Informal and Formal Mechanisms of Coordination in Hybrid Food Value Chains

J Dara Bloom,C Clare Hinrichs

doi:10.5304/jafscd.2011.014.016

Abstract

The challenges of meeting growing consumer demand for local food, especially from larger, institutional buyers, has sparked many to look beyond direct marketing to alternative models of produce aggregation and distribution. Value chains that incorporate conventional food system infrastructure are one such model for local food system development, but little research has studied their functioning and outcomes. Arrangements where conventional produce distributors handle local food can be viewed as "hybrid" food value chains, since they include both local and global resources, and combine conventional food system infrastructure with the more alternative goal of building local food systems. This qualitative study examines three hybrid food value chains that revolve around conventional, wholesale produce distributors located in rural, urban, and exurban regions of Pennsylvania. Theories of local and social embeddedness inform the analysis of how participants negotiate and coordinate their interactions through informal mechanisms, such as their social relationships, and formal mechanisms, such as contracts and labels. Case study findings reveal distinctions between the rural and exurban cases on the one hand, where participants combined both personal and market-based mechanisms to coordinate their relationships, and the urban case, where the sale of specialty products to a niche market both fostered and inhibited the use of more formal mechanisms of coordination. In all cases, commercial conventions tended to take precedence over social relationships, despite the role that personal trust may have played. These findings suggest that when value chains incorporate conventionally oriented businesses, they would benefit from more deliberate commitment to non-economic goals in order to establish successful mechanisms of interorganizational coordination.

Highlights

Many efforts to change the food system sound the mantra of “cutting out the middleman.” Direct marketing relationships between producers and consumers are said to counter the faceless anonymity of conventional marketplaces and allow producers to retain higher profits (Hinrichs, 2000; Kirwan, 2006)
Our case study findings highlight how local embeddedness contributes to the way that hybrid food value chains are coordinated and regulated
In this study, the small sample size and focus on one particular state (Pennsylvania) restricts our ability to generalize the results to other instances of hybrid food value chains

Summary

Introduction

Many efforts to change the food system sound the mantra of “cutting out the middleman.” Direct marketing relationships between producers and consumers are said to counter the faceless anonymity of conventional marketplaces and allow producers to retain higher profits (Hinrichs, 2000; Kirwan, 2006). By emphasizing “valuesbased” relationships between supply chain participants and incorporating an ethical element of commitment to fairness, value chains are believed to address the power imbalances that exist in the conventional food system (Stevenson & Pirog, 2008) In doing so, they ideally improve outcomes for producers, thereby contributing to rural development, while improving the availability of quality products for consumers. Alternative food networks, such as Fair Trade, tend to utilize conventional food system infrastructure and operating mechanisms, while smaller scale producers of specialty foods will “dip in and out” of conventional and alternative resource streams and markets (Ilbery & Maye, 2005; Whatmore & Thorne, 1997). Hybridity has been seen alternately as a necessary, possibly pragmatic feature of some alternative food networks, or as evidence of co-optation

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