Securing small farmer participation in supermarket supply chains in South Africa

Abstract

Urbanisation and a growing middle class with changing consumption patterns provide an ideal setting for supermarkets to prosper. With South Africa's urban population approaching 60 per cent, supermarket retail chains are now important players in the agro-food sector. Over the last two decades they have begun to purchase produce from in-house sourcing companies who buy mainly from large-scale farmers. Together with the strict requirements of the retail groups, this makes it difficult for small-scale farmers to supply these retailers. This paper highlights the market changes that could continue to exclude small producers from mass consumer markets. It uses a case study to show how small farmers can be integrated into the urban retail market and, using evidence from this study, proposes a number of strategies to help them participate in the mainstream agro-food supply chains and an innovative model for including them while maintaining profitable business operations.

The Future of the Food System: Cases Involving the Private Sector in South Africa

“…Woolworths and Spar complete the formal retail sector with Massmart (which has now been taken over by Walmart) and Metcash being the country's two main wholesalers [38]. With growing urbanisation and a burgeoning middle class, food retailers play a significant role in the country and are vital actors in the agri-food chain for innovation around development issues [38] and potentially climate change adaptation too [14]. That being said, this "rapid rise of supermarkets" has also extended into poor neighbourhoods and the new trend in the region is of "supermarkets to the poor", making them important both from a food security perspective, as well as for rural development (Weatherspoon and Reardon [30], p. 1).…”

“…As Johannesburg Stock Exchange (JSE) listed companies, they ranked 127th and 129th respectively in the 2009 Stores global survey, making them relatively important players, especially in southern Africa [37]. Woolworths and Spar complete the formal retail sector with Massmart (which has now been taken over by Walmart) and Metcash being the country's two main wholesalers [38]. With growing urbanisation and a burgeoning middle class, food retailers play a significant role in the country and are vital actors in the agri-food chain for innovation around development issues [38] and potentially climate change adaptation too [14].…”

Global Agro-food Governance, Supermarket Chain Expansionism and Household Food Insecurity in Rural South Africa

“…Supermarket food chains have since the late 1990s dominated the local rural markets in South Africa; and, the proportion of rural households who purchased foods from these networks than from informal traders and smallholders, was on the rise especially from 1994 (D'Haese and Van Huylenbroeck, 2005;Louw et al, 2007;Jacobs, 2008Jacobs, , 2009aBaiphethi and Jacobs, 2009). Analyzing Statistics South Africa's (2007) 2005/06 Income and Expenditure Survey, it was found that 92%, 94%, 94% and 72% of black rural households purchased most of their grain products, meat, dairy products and vegetables from the supermarket chains and other formal retailers (Jacobs, 2008(Jacobs, , 2009aBaiphethi and Jacobs, 2009).…”

Strategic CSR Shifts Towards Adaptive Food Governance Under Environmental Change: A Comparison Between South African and Brazilian Retailers

“…As Johannesburg Stock Exchange (JSE) listed companies, they ranked 127 th and 129 th respectively in the 2009 Stores global survey making them relatively important players in the South African economy. The companies completing the large formal retail sector in South Africa are Woolworths and Spar with Massmart and Metcash being the two main wholesalers (Louw et al 2006). With growing urbanisation and a burgeoning middle class, food retailers play a significant role in the country and are prime actors in the agri-food chain for innovation around development issues (Louw et al 2006) and potentially climate change adaptation.…”

“…The companies completing the large formal retail sector in South Africa are Woolworths and Spar with Massmart and Metcash being the two main wholesalers (Louw et al 2006). With growing urbanisation and a burgeoning middle class, food retailers play a significant role in the country and are prime actors in the agri-food chain for innovation around development issues (Louw et al 2006) and potentially climate change adaptation. That being said, this "rapid rise of supermarkets" has also extended into poor neighborhoods and the new trend in the region is of "supermarkets to the poor" making them important both from a food security perspective, as well as for rural development (Weatherspoon and Reardon 2003: 1).…”