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

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Listed:
  • Thomas Reardon

    () (Michigan State University)

  • Peter Timmer
  • Julio Berdegue

Abstract

There has been extremely rapid transformation of the food retail sector in developing regions in the past 5 to10 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

  • Thomas Reardon & Peter Timmer & Julio Berdegue, 2004. "The Rapid Rise of Supermarkets in Developing Countries: Induced Organizational, Institutional, and Technological Change in Agrifood Systems," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 1(2), pages 168-183.
  • Handle: RePEc:fao:tejade:v:1:y:2004:i:2:p:168-183
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    References listed on IDEAS

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    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.
    2. Fernando Balsevich & Julio A. Berdegué & Luis Flores & Denise Mainville & Thomas Reardon, 2003. "Supermarkets and Produce Quality and Safety Standards in Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1147-1154.
    3. Reardon, Thomas & Codron, Jean-Marie & Busch, Lawrence & Bingen, R. James & Harris, Craig, 1999. "Global Change In Agrifood Grades And Standards: Agribusiness Strategic Responses In Developing Countries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(3-4), pages 1-15.
    4. Hueth, Brent & Ligon, Ethan & Wolf, Stephen & Wu, Steven, 1999. "Incentive Instruments in Agricultural Contracts: Input Control, Monitoring, Quality Measurement, and Price Risk," Staff General Research Papers Archive 5237, Iowa State University, Department of Economics.
    5. Dave D. Weatherspoon & Thomas Reardon, 2003. "The Rise of Supermarkets in Africa: Implications for Agrifood Systems and the Rural Poor," Development Policy Review, Overseas Development Institute, vol. 21, pages 333-355, May.
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    Cited by:

    1. 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.
    2. Kit Chi Chung & Pauline Fleming & Euan Fleming, 2013. "The impact of information and communication technology on international trade in fruit and vegetables in APEC," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 27(2), pages 117-130, November.
    3. Altenburg, Tilman & Kulke, Elmar & Reeg, Caroline & Peterskovsky, Lisa & Hampel-Milagrosa, Aimée, 2016. "Making retail modernisation in developing countries inclusive: a development policy perspective," Discussion Papers 2/2016, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE).
    4. Tram Anh Thi Nguyen & Kim Anh Thi Nguyen & Curtis Jolly, 2019. "Is Super-Intensification the Solution to Shrimp Production and Export Sustainability?," Sustainability, MDPI, Open Access Journal, vol. 11(19), pages 1-22, September.
    5. 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(Conferenc).
    6. Alemayehu Dekeba Bekele & Joost Beuving & Ruerd Ruben, 2017. "How African Households Shop: Evidence from Dairy Chains in Ethiopia," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(4), pages 806-826, August.
    7. Berger, Mira & van Helvoirt, Bram, 2018. "Ensuring food secure cities – Retail modernization and policy implications in Nairobi, Kenya," Food Policy, Elsevier, vol. 79(C), pages 12-22.
    8. 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.
    9. George Hendrikse & Li Feng, 2013. "Interfirm cooperatives," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 26, Edward Elgar Publishing.
    10. Butzlaf, Iris & Minos, Dimitrios, 2016. "Understanding the Drivers of Overweight and Obesity in Developing Countries: The Case of South Africa," GlobalFood Discussion Papers 232025, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    11. repec:mir:mirbus:v:7:y:2017:i:10:p:1-17 is not listed on IDEAS
    12. 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.
    13. 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.
    14. Zhang, Yuehua & Rao, Xudong & Wang, H. Holly, 2019. "Organization, technology and management innovations through acquisition in China’s pork value chains: The case of the Smithfield acquisition by Shuanghui," Food Policy, Elsevier, vol. 83(C), pages 337-345.
    15. 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

    Keywords

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

    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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