Informal and Formal Mechanisms of Coordination in Hybrid Food Value Chains

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.