.” (Schaltegger, 2002, p. 52). The customer group of bioneers usually consists of individuals with a higher income and higher environmental standards and preferences (Schaltegger, 2002; Schaltegger & Wagner, 2011). Most of the bioneers are active in the high-technology environmental sector. There are other examples, such as SMEs, which develop products and services based on environmental problems and conforming with environmental criteria (Schaltegger & Wagner, 2011). The second type of bioneer is often shaped by the visions of the founder or owner, who wants to balance environmental, social and financial goals (Schaltegger, 2002). The impact of bioneers stays rather small, as the mass market and the majority of consumers are not affected by their innovations (Schaltegger, 2002).
Figure 1: The relationship between environmental direction and market effect (Source: Schaltegger & Petersen, 2001, p. 10)
2.2.3. Ecopreneurship
The term ecopreneurship is a composition of the term entrepreneurship and ecological and means the alignment of market success but also considering environmental challenges in the entrepreneurial process (Schaltegger, 2002; Pastakia, 1998). Ecopreneurial companies are strongly led by the goals and personality of the leader. Therefore, the broad definition of ecopreneurs is quite similar to the description of a bioneer. The distinction can be made in the positioning of the companies in the market. As already mentioned, a bioneer positions his / her company in a niche market and therefore, does not have that much impact. The ecopreneur in comparison to this wants to have a positive influence and make a meaningful contribution to solve environmental problems (Schaltegger, 2002; Schaltegger & Wagner, 2011). His / her goal is to enter the mass market, gain a substantial share of the market and earn high and rising revenues (Schaltegger, 2002; Walley & Taylor, 2002; Jolink & Niesten, 2015). Bioneers and ecopreneurs often cooperate to bring innovative environmental solutions to the mass market (Schaltegger, 2002).
Schaltegger & Wagner (2011) further distinguish ecopreneurship from sustainable entrepreneurship. Ecopreneurship shall solve environmental problems and at the same time generate economic value, whereas sustainable entrepreneurship is supposed to address societal and environmental issues and build a successful business. Therefore, several scholars classify ecopreneurship as part of sustainable entrepreneurship, which narrows the topic further down (Schaltegger, 2002; Jolink & Niesten, 2015).
In Isaak’s (2002) opinion two types of ecopreneurial companies exist, which are ‘green businesses’ and ‘green-green businesses’. Green businesses are companies that were not founded as sustainable companies, but developed a ‘greening’ strategy, as they saw the cost, innovation, and marketing benefits this would bring (Isaak 2002; Walley & Taylor, 2002). Green-green businesses compared to this, are companies that were sustainable from the start (Isaak, 2002; Walley & Taylor, 2002). This type of venture is supposed to change the industry in which it is active in the direction of more sustainable developments (Isaak, 1998).
The previous section gave deeper insights into forms of sustainable entrepreneurship and the differences between them. Ecopreneurship is the most common concept of the three. Especially making the distinction between bioneers and ecopreneurs will be rather difficult, as the definitions are quite similar, except the fact that bioneers enter the niche market instead of the mass market (Schaltegger, 2002; Schaltegger & Wagner, 2011). The thesis aims to differentiate between an entrepreneur, who wants to be an underdog active in the niche market, and a
high-flyer, who enters the mass market. To classify the cases, it will be necessary to see whether the entrepreneurs intend to establish a green-green business from the beginning, or whether they want to produce high-quality products, which in most cases go hand in hand with a green strategy.
2.3. Sustainable Business Models
Business models are defined as a company’s economic strategy and the company’s aim to sustain revenues over a period of time (Stewart & Zhao, 2000; Morris, Schindehutte & Allen, 2005). Furthermore, business models regard the strategic levels of a company, which include the overall market positioning, interactions and growth opportunities (Morris et al., 2005). Scholars, such as Jolink & Niesten (2015) and Morris et al. (2005), determine four types of sustainable business models, which are shown in Figure 2. The ecopreneurial business model is connected to the value creation of the ecopreneur. Thus, it turns disvalue into value, by generating greater customer value for environmentally concerned customers (Jolink & Niesten, 2015; Zott & Amit, 2007).
2.3.1. The Income Model
The income model has money as a means and the goal of creating a new and more sustainable world. Ecopreneurs who adopt this model want to generate a steady, continuous income and know exactly what needs to be developed (Jolink & Niesten, 2015). Companies adopting this model are typically rather small and do not have a significant market effect. In their opinion,
starting small is an important factor to build a basis to expand their business, while at the same time continuing with their existing environmental goals (Jolink & Niesten, 2015). Consumers are provided with decent information, which convince them to buy eco-products. Ecopreneurs try to build a community of people that share the beliefs of the ecopreneur. Therefore, they try to persuade the consumers with transparency and high-quality products (Jolink & Niesten, 2015). Most customers are willing to pay higher prices. However, the ecopreneurs are ready to decrease profits to be more sustainable, as they think that “reaching and growing the mass market needs to be done by being transparent” (Jolink & Niesten, 2015, p. 397).
2.3.2. The Subsistence Model
The subsistence model also has money as a means, but in comparison to the income model, has the goal of improving the sustainability of the existing world. Most of the businesses applying this model, want to secure their existence and meet their financial responsibilities (Morris et al., 2005; Jolink & Niesten, 2015). These ecopreneurs did not start their business as a green-green business, but had the aim to produce high-quality products, which in most of the cases are green products. However, they do not want to promote their products as ecological, as this might result in a decrease in consumers (Jolink & Niesten, 2015). Ecopreneurs adopting the subsistence model are willing to compromise, to reach a wider audience and make more profits (Jolink & Niesten, 2015). Nevertheless, they aim to make the world better and try to balance short-term economic goals with long-term sustainability goals, to become and continue to be profitable (Jolink & Niesten, 2015).
2.3.3. The Growth Model
The growth model has money as an end and has the goal to create a new and more sustainable world. Ecopreneurs adopting this model assume that it is possible to be profitable and have a substantial market effect, while also being sustainable (Schaltegger & Wagner, 2011; Jolink & Niesten, 2015). Most of the companies, adopting this strategy have a large market effect, due to a strong product, prior business experiences and an extensive industry network (Rodgers, 2010). Ecopreneurs engage in investing and reinvesting in financial and relational resources, while also believing the world can be made a better place (Jolink & Niesten, 2015). The main aspect of this model is that ecopreneurs believe the mass market can be reached when being transparent about the company goals and products (Jolink & Niesten, 2015). They target large supermarkets and companies (Jolink & Niesten, 2015).
2.3.4. The Speculative Model
The speculative model has money as an end and the goal to improve sustainability in the existing world. Their strategy is to create revenues by selling eco-products. However, the environmental performance is not the main company goal. Realizing economic goals is the most important part of this strategy (Jolink & Niesten, 2015). The model is for companies aiming to change their strategy to a greener one, exploiting consumer demands and seeing the potential of ecological products (Jolink & Niesten, 2015).
The preceding theory reviewed sustainable business models and explained the goals of the entrepreneurs and whether they saw money as an end or as a means to start a green business. The thesis intends to shed light on the question which strategy and business model a green entrepreneur pursues. The business model theory further extends research on forms of sustainable entrepreneurship. It was substantial to explain ecopreneurial business models to determine the form of sustainable entrepreneurship and to conclude which strategy they adopt. The theory shall help to find out the entrepreneurs’ intentions while choosing the business model and how their motivations affect the growth aspirations of their company.
2.4. Opportunity Development
Venkataraman (1997) describes opportunity recognition and development as a key factor in successful entrepreneurship. Opportunity can be defined as a development process, in which concepts and fundamental ideas are further developed into opportunities (Ardichvili, Cardozo & Ray, 2003; Hansen, Monllor, McMurchie, 2012). Scholars, who argue that opportunity development is a process, suggest it needs to include creativity (Runco, 2004; Ardichvili, Cardozo & Ray, 2003; Hansen, Monllor, McMurchie, 2012). According to several scholars, creativity is a constellation of four components: person, press, process and product (Runco, 2004; Woodman, Sawyer & Griffin, 1993).
First, person refers to the characteristics and motivations of the individuals, which consists of four components: creative thinking skills, expertise, motivation and personality (Hansen et al., 2012; Amabile, 1998; Woodman et al., 1993). Hansen et al. (2012) suggest motivation to be the most important component, as motivated entrepreneurs come up with more creative ideas. The entrepreneurial motivation will be elaborated in the next section of this chapter. Second, press or also referred to as situation or environment describes the pressure from the outside world on the process (Murray, 1938; Runco, 2004; Hansen et al., 2012). Positive influences on creativity might include freedom, autonomy, encouragement, and
freedom from criticism (Amabile, 1998; Runco, 2004). These situations are more common in entrepreneurship. Negative situations include time pressure, resources, competition and lack of autonomy (Runco, 2004; Hansen et al., 2012). The pressure can either be enhancing or constraining for companies and entrepreneurs (Hansen et al., 2012; Woodman et al., 1993). Third, one of the components is the process, which refers to a series of activities and thoughts that have a new product as an end goal (Hansen et al., 2012; Lubart, 2001). The process is supposed to consist of five elements: preparation, incubation, realization, evaluation, and elaboration (Hansen et al., 2012). The component product depicts the outcome of the process, which can be business plans, concepts or new ideas (Runco, 2004; Hansen et al., 2012).
In the preparation phase general or specific knowledge is acquired, that does not necessarily need to have something to do with the business idea itself (Corbett, 2005; Hansen et al., 2012).Incubation means that individuals mostly get their ideas while doing something completely different (Csikszentmihalyi, 1997; Hansen et al., 2012). Another element is the moment of realization, in which solutions or possibilities come to surface (Hansen et al., 2012). Throughout the evaluation phase, the idea is further developed and evaluated to see whether it is worth pursuing (Csikszentmihalyi, 1997; Hansen et al., 2012). The elaboration phase involves the implementation of the most viable idea (Csikszentmihalyi, 1997; Hansen et al., 2012).
2.5. Drivers of Sustainable Entrepreneurship
Before being able to define ecopreneurial motivations and intentions, it is necessary to describe entrepreneurial motivations in general, which build the foundation for the subsequent theory. Following this, the entrepreneurial intentions towards sustainable entrepreneurship will be explained on the basis of a suggested model by Koe & Majid (2014), which expands the two most important models for predicting intentions.
2.5.1. Entrepreneurial Motivation
Shane et al. (2003) argue that individual motivations affect the decision-making processes of humans and that motivations influence whether individuals are likely to follow entrepreneurial opportunities or not. In their opinion, “human motivation plays a critical role in the entrepreneurial process” (Shane et al., 2003, p. 258). Entrepreneurial motivation is a widely researched topic that distinguishes types of motivations into push and pull factors (Hakim, 1989; Shane et al., 2003, McClelland, Swail, Bell & Ibbotson, 2005; Segal et al., 2005; Kirkwood & Walton, 2011). Several scholars define four main drivers for entrepreneurial
motivation, which are a desire for independence, monetary motivations and family and work-related factors (Carter, Gartner, Shaver & Gatewood, 2003; Kirkwood & Walton, 2011).
In this framework, pull factors are determined as factors “that draw people to start a business” (Kirkwood & Walton, 2011, p. 208). This can include the recognition of an opportunity by the entrepreneur (Kirkwood & Walton, 2011, p. 208). One of the main drivers for entrepreneurship is independence, which can also be classified as a pull factor (Shane et al., 2011; Kolvereid, 1996; Carter et al., 2003; Kirkwood & Walton, 2011). Independence means that individuals can control their own time, have more flexibility regarding their private life and have freedom concerning approaches to work (Scheinberg & MacMillan, 1988; Shane et al., 2003; Carter et al., 2003). All of these aspects seem to have a significant influence on why people pursue entrepreneurship (Kirkwood & Walton, 2011). Another pull factor is the financial motivation certain entrepreneurs have (Kirkwood & Walton, 2011). Scheinberg & MacMillan (1988) describe financial success or monetary motivations as the desire of entrepreneurs to have security for themselves and their families and to earn higher returns as an entrepreneur compared to returns as employees (Kolvereid, 1996; Carter et al., 2003).
As opposed to this, push factors mostly represent external and personal factors (Hakim, 1989). These factors might include negative events, related to the individual’s work or family life (Kirkwood, 2009; Kirkwood & Walton, 2011). Entrepreneurs who started their own business because of external or personal reasons are less likely to become and stay successful in comparison to individuals who were pulled into entrepreneurship (Amit & Muller, 1995). Work-related aspects, such as unemployment, lack of job and career prospects and redundancy, are classified as factors, that push individuals in the direction of entrepreneurship (Kirkwood, 2009, Hakim, 1989; Kirkwood & Walton, 2011). Family-related factors are categorized as push factors and involve aspects such as a desire for a good work-life balance, family policies and obligations (Sundin & Holmquist, 1991; Kirkwood & Tootell, 2008; DeMartino & Barbato, 2003).
2.5.2. Ecopreneurial Motivation
Ecopreneurial motivation is a topic that has not been researched in depth. According to Freimann, Schick & Marxen (2005) entrepreneurs have different perceptions of sustainability and sustainable orientations in the venture founding process. Ecopreneurs in comparison to ‘other’ entrepreneurs have stronger ethical attitudes (Linnanen, 2002; Kirkwood & Walton, 2011). They might have a diverse set of motivations, that can be a combination of green, ethical and social motives (Walley & Taylor, 2002). Ecopreneurs are viewed as agents of change, who
want to change the world into a better place, by also accepting lower returns (Linnanen, 2002; Walley & Taylor, 2002; Cohen & Winn, 2007; Kirkwood & Walton, 2011). However, for most ecopreneurs the ethical reasons are just one part of their motivation to start a company. As results of market failures and market imperfections market needs arise, which ecopreneurs aim to satisfy, by providing environmentally friendly solutions (Pastakia, 1998; Cohen & Winn, 2007). Little research has been done on how ecopreneurial motivations affect the growth of a startup, and how ecopreneurs balance green values with profit goals (Kirkwood & Walton, 2011).
2.5.3. Entrepreneurial Intentions towards Sustainable Entrepreneurship
Although interest in entrepreneurial intentions is high, research on this topic is rather small (Vuorio, Puumalainen & Fellnhofer, 2018). Several models that aim to analyze entrepreneurial intentions exist. One of the most common ones is the theory of planned behavior (TPB), and the other one is the theory of the entrepreneurial event (EEM) (Ajzen, 1991; Shapero & Sokol, 1982). The TPB model was developed by Ajzen (1991) and aims to explain individual behavior, which is caused by intentions. In this model intentions are influenced by several factors, such as personal attitude, subjective norm and perceived behavioral control (Koe & Majid, 2014). According to Ajzen (1991), intentions are precursors of actual human behavior (Kolvereid, 1996). The EEM was developed by Shapero & Sokol (1982) and intends to explain why people engage in entrepreneurship. This model tries to describe that any entrepreneurial event results from perceptions of desirability and feasibility (Koe & Majid, 2014). Both models have been used to predict entrepreneurial intention in general. However, it has not been examined in the context of sustainable entrepreneurship (Koe & Majid, 2014). Therefore, scholars argue both models need to be expanded (Krueger, Reilly & Carsrud, 2000; Koe & Majid, 2014).
Koe & Majid (2014) reveal several influences on entrepreneurial intentions, especially regarding sustainable entrepreneurship. First of all, intentions are affected by an individual’s personal factors, which include values and beliefs (McGee et al., 2009; Koe & Majid, 2014). Hence, sustainable values are a sign of sustainable affinity (Gagnon, 2012; Koe & Majid, 2014). Intentions are influenced by a person’s attitude, which again has an effect on sustainable behavior and thinking (Ajzen, 1991; Stern, 2002; Koe & Majid, 2014). Second of all, intentions are affected by external or situational factors (Spence, Gherib & Biwolé, 2011; Koe & Majid, 2014). These factors include social pressure, governmental rules, and regulations (Vermeir & Verbeke, 2008; Moorthy et al., 2012; Rasi et al., 2010; Koe & Majid, 2014). Lastly, intentions are stimulated by cultural factors (Mueller & Thomas, 2000). According to Bhalachandran
(2011), the cultural setting of the entrepreneur and cultural pressure has an influence on sustainable development. It is necessary to dedicate long times to sustainable management (Koe & Majid, 2014).
In the EEM, it is suggested that entrepreneurial events are the outcomes of the perception on desirability and feasibility by an individual (Shapero & Sokol, 1982; Koe & Majid, 2014). Whereas perceived desirability means that individuals are attracted to start their own venture, and perceived feasibility describes whether the person can start the business or not (Shapero & Sokol, 1982; Koe & Majid, 2014). Concluding from this, Koe & Majid (2014) suggested a model for predicting intentions towards sustainable entrepreneurship (Figure 3). In this model, the personal, situational and cultural factors, which were described above depict the independent variables, the perceptions on desirability and feasibility represent the mediating variable and intention towards sustainable entrepreneurship is the dependent variable (Koe & Majid, 2014).
The previous section of the theoretical framework gave more profound insights into drivers towards sustainable entrepreneurship, which included an overview of entrepreneurial and ecopreneurial motivation, followed by entrepreneurial intention theory. The intention theory distinguishes two models, the TPB and the EEM and presented a model established by Koe & Majid (2014). The three main topics are important for being able to analyze the drivers of the entrepreneurs and to see whether the theory applies to sustainable entrepreneurship in the food industry or not. The thesis wants to investigate whether the factors have an impact on the motivation and success of the company throughout the lifecycle of the company.
2.6. The Food Industry
The following paragraph will give deeper insights into the food industry, its different actors, their influence, the consumers and the importance of the industry. According to the European Commission, the food and drink industry is the largest producing sector in the European Union, regarding value-added and provided jobs. Resulting from this, the European Union enters trade agreements with other non-EU countries (European Commission, n.d.). The food industry consists of various actors, such as farms producing agricultural products, which will be processed in enterprises. Further enterprises will distribute the finished goods, which will be used in the foodservice industry. All this will be delivered to around 500 million consumers in the EU (Figure 4). 15 million of the actors in the food supply chain are small or medium-sized enterprises. However, the market share of the top five firms was between 56 to above 60 percent in 27 of the EU member states in 2012 (DG Agricultural and Rural Development, 2017).
Jordana (2000) argues that the European food market is expanding into a global market, where products are becoming more standardized, because large companies enter the market on a daily basis and distribute their products in various markets. These companies buy the products from large processing enterprises and are the only ones being able to sell products in the right quality and for a reasonable price (Jordana, 2000). The primary goal of the food industry is to satisfy the consumers’ needs, which are cheap and easy to prepare foods (Jordana, 2000). On the one side there are homogenous mass-produced food products, and on the other side, there are traditional products, produced on a small scale (Jordana, 2000). Food producers have to meet the demands of the customers regarding safety and sanitary regulations and guarantee the
constant availability in the market (Jordana, 2000). Consumers request healthier products, as a result of increased awareness concerning health (Jordana, 2000).
2.7. Presuppositions
This section will briefly explain the importance of the theory for the case studies, as well as how the thesis aims to fill a research gap. The case studies aim to shed light on the phenomenon of sustainable entrepreneurship in the food industry. It mainly wants to reveal which intentions and motivations bring the entrepreneurs to engage in sustainable entrepreneurship and to start a green business. It is believed that not all case initiatives had the idea to start a green-green business from the beginning, but rather established a greening strategy throughout the founding process because even though green products are gaining more importance, not everyone believes in their success and wants to be associated with the eco scene. However, it is still believed, that the case initiatives have stronger social, environmental and ethical believes and not only engage in sustainable entrepreneurship to acquire customers. It is important to understand the basic concept of sustainable entrepreneurship and to delineate it from ‘classic’ entrepreneurship to see whether the chosen case initiatives are even active in sustainable entrepreneurship. Furthermore, the existing forms and business models of sustainable entrepreneurship need to be understood to be able to categorize the case initiatives and see what the intentions of the entrepreneurs with their businesses are. It is assumed that both underdogs and high-flyers are found in the case initiatives.
As the opportunity development process goes hand in hand with the motivations and intentions of entrepreneurs, it has been necessary to explain this process briefly. It is believed that there are changes throughout the opportunity development process and that this process is a constellation of the four components mentioned above. The thesis not only wants to get deeper insights into the motivation and intentions before starting the business and during the founding process but also in a later stage of the business. It mainly wants to reveal how the entrepreneurs aim to grow their business and build their strategy in line with their intentions and motivations. One of the main parts of the study is to uncover the drivers towards sustainable entrepreneurship in the food industry. This includes motivation and intentions of entrepreneurs. It is assumed that personal values and beliefs of the case initiatives as well as independence play a vital role in their decision to start a green business. Furthermore, it is presumed that green entrepreneurs accept lower returns to change the food industry and have an impact.
3. Methodology
The underlying research question is a ‘how question’, which suggests a qualitative research design (Yin, 1981; Edmonson & McManus, 2007). This type of question tries to draw connections between phenomena when little to no prior research about the phenomenon exists (Edmondson & McManus, 2007). Based on this, the following chapter will explain the used research method and will give a brief overview of the conducted case studies.
3.1. Research Method and Design
To find answers to the research question ‘how sustainable entrepreneurs aim to shape the food industry’, the Eisenhardt method (1989) will be applied. According to Yin (1994) case studies can either include single or multiple cases with the goal to provide a description for theories or to test or generate theories (Kidder, 1982; Pinfield, 1986; Harris & Sutton, 1986; Eisenhardt, 1989). Using multiple case studies has the aim to replicate or confirm the results (Yin, 1981). In this thesis, four cases will be analyzed. Firstly, the single cases shall be examined, and secondly, the cases will be compared to each other (Eisenhardt, 1989). The cross-case analysis was chosen to work out similarities and differences between the case initiatives. Furthermore, the analysis is supposed to give tendencies which strategy, business model, and drivers are most common among entrepreneurs and companies active in the sustainable food industry. The method consists of various steps that are selection of cases, collection of data by using multiple sources, analysis of data and comparison of the cases with the literature (Eisenhardt, 1989).
One of the first steps, after the definition of the research question, is the selection of the cases. Four entrepreneurs and their companies, which are green or green-green businesses and active in the sustainable food industry, were selected on the basis of the above-described theory. The initial information was taken from the companies’ websites, articles, and interviews. In the next step, semi-structured interviews were conducted with, in most of the cases, the founders themselves. Therefore, the study combines multiple sources and data methods, which is an important factor in case study research (Eisenhardt, 1989). The entrepreneurs were interviewed about their intentions, motivations, and drivers towards sustainable entrepreneurship, but also on the food industry and its trends in general and on their attitudes toward sustainability. The conducted interviews lasted between 30 to 45 minutes. The overview of all questions can be found in the Interview Guide (Appendix, p. 59). The chosen start-ups have their own products, ranging from popcorn and pasta to dried fruits and nut butter in bulk packages, to chocolate. One of the principles of the Eisenhardt method (1989) is that the cases differ in one key
dimension. The chosen case companies can be distinguished in the stage they are currently in, some start-ups were just founded and are still in the product development phase, while others are already in later stages, with an established customer base and a range of products.
After the data collection, it is necessary to analyze the data, which will be done in two steps. Firstly, the single cases will be analyzed, which is called within-case analysis (Eisenhardt, 1989). This step includes very detailed materials and narratives about the case studies, which are mostly simply descriptions, but give deep insights into the cases (Gersick, 1988; Pettigrew, 1990). No clear format exists for this step. To analyze every single case on its own, the materials are searched for signals and statements about the main topics, which are sustainable entrepreneurship including forms and business models of sustainable entrepreneurship, the opportunity development process, the drivers of sustainable entrepreneurship and the impact on the food industry. By clustering the materials into four key topics, the theory shall be applied to the case initiatives. This is important to determine the different strategies of the initiatives and to be able to compare the cases to each other, which will be done in the second step of the analysis. The main idea of the within-case analysis is to “become intimately familiar with each case as a stand-alone entity” (Eisenhardt, 1989, p. 540). This process gives the possibility for unique patterns to arise in each case before generalizations across the cases emerge (Eisenhardt, 1989).
Secondly, the cross-case analysis will be conducted. This step involves the search for general patterns across the cases. Three tactics exist to perform this process (Eisenhardt, 1989). The first tactic is to choose dimensions and then look for similarities and differences between the cases (Eisenhardt, 1989). The dimensions can either be chosen by the researcher or are proposed by the underlying question or literature. The second strategy is to pick pairs of cases and record the differences and similarities between each pair (Eisenhardt, 1989). The outcomes of this method might be new categories and concepts, which were not foreseen (Eisenhardt, 1989). The third tactic is to separate data sources from each other (Eisenhardt, 1989). When using this strategy, every researcher taking part in the study reviews a different type of data. The advantage of the approach is, if one pattern from a data source is confirmed by a pattern from a different data source, the finding is stronger (Eisenhardt, 1989). The general idea of cross-case analysis is to compel the researchers to go deeper into the data and beyond the first impressions of the cases (Eisenhardt, 1989). This thesis will use the tactic to select dimensions and look into the similarities and differences between the four cases (Eisenhardt, 1989). The dimensions will be elaborated in the first step already. However, in the second step the
outcomes of the within-case analysis shall be compared to each other, to be able to make suggestions and find answers for the research question.
3.2. Case description
In the following section, the case initiatives will be introduced, by giving an overview of the general facts of the companies, which can also be found in Table 1.
Entrepreneur Company Product Size Country
1 Pastazeit Pasta 2 Austria
2 True Popcorn Popcorn 4 Germany
3 Tony’s Chocolonely Chocolate 68 The Netherlands
4 KoRo dried fruits, nuts, etc. 9 Germany
3.2.1. Case 1 – Pastazeit
Pastazeit is an Austrian-based pasta manufacturer, which was founded in 2017 by two friends. They wanted to provide an alternative to regular pasta, by using legumes, rice or Ur-grains as the basis for the noodles. They aim to offer substitutes to the consumers that are vegan, gluten-free, organic and handmade. Pastazeit launched their products in November 2017 and sells them through an online shop. They only use organic raw materials from German and Austrian retailers and produce their handmade pasta in a small German manufactory.
3.2.2. Case 2 – True Popcorn
True Popcorn is a Cologne-based company which produces and distributes popcorn, made from Ur-corn. The company was founded in the middle of 2017 by two founders. True Popcorn will launch their online shop in the second quarter of 2018 and will start selling their products in the supermarket starting in the middle of 2018. They are now a team consisting of four people. The vision of the start-up is to bring products without additives to the market while doing something good at the same time. They aim to provide consumers with an alternative to ordinary popcorn.
3.2.3. Case 3 – Tony’s Chocolonely
Tony’s Chocolonely is a Dutch-based company which produces slave-free chocolate and aims to make slave-free cocoa the norm in the industry. The company was founded in 2003 and is
now the biggest chocolate brand in the Netherlands while expanding into other markets as well. They purchase their chocolate from farmers, which are part of partner cooperatives. Tony’s Chocolonely only obtain their cocoa from the Ivory Coast and Ghana. Their chocolate is produced in Belgium. They want to provide the consumers with a unique experience, by having good flavors, while at the same time having an impact on the industry.
3.2.4. Case 4 – KoRo
KoRo is a Berlin-based company, that was founded in 2013. They offer reasonably priced bulk packages of superfoods, dried fruits, nuts, etc. By skipping several steps in the supply chain, they aim to be transparent and sustainable with their products. With their approach, they can pass the price advantage on to the consumer and offer them high-quality products. They mostly sell their products through their online shop. Their initial idea was to sell bulk packages of washing detergent and cleaning products, but switched to food products, when realizing these products sell better, even without marketing.
4. Within-case Analysis
After explaining the relevant theory and methodology in the preceding chapters, the analysis of the case initiatives will follow. The chapter will start with the individual interpretation of the four cases to develop unique patterns. The within-case analysis of each case will begin with the evaluation of sustainability in the case initiatives, including the form of sustainable entrepreneurship and the business model. Following this, the opportunity development process, the drivers of sustainable entrepreneurship and the impact on the food industry will be examined.
4.1. Case 1 – Pastazeit
4.1.1. Sustainable Entrepreneurship
Pastazeit provides the market with an innovation in the pasta segment by offering an alternative to regular wheat noodles. They only produce pasta made from alternative flours, such as lentil, chickpea or konjac flour. The raw materials are mainly sourced from German and Austrian organic retailers, and the product is handcrafted in a German manufactory (Mirra, 2018). In addition to this, the founders aim for transparency in every step of their supply chain (Mirra, 2018). The company wants to be as green as possible, tries to use as many regional, sustainable, and organic resources as possible and aims for the shortest ways of transportation (Transcript Pastazeit, 2018). According to the founders, they are still a young and small company, that needs to adjust to current market conditions, which is why they do not have biodegradable packaging so far. However, the goal is to change this as soon as they have established their business. The founders took an existing product and modified it in a way, that they created a greener alternative, which by definition makes them a sustainable company (Kirkwood & Walton, 2014; Sharma & Kushwaha, 2015).
As explained in the theoretical framework, several forms of sustainable entrepreneurship exist. Pastazeit offers a product which is positioned in the higher priced segment and reaches only a specific group of people, which are mostly women, between 30 and 50 years old (Transcript Pastazeit, 2018). This might be a signal that they are active in a niche market and do not serve the mass market, so they are more likely bioneers instead of ecopreneurs. According to the founder, the customer group leads a more conscious life and has higher environmental standards and a higher income (Transcript Pastazeit, 2018). However, the company aims to serve the mass market and reach a good market position in the future (Transcript Pastazeit, 2018). According to Pastazeit, critical trends in the food industry are
vegan, simple and protein-rich products, which are organic or regional. As the consumer demand for such products is growing, the company decided to act on these trends and created a variety of pasta that only contains two ingredients, is vegan, handmade and locally produced (Transcript Pastazeit, 2018; Mirra, 2018). Concluding from this, it is suggested that Pastazeit is a bioneering company, which has the characteristics of serving a niche market, acting on consumer demands, and having customers with higher environmental standards and a higher income (Kotler, 1998; Schaltegger, 2002; Schaltegger & Wagner, 2011). Although most of the bioneers serve the high-technology sector, SMEs, such as Pastazeit, can also be included in this form of sustainable entrepreneurship (Schaltegger & Wagner, 2011).
Subsequently, Pastazeit’s business model will be analyzed. According to the founder, “being green was not part of [their] philosophy in the beginning” (Transcript Pastazeit, 2018, p. 59). However, after conducting market research, diving deeper into the development of their products and determining the most important aspects, the founders realized a green strategy has to be established, to meet customer demands (Transcript Pastazeit, 2018). The aim was to produce an alternative form of high-quality pasta, which in most of the cases means ecological (Transcript Pastazeit, 2018; Jolink & Niesten, 2015). However, the founders do not want to be associated with the ecological scene too much. They want to be a young and modern company, which conforms with Jolink & Niesten’s (2015) proposition that founders adopting the subsistence model do not want to promote their products as green products. Another indicator that Pastazeit is adopting the subsistence model might be that they try to source the resources as regional as possible, if the price is too high, they are willing to compromise and obtain the funds from cheaper retailers to make profits (Transcript Pastazeit, 2018). However, the founders still want to offer an alternative that is as regional and sustainable as possible, which is also indicated in their organic certification (Transcript Pastazeit, 2018).
4.1.2. Opportunity Development Process
The opportunity development process consists of four components, whereby the component person will be examined in the section drivers of sustainable entrepreneurship. The five stages of the process will be examined, press and product will be analyzed within the phases. The preparation phase for Pastazeit consisted of acquiring knowledge about venture creation and philosophizing about wanting to establish a business together. One of the founders works as a start-up consultant, which can be seen as gathering information about business creation. In the incubation phase, they actively talked about potential ideas and got the idea to create an alternative form of pasta for people with intolerances, different diets, etc. because both founders
are interested in balanced and healthy nutrition. During the process, the idea went through some general changes, as the founders’ first strategy was to produce a rye or spelt noodle. However, with this type of noodle, they would not have a unique selling proposition, as several manufacturers for rye and spelt pasta are already on the market (Transcript Pastazeit, 2018). Therefore, they changed their concept to alternative sorts of flours. This can be seen as the moment of realizing, they need to have something unique to become successful.
Another factor that needs to be taken into consideration is the fact that the implementation of something that was planned on paper, needs to be proven in reality (Transcript Pastazeit, 2018). It needs to be evaluated whether the dreams and visions from the business plan will survive in the market (Transcript Pastazeit, 2018). Furthermore, one of the most significant changes the concept went through was the label healthy. In the beginning, the founders used the term to acquire resellers, customers, and investors, but distanced themselves, as the question ‘what is healthy?’ emerged (Transcript Pastazeit, 2018). During the evaluation phase, they were influenced by their friends and families, who were not convinced that the idea could be successful, due to the pricing strategy (Transcript Pastazeit, 2018). Although this sort of pressure could have been constraining and discouraging, the founders realized the potential and the market for the idea and pursued with it (Transcript Pastazeit, 2018). The end product of the development process was an online shop with 12 different types of pasta (Pastazeit, 2018). Currently they are in the elaboration phase.
4.1.3. Drivers of Sustainable Entrepreneurship
As explained in the theoretical framework entrepreneurial motivation can be divided into push and pull factors (Hakim, 1989; Shane et al., 2003, McClelland, Swail, Bell & Ibbotson, 2005; Segal et al., 2005; Kirkwood & Walton, 2011). Pastazeit was established out of several reasons and motivations that can be categorized into push and pull factors. To elaborate the intentions the personal, situational and cultural factors shall be analyzed, which might cause an overlap with the push factors that will be examined.
Firstly, the pull factors shall be analyzed. The two founders were drawn into entrepreneurship as a result of recognizing an opportunity and the wish for independence (Transcript Pastazeit, 2018). Due to personal reasons, the founders realized that there are not many alternative forms of pasta on the market (Mirra, 2018). As already described in the preceding section about the opportunity development process, the founders started to develop an alternative form of pasta to satisfy consumers’ needs (Mirra, 2018, Transcript Pastazeit, 2018). One of the main drivers for the founders to establish their own company was to tell their
story and work on their dream and not someone else’s dream. One of the founders sees his “professional accomplishment in having [his] own project [and having] a vision and a story that [he] wants to realize and tell the world” (Transcript Pastazeit, 2018, p. 57). This statement can be seen as a desire for independence and self-fulfillment.
Despite the pull factors, there were also push factors, that drove the founders into sustainable entrepreneurship. Due to intolerances, the entrepreneurs started to think about engaging in the alternative food industry (Mirra, 2018). However, there was no particular event, such as divorce or unemployment, that forced them to start a company. According to the founders, the motivation to keep going with the company is mainly influenced by external factors, which is shown in positive feedbacks and seeing that the idea has potential (Transcript Pastazeit, 2018). As stated in the interview, individuals who are not motivated and are affected by small obstacles, will not be successful in the long run. The motivation of the founders is the key to success and survival (Transcript Pastazeit, 2018).
The ecopreneurial motivation is characterized by stronger ethical, social and green values. The founders have stronger social and green values, although the green strategy was not part of the initial idea. During the development process and while conducting research, it was clear they wanted to be as transparent as possible, source the raw materials as regional as possible, and produce the pasta in Germany (Mirra, 2018, Transcript Pastazeit, 2018). Furthermore, the goal of Pastazeit is to offer a product that provides the customer with added value (Pastazeit, 2018).
In the next step, the intentions towards sustainable entrepreneurship shall be analyzed by using Koe & Majid’s (2014) model, which was described in the theoretical framework. Firstly, personal factors reflect the attitudes and values of the entrepreneurs. The two founders were always conscious about their diet and considered balanced and healthy nutrition as important, which is a sign that green values and attitudes existed before starting the business (Mirra, 2018; Transcript Pastazeit, 2018). They did not want to position their products only in the environmental sector. Nevertheless, it is an important factor for the company, that the production process is as transparent and accountable as possible (Mirra, 2018; Transcript Pastazeit, 2018).
Secondly, the situational factors, such as governmental legislation and norms shall be assessed. As already mentioned in the opportunity development process, there were no factors such as governmental legislation or standards that had an impact on the decision whether the founders wanted to establish a green company or not. The social pressure was analyzed in the section on opportunity development. However, according to one of the founders, regional
products are more important than organic ones. They dealt with organic labels during the founding process and were astonished about the low guidelines of organic products, which is a reason why they decided to focus on regional and sustainable products instead of only organic products (Transcript Pastazeit, 2018).
Thirdly, the cultural factors will be analyzed. In Austria, local products are gaining larger market shares and more attention as many consumers are interested in what they buy and consume. People who can afford to change their buying behavior are going back to regional and more sustainable products (Laroche et al., 2001; Transcript Pastazeit, 2018). Sustainability is a topic that is getting more important in Austria and people are willing to contribute to change something (Marktmeinungmensch, 2015). Therefore, the market for sustainable products exists, and small companies can acquire at least a small share of the market (Transcript Pastazeit, 2018). Dedicating long times on sustainable entrepreneurship is necessary to be successful. The two founders have another job, next to their own company, which could question whether they dedicate enough time on Pastazeit (Transcript Pastazeit, 2018).
4.1.4. Impact on the Food Industry
As explained in the theoretical framework many consumers demand more sustainable and healthy products, which is also indicated by the current trends in the food industry. According to Pastazeit, critical trends in the food industry are vegan, protein-rich and simple products, because consumers start to rethink and aim to go back to the roots (Jordana, 2000; Transcript Pastazeit, 2018). By making use of the e-commerce trend, Pastazeit seeks to change the food industry and the consumer behavior in a direction, in which it becomes normal to buy food products online. Furthermore, the lifespan of trends is decreasing, which gives momentum to small companies with a good idea to become successful (Transcript Pastazeit, 2018). It is probably easier for small companies to enter a new market with a new product and gain a lead over big companies, which need to react to these trends first (Transcript Pastazeit, 2018). In their opinion, small companies can have an impact on the food industry, so that big companies cannot expand their market share (Transcript Pastazeit, 2018).
Pastazeit
Form of Sustainable Entrepreneurship Bioneering Company
Sustainable Business Model Subsistence Model
Motivation (pull factors) Independence, opportunity recognition
Motivation (push factors) Outside feedback, intolerances
Intention (personal factors) Consciousness about nutrition, transparency
Intention (situational factors) Organic guidelines à rather regional products,
instead of organic products
Intention (cultural factors) Increasing market for regional products,
part-time orientation
4.2. Case 2 – True Popcorn
4.2.1. Sustainable Entrepreneurship
True Popcorn was established in the beginning of 2017 and produces a greener version of popcorn, as they use Ur-corn instead of regular corn (Kern, 2017; Transcript True Popcorn, 2018; True Popcorn, 2018). The company has several attributes and measures that make them sustainable. Firstly, the company uses 60 percent less sugar than usual popcorn producers and only uses raw cane sugar (Kern, 2017; Transcript True Popcorn, 2018). In addition to this, their sweet popcorn only has four ingredients and no additives (Kern, 2017, Transcript True Popcorn, 2018). Secondly, True Popcorn tries to be as transparent as possible, sources the products from a farmer cooperative directly, so they do not need any intermediaries and buys the resources for a fair and above market price (Kern, 2017; Transcript True Popcorn, 2018). Thirdly, they try to have the shortest supply chain possible. Their supply chain consists only of a few steps: farmer cooperative in the USA, transport to popcorn producer in the Czech Republic and production, transport to the warehouse in Germany. The product is distributed from their warehouse directly to resellers and customers (Kern, 2017; Transcript True Popcorn, 2018). Fourthly, by using Ur-corn, which is grown without pesticides, they help to preserve the environment, as well as help to protect insects, such as bees. The farmer cooperative, where they get their corn from, does not use any neonicotinoids1. A significant factor for True Popcorn, which gets visible in their brand name, is being honest and completely transparent. All mentioned aspects are signs that they are a sustainable company (Transcript True Popcorn, 2018; Kirkwood & Walton, 2011; 2014).
1 Neonicotinoids are pesticides, which are applied to many seeds before they are brought into the soil. The plant
absorbs the pesticides so that they are in every part of the plant. Neonicotinoids are the most common pesticides. Insects get disoriented and die when they get in contact with plants that were treated with neonicotinoids
