Exploring consumer-driven food value chain and market opportunities in Pacific SIDS countries

Abstract

Consumers and food systems are changing globally, presenting market opportunities for smallholder farmers. However, research into changes in agrifood systems in small island developing states (SIDS), such as Fiji, is rare. This thesis attempts to demonstrate the usefulness of using a value chain approach to better understand consumers and how their changing preferences impact the value chain back to smallholder farmers. Two significant consumer studies were performed; one focused on changes in the domestic Fijian food industry, and the other on a potential niche export market opportunity. This first study involved a survey of 1000 urban Fijian households to better understand their food consumption and shopping patterns and how that has changed in recent years. The study found that modern supermarkets are now the dominant food retail outlet, although traditional markets are still the preferred retail outlet for fresh fruit and vegetables for the majority of urban Fijian consumers. Rising urban incomes and changing consumer preferences appear to be driving this transformation. A Latent Class (LC) cluster analysis of these urban Fijian households revealed five distinct household clusters based on food shopping behaviour. The cluster with the highest income level spent significantly lower amounts on fresh fruit and vegetables (FFV) at the main traditional market, preferring to buy their FFV from modern supermarket outlets. Considering the vast majority of local smallholder farmers rely on traditional market channels to sell their produce, the growth and dominance of Fijian supermarkets are of some concern with potential implications for the livelihood of rural smallholder farmers and the food security of the people of Fiji. Understanding this transformation is critical to Fiji’s social structure and has implications for other Pacific SIDS facing similar challenges. Two key strategies to address this threat were discussed. The first is the opportunity for traditional markets to improve their facilities, quality and food safety to meet changing consumer needs and compete with more modern supermarkets. The second strategy is to find ways to better link smallholder farmers to supermarkets using specialist wholesale traders or horizontal farmer alliances with the help of government and donor stakeholders. The second study examined the growing ethical consumer market and the potential propoor niche export market opportunities for a range of Pacific SIDS countries. A LC cluster analysis of ethically conscious Australian Oxfam consumers (n=637) has identified four distinct consumer segments. Two of these clusters are considered good target markets for value-added Pacific food products, with the ‘origin’ and ‘story behind the product’ found to be particularly important to these consumer groups. In addition to the direct insights for Oxfam and Pacific food companies looking to target new niche export opportunities, this study also contributes to the growing literature on ethical consumerism in the context of social, regional and pro-poor aspects in an emerging economy. The final chapter combines the two consumer studies to highlight the importance of using a market-driven value chain approach to identify opportunities. A key opportunity for Fiji is for them to combine their competitive advantages of agriculture and tourism into valueadded products for consumers willing to pay for them, whether that is via export or tourism within Fiji. This strategy can improve farmers' livelihoods and have spill over benefits to the wider economy, but it will require the collaboration of government, donors and the private sector to make it happen.