Being different matters! A closer look into product differentiation in specialty coffee family farms in Central America

Abstract

PurposeThere is a growing interest in understanding the strategic behaviour of family firms producing international commodities such as coffee, particularly in contexts where decisions about what products to sell, where to commercialise them and how to promote them appear to be highly based on both business and family aspects. The purpose of this paper is to explore product differentiation strategies in family firms in the specialty coffee industry across Latin American countries. Whilst the socioeconomic relevance of coffee production in Central America is unequivocal, the approach and rationale of families that engage in specialty coffee production remain underexplored.Design/methodology/approachThis study examines product differentiation in specialty coffee family farms across countries in Central America: Guatemala, Honduras and Nicaragua. The study relies on in-depth interviews, case studies and an interpretative approach to unpick the dynamics of product differentiation by families in business dedicated to producing specialty coffee.FindingsThe findings show that product differentiation in specialty coffee family farms is influenced by both business and family aspects and driven by entrepreneurial stewards. Coffee-farming families can engage in product differentiation through a shared vision, a combination of traditional and specialised knowledge, and through the continuous development of an exchange network. The findings reveal a connection between families in business balancing family and business interests, and the strategic intention to build up their assets entrepreneurially over time.Originality/valueThis study contributes to the literature on stewardship and strategic behaviour in family firms when families in business engage in differentiating their products in a highly competitive industry. More specifically, this study focuses on companies across countries where coffee is of crucial socioeconomic importance, and where the said companies are owned and managed by families. The study expands understanding of product differentiation in family-enterprise-first businesses and suggests that the family elements in differentiation can be explained through an entrepreneurial stewardship perspective.

Green innovation in the Latin American agri-food industry: understanding the influence of family involvement and business practices

“…More specifically, to the scarce research on families that own agricultural businesses, the effects of the family on business orientation are added as determinants of green innovation (Vrontis et al. , 2019; Discua Cruz et al. , 2020).…”

“…For family business owners, the practical implications know how to properly communicate their practices in the segments and markets where they operate. The green innovation approach would push FB in the agri-food sector in Latin America to become more entrepreneurial, change the way they do things and promote further the value of stewarding our environment (Discua Cruz et al. , 2020).…”

“…This methodology is the most commonly employed in the family business field to explore phenomena previously unexplored (Leppäaho et al. , 2016; De Massis and Kotlar, 2014a, b) and has been relevant to understand the way family firms in the agricultural sector approach the balance of family and business objectives (Discua Cruz et al. , 2020; Roscoe et al.…”

“…, 2019), despite the relevance and importance of family firms in the agricultural sector (Conto et al , 2014). Our study aims to provide in-depth insight on the topic and fill in some of these gaps in the context of Latin America, where family firms dominate the agricultural sector (Discua Cruz et al. , 2020), and a growing demand for organic and more eco-friendly agricultural products is countered by a lack of supply and variety (González, 2009).…”

“…, 2011). In Latin America, family firms are the driving force in the agricultural landscape (Discua Cruz et al. , 2020; Roscoe et al.…”