An analysis of the Short Food Supply Chains in the region of Twente
Source: https://unsplash.com/s/photos/farmers-market
Author: Jesse Ann Weggemans Student number: s1937375
Bachelor: Industrial Engineering and Management, University of Twente Faculty: Faculty of Behavioral, Management and Social sciences (BMS) Thesis supervisors: Dr. ir. Guido van Capelleveen, University of Twente
Martin Verbeek, Mineral Valley Twente Dagmar Makkink, Mineral Valley Twente
Date: 19/08/2020
Abstract
This bachelor thesis is a qualitative analysis of the status of food producers in the region of Twente involved in Short Food Supply Chains (SFSC). Short Food Supply Chains are food chains with a minimum number of intermediates that focus enhancing the consumer producer relationship. This paper examines the research question: What are the enablers and barriers for present partners of the Twente’s local food market? For the conceptual framework, a literature review of studies examining SFSC initiatives in the Netherlands and elsewhere in Europe is used as a starting point of reference. The paper then takes inventory of the current situation and the problems faced by Twente SFSC producers in order to make recommendations to increase chances of success. We gathered information about regional SFSC producers in Twente involved by analyzing documentation from publicly available sources and conducting face-to-face interviews with a representative sampling of six local producers. The interview findings are tagged to create an overview and are subsequently used to develop grounded theory. Recommendations based on the findings are discussed from the perspective of the consumer-, producer- and government level.
Table of Contents
Abstract ... 2
1.Introduction ... 4
2.Background ... 6
2.1 Current agro-food system ... 6
2.2 Consequences of the current agro food system ... 8
2.3 How SFSCs can reduce these problems ... 9
3. Related works and identified knowledge gaps ... 10
3.1 Initiatives in the NL and their ways of organization ... 10
3.2 Identified barriers of SFSCs in Europe from literature ... 12
3.3 Research gap ... 14
4.Research Approach ... 14
4.1 Multiple case study ... 14
5. Results ... 16
5.1 Case 1: Veldhoeve Kip ... 16
5.2 Case 2: Blije Zuivel ... 17
5.3 Case 3: Twentse Scharrel ... 18
5.4 Case 4: Zuuver ... 19
5.5 Case 5: Kruidenhuis de Vlo ... 21
5.6 Case 6: Raw Milk Company ... 22
5. Development of the grounded theory ... 24
5.1 Summary interview results ... 24
7. Conclusion, Discussion and Recommendations ... 26
7.1 Discussion and recommendations ... 26
7.2 Conclusion ... 27
8. Acknowledgements ... 29
References ... 30
Appendix A. Interview form ... 32
Appendix B. Interview transcripts ... 33
Appendix C ... 48
1.Introduction
This bachelor thesis performed in partial fulfillment of the requirements of the IEM bachelor presents an analysis of barriers that Short Food Supply Chains (SFSCs) in the region of Twente are currently facing. The concept of SFSCs is first explained and the current situation and problems around SFSCs in Twente are then outlined. This is followed by an explanation of the intended contribution of this paper and the proposed research questions.
When considering descriptions of food supply chains, the term Short Food Supply Chain (SFSC) is a broad concept that is used in many different matters. According to Galli & Brunori (Galli & Brunori, 2013), the first time the term emerged in broader stage, was at the beginning of this century. The debate involved the growing trend in the agro-food system of global value chains, dominated by retailers. In these food systems power was unequally distributed, leaving producers and consumers with little to say and large retail chains making the decisions in long distance trade and industrialized food production. Galli & Brunori suggested the idea that SFSCs should be a strategy taking into consideration as a “driver of change towards sustainability both in agro-food system and rural areas.”
It could ideally improve the resilience of the family farms with the support of concerned consumers, local communities, and civil society organization. In 2002, SFSCs were described in the paper `Food Supply Chain Approaches: Exploring their Role in Rural Development’ as alternative food chains that sought “to redefine the producer-consumer relation by giving clear signals as to the origin of the food product” (Marsden, Banks, & Bristow, december 2002). Marsden Banks and Bristow wrote about recent political changes in the conventional government regulation and growing public concern over the provenance and manipulation of consumer foods. Alternative food chains were seen as a way to provide ‘more natural’ or ‘more local’ types of food and avoid long, complex and rationally organized industrial chains. These alternative food chains were described as a short-circuit that have “capacity to re-socialize or re-spatialize food, thereby allowing the consumer to make value-judgements about the relative desirability of foods on the basis of their own knowledge, experience or perceived imagery” (Renting, Marsden , & Banks, 2003). The concept SFSC may be divided into 3 different categories:
1. Face-to-Face: SFSC:
With Face-to-Face SFSC’s the customer buys the product directly from the producer. This can be through farm shops, roadside sales, farmers markets, etc. Proximate SFSCs have one and sometimes two intermediaries (middlemen) between producer and customer. A good example here are farm shop groups, regional hall markets, local shops, restaurants etc.
Origin and production are transparent, and food is still produced within the same region.
2. Proximate SFSC:
Proximate SFSCs are an effective way to increase supply and generate more consumer traffic, and so potential buyers. Consumers are aware of and partly driven by the local nature of the product at retail level.
3. Extended SFSC:
Extended SFSCs are not so much about locally produced foods, as much as it they are about transparency. Here it is important that origin and the intermediary distribution channels are clearly visible, making the production easy to trace back. A good example are certification labels like Faire Trade, company making values and goals clear for consumer.
Examples within each category may be seen in Figure 1.
Figure 1. Different mechanisms for extending short food supply chains (SFSCs) in time and space. Reprinted from source (Renting, Marsden , & Banks, 2003)
This thesis will focus on locally produced food with transparent chains. The discussion of SFCSs will therefore be limited to Face-to-Face and Proximate SFSCs and specifically those within Twente.
In Twente there are currently many producers involved in SFSCs. There lacks however an comprehensive overview of the commonalities these producers share.
With this research paper I analyze the barriers producers in Twente are facing when engaging in SFSCs. To do so I interview six local producers with the aim of obtaining an representative overview of the current situation. I compare the current situation in Twente to that of similar initiatives in other regions in the Netherlands and Europe. There may be lessons or insights to be learned from comparable SFSC initiatives in other locations.
The research question of the thesis is:
What are the enablers and barriers for present partners of the Twente’s local food market?
2.Background
2.1 Current agro-food system
To understand the benefits of SFSCs, the current agro-food system in Europe, the Netherlands and Twente needs to be explained. To start with the agro-food system in Europe, and gradually work towards the region of interest: Twente. According to a document published in 2017 by the Department of Agriculture and Rural development of the European union, there were approximately 11 million farms active in Europe in 2017. These farms supplied around 300.000 enterprises in the food and beverage processing industry. The products were then sold to around 2.8 million enterprises of food distribution and food service industry, which in turn sold their food to 500 million consumers within the European Union. (DG Agriculture and Rural Development, 2017). This division is shown in Figure 2.
Figure 2. Synthetic and approximate representation of the food chain in the EU by actors involved. Reprinted from source (DG Agriculture and Rural Development, 2017).
According to the Agriculture and Rural Development Department of the European Union, the power
of the actors in the food chain is unequally distributed. Together with the increase of the economies
of scale, the food processing and retail enterprises have grown, gaining more and more bargaining
power in comparison to the agricultural sector. In 2012, the top five firms in the European food
industry owned 56 percent of the market shares in fourteen EUs Member States, and 60 percent or
even more in thirteen other Member States. This unbalanced ratio of food distributers on the food
market leads to sharp market prices. This is detrimental for small producers as these prices are often
unfeasible when producing on small scale. Where the producers in the 1960’s received 40 cents for
each consumer euro spent on produce, in the late 1990’s that fraction was reduced to a mere of 20
cents. The profit shift favored the processor, retailer and not the producer (Bijman, Pronk, & de
Graaff, 2003). According to European Union, the added value share belonging to the agricultural
sector currently hardly passes the 25 percent (DG Agriculture and Rural Development, 2017).
Figure 3 shows the distribution of the gross value added per food supply stage in the European Union.
Figure 3. Distribution of the gross value added per food supply stage in the EU. Reprinted from source (DG Agriculture and Rural Development, 2017). * EU-27 data for 2008-2010; EU-28 data for 2011-2012.
The Netherlands plays a large role in the import and export of food in Europe. According to the report “De Nederlandse agrarische sector in internationaal verband” published by University of Wageningen in 2020, the Dutch export of food products in 2019 was estimated on 94,5 billion euros and their import lay around 64,1 billion euros in 2019 (Jukema, Ramaekers, & Berkhout, 2020). This is shown in figure 4.
Figure 4. Dutch trade balance, Import and export of agricultural goods in 2019 per region. Reprinted from source (Jukema, Ramaekers, & Berkhout, 2020).
In the Netherlands food is imported and exported from all over the world, with Germany being the largest trade partner. Dutch enterprises in the food and beverage processing industry are importing product types from foreign countries while at the same time Dutch producers are exporting these same product types. Two examples are:
- Each year 230 million kg of tomatoes get imported by the Dutch food industry while 1.084
million kg of tomatoes are produced in the Netherlands and exported to other countries
each year (Bergevoet, et al., september 2019).
- Each year 250 million living chicks get imported by Dutch abattoirs while 160 million chicks that are hatched in the Netherlands get exported to other countries each year (Bergevoet, et al., september 2019).
This high rate of food trafficking makes it very difficult to report which fraction of food consumption is produced in the Netherlands and which fraction is imported. Globalization of the food production chain has led to replacement of many local services and products by external services and products.
This may harmful to the environment and at the cost of the employment opportunities in the region.
For consumers it can be hard to find precise origin and farming manners of store bought products, and trace their supply chains. Much of the food that is sold in the supermarkets is imported from other countries (Kendall, et al., 2019).
Currently around 79 percent of the food consumed in the Netherlands is bought in supermarkets (Arkenbout & Prause, 06.2014). This fraction has not always been this high but has rapidly grown since the 60s. After the second world war, food was limited and nondiverse. The Dutch government played a role in changing this, helping supermarket chains to become more efficient and enlarge their supply. Together with the industrialization, this led to huge supermarket chains with a large dominant position. Small suppliers and enterprises could not compete with the price wars and disappeared (Arkenbout & Prause, 06.2014). This lead to a select number of 26 different retail formulas and only five different sourcing offices in the whole country, deciding on food supply for over 7.900.000 households (Bergevoet, et al., september 2019). Figure 5 shows the power distribution.
Figure 5. Agrocomplex: structure inland chains. Reprinted from source (Bergevoet, et al., september 2019)
2.2 Consequences of the current agro food system
Globalization and long food supply chains are detrimental for certain actors in the current agro food system and can have a negative impact on the environment. Subjects typically suffering the negative consequences of the current system are:
1. Producers
Because of the unequal power distribution, producers are forced to sell to Supermarket
chains which have an increasingly dominant market position, leaving farmers with little to no profit margin. Farmers are forced to upscale their production in order to keep their business alive. As a consequence of the price wars and unequal power distribution, profit margins for producers have decreased towards minimal profit and sometimes even cost price.
2. Consumers
For consumers, there are also disadvantages to supermarkets having excessive power. In most cases, supply chains of these supermarkets are long and nontransparent, making it hard for the customer to trace the products back to its origin. This disables consumers from having insight in production and handling methods of the products they are consuming. In turn, the consumer has difficulty making knowledgeable, sustainable, and healthy choices.
(Komrij, van Minnen, & de Winter, 2016).
3. Environment
Large scale production is achieved by large scale, intensive land usage. This goes hand in hand with high water, energy, pesticide, and fertilizer usage and is extremely harmful for the environment. This heavy burden leads to loss of biodiversity, water contamination, degradation in soil fertility and high greenhouse gas emissions. Currently, the food sector is responsible for approximately 30 per cent of the world’s total energy consumption and accounts for 22 per cent of total greenhouse gas emissions. This means that sustainable changes in the food sector would have significant impact upon the overall levels of the worlds sustainability (UN, 2020).
2.3 How SFSCs can reduce these problems
Shortening the food supply chain and relocating the value adding will help shifting the power distribution towards producers and consumers. In Face-to-Face SFSCs supermarkets are passed over and producer and consumer can negotiate directly over a fair price. Regional development economist Willem Kruidhof estimated that 1500-2000 job opportunities will arise if the local food consumption would increase from the current 5% to a level of 15% (Kruidhof, 2019). Thereby, farmers would not have to compete in prices with the large players that have the advantage of economies of scale. Chain integration on a local scale gives farmers greater influence on setting a fair price for their produce. Consumers on the other hand have more insights in the origin, and production method and freshness of the products. Consumers that attach importance to organic production methods can personally talk to producers. SFSCs are by many reasons beneficial for the environment. They often have a sustainable influence on the production methods, processing, packaging, distribution, cooling, transport and waste. Examples of these improvements are:
minimizing packaging and use of fossil fuel, adoption of pesticides free production methods,
reduction transport kilometers, storage energy, etc. (Galli & Brunori, 2013).
3. Related works and identified knowledge gaps
In this chapter, specific background related works are provided to help the reader understand the current situation around SFSCs in European countries. Fifteen SFSC cases in the Netherlands and fifteen SFSC cases in Europe are presented to learn more about common barriers and key questions.
This knowledge is based on a literature review of existing theories, findings, and contexts of 30 SFSCs cases in the last 15 years. Aspects included in the discussion are relevant to the research question.
These aspects being:
1) organization 2) size
3)product types 4)key questions
3.1 Initiatives in the NL and their ways of organization
There are many example cases throughout Europe that successfully established a SFSC. Looking at these cases can help understanding requirements for SFSCs and how to put these to practice.
Furthermore, lessons can be learnt about potential problems that can show up and how to deal with them. This conceptual framework first looks at fifteen current SFSCs in the Netherlands. The cases are color-coded according to their type of SFSC. Producers that sell their products directly to consumers are colored yellow, Cooperation between producers and consumers are colored green, Intermediary between producers and consumers are colored blue and online networks are colored red. Table 1 shows the legenda.
With this conceptual framework I will first look at fifteen current SFSC initiatives in the Netherlands.
An overview of the initiatives and their structure type are summarized in table 2.
Table 2 shows fifteen Dutch SFSC initiatives with a short description of the organization.
Producers that sell their products directly to consumers Cooperation between producers and consumers Intermediary between producers and consumers Online network
Table 1. Color code of the conceptual framework
Case SFSC description 1. Tuinderij De Stroom,
Gelderland
(Tuinderij De Stroom, 2020)
Farming company with direct consumer contact. Customers have memberships on weekly organic food boxes filled with (mostly) local vegetables and fruit. They work with single pick up point where customers collect their box.
2. BioRomeo, Noordoostpolder (BioRomeo, 2020)
Cooperation of 8 producers that directly sell their products through online web shop orders to consumers, restaurants, and local shops. The cooperation is responsible for delivery and pickup.
3. Voedselkollektief, Utrecht (Over Voedselkollektief Amersfoort, 2020)
Cooperation between producers and consumers that organize a pop-up farmer shop twice week. Consumers order beforehand through online order system so producers have an indication of the demand. Customers buy a membership and are expected to help a couple days a year. This way costs stay low and no middlemen is needed.
4. Biorself, Gelderland (Biorself, 2020)
Cooperation between producers and consumers that organize a pop-up farmer shop twice week. Consumers order beforehand through online order system so producers have an indication of the demand. Customers buy a membership and are expected to help a couple days a year. This way costs stay low and no middlemen is needed.
5. FoodCoopNoord, Noord- Holland (Voedselcooperatie in Amsterdam Noord, 2020)
Cooperation between producers and consumers that organize a pop-up farmer shop twice week. Consumers order beforehand through online order system so producers have an indication of the demand. Customers buy a membership and are expected to help a couple days a year. This way costs stay low and no middlemen is needed.
6. Heiloogisch, Noord-Holland (Heiloogisch, 2020)
Cooperation between producers and consumers that organize a pop-up farmer shop twice week. Consumers order beforehand through online order system so producers have an indication of the demand. Customers buy a membership and are expected to help a couple days a year. This way costs stay low and no middlemen is needed.
7. De Groene Schuur, Utrecht (De Groene Schuur, 2020)
Cooperation between producers and consumers that organize a pop-up farmer shop twice week. Consumers order beforehand through online order system so producers have an indication of the demand. Customers buy a membership and are expected to help a couple days a year. This way costs stay low and no middlemen is needed.
8. Groenteclub Bussum, Noord-Holland (Groenteclub, 2020)
Cooperation between producers and consumers that organize a pop-up farmer shop twice week. Consumers order beforehand through online order system so producers have an indication of the demand. Customers buy a membership and are expected to help a couple days a year. This way costs stay low and no middlemen is needed.
9. Oregional (Gelderland), (Oregional, 2020)
Intermediary between over 35 farmers and local consumers, restaurants, care institutions and catering. Sales channel is through their website with online ordering and at home delivery.
10. Vertwenz (Twente), (Welkom bij Vertwenz, 2020)
Intermediary between farmers and local consumers. Customers have a membership on weekly vegetable/ fruit boxes that are delivered at home. Registration of membership is done through their website.
11. Aanstrekelijk (Twente), (Aanstrekelijk, 2020)
Intermediary between farmers local consumers. Sales channel is through their website with online ordering and at home delivery.
12. Willem en Drees
(nationwide) (Galli & Brunori, 2013)
Intermediary and farmers’ cooperative responsible of the distribution system of local produced foods. Main sales channels are supermarkets and direct sales to restaurants and care institutions.
13. Boeren & Buuren (Europe) (Boeren&Buren, 2020)
This is an online platform active in the Netherlands, Belgium, Germany, France, Switzerland, Italy, and Spain that acts as an intermediary between local producers and consumers. Producers upload their products online which can be then ordered by customers. Once a week there is local pickup point where customers can pick up their ordered products. Producers are responsible of delivering products at pick up point to customers.
14.Hallo boer (Nationwide), (Hallo Boer!, 2020)
Online platform that gives an overview of all the local road and farm shops and their produce. In region Overijssel, Twente, even possible to order online and receive home delivery
15. Kies lokaal (Nationwide), (Kies Lokaal, nieuw normaal, 2020)
Part of lobal network Slow Food, overview of local producers
Table 2. Fifteen case studies of SFSCs in the Netherlands
3.2 Identified barriers of SFSCs in Europe from literature
Most initiatives in the Netherlands are still in their infancy and were created within the last 10 years.
Little studies have been done on these initiatives and therefore there is only limited information available about these cases. This makes it difficult to state their key questions regarding their barriers to success. Further research is necessary to establish the drivers and barriers of such initiatives.
Within Europe is a project called FoodLinks linking researchers, food producers and policy makers (Galli & Brunori, 2013). In 2013 members of FoodLinks created a ninety page document to take stock of a number of sustainable SFSCs in Europe. For this thesis, findings from the FoodLinks paper have been summarized in table 3. Considering that it is likely that the other European initiatives share similar characteristics, it may provide insights into the key questions faced by the Dutch SFCS initiatives.
Case SFSC type Size Product type Key question
1. Villa of Roses (Ukraine)
Farming company that directly sell their products through online web shop orders to consumers, restaurants, and local shops.
Single farm with 30-50 employees
Organic fruit, vegetables meat, eggs, honey, dairy
How to build trust in this SFSC and involve other actors?
How to maintain the values and norms while growing as a SFSC?
2. Corazzano Farm (Pisa, Italy)
Organic agricultural firm selling products directly to consumers.
Selling channels are: onsite farm shop, the GAS network mentioned above
Single farm Mainly fruit and vegetables
What factors contribute/hamper economic sustainability in the medium long term, given the size (quite large) and the technology of the farm?
How can an organic farm producing for a non-conventional market run in a conventional way?
3. Farm dairy Birkenhof &
Uster plus association (Switzerland)
Farm cooperation that have their own logistics and deliver directly to customers, shops, canteens etc..
4 dairy farms + cooperative farms in area
Dairy products, egg noodles, beverages, meat, wine
Whether further growth has quantitative limits, workload is currently too high
4. Meat Box Schemes in Alava (Spain)
Livestock farms that directly sell to consumers. Contacts goes through email, phone, website when next slaughter date is announced. Farmers are responsible for transportation from and towards abattoir.
4 farms Vacuum packed meat. Beef, horse and lamb
Lack of available abattoirs and complaints about service provided by existing abattoirs
5. Straupe market of rural goods (Latvia)
Farmers’ market with space for local producers. The market is organized twice a month
±70 food and non-food suppliers
Preference to local, organic foods and non- foods
Problems with national market regulations
6. Brin d’Herbe (France)
Cooperation of producers that manage their own shop. Each farmer is responsible for delivering his/her own products to the hops and take home leftovers.
20 suppliers Fruit, vegetables, bakery, dairy products, eggs, honey, cider
Chosen not to expand to avoid complexity
7. Ka dzi’: CSA Riga-Gulbene (Latvia
Cooperation between producers and consumers. A weekly list is circulated in which the consumers mark their choices.
Tasks divided over consumers are: ordering, sorting, delivery, transport, collection, washing, packaging
8 farms Organic raw (vegetables, fruits, milk, …) and processed (cheese, bread,
…) products
How to animate consumers and encourage them into more active engagement? How to avoid standardization and the related risk of absorption of alternative initiatives by conventional chains?
8. GAS San Zeno (Pisa, Italy)
Cooperation between producers and consumers. Boxes with seasonal products are put
10 suppliers Vegetables, fruit, dairy, jams, flours,
How to animate consumers and encourage them into more active engagement? How to avoid
together and redistributed at central meeting point. Members are in charge of management of orders and transportation of products.
eggs, juices, pasta, cereals
standardization and the related risk of absorption of alternative initiatives by conventional chains?
9. UAGALUR Food from the land (Spain)
Intermediary established within UAGA, the farmers Union of the province Alave. Products are directly sold to consumers through shop and web shop.
±47 farms Vegetables, fruits, legumes, meat, dairy products, olive oil
10. Les Bons Repas de l’Agriculture Durable (France)
Voluntary organization that uses biological products from local farms to make meals to sell at school canteens. They also offer workshops for pupils on sustainable eating.
65 suppliers, 11-15 schools, 15-18 colleges
Meals from biological crops and animal products
11.LavkaLavk a (St.
Petersburg, Russia)
Intermediary and farmers’
cooperative in form of an Internet shop with home delivery and pickup.
±59 farms Organic vegetables, fruit, meat, dairy, fish, etc.
Is it really feasible to decrease the price only by involving more farmers, or does it require more radical changes? Can upscaling be done without compromises in the ideology and decrease in the quality? Will the company go in
the direction of
commercialization or will it manage to develop the farmers’
cooperative and engage consumers more actively?
12.
SpeiseLokal!
(Austria)
Intermediary between producers and consumers that organizes weekly selling point. Orders are placed online and forwarded to the suppliers. They deliver the food to the selling point and get 2/3s of final product price
±40 farms Fruit, vegetables, herbs, eggs, dairy, meat, pasta, beverages, bread and cakes, cereals, oil and vinegar, honey and jams, beans
How viable economically is this food system in the long run?
13. Willem en Drees (the Netherlands)
Intermediary and farmers’
cooperative responsible of the
distribution system.
Supermarkets are the main selling point
±100 farms Fruits and vegetables
How to manage the integration of this SFSC into the mainstream and keep its unique advantages compared to the conventional chains?
How to optimize the logistics and distribution model for a better service within the entire country in order to meet the growing demand?
14. Pico Bio (Switzerland)
Intermediary between producers and consumers, delivery to gastropubs, restaurants, small retail/organic shops
98% organic, vegetables, fruit, dairy products, meat
Local and cheaper provision from big farms versus fairness for small holders in small areas
15. Zolle (Rome, Italy)
Intermediary between producers and consumers. Customers order
‘surprise’ boxes with local produce
±90 farms Fruits, vegetables, eggs, dairy, meat, bread, cakes, pasta, cereals, olive oil and vinegar, honey and jams
How can upscaling happen without distorting the current principles? How viable economically is this in the long run?
Table 3. Overview of 15 SFSC case studies in Europe. The table is constructed using findings of the FoodLinks project (Galli &
Brunori, 2013)
3.3 Research gap
A lot of these European SFSCs described in table 3 have similarities in organization structure as the Dutch initiatives described in table 2. It is an assumption that the drivers and barriers applicable to the European organizations are the same as those for the Dutch initiatives. For such an assumption to be true and the information wone to be validly applicable to the Netherlands however it is necessary to address the research gap of this constitutional framework. This entails a location- specific data analysis of Twente. The characteristics of the region of Twente have a unique impact on the way SFSCs are organized and their chances of success. Environment, culture, wealth, politics the number of producers and type of products are all important aspects to take into account. This thesis will specifically look at the number of producers, product types and governmental support.
4.Methodology
4.1 Multiple case study
To realize successful SFSCs in the region of Twente, it is important to understand the current situation. Therefore, an analysis of the current producers with an eye on future development of SFSCs in the region of Twente is executed. There are several research designs that could be used in this thesis. Because a major part of the research will be explanatory, providing new insights and understandings of the problem, qualitative research is the most suited. I will use the communication approach of data gathering, conducting interviews. This is a flexible way of gathering data, making it possible to collect opinions and look at the future and past. Semi-structured interviews are extremely helpful to create structure of data collection while keeping the focus sufficiently broad, allowing hidden or emerging themes to be found. Interviews are also a good way of developing thought together with the stakeholders.
Six interviews are held with progressive producers that are taking steps towards SFSCs. Most producers in Twente are cattle farms which have their own grassland and green fodder production.
This represents the vast majority of the production activities in Twente. Other agro types on descending sequence are granivores, arable farming and horticulture. It is important to realize how the division of agricultural company types are distributed. Table 4 shows this distribution of the different agricultural sectors in Twente. Figure 6 is a diagram of the data from derived from Table 4.
The totals in the table do not add up as the sum of types because producers with two activities are counted twice. More specific information elaborating upon the make-up of the distinct types of agricultural companies may be found in appendix C.
Type agricultural
company 2017 2018 2019
Arable farming Amount 564 604 661
Outdoor horticulture Amount 148 138 145 Greenhouse horticulture Amount 19 17 18 Horticulture other|bulbs Amount 1 0 0 Horticulture other |mushrooms Amount 2 3 2 Grassland and green fodder Amount 3212 3175 3113 Grazing livestock Amount 2596 2524 2466
Granivores Amount 507 495 466
Total Amount 3329 3299 3253
Table 4. An overview of the agricultural sectors in the Region of Twente. Data derived from (CBS, 2020).
Figure 6. Histogram of the agricultural sectors in the region of Twente. Data derived from (CBS, 2020).
The case studies are held with six producers in the region of Twente that are actively trying to establish successful SFSCs in Twente. They are associated with regional initiatives and have direct contact with consumers. For each case study the communication approach of data gathering was used. Face-to-face semi-structured interviews were held (see Appendix A for interview questions), which are extremely helpful to create structure of data collection while keeping the focus sufficiently broad, allowing hidden or emerging themes to be found. Interviews are also a good way of developing thought together with the stakeholders. Discussing past and future developments and making it possible to collect opinions and different views of SFSCs. Before conducting these interviews, the respondent group is established. Approximately 65 producers were approached and ultimately six were willing to be interviewed. These six respondents are an heterogeneous group in which their producer activities forms the primary source of income for some, and the partial for others. Characteristics are shown in table 5. A greater number of respondents would have increased the reliability that the interview results were representative of the entire group of producers in Twente active in SFSCs. One limitation of this study is the small sample size. Despite the small sample size however, the respondents did represent a wide variety of the producer types in Twente through their heterogeneity.
The interviews were conducted in a similar fashion, making use of an interview form which may be found in appendix A. The interview transcripts are found in appendix B.
As required for qualitative analysis in the social sciences, after reading and rereading the interview transcripts the resulting information was organized using index words. These coding tags were used to code the information and to gain clarity. In the transcripts they are shown in bold font. The codes were grouped into similar clusters and may be found in tables 6 to 11.
Case Agro sector Size
Veldhoeve Kip Poultry farm Main income
Blije Zuivel Dairy farm Main income
Twentse scharrel Combination biological dairy farm + biological small- scale pig farming and vegetable and fruit cultivation
Main income
Zuuver Biodynamic farm Partial income
Kruidenhuis de Vlo Biological Vegetables, fruit, and herbs cultivation Partial income
Raw Milk Company Dairy processing Main income
Table 5. Key specifications of the six SFSC cases in Twente
5. Results
5.1 Case 1: Veldhoeve Kip Case description:
Veldhoeve Kip is a poultry farm located in Albergen. Formerly traditional poultry, but since 2015 transformed into a sustainable and innovative company. Now Veldhoeve Chicken produces sustainable chicken that is 100% antibiotic free and coccidiostats free. The chickens get healthy and natural food and grow up without growth promoters. The company’s priorities are sustainability and the quality of life of the chicken. Transportation of the poultry is minimalized and they are given the room to play and scavenge. The chicken has been named Tastemaker 2018, the tastiest regional product in the province of Overijssel. Veldhoeve Kip also won the Innofood Award 2019 THE TASTE OF CHANGE. The company strives for short chains and regional sales.
Case analysis 1
Company Veldhoeve Kip
Products Chicken, antibiotic and coccidiostat free
Sales channels (customer type)
Consumer Onsite shop, Farm shops, web shop, farmers’ market
Retail
wholesale Butcher
Catering industry Restaurants
Other
Regional sales fraction unknown
Activities to date to promote regional sales:
Onsite farmer shop ✓
Self-serve road sales
regional farm shops ✓
farmers’ market ✓
Logistics Product delivery
Marketing Commercial delivery van, Social Media, winner Smaakmaker 2018, winner Innofood award 2019
Affiliations
Other
Factors identified by the producer that need to change in order to promote/facilitate a larger market for SFSC products:
Consumer mindset/behavior ✓ Consumer awareness of SFSCs ✓ Consumer awareness of
biological/biodynamic farming
Higher accessibility of products compared to current situation of producer compared to current situation of producer
✓
Higher availability of products compared to current situation of producercompared to current situation of producer
✓
Broader assortment of products compared to current situation of producer compared to current situation of producer
✓
Cooperative of local initiatives
Other prime shared sales location
Problems faced by the producer in developing SFCS products
Lack of demand ✓
Little growth ✓
Insufficient profit ✓
Lack of government support (i.e.
subsidies/tax benefits) (i.e.
subsidies/tax benefits)
✓
Missing out on economies of scale, hindering ability to compete in price wars
Inaccessibility of prime sales locations
Time consuming ✓
Difficult to reach target audience
Logistics Currently delivery is inefficient and time consuming. An increase in sales would exceed delivery capacity.
Other
Current status of Current status of
collaboration with other regional producers
No collaboration
Interview question towards producer: “ Do you see possibilities in an intermediary in Twente that is responsible for distribution, logistics, marketing etc.?”
“Seems like a good idea that could work. This is what we need. Now is the time for action!”
Tabel 6. Overview of Interview result case 1 (translated from Dutch)
5.2 Case 2: Blije Zuivel
Case description:
Blije Zuivel is a dairy farm located in Bornerbroek. Their number one purchaser is Friesland Campina.
The remaining milk is made into dairy products and sold directly to the customer or local farm shops.
Case analysis 2
Company Blije Zuivel
Products Raw cow milk, dairy products
Sales channels (customer type)
Consumer Self-serve road sales, farm shops, farmers’ market
Retail
wholesale
Catering industry
Other Friesland Campina, Boeren & Buuren, Vertwenz, Aanstrekelijk
Regional sales fraction <0.1 %
Activities to date to promote regional sales:
Onsite farmer shop
Self-serve road sales ✓
regional farm shops ✓
farmers’ market ✓
Logistics
Marketing Newspaper, Social Media
Affiliations Vertwenz, Aanstrekelijk, Boeren & Buuren
Other
Factors mentioned by the producer that need to change in order to promote/facilitate a larger market for SFSC products:
Consumer mindset/behavior ✓ Consumer awareness of SFSCs ✓ Consumer awareness of
biological/biodynamic farming
Higher accessibility of products compared to current situation of producer
✓
Higher availability of products compared to current situation of producer
✓
Broader assortment of products compared to current situation of producer
✓
Cooperative of local initiatives ✓
Other Prime shared sales location
Problems faced by the producer in developing SFCS products
Lack of demand ✓
Little growth
Insufficient profit Of supermarkets Lack of government support (i.e.
subsidies/tax benefits)
✓
Missing out on economies of scale, hindering ability to compete in price wars
✓
Inaccessibility of prime sales locations
✓
Time consuming
Difficult to reach target audience
Logistics
Other
Current status of collaboration with other regional producers
No collaboration
Interview question towards producer: “ Do you see possibilities in an intermediary in Twente that is responsible for distribution, logistics, marketing etc.?”
“Several initiatives in the region are working on this. Maybe they should be bundled. Important is to do a lot of marketing and have one central selling point.”
Tabel 7. Overview of Interview result case 2 (translated from Dutch)
5.3 Case 3: Twentse Scharrel
Case description:
Twente Scharrel is an agricultural company with its main branch an organic dairy farm, located in Markelo. They also keep some pigs, grow a vegetable garden and rent out a stall to a goat farmer.
Plans are in place to set up a vegetable garden club in early 2021. Children between 7 and 12 years old can then sign up for this and get a 2m^2 ground available where they can grow herbs and vegetables under supervision. Plans for a coffee garden have been made as well.
Case analysis
Company Twentse Scharrel
Products Raw cow milk, pork, chicken, eggs, vegetables, koffie garden, begeleidde moestuin voor kinderen
Sales channels (customer type)
Consumer Self-serve road sales
Retail Deli shop, local supermarket
wholesale
Catering industry restaurant
Other Eko-Holland
Regional sales fraction Ca. 5%
Activities to date to promote regional sales:
Onsite farmer shop
Self-serve road sales ✓
regional farm shops
farmers’ market ✓
Logistics Transportation of pork from and towards butcher and selling point Marketing Social Media, coffee garden and moestuinclub
Local activities as Christmas markets etc.
Affiliations Markolokaal
Other Local deli shop
Factors identified by the producer that need to change in order to promote/facilitate a larger market for SFSC products:
Consumer mindset/behavior ✓ Consumer awareness of SFSCs ✓ Consumer awareness of
biological/biodynamic farming
✓ Higher accessibility of products
compared to current situation of producer
✓
Higher availability of products compared to current situation of producer
✓
Broader assortment of products compared to current situation of producer
✓
Cooperative of local initiatives Other
Problems faced by the producer in developing SFCS products
Lack of demand ✓
Little growth ✓
Insufficient profit ✓
Lack of government support (i.e.
subsidies/tax benefits)
✓
Missing out on economies of scale, hindering ability to compete in price wars
✓
Inaccessibility of prime sales locations
Time consuming ✓
Difficult to reach target audience
Logistics Transportation of pork from and towards butcher was time consuming and inefficient. Capacity not maximum used and pork had little profit.
Other
Current status of collaboration with other regional producers
No collaboration
Interview question towards producer: “ Do you see possibilities in an intermediary in Twente that is responsible for distribution, logistics, marketing etc.?”
“producers in Twente are not very open towards each other. In general producers are not thrilled to work together but prefer doing things their own way. However cooperation could be a good idea which we would participate in.“
Tabel 8. Overview of Interview result case 3 (translated from Dutch)
5.4 Case 4: Zuuver
Case description:
Zuuver is a biodynamic farm in Buurse that strives for a balance in natural systems.
Chickens and pigs are kept in a biological environment where they feel at home. Also Zuuver cultivates fruit and vegetables organically. The products are sold in the farm shop or through local businesses in the region.
Case analysis 4
Company Zuuver
Products Biological vegetables, fruit, pork, chicken, eggs, and honey Sales channels (customer type)
Consumer Self-serve shop, onsite shop, webshop, farmers’ market
Retail Ekoplaza
wholesale
Catering industry Restaurant
Other Distreko, Boeren & Buuren
Regional sales fraction 100%
Activities to date to promote regional sales:
Onsite farmer shop ✓
Self-serve road sales ✓
regional farm shops
farmers’ market ✓
Logistics Zuuver used to offer product delivery service. During corona they however could not keep up with fast increase of sales and decided to stop the delivery service. Now customers can pick up their orders at the self-serve shop.
Marketing Social Media,
Affiliations Distreko
Other
Factors identified by the producer that need to change in order to promote/facilitate a larger market for SFSC products:
Consumer mindset/behavior ✓ Consumer awareness of SFSCs ✓ Consumer awareness of
biological/biodynamic farming
✓ Higher accessibility of products
compared to current situation of producer
Higher availability of products compared to current situation of producer
Broader assortment of products compared to current situation of producer
✓
Cooperative of local initiatives “Producers should stops seeing each other as rivals and start working together. Power and facilities can be bundled which will lower costs.”
Other
Problems faced by the producer in developing SFCS products
Lack of demand ✓
Little growth
Insufficient profit From restaurants Lack of government support (i.e.
subsidies/tax benefits)
✓ Missing out on economies of scale, hindering ability to compete in price wars
Inaccessibility of prime sales locations
Time consuming
Difficult to reach target audience ✓
Logistics
Other Difficult to create notoriety without coming across commercial and difficult convincing customers their products are worth the extra money and effort.
Current status of collaboration with other regional producers
No direct collaboration. Products between producers are interchanged through Distreko.
Interview question towards producer: “ Do you see possibilities in an intermediary in Twente that is responsible for distribution, logistics, marketing etc.?”
Zuuver does not have the time to do this. However, they would participate in such initiatives.
They seem to find it hard to make this profitable.
Table 9. Overview of Interview result case 4 (translated from Dutch)
5.5 Case 5: Kruidenhuis de Vlo
Case description:
Herb house De Vlo is an organic farm in the outer area of Rijssen-Holten that cultivates vegetables, fruits, herbs and flowers. The herb house owner has a background
food safety and is market master of the local products market in Delden. Every week the owner sends a list of the fresh available products to the customers on her mailing list, to which customers can respond with an order. The products are then prepared and available for pick up at the herb house. Due to persistent drought and sandy soil, the conversion of vegetables has drastically shrunk.
The conditions made it very difficult to grow these products. In 2021 Herb house de Vlo will open a tea garden and picking garden where one will have a cup of organic tea can drink a bunch of flowers can pick.
Case analysis
Company Kruidenhuis de Vlo
Products Biological herbs, vegetables, fruit, flowers, and seeds
Sales channels (customer type)
Consumer Self-serve shop, farm shops
Retail
wholesale
Catering industry Restaurants
Other
Regional sales fraction 100%
Activities to date to promote regional sales:
Onsite farmer shop
Self-serve road sales ✓
regional farm shops ✓
farmers’ market ✓
Logistics Delivery and pick up of products (exchange between local producers)
Marketing Local newspaper, Social Media
Affiliations De BioTuinders
Other Mailing list of the regular customers which receive an overview of each weeks offer
Factors identified by the producer that need to change in order to promote/facilitate a larger market for SFSC products:
Currently demand is larger than supply. No increase is needed.
Consumer mindset/behavior - Consumer awareness of SFSCs - Consumer awareness of
biological/biodynamic farming
- Higher accessibility of products
compared to current situation of producer
-
Higher availability of products compared to current situation of producer
-
Broader assortment of products compared to current situation of producer
-
Cooperative of local initiatives -
Other There should be more biological producers in the surroundings.
Currently, Kruidenhuis Vlo is one of the few.
Problems faced by the producer in developing SFCS products
Lack of demand
Little growth
Insufficient profit ✓
Lack of government support (i.e.
subsidies/tax benefits)
✓
Missing out on economies of scale, hindering ability to compete in price
wars
Inaccessibility of prime sales locations
Time consuming
Difficult to reach target audience
Logistics
Other
Current status of collaboration with other regional producers
Kruidenhuis de Vlo interchanges products with one other biological cultivator and share their selling point.
Interview question towards producer: “ Do you see possibilities in an intermediary in Twente that is responsible for distribution, logistics, marketing etc.?”
“This can have opportunities but the last five years I have seen most initiatives fail. Only succesful one is BPA (Biologisch Product Achterhoek).”
Tabel 10. Overview of Interview result case 5 (translated from Dutch)
5.6 Case 6: Raw Milk Company
Case description:
The Raw Milk Company is a company located in Lutte. It produces raw milk, fermented
products that are therefore not pasteurized, sterilized, or homogenized. About 14,000 liters of milk is processed each week. The milk is supplied by two organic dairy farms in the area, which also deliver milk to Eko Holland. The company used to be located in Zwolle, but moved due to a new highway construction. The company still has many contacts in Zwolle which they sell and buy products from.
Once a week the owner drives to Zwolle to exchange products.
Case analysis
Company Raw Milk Company
Products Raw fermented dairy products, meat, vegetables, fruit
Sales channels (customer type)
Consumer Onsite shop, farmer shops
Retail Biological retails shops, Jumbo, Coop ,Plus
wholesale Odin, Udea
Catering industry
Other
Regional sales fraction Ca. 30%
Activities to date to promote regional sales:
Onsite farmer shop ✓
Self-serve road sales
regional farm shops ✓
farmers’ market
Logistics Product transportation to (farm) shops
Marketing Newspaper, Social Media, tv program,
Affiliations Participation with workshops/lectures organized by Mineral Valley Twente
Other Organizing talks
Factors identified by the producer that need to change in order to promote/facilitate a larger market for SFSC products:
Consumer mindset/behavior ✓ Consumer awareness of SFSCs ✓ Consumer awareness of
biological/biodynamic farming
✓ Higher accessibility of products
compared to current situation of producer
Higher availability of products compared to current situation of producer
Broader assortment of products compared to current situation of producer
✓
Cooperative of local initiatives
Other
Problems faced by the producer in developing SFCS products
Lack of demand
Little growth
Insufficient profit
Lack of government support (i.e.
subsidies/tax benefits)
✓
Missing out on economies of scale, hindering ability to compete in price wars
Inaccessibility of prime sales locations
Time consuming
Difficult to reach target audience ✓
Logistics
Other Supply connection with supermarkets are difficult because of automatization of supermarkets.
Current status of collaboration with other regional producers
No collaboration
Interview question towards producer: “ Do you see possibilities in an intermediary in Twente that is responsible for distribution, logistics, marketing etc.?”
“In the town Losser a regional distribution center could work. This way the offer is broad and facilities can be bundled. However logistics can get difficult.”
Tabel 11. Overview of Interview result case 6 (translated from Dutch)
5. Development of the grounded theory
The results of each case are compared and an overview of answers is made. Through the indexing of information retrieved from the interviews, it is possible to create a grounded theory supported by commonalities. Figures 6 to 10 are used to illustrate and support the grounded theory.
5.1 Summary interview results
Figure 6 shows the sales channels with their customer types. All six producers sell directly to the customer. For most of them however, this is not their only sales route. Figure 6 shows the different customer types but does not indicate sales percentages.
Figure 6. Sales channels, customer types
To learn more about the producer consumer relationship, it is important to look at the sales channels that have a direct contact with the consumer. This is shown in figure 7. The most frequent used sales channel is the farmers´ market. Closed second are self-serve road sales and regional farm shops.
Figure 7. Sales channel, direct consumer
Figure 8 illustrates the current problems the producers of the SFSCs in Twente are facing. Of great concern to more than half the group is the lack of demand and insufficient profit. None of the group members reported received economical government assistance in the form subsidy to promote regional trade.
3 4 2
3
6
0 1 2 3 4 5 6 7
other catering industry wholesale retail direcht consumer
Sales channels; customer types
2 2
5 4 3
4
0 1 2 3 4 5 6
webshop through intermediate farmers' market regional farm shops onsite shop self-serve road sales
sales channel; direct consumer
Figure 8. Producer faced problems
In order to engage Twente more in SFSCs, changes have to be made. The interview gave producers space to discuss thoughts on proposed changes. Results are shown in figure 9.
Figure 9. Proposed changes
Half the producers recognizes the value of cooperation between local producers/local initiatives.
Such possibilities were suggested in the hope of sharing costs and facilities. Figure 10 shows the fraction of producers that are already collaborating with other producers is only 17%. This suggests there is much room for improvement.
2 2 2 2 1
2
6
0 1 2 3 4 5 6 7
other logistics difficult to reach target audience time consuming inaccessibility of prime sales location missing out on economies of scale, hindering ability to
compete in price wars
lack of government support
Problems faced in regional sales
3 3
5 3
3 3
5 5
0 1 2 3 4 5 6
other cooperative of local initiatives broader assortment of products higher availability of products higher accessibility of products consumer awareness of biological/biodynamic farmin consumer awareness of SFSCs consumer mindset/behavior
Proposed changes
Figure 10. Current status of collaboration with other regional producers
7. Conclusion, Discussion and Recommendations
7.1 Discussion and recommendations
Consumer behavior is a complex issue that is influenced by culture, geography, demographics and economic welfare. This makes it difficult to extrapolate directly information from case studies from one country to another. An SFSC that is successful in one location might not work in another. This is important to consider when considering recommendations. It is also difficult to predict how consumers behavior will change in the future and how fast these changes will occur. Currently, almost everyone buys groceries from the supermarket because of convenience, price advantage and the large attractive assortment. Creating SFSCs in the region of Twente that offer fresh, organic products for the same price however does not mean this will change the current buying behavior.
Because there are still many uncertainties about this, it is difficult to translate successful methods from one country to another. It is not even a guarantee that when the SFSC is beautifully designed with delicious fresh, organic products that this will run well, because consumer behavior plays a key role in this too. For SFSC to be successful, consumer behavior must change. Analyzing consumer behavior and finding ways to change this is desirable but beyond the scope of this thesis. The demand therefore depends not only on the products, availability and accessibility, but also on factors beyond the reach of producers.
A shift in consumer behavior begins with an increase in consumer awareness. Many consumers in Twente seem to be unaware of the benefits that SFSC offer, or that they even exist. It is often a question of consumer ignorance and not so much a lack of desire. This is also true for organic and dynamic production methods, which often go hand in hand with SFSCs. Consumers still know little about organic products, what organic product methods are and what their advantages are. If consumers knew this they would also understand why the SFSCs are higher and would perhaps be more willing to pay higher prices.
When considering producers, there is still room improvement they could make towards their own advantage. Presently road sales are difficult and time consuming to find. The farms are often not accessible by foot and are far apart. It is not realistic to expect a consumer to visit six different farms every week to collect the ingredients for meals. This is simply inefficient and ultimately more
17%
83%
Collaboration with other regional producers
yes no
