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Small and medium-sized enterprises can benefit from the increased consumer demand for locally produced foods
 8 min read

Consumer trust and confidence in the ability of industrial food systems to deliver safe and healthy products has been undermined by numerous concerns related to health. There were for example the outbreak of BSE in 1996, the foot-and-mouth epidemic in 2001 and the dioxin scare in 2008. Also food authenticity raises concerns, for example genetically modified food or the meat mislabelling in 2012. These repeated scares and controversies have left consumers suspicious of the system that provides us with the majority of our food. It seems that the next food scandal is always lurking around the nearest corner, waiting to be exposed.


Further mistrust in the large-scale industrialised food system is driven by environmental problems, rising food prices and structural inequalities. Food security – meaning access, availability and affordability to a stable supply of high quality food for all -, is another concern, as are health and nutrition, animal welfare, working conditions, rural development and the economic feasibility of quality food production.

Because of these concerns there is a growing interest in ‘alternative’ models of food provision. These alternative approaches aim to reconnect consumers with the food they eat, reconnect the actors along the food chain and reconnect the food system with the natural world. Small and medium-sized enterprises (SMEs) in the food sector are central in developing a more just, equitable and sustainable food system. They are in a good position to tap into consumer demand for more sustainable food.

SMEs can provide a sustainable alternative to large-scale industrialised agriculture.

Gary Goggins, PhD researcher

Social and environmental factors

Efforts at an integrated policy approach that incorporates all aspects of the food system have to date been largely lacking. Where linkages have been made, they tend to focus on the challenges of food security and agricultural production. The problem of food system sustainability is presented as a production challenge that can be addressed by adapting new technologies to improve the efficiency of food production. There may be a need to produce more food using more environmentally friendly methods. However, the type of foods that are produced, where they are produced, under what conditions, by whom and for whose benefit, are equally important.


A more holistic approach to food sustainability is needed, focusing on the structures, systems and relationships underpinning all stages along the food chain. From here, we can develop a more extensive policy framework promoting social and participatory management processes, in which social and environmental dimensions are considered equally as important as technical and economic factors. Integrated strategies to promote better environmental and societal health and greater human well-being can then be more easily put into plans for action. The system of food provision is a key consideration for supporting sustainability - social, economic and environmental - at local and regional levels.

Relationships between producers and consumers are an essential part of alternative food systems.

Gary Goggins, PhD researcher

Beneficial relationships

Advocates for a sustainable food systems approach argue that re-localising the food system and encouraging small-scale production has many benefits. These include enhanced rural development, stabilised incomes and increased security for local farmers, increased local employment, a reduction in food miles, protection of biodiversity, reduced risk of contamination and diseases, increased health and well-being and greater social cohesion. Also the social and human capital in local communities will grow through trust, collaboration, training, education and skill sharing.

 The development of relationships between producers and consumers built on trust, quality and care, is an essential part of alternative food systems. Information about the food is communicated through the relationship between producer and consumer, making alternative food more valuable. Local production, higher quality food, sound environmental management, organic production and greater community cohesion also bring additional value. 

Consumer information

To pass on information about these characteristics might require eco or food origin labelling, interaction between producers, food retailers or other intermediaries and consumers. Direct contact between producer and consumer facilitates the exchange of information. This enables consumers to make more informed moral, ethical or sustainable choices and distinguishes alternative foods from conventional offerings. At the same time the exchange provides producers with feedback on consumer preferences and demands.

The most obvious example of direct contact are seen at farmers markets, farm-shops or through other avenues of direct sale. In a proximate supply chain, intermediary actors take over the role of providing consumer information on food that is produced and retailed in close proximity. Examples of proximate supply chains include restaurants, pubs and hotels selling local produce, supermarkets selling local produce, or specialised retail shops. Also in this category are organisations and institutions which sell or provide locally sourced foods, such as hospitals, educational institutions and workplace canteens.

SMEs can take advantage of the increasing demand for sustainable food systems to grow and develop their business.

Gary Goggins, PhD researcher


Food sector SMEs with an active interest in sustainability can benefit from the added value that the socio-ecological benefits attribute to their products, and command higher prices. The accessibility of sustainable food can be increased by delivery box schemes, specialty shops or supermarkets or through food service intermediaries. However the price that consumers pay must be low enough to make purchasing this food a viable option and high enough to make it feasible for producers and suppliers. In addition, if supplying new markets requires a significant scaling-up of operations, then alternative food systems may be subsumed into conventional supply chains. For example livestock producers in the Scottish-English borders used supply chains that could be considered part alternative and part conventional. Indeed, some producers may prefer a greater integration into conventional supply networks as they feel these offer more stable relationships.

The blurring of the boundaries between alternative and conventional food systems also occurs in the increase in availability of organic produce through conventional chains, such as multinational supermarkets. Critics argue that although large-scale organic farms meet the necessary certification requirements, they do not encompass the original spirit behind the organic movement of local and small-scale dimensions. Nonetheless, the ability of conventional chains to adapt to consumer demand for more sustainable produce is evident.

SME advantages

The transition from conventional to alternative food systems, and the grey area in between, shows that consumers can influence the food system through their purchasing behaviours. Consequently, supermarkets and corporate retailers are showing a greater interest in supporting food sector SMEs, albeit still largely on the terms of the supermarkets. Nevertheless, this shift in policy from multinational retailers might be interpreted as the beginning of a new phase in retailing where SMEs can occupy both alternative and conventional spaces. This allows SMEs to compete and thrive alongside large-scale producers. They can use their comparative advantages, such as greater sustainability or support for local economies, to develop their business and increase market share. When SMEs use effective communication strategies to develop and maintain relationships with consumers, they will be able to capitalise on these advantages and articulate the value-added characteristics of their products.

If you are interested in exploring alternative food chains and opportunities to address sustainability in your production and food distribution processes, the TRADEIT project can potentially support. Please contact your closest TRADEIT Hub via or


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