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The Rapid Rise of Supermarkets in Developing Countries: Induced Organizational, Institutional, and Technological Change in Agrifood Systems


  • Reardon, Thomas
  • Timmer, C. Peter
  • Berdegue, Julio A.


There has been extremely rapid transformation of the food retail sector in developing regions in the past 5 to 10 years, accompanied by a further consolidation and multi-nationalization of the supermarket sector itself. This organizational change, accompanied by intense competition, has driven changes in the organization of procurement systems of supermarket chains, toward centralized and regionalized systems, use of specialized/dedicated wholesalers and preferred supplier systems, and demanding, private quality standards. These changes in the system have in turn determined the very recent rise of the use of contracts between supermarkets and agrifood producers in these regions to cover provision of services and provision for risk management, as well as requirements for demanding quality and safety attributes, which require substantial investment in technological change and upgrading at the producer level. This paper presents a brief discussion of these trends, followed by a conceptual framework to explain this phenomenon, illustrated with empirical evidence drawn mainly from Latin America.

Suggested Citation

  • Reardon, Thomas & Timmer, C. Peter & Berdegue, Julio A., 2004. "The Rapid Rise of Supermarkets in Developing Countries: Induced Organizational, Institutional, and Technological Change in Agrifood Systems," eJADE: electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization, Agricultural and Development Economics Division, vol. 1(2).
  • Handle: RePEc:ags:ejadef:12005

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    References listed on IDEAS

    1. Jean-Marie Codron & Zouhair Bouhsina & Fatiha Fort & Emilie Coudel & Aurélie Puech, 2004. "Supermarkets in Low-income Mediterranean Countries: Impacts on Horticulture Systems," Development Policy Review, Overseas Development Institute, vol. 22, pages 587-602, September.
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    9. Liesbeth Dries & Thomas Reardon & Johan F. M. Swinnen, 2004. "The Rapid Rise of Supermarkets in Central and Eastern Europe: Implications for the Agrifood Sector and Rural Development," Development Policy Review, Overseas Development Institute, vol. 22, pages 525-556, September.
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    1. George Hendrikse & Li Feng, 2013. "Interfirm cooperatives," Chapters,in: Handbook of Economic Organization, chapter 26 Edward Elgar Publishing.
    2. Butzlaf, Iris & Minos, Dimitrios, 2016. "Understanding the Drivers of Overweight and Obesity in Developing Countries: The Case of South Africa," Discussion Papers 232025, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    3. Subervie, Julie & Vagneron, Isabelle, 2013. "A Drop of Water in the Indian Ocean? The Impact of GlobalGap Certification on Lychee Farmers in Madagascar," World Development, Elsevier, vol. 50(C), pages 57-73.
    4. Somasekharan, J. & Chandran, K.P. & Harilal, K.N., 2014. "Whether an Effective Innovation System is Inevitable for Sectoral Value Chain Development? Evidence from Coconut Sector in Kerala," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(2014).
    5. Bastiaensen, Johan & Van Hecken, Gert, 2009. "The potential and limitations of markets and Payments for Ecosystem Services in agricultural landscape restoration: critical reflections inspired by an assessment of the RISEMP program in Matiguás-Río," IOB Discussion Papers 2009.02, Universiteit Antwerpen, Institute of Development Policy (IOB).
    6. Hendrikse, G.W.J., 2011. "Pooling, Access, and Countervailing Power in Channel Governance," ERIM Report Series Research in Management ERS-2011-009-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    7. Pingali, Prabhu, 2007. "Westernization of Asian diets and the transformation of food systems: Implications for research and policy," Food Policy, Elsevier, vol. 32(3), pages 281-298, June.
    8. Rischke, Ramona & Kimenju, Simon C. & Klasen, Stephan & Qaim, Matin, 2015. "Supermarkets and food consumption patterns: The case of small towns in Kenya," Food Policy, Elsevier, vol. 52(C), pages 9-21.
    9. Julie A. Caswell & Siny Joseph, 2007. "Consumer Demand for Quality: Major Determinant for Agricultural and Food Trade in the Future?," Working Papers 2007-4, University of Massachusetts Amherst, Department of Resource Economics.
    10. Trebbin, Anika, 2014. "Linking small farmers to modern retail through producer organizations – Experiences with producer companies in India," Food Policy, Elsevier, vol. 45(C), pages 35-44.
    11. Chemnitz, Christine & Grethe, Harald & Kleinwechter, Ulrich, 2007. "Quality Standards for Food Products - A Particular Burden for Small Producers in Developing Countries?," 106th Seminar, October 25-27, 2007, Montpellier, France 7926, European Association of Agricultural Economists.
    12. Vermeulen, S. J. & Aggarwal, Pramod & Ainslie, A. & Angelone, C. & Campbell, B. M. & Challinor, A. J. & Hansen, J. W. & Ingram, J. S. I. & Jarvis, A. & Kristjanson, P. & Lau, C. & Nelson, G. C. & Thor, 2010. "Agriculture, food security and climate change: outlook for knowledge, tools and action. Background paper prepared for The Hague Conference on Agriculture, Food Security and Climate Change, 31 October ," IWMI Research Reports H044643, International Water Management Institute.
    13. Vamsidhar Reddy, T.S. & Hall, Andy & Sulaiman V., Rasheed, 2010. "New Organisational and Institutional Vehicles for Managing Innovation in South Asia: Opportunities for Using Research for Technical Change and Social Gain," MERIT Working Papers 054, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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    15. Wells, Patricia Bryn & Saghaian, Sayed H. & Osborne, William, 2013. "The Expansion of Food Retail in Developing Countries and Its Effects on the Hunger Index," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142630, Southern Agricultural Economics Association.
    16. Bastiaensen, Johan & Marchetti, Peter, 2010. "Microfinanzas rurales y cadenas de valor agropecuarias," IOB Working Papers 2010.02, Universiteit Antwerpen, Institute of Development Policy (IOB).
    17. Asfaw, Abay, 2007. "Supermarket purchases and the dietary patterns of households in Guatemala:," IFPRI discussion papers 696, International Food Policy Research Institute (IFPRI).
    18. Kersting, Sarah & Wollni, Meike, 2011. "Public-private partnerships and GLOBALGAP standard adoption: evidence from small-scale fruit and vegetable farmers in Thailand," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114761, European Association of Agricultural Economists.

    More about this item


    supermarket chains; procurement systems; quality standards; agrifood producers; Agribusiness;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets


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