Sharing and connecting differently involves creating a different distribution of revenues across the supply chain, from farm to supermarket. Also, it is about increasing transparency on the sustainability of company processes and bringing consumers and farmers closer together.
The business model
The money that manufacturers need to make sustainable investments can in principle be earned by charging customers a higher price. But although minimum production standards have become more sustainable over time, most products are uncertified and anonymous (such as the supermarket’s own brand), meaning that consumers do not pay extra for the higher standards. In the past 50 years, four major supermarket chains and wholesalers have taken over two-thirds of the market, which has concentrated bargaining power and given them more control over prices, at the expense of producers. Another issue is that a large part of Dutch produce is exported, and foreign markets do not attach the same value to sustainability. Possible solutions are jointly agreeing on higher minimum standards and introducing them gradually, the creation of international certificate schemes or cooperatives or farmers entering into long-term contracts with buyers.
Reinders, M. J., Poppe, K. J., Immink, V. M., van den Broek, E. M. F., van Horne, P. L. M., & Hoste, R. (2013), p. 2-3, 14-16.
WRR (2014), p. 29.
Trust and transparency
Besides the importance of investing in sustainability, confidence in the food industry and the transparency of its practices are often hotly debated. On the one hand it is expected that the food industry provide reliable information about the sustainability of products and that unhealthy diets are discouraged as much as possible. On the other hand, food scandals such as the horsemeat affair constantly surface, and there is a constant threat of infectious disease outbreaks in animal farming. In part for this reason, the industry platform for sector-wide cooperation (the Alliance for Food Sustainability) has as its priorities stimulating demand for sustainable products, as well as increasing transparency and promoting information about them.
WRR (2014), p. 128.
Onderzoeksraad voor de veiligheid (2014), p. 10-12.
AVV (2013), p. 7.
Shorter food chains and local production
Today, an increasing number of entrepreneurs decide to produce in shorter, locally sourced food chains. The reason may be reducing the number of supply chain intermediaries, and/or reducing the geographical distance between producers and consumers. Major reasons for shorter chains are breaking through the anonymity of the food producer and bypassing the large food processors and supermarkets. Thus, (online) farm shops, food stalls, food halls and local markets become a way in which consumers better understand the production process, producers can obtain a larger share of the profits in the chain and fewer food miles are required.
WRR (2014), p. 35.