Global Food Policies - Causes, Solutions, & Objectives - Essay Example

?Food Policy 0 Introduction Food is one of the psychological needs of a person; thus, the food industry is one of the most significant activities in the global market. In fact, the world’s number one food firm has recorded total food sales of $44,640 million and employed a bigger portion of the world’s overall population (Lang and Heasman, 2004:154). In addition, ‘large companies are responsible for more than 40% of the output of the food industry in the EU and more than 50% in some countries’ (Traill and Grunert, 1997:55). Hence, this shows that the EU is one of the biggest suppliers and producers of food in the global market, and among the leading food markets include the UK, France, Netherlands, Germany, Italy, Spain. The 15 member states of EU are also a habitat of giant food and beverage multinational enterprises, which have enormous influence on the global food environment, considering that these firms are producing both agricultural and manufactured products. The main thrust of this paper is to investigate global food policies (e.g., causes, solutions, & objectives), as well as the macro-environment of the food sector. In addition, this paper will evaluate the current trends in the food sector and various marketing strategies and issues within the global food business. 2.0 Global Food Policy According to Pinstrup-Andersen and Cheng (2009:1), ‘Food policy is a plan of collective action intended to influence and determine decisions, actions, behavior, and perceptions to enable people to achieve certain objectives.’ At present, the world’s food system or new departure programme ultimate objective is the ‘integration of consumer protection and food safety - and a focus on issues of transparency, participation, and accountability’ (Houghton et al., 2007:15). In other words, the old and fragmented food policy is now integrated in favor to consumer interests, thus, making it the new significant image or the highest level in the world’s food system. The restructuring is a precise reaction to the public concern about the safety and quality of food supply in the global market, which has started in the outbreak of foodborne illnesses like bovine spongiform encephalopathy or mad cow diseases, haemolytic uraemic syndrome (HUS), E. coli, and many more. This event has weakened the consumer’s confidence on food businesses, as well as to the government’s capacity of directing food firms to produce and sell safe and quality food products. Thus, the new food policy gave emphasis on consumer protection and interest or made end-users the core of the reform food safety system (Bergeaud-Blackler, 2004:11). Causes. The EU consumer policy is created because of the declaration that a single market efficiency will be attained only if consumers will actively participate in market activities, as an evidence that their confidence is already reinstated. After the foodborne disease scandal, the government has decided to ‘put food safety at the top of political agenda’ (Halkier and Holm, 2006:127), and it established minimum standards for the entire food fabrication, processing, and marketing (Burnett and Oddy, 1994). The serious food incident is a big challenge to food businesses all over the world because food demand, sales, and consumer confidence have declined to the extent that some companies go bankrupt. The consequences are even more complicated considering that food firms need to invest a large amount for a product checking to restore the public confidence toward ‘food supply, food science, food law and food controls’ (van der Meulen and Freriks, 2006:157). Solutions. Setting policies to form a functional food system needs careful analysis on things that are directly or indirectly involved such as the economy, food chain management, environment, and marketing issues. An integrated policy is difficult to obtain because policy makers need to examine the different macro-economic environmental issues (e.g., culture, history, economic affairs, export & import trading, etc.) of many countries all over the world. Also, food firms need to be mindful that a change of policy from the market to the consumer’s perspective will make the food chain complicated and risky because the process will involve different stakeholders (with various interests and expectations) (Halkier and Holm, 2006:128). 3.0 Objectives for Analysis 3.1 Economical, Social, and Environmental Objectives ‘Resolving the tensions between social, economic, and environmental objectives within the food sector requires changes in wider social and economic policy, including in trade, competition, employment conditions, and benefit levels’ (United Kingdom Parliament, 2011). This statement revealed that policy makers could develop an effective food policy out of various policy choices by working closely with other industry players in the economy, society, and environment. However, they are ‘free actors whose decisions reflect values about how food producers, food traders, and food consumers are to be treated (Wegren, 2005). Economic Objectives. The food industry is very significant to the global business environment because it helps to alleviate poverty level in terms of economic output, employ bigger portion of the population (nearly 40%), and increase trading affairs (Menrad, 2004). In general, the objective is ‘to provide a safe and adequate supply of food at reasonable prices,’ but this is contradictory to other objectives in political, social, and environmental settings (Westhoff, 2010:55). For instance, how could a government provide the public an acceptable standard of living if the ‘reasonable price’ stated in the objective is below minimum, caused by consumers’ demand of lower prices. Another tension within the food sector is the food shortage brought by the increasing world’s population (7.5 billion in 2020), which ‘continuous to increase faster than the global food supply’ (Pimentel and Giampietro, 1994:239). With this scenario, how could a government provide a safe and adequate supply of food to consumers if it is not capable of meeting the growing food demand because of land and water scarcity. Therefore, the food sector should reorganize its economic policy to resolve the tension between various objectives. The sector can adopt the high-technology approach like the self-service technology, which is ‘highly successful in raising productivity and increasing production far beyond internal needs and local markets’ (Francis and Wart, 2009:14; Davis, 2011). Social Objectives. The social objectives of the food policy are to deliver safe and quality foods, reduce health inequalities or eliminate dietary deficiencies, and reduce the level of poverty. However, these objectives are in conflict with other purposes within the food sector considering that a food policy is altered from one nation to another. Thus, the social policy including the benefit level and trade should be widened, so that flows of good will be properly monitored, and conflict will be resolved. Through this policy, the product’s origin will be identified as well as the accuracy of stated benefits through packaging because the societal aim can be realized ‘through the physical attributes of the product’ (Engelseth et al., 2009:46). In addition, ‘Government-mandated labeling can be a useful tool for achieving social objectives because of the potential power of information to influence consumption decisions’ (Golan et al., 2001:14). Environmental Objectives. The environment is one of the industry sectors that experienced the negative effects of food processing. The environmental objective of the food policy is to maintain or keep the natural qualities of the environment by eliminating material wastes (with high toxicity) through degradation or recycling. Also, food firms need to reduce agricultural water pollutants induced by irrigation; thus, it will not lose its nutrients and sustainability for the next generations (Dieu, 2009:24). The world’s population, income growth, living standards, nutritional status, technological innovation, globalization, etc., are among the many factors that will increase the global food demand and output. However, this event created tension to the environmental objective because it would harm the environment through harmful gases and wastes brought by the expansion of food production (Blazer and Befort, 2011). Thus, the industry should widen its food policies (price-based and non-price-based instruments) including trade and benefit levels because environmental management has become ‘crucial elements for competitiveness and market success’ (Knura et al., 2006:19). In terms of price-based policy, the ‘country decides to impose a tax on product variety that it considers to be less environment-friendly than other product varieties, and...the country imports a certain quantity of the less environment-friendly variety’ (Wijen et al., 2005:122). This policy is more or less effective because local and international food producers are imposed of same taxes compared to labelling policies (non-price-based) wherein international producers are to incur high cost of production for product and method improvement. 4.0 Analysis of Evidence 4.1 Marketing Strategies, Marketing Mix and Contemporary Marketing Issues Together with the restructuring of food policies is the change of marketing strategies and market mix in the global food environment. The food industry is a very promising market in terms of demand, sales, and market share (Kearney, 2010); thus, it is not surprising for it to be concentrated with giant food manufacturers or multinational food companies. The fact that the industry is becoming more and more competitive, manufacturers or producers need to change their marketing tactics and expand their marketing mix to be sustainable. Food firms should consider that the behaviors and attitudes of consumers nowadays are rapidly changing; in fact, they are more sophisticated and knowledgeable than before, their tastes and preferences have changed, and they are more conscious on health, benefits, and price. In other words, food companies need to examine the new consumption patterns of consumers, thus, appropriate business strategies can be applied (Valli et al., 1999:78). Market Segmentation. Nowadays, companies from different sectors are using segmentation as one of their marketing analyses factors, which are essential in developing marketing strategies in a rapidly-changing and highly competitive environment. Target markets of the food industry today need to be segmented based on significant separating factors because they have a variety of needs and preferences brought by the shifting of demographic, technological advancement, economic status, and many more. In fact, according to Valli et al. (1999), segmentation is the most effective marketing strategy that food firms could use to increase market share within international and domestic food environment. This strategy has imparted benefits to food firms such as the opportunity to identify concerns and perceptions of consumers and find out if ever there is a change of buying patterns and behaviors in the food market. In addition, food firms would also have the ability to properly allocate monetary and non-monetary resources in terms of marketing campaigns and marketing channels. Also, they should be careful with cultural, social, media, and food retailers change because these are the elements that influenced the change in consumer’s attitude toward food (Beer et al., 2009:59). Product Differentiation. This strategy creates unique perceptions, generates loyalty among consumers, and worthy of a premium price despite intense competition. The food industry is full of competitors, which had brought more variety of foods to the public and endangered the loyalty of consumers. Thus, food firms are very determined to have highly differentiated product characteristics in response to the expectations of consumers wherein they ‘require high, quality, safe, healthy, and convenient food’ (Grunow and van der Vorst, 2010:861). Furthermore, this strategy would create homogeneous product characteristics out of heterogeneity in food quality through the modification of evident features, food quality, packaging, branding, and many more (Unnevehr et al., 2010:512). Marketing Communication. The communication strategies that food firms could use are branding and food labelling. ‘Branding is important so that product identification is eased, price comparison is reduced, and the product is known for an established quality’ (Michman and Mazze, 1998:125). This strategy is effective considering that consumers of today prefer quality and safety foods over quantity; thus, the loyalty will be strengthened, and long-term relationship will be nurtured. Another communication option is the food labeling because it makes information more accessible to consumers as they ‘attempt to maximize profits; they will add more information to product packaging so long as each additional message generates more revenues than it costs’ (Oddy et al., 2009:108; Golan et al., 2001:119). Product Distribution. This marketing mix element is one of the crucial tools in the food industry considering that the nature of food is perishable, and it's very prone to contamination if not properly stored. Nowadays, logistics or supply chain management is given so much importance by food firms because consumers have demanded fresh-produced products and rapid delivery of their food (Bourlakis et al., 2011); thus, they are pressured to have an alignment of their supply-raw materials including manufacturers, retailers, wholesalers, intermediaries, etc., and a set of multiple business activities such as third-party logistics and warehouses. Recommendations Food companies should always put consumers’ safety and food quality as primary objectives of their food production because this is the core of every food policy across the world. They should adopt a two-communication from producers to consumers & vice-versa, so that loyalty will be created, as well as the long-term relationship. It is also important to have a regular conversation with end-users to be updated with their demand, needs, and preferences, thus, satisfy and serve them well. Furthermore, to improve their communication and coordination with stakeholders, they could use the standard transaction formats and protocols called the Electronic Data Interchange (EDI) capabilities and the Radio-frequency Identification (RFID) chips for inventory purposes. This is the right time for food firms to run away from conventional food chain management because they need to meet the expectations of both virtual and real consumers. In terms of environment and social issues, food firms should give more emphasis on eco-management and waste management to preserve the natural base resources of food products through recycling and degradation of packaging materials. Also, they could use the nitrogen-efficient farming to lessen the pollutants and preserve the nutrients of the agricultural land. Also, companies should follow the food labeling regulation to ensure the safety of consumers and reduce the poverty level considering that there is no need for them to incur high medical costs because they are directed to sustainable choices (Diez, 2007:155). In this modern economy, food firms need to get rid of traditional research and food production because this is the right time for innovative research to gain a competitive edge. The new market trend of food production is from ‘farm to table’; thus, it is important that they will provide a food handler or hygiene training to their staff and be consistent with their production chain (Egan et al., 2006:1181). Conclusion The global food growth is stable, but food firms have encountered challenges from the society, environment, and economy that are difficult to ignore because these have negative effects on consumer’s purchasing pattern and behavior. These current trends and objectives have acted as catalysts for food companies to implement long-term restructuring in food fabrication and processing. Thus, they have formulated new marketing strategies and marketing mix to be resolved in the current trends of the food sector and food policies. Food businesses and agencies in the global food environment have acknowledged that the best way to restore consumer confidence and demand is to reorganize the food policy or have a consistent food system. 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