Is there a middle ground?

A study of how retailers and other key stakeholders view farm animal welfare from indoor production

Lars Esbjerg* and Klaus Brønd Laursen
MAPP Centre – Research on value creation in the food sector Department of Management
Aarhus School of Business and Social Sciences Aarhus University
Fuglesangs Allé 4
8210 Aarhus V
Denmark

*Corresponding author: lae@mgmt.au.dk 

Animal welfare is an important issue for modern industrialised food production. The industrialisation of food production after World War has enabled the production of larger quantities of meat while lowering production costs, but often at the detriment of welfare of farm animals. Public concern about the negative consequences of modern factory farming practices for the welfare of farm animals continues to put pressure on actors in the food sector to improve the conditions of farm animals. Previous research has shown that animal welfare differs in importance to the practices of different actors: to some actors, animal welfare is central, while for others, animal welfare is but a minor concern (Esbjerg, Pedersen and Hansen, 2014).

Studies show that many consumers view animal welfare as important but that other issues such as taste and prices are more important when making buying decisions. Retailers play a central role in relation to animal welfare as consumers can only buy what is available in stores, while producers will only produce welfare meat if there is a demand to satisfy. This can create a ‘lock-in’ situation where producers and consumers wait for the other party to act first. Hence, producers have to be able to trust that retailers actually want to promote better farm animal welfare (Purwins and Schulze- Ehlers, 2018).

The purpose of this study is to examine how retailers and other key stakeholders view the market for welfare pork and their expectations for how it will develop, not least with regard to products based on indoor production. Although outdoor production is often seen as the best from an animal welfare perspective because it enables pigs to engage in natural rooting behaviour, there are serious environmental problems associated with large-scale outdoor pork production. Retailers are not a neutral mediator between primary producers and consumers, but an agent with their own interests to satisfy in the value chain.

Compliance with the demands of retailers – to be eligible to supply to their retailer brands and comply with third-party certification schemes – often impose extra costs on primary producers due the asymmetry in bargaining power between them and retailers. This is less marked when primary producers are well organised (Richards et al., 2013). “Vertical coordination can be costly since farmers may lose autonomy and must be customer oriented” (Purwins and Schulze-Ehlers, 2018: 545).

The institutional setting around a value chain is thus important for what qualities and values that are promoted in the value chain – it is thus not only the demands of end consumers that are important (Philip and Cesar, 2013). In previous research, different actors in the value chain construct animal welfare in different ways based on what criteria they use to define success (Esbjerg and Pedersen, 2014, Esbjerg et al., 2014). These criteria are often tied to financial issues and therefore have implications for the kinds of incentives that can be expected to further the production of particular welfare aspects.

The study is based on the assumption that a market for farm animal welfare products is constituted and evolves through the concrete activities of different stakeholders, including retailers, animal welfare organisations, authorities and consumers. We take a market practice perspective (Kjellberg and Helgesson, 2007; Schatzki, 1996). As a first step, we will study the Danish market and conduct interviews with 4-6 retail buyers and a similar number of stakeholders (animal welfare organisations, authorities and the like) in order to investigate their respective practices and how they view indoor production in terms of animal welfare concerns. In the next step, we will do the same in Germany and Sweden, which are two very important export markets for Danish pork

At the conference, we will present the first results of our interview with Danish retail buyers and other relevant stakeholders.

References

Esbjerg, L. & M. Pedersen (2014). Kan global markedspraksis bidrage til, at der kommer flere løse søer? In T. Christensen, G. Tveit & P. Sandøe (Eds.), Løse søer - en tværfaglig undersøgelse af markedsdevet dyrevelfærd (pp. 61-77. Frederiksberg: Center for Biotetik og Risikovurdering, Københavns Universitet.

Esbjerg, L., Pedersen, M. & Hansen, K. N. (2014). Kan danske virksomheder og organisationers aktiviteter sikre markedsdrevet dyrevelfærd for danske søer? In T. Christensen, G. Tveit & P. Sandøe (Eds.), Løse søer - en tværfaglig undersøgelse af markedsdevet dyrevelfærd (pp. 43-59). Frederiksberg: Center for Biotetik og Risikovurdering, Københavns Universitet.

Kjellberg, H. & Helgesson, C.-F. (2007). On the nature of markets and their practices. Marketing Theory, 7(2), 137-162.

Philip, M. K. L., & Cesar, R.-G. 2013. In search of differentiation and the creation of value: the quest of the Scottish pig supply chain. British Food Journal, 115(10): 1487-1504.

Purwins, N., & Schulze-Ehlers, B. 2018. Improving market success of animal welfare programs through key stakeholder involvement: heading towards responsible innovation? International Food and Agribusiness Management Review, 21(4): 543- 558.

Richards, C., Bjørkhaug, H., Lawrence, G., & Hickman, E. 2013. Retailer-driven agricultural restructuring—Australia, the UK and Norway in comparison. Agriculture and Human Values, 30(2): 235-245.

Schatzki, T. R. (1996). Social practices: A Wittgensteinian approach to human activity and the social. Cambridge: Cambridge University Press