Differences in retail strategies on the emerging organic market

Summary

Abstract: Purpose – The organic product market can be considered as an emerging market. Since the 1990s it has experienced rapid growth, and supermarket chains have become the sales channel with the largest market share and are the main driver for further growth. However, different supermarket retail groups have very different strategies concerning the marketing of organic products. The purpose of this paper is to gain insight into the different strategies of retailers who are active in the organic product market and to explain the drivers which may underlie them.
Design/methodology/approach – The strategies of the three most important Belgian retailers that market organic products, and in particular organic beef, are analyzed. Data were collected through interviews with the retailers' staff and through observations in retail outlets. Also, GfK-household panel data which recorded all purchases of 3,000 Belgian households and a postal survey with 529 respondents were used as data sources.
Findings – The different strategies used by retailers to market organic foods are associated with the overall characteristics and marketing strategies of the retail groups. Some retail groups have clear “first mover” advantages from engaging in the organic product line, while for others an adaptive strategy is more appropriate.
Research limitations/implications – The insights from this paper will help the understanding and facilitate the development of future strategies for organic and other high-value or premium products, which will be of interest to researchers and stakeholders who are active in these markets.
Practical implications – The retail sector is not a single homogeneous block, but instead consists of retailers who pursue quite different strategies. This concept may have major implications for the future development of high-value markets.
Originality/value – Existing relevant theories were applied to the adoption of the organic product line, a segment in the portfolio of retailers that is becoming more important. The empirical material collected sheds new light on the drivers behind retail strategies.