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Richards, Timothy J.; Hamilton, Stephen F.
doi: 10.1002/agr.21740pmid: N/A
Food waste, or loss, at the wholesale and retail levels accounts for some 40% of the total amount of supply‐chain waste. While zero waste is never optimal, there are managerial variables that contribute to the level of loss. In this paper, we use data from a large beverage distributor to estimate the most important causes of loss, and investigate which can be controlled in an economically‐viable way. Controlling for a range of important environmental (uncontrollable) variables, we find that competitive pricing, case sets, assortment size, package size, and inefficiency are the most important determinants of loss. However, our most important finding highlights the importance of “discretion over rules” in inventory management as salesforce discretion in delivering less‐than‐ordered amounts is statistically important and one of the only ways management can directly influence supply‐chain loss. Our findings contribute to the growing literature on food and beverage supply‐chain sustainability, food loss and waste, and inventory management. As such, our findings are likely to be of interest to both managers in the food and beverage supply chain (manufacturers, distributors, and retailers) and policy makers interested in reducing food and beverage loss and improving food system sustainability. [EconLit Citations: D43, L13, M31].
Miranda, Bruno V.; Ross, Brent; Franken, Jason; Gómez, Miguel
doi: 10.1002/agr.21741pmid: N/A
This article investigates how measurement ability, trust, and the pursuit of differentiation strategies influence the adoption of plural forms in an agri‐food system. We analyze a unique dataset of 314 winegrape sourcing choices from 74 wineries located in five U.S. states, investigating how the pursuit of differentiation influences the likelihood of adoption of a plural form—that is, the simultaneous adoption of a formal arrangement (i.e., vertical integration or long‐term formal contract) and an informal arrangement (i.e., informal contracts or spot‐market transactions). Consistent with previous studies, measurement ability and the existence of trust are both associated with a higher likelihood of adoption of informal arrangements in comparison to formal arrangements. Moreover, we show that the likelihood of adoption of a plural form increases as the differentiation potential of a winegrape variety also increases. Finally, we find that the use of plural forms is associated with a reduction in the importance of trust in the relationships with external suppliers. This study is important because it sheds light on the role of plural forms in the pursuit of competitive advantage in an agri‐food system. Overall, it suggests that the current interpretations of the idea of “vertical coordination” may be enlarged to encompass a greater deal of organizational diversity.
doi: 10.1002/agr.21745pmid: N/A
Parents may be more attentive to health and safety concerns when purchasing food for their babies due to the fragility of the digestive system of infants and their early stage of growth. The processing of organic baby food involves minimal use of toxic chemicals and synthetic food additives which may be attractive to health‐conscious parents. On the other hand, organic baby food is generally more expensive than nonorganic alternatives due to the cost of organic certification. The purpose of this paper is to estimate the price premium that parents are willing to pay for organic baby food and how it varies along several dimensions: organic label, food type based on developmental stage, retail channel, frequency of purchase of organic products, and over time. We apply the hedonic price model to Nielsen consumer panel data to isolate brand effects from the organic effects on product prices. The empirical results show that parents pay 17%–27% more, on average, for organic baby food than conventional alternatives, after controlling for a series of product and market characteristics. [EconLit Citations: D12, Q11, L66, C13].
Cleary, Rebecca; Chenarides, Lauren
doi: 10.1002/agr.21743pmid: N/A
We investigate the competitive effects of entry in the food retail sector in nonmetropolitan counties in the United States from 1998 to 2014. We pay particular attention to the period that covers the Great Recession, which disrupted market structure across a number of industries. Using a county‐level panel dataset, we use a seminal entry model to infer the local competitive effects of entry in the food retail sector. We estimate entry thresholds over time, which we then use to describe the rate of decline in profit margins following subsequent entry via entry threshold ratios. We find that food retail firms required a smaller market size to break even during the Great Recession, perhaps pointing to higher profits, as consumers shifted purchases to food‐at‐home. This effect is short‐lived for all but a single firm. The market threshold required to support a single food retail firm remains low throughout the post‐recession recovery period. We also find that the second firm may not decrease profit margins, but that competition increases meaningfully with the third and fourth entrants. The increased competition during the Great Recession also appears to have persisted into the recovery period. [EconLit Citations: L18; Q18].
Adelaja, Adesoji O.; Mukhopadhyay, Ramyani
doi: 10.1002/agr.21734pmid: N/A
Longer time‐to‐completion (TTC) increases transaction costs, delays deal benefits, and reduces the probability of meeting transaction objectives in mergers and acquisitions (M&A) transactions. This paper conceptualizes the determinants of TTC and estimates their effects in the food and agribusiness industry (FABI) due to the critical importance of TTC to M&A success and the dearth of existing studies on the industry. We confirm that longer TTC increases the likelihood of deal failure. We also find the following: company‐specific factors such as acquirer solvency and leverage reduce TTC; deal complexity factors such as deals involving payment in cash or hard currency conclude faster; deals involving both acquirers and targets from the same country or industry take longer; using legal or financial advisers lengthens TTC; limited transparency or greater risk involved in a deal do not delay financing; deals consumed during a recession take longer; deal size and acquirer history of repeated M&A activities neither accelerate nor delay TTC. Considering the limited existing information on the contributions of various factors to timely deal completion or delays in FABI, our findings are useful in predicting M&A deal duration, costs, and potential for success. [EconLit Citations: G24, G34, L22, L66].
doi: 10.1002/agr.21737pmid: N/A
There are few empirical explanations for consumer preferences for payoff distributions across the agri‐food value chain in terms of psychographic characteristics. In the context of product origin, we contribute to the literature with an incentivized experiment to estimate preferences for payoff distributions among Missouri beef consumers, Missouri beef producers, and non‐Missouri beef producers on the basis of inequality aversion and consumer ethnocentrism. According to the results, Missouri beef consumers not only have self‐regarding preferences but also other‐regarding preferences in case of payoff distributions, in particular toward Missouri beef producers. We explain such preferences from the perspective of consumer ethnocentrism. Specifically, Missouri beef consumers who have a higher degree of state‐level ethnocentrism also have a higher degree of aversion to inequalities among themselves and Missouri beef producers. Although few food consumers appear to be highly ethnocentric, there may exist potential to segment on the basis of state‐level ethnocentrism. Other implications and research directions are also discussed.
Staples, Aaron; Behe, Bridget K.; Huddleston, Patricia; Malone, Trey
doi: 10.1002/agr.21736pmid: N/A
Though choice overload has been extensively studied in packaged products, fewer studies have explored these phenomena in minimally packaged agribusiness products such as potted plants. This matters as these products are heterogeneous not only across product categories but also within the same plant genus, changing the baseline cognitive load for consumer decision‐making. This study uses eye‐tracking technology to explore how increases in the number of options presented in potted plant retail displays affects visual attention and consumer choice by expanding cognitive load. In a within‐subjects design, participants completed six choice tasks, indicating their likelihood to buy their most preferred alternative. As display size increased, participants ignored a larger percentage of the display, engaged in common choice patterns, and spent a lower percentage of their gaze sequence fixated on their selected alternative. [EconLit Citations: C91, D91, Q13]
Kumar, Anjani; Mishra, Ashok K.; Saroj, Sunil; Rashid, Shahidur
doi: 10.1002/agr.21746pmid: 35937589
The coronavirus disease 2019 (COVID‐19) pandemic has decimated the lives and livelihoods of people worldwide. The impact of COVID‐19 has been especially devastating for low‐income families in rural areas of India. Soon after the nationwide lockdown was announced, food insecurity became pervasive in rural areas, as many families relied on daily wage work to fund necessities. By providing cash transfers and additional foodgrains, Indian policymakers acted swiftly to reduce the financial impact on family income and consumption. This paper investigates the factors affecting rural families' participation in the cash transfer program and the effect of government cash transfers on food insecurity. Results indicate that India's government cash transfer program decreased moderate food insecurity by 2.4% and severe food insecurity by about 0.92% [EconLit Citations: O12, I31, I32, I38].
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