Choosing your partners in the food supply chain- what criteria are valued by producers, distributors and retailers of rural provenance food products?

Abstract

1. PURPOSE
This presentation characterizes the main venues targeted by producers and distributors of rural provenance food products, also exploring which criteria guide their selection of collaborations, namely what characteristics are pursed by producers to choose retailers and intermediaries and by intermediaries to choose their producers and retailers. Additionally, the choices and preferences of retailers in choosing their producers and distributors, are also explored.
2. METHODOLOGY
This research is based on a broader project designed in three phases. The first phase aimed at typifying the urban specialty food shops located in three Portuguese cities (Aveiro, Lisbon and Porto). A universe of 113 shops was surveyed and analysed through a hierarchical cluster analysis based on the type of products sold resulting in three distinct clusters of stores: ‘The Wine Focused’, including shops mainly commercializing wine; ‘The Rural Provenance Focused’, with shops selling mainly rural provenance food products and ‘The Generalist’, including shops commercializing a wide range of products from diverse provenances (Silva et al., 2021).The results of the cluster analysis and the number of stores in each city informed the random selection of 30 shops in a second phase, 5 in Aveiro, 13 in Porto and 12 in Lisbon. Semi-structured interviews were conducted in a second phase with shop owners and managers. In a third phase, 9 of these shops were selected as case studies and asked to provide the contacts of producers and distributors of rural provenance food, resulting in 104 answers from producers and 40 from distributors.
3. FINDINGS
Producers of rural provenance food commercialize their products to diversified venues, ranging from urban specialty shops, restaurants, supermarkets and directly to consumers to, less often, cooperatives and farmers markets, as well as organic and traditional products’ markets. Distributors of those food products also commercialize them mainly to urban specialty food shops, restaurants, supermarkets and directly to consumers. The retailers surveyed and interviewed sell products sourced both directly from the producers and distributors, although a significant part privileges sourcing them directly from producers with whom they have a close relationship. When choosing a retailer and an intermediary, despite some differences according to their type, producers tend to pragmatically value their proximity and if they want to sell or distribute the food products. Also, relevant criteria are the fact that retailers (particularly urban specialty shops) and intermediaries are specialized in specific products, their experience and the family character of the businesses. Additional differences may be found considering the region of origin of the producers and products sold. Producers of vegetables and olive oil seem particularly keen on the specialization of retailers and distributors, whereas wine producers find it more acceptable to choose new selling venues. Producers located in the North region of Portugal seem to prefer distributors specialized in particular food products, while (the few) producers from Algarve and Madeira regions seem to value more distributors who are part of a family business. Similarly, when choosing a producer, distributors tend to privilege specialization, experience and the family nature of the businesses. These criteria are mostly valued by those distributing vegetables, wine and cheese especially to those located in the Centre region of Portugal. Regarding the selection of retailers, specialization stands out as the most valued criterium, particularly for vegetables, fruits, olive oil and wine distributors from Centre and Algarve. Finally, regarding retailers that source directly from producers, especially those selling wine, vegetables and olive oil, the most valued criteria are trust, proximity, quality and flexibility to negotiate prices and general conditions. However, many retailers refer the difficulties in transportation and logistics together with a higher vulnerability regarding products’ availability and deadlines. In turn, distributors are perceived as a safer choice, due to the variety of products they may distribute and easy to reach.
4. RESEARCH LIMITATIONS AND CONCLUSIONS
All in all, despite some differences, the qualities mostly valued by the producers, distributors and retailers analysed relate to what generally characterize shorter supply chains: small dimension, specialized, familiar but with expertise and experience in the market. Proximity is also an important criterion for all the actors considered. However, due to the limited number of producers, distributors and retailers surveyed and interviewed, further evidence, also from different cities and countries, is needed.
5. ORIGINALITY
This contribution is original and was not present anywhere else.
6. REFERENCES
Silva, A.; Figueiredo, E.; Truninger, M.; Eusébio, C. and Forte, T. (2021). ). A typology of urban specialty shops selling rural provenance food products – a contribution from Portugal. British Food Journal, 123(12): 3902-3917.
KEYWORDS: characteristics of food distributors, producers and retailers; criteria of partners’ choice in the food supply chain; rural provenance foods;

Full text

Choosing your partners in the food supply chain-
what criteria are valued by producers,
distributors and retailers of rural provenance food
products?
Teresa Forte, Elisabete Figueiredo and Joana Couto
University of Aveiro, Portugal
STRINGS - Selling The Rural IN (urban) Gourmet Stores –establishing new liaisons between
town and country through the sale and consumption of rural products (PTDC/GES-
OUT/29281/2017/ POCI-01-0145-FEDER-029281)

Aims
➢To characterize the main venues targeted by producers and
distributors of rural provenance food
➢Explore which criteria guide their selection of collaborations, namely
what characteristics are pursed by producers to choose retailers
and intermediaries and by intermediaries to choose their producers
and retailers.
➢Explore the choices and preferences of retailers in choosing
producers and distributors.

Introduction
Rural-urban connections and linkages emphasize the interdependency of these geographical
contexts with fluxes of people, products, capital and knowledge (Mayer, Habersetzer & Meili,
2016).
Urban specialty stores play an important role in this connection through:
➢Providing a venue to sell small to medium-sized producers’ rural provenance products
➢Acting as showcases of the territories of origin, ways of production and symbolic dimensions
of local, regional and cultural identities (Figueiredo, 2021).
➢Promoting a distinct and more connected approach to consumption vis-à-vis mass agri-
industrial choices (Figueiredo, 2021; Silva et al., 2021)
“Shortening distances to reduce uncertainty”(EU,2021) is known as one of the powers of shorter
food supply chains to which urban specialty shops and their producers and distributors may be
key”

Methods
The study follows a mixed methods sequential design:
➢1st phase –Empirical evidence from a survey to the specialty food shops
(n=113). A hierarchical cluster analysis was conducted segmenting the stores
according to the most sold rural provenance Portuguese products.
➢Three clusters were identified:
1)Wine Focused (n=13)
2) The Rural Provenance Focused (n=49)
3) The Generalist (n=51)

Methods
2nd phase- Selection of 30 stores for semi-structured interviews
N=30 Aveiro (n=5) Porto (n=13) Lisbon (n=12)
The Wine
focused(n=4)
0 2 2
The Rural
Provenance
Focused (n=13)
2 7 4
The Generalist 3 4 5

Methods
3rd phase- Case studies of surveys to 9 stores’ producers and distributors
Producers/ City nº %
Aveiro 24 23,08
Lisboa 25 24,04
Porto 55 52,88
Total 104
Distributors/ City nº %
Aveiro 5 12,50
Lisboa 6 15,00
Porto 29 72,50
Total 40

Diversity of products
➢1- Stores with diverse assortment but still specialized on a few products
(commonly cheese and meat derivatives)
➢2- Stores selling many products equally representative of their aim and
character (e.g., ecological mission, based on products from one region)
➢3- Stores specialized in one product

➢Wine Focused stores include wine and
beverages from all regions of CDO
production, with an emphasis on Douro
region
➢Rural Provenance Focused stores sources
from proxies of the North (Trás-os-Montes),
Center (Serra da Estrela) and South
(Alentejo) of the mainland and Azores ..
➢The Generalist stores choose regions
according to the weight and quality of the
productions (specially olive oil) or the
proximity (specially vegetables and
derivatives)
Single region Multple regions
Regions

Circuits /supply chain
➢50.9% of the urban specialty retaillers sell products that are sourced by producers and
intermediary/ distributers
➢38.8 % sell only directly from producers thus fostering a closer rural and urban linkage
Type
of product sourced from the producer
N
%
Wine
and other beverages
37
31,1%
Cheese and other milk derivatives
36
30,3%
Vegetables
and derivatives
34
28,6%
Honey
, Jams and Preserves
23
19,3%
Olive
oil
20
16,8%
Cured meat and other animal based products
17
14,3%
Meat
8
6,7%

Circuits/Supply chain
➢Urban specialty stores’ owners, in all clusters, report preferring a direct contact with the
producers for similar reasons:
➢reduced cost
➢chance to establish a closer relationship that allows to follow up the production
processes
➢give feedback and often mediating the interaction between producer and
consumer
➢specialization and differentiation of the selected products
➢personal guarantee of quality and trustworthiness
➢support for small producers and small productions
“Our aim is not only to work with producers but also find new small ones” L1.4
“It is the most valuable guarantee of their quality and traditional flavour “P2.1
“It is a criteria of differentiation, specially when they are exclusive” P2.4

Circuits/Supply chain
➢Disadvantages of a direct contact with the producers
➢Frequent stockouts
➢Problems with deadlines
➢Difficulties in accessing the venues of production and products
➢Transportation and extra related costs
➢Weather, in the case of vegetables and derivatives
“The highway prices, gas, routes make it a tougher choice” P1.1
“If we don’t buy large quantities of the product, it is too expensive” P2.2
“It is hard sometimes to get the desirable number/volume of a certain
product” P2.11

Circuits/Supply chain
➢Advantages of sourcing from distributors
➢Easier to contact or reach them
➢Wider assortment of products and easy replacement
➢Orders can be put together with a lot of diferente products, crucial
in the case of perishable foodstuffs
“So I can have a wide and careful selection” P2.3
“It is so much easier and often cheaper” P3.4
“I can contact them at anytime, often they are the ones showing up”
A2.2

Production features
Products
categories N %
Wine
30 28.8
Olive
oil 29 27.9
Vegetaibles
23 22.1
Liquors
17 16.3
Honey
and jams 16 15.4
Fruit
15 14.4
Cheese
10 9.6
Meat and meat derivatives
10 9.6
Cakes
, biscuits 7 6.7
Vinager
5 4.8
Bread
and cereals 2 1.9
Milk
derivatives 1 1
Commonly enterprises, individual and family
productions
Commonly enterprises/explorations between
21 and 50 years and 5 to 10 .
Almost all productions are exclusively to sell
They range betwen 101 a 500 ha, 21 a 50 ha
and the more reduced (de 1 a 5 ha).
40 produçtions have between 1 to 5
employees, 23 between 6 to 10, 13 between
11 to 20 and 14 between 21 and 50. Often
employ seasonal workers
Only a minority raises animals ( specially bees
and cows)

Producers’ Venues of choice
Urban specialty
stores (100%)
Directly to the
consumers
(75%)
Restaurants
(64.4%
Supermarkets or
hypermarkets
(60.6%)
Traditional
products fairs
(15.4%)
Organic markets
(10.6%)

Producers’ venues of choice regions
Venues North Center Lisboa Alentejo Algarve Azores Madeira
Urban specialty
or gourmet
stores 73.1% 60.6% 61.5% 21.2% 29.8% 16.3% 18.3%
Directly to the
consumers 50% 26% 23.1% 20.2% 18.3% 15.4% 16.3%
Restaurants 49% 28.8% 37.5% 17.3% 20.2% 15.4% 16.3%
Supermarkets or
hypermarkets 47.1% 45.2% 46.2% 41.3% 41.3% 41.3% 42.3%
Traditional
products fairs 8.7% 9.6% 9.6% 2.9% 1.9 1.9% 1.9
Organic markets
5.8% 0 4.8 0 0 0 0
Other 0 1 1.9 1 0 0 0
Farmers markets
2.9 3.9% 1% 1% 1% 1% 1%
Cooperatives 1 0 0 0 1 1 1
Other producer
3.8 1.9 1.9 1 1 1 1

Producers’ circuits
Shops and markets (supermarkets,
hypermarkets)
•73.1%
Directly
•26.9%
Intermediary
•21.2%
Both
Directly to retailers
N %
Retailer contact
78 75
Online
searching 73 70.2
Recommendation of retailers
41 18.3
Recommencation of other producers
32 30.8
Other forms
19 18.3
Intermediary
N
%
Online searching
20 19.2
Immediate contacts
16 15.4
Recommendation
of other
producers
6 5.8
Recommendation
of retailers 5 4.8
Other forms
5 4.8

Criteria to choose intermediaries and
retailers
Characteristics of intermediary
MSD
that they are specialized in
given products
4,06 0,814
that they want to distribute
my products
3,90 0,700
that they are experienced
enterprises
3,55 1,028
that they are family
businesses
3,16 1,098
that they are new enterprises
2,87 0,846
that they are generalist
enterprises
2,87 0,957
that they are part of a
franchising
2,81 0,833
Characteristics
of retailers MSD
that they want to sell my
products
4,13 0,696
that they are specialized in
given products
3,96 1,019
that they are family businesses
3,72 1,070
that they are experienced
shops
3,52 1,046
that they are generalist shops
2,91 1,011
that they are new shops
2,88 0,911
that they are part of a
franchising
2,49 1,047

Distribution features
➢More common enterprises,
individual and family productions
➢Most enterprises have between
21 to 50 years or 11 to 20 years
➢Medium/ large size dimension
:
➢9 have between 1 to 5 workers
.
➢10 have between 11 to 20 workers or 6
to 10, 8 have between 21 to 50 0
Products N %
Wine 19 47.5
Olive oil 11 27.5
Vegetables 9 22.5
Fruit 7 17.5
Cheese 7 17.5
Meat derivatives 717.5
Liquors and
beverages 6 15
Honey, jams 3 7.5
Vinager 2 5
Milk derivatives 2 5
Bread
and
cereals
2 5

Distributors features
➢Majority is male (75%)
➢Commonly aged between 41 to 50 years. 31 to 40 and 51
to 60
➢47.5% attended high education: Management and Law;
Agriculture, Wine and Food sciences.
➢Montly income is superior to 3001 euros, followed by 2601e
3000 euros

Distributors’ venues of choice
Urban specialty
stores (100%)
Restaurants
(87.5%)
Supermarkets or
hypermarkets
(67.5%)
Directly to
consumer
(55%)
Cooperatives
(17.5%)
Organic markets
(12.5%)

Distributors’ venues of choice regions
Venues North Center Lisboa Alentejo Algarve Azores Madeira
Urban specialty or gourmet stores 77.5 70 70 27.5 45 25 27.5
Directly to the consumers 60 57.5 45 40 37.5 40
Restaurants 77.5 62.5 62.5 40 47.5 35 35
Supermarkets or hypermarkets 70 65 72.5 62.5 65 62.5 65
Traditional products fairs 5 5 7.5 0 0 0 0
Organic markets 10 10 12.5 0 0 0 0
Cooperatives 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Traditional products fairs 5 5 7.5 0 0 0 0

Distributors’ circuits
Contact with Producers N %
Other forms (also producer) 28 70
Immediate
contacts
producers
15 37.5
Recommendation of retailers 14 35
Online searching 12 30
Recommendation of other
intermediaries 9 22.5
Contact with Retailers N %
Online searching 30 75
Retailer contact 22 55
Recommendation of other
intermediaries 19 47.5
Recommendation of
producers 14 35
Recommendation of
retailers 13 32.5
Other 822

Criteria to choose producers or retailers
Importance of characteristics
Producer M SD
that they want me to distribute
their products
4,00 0,535
that they are specialized in
certain products
3,69 1,167
that they are experienced
producers
3,56 1,275
that they are small family
producers
3,53 1,158
that they are new producers 2,83 1,082
that they are large producers 2,75 1,105
that they produce diverse
products
2,75 1,025
Importance of characteristics
Retailer M SD
that they are specialized in given
products
3,83 0,984
that they are family businesses 3,72 0,826
that they want to sell the
products my company distributes
3,68 0,764
that they are experienced shops
3,28 1,219
that they are part of a franchising
3,05 0,904
that they are generalist shops 3,03 0,891
that they are new shops 2,98 1,050

Conclusions
➢Despite some diferences, the qualities mostly valued by the producers,
distributors and retailers analysed relate to what generally characterize
shorter supply chains: small dimension, specialized, familiar but with
expertise and experience in the market
➢Proximity is also an important criterion for all the actors considered.
➢Due to the limited number of producers, distributors and retailers
surveyed further evidence, also from different cities and countries, is
needed.

Thank you
https://www.stringsproject.pt/
STRINGS - Selling The Rural IN (urban) Gourmet Stores –establishing new liaisons between
town and country through the sale and consumption of rural products (PTDC/GES-
OUT/29281/2017/ POCI-01-0145-FEDER-029281)