Adoption of Geographical Indications and origin-related food labels by smes – A systematic literature review

Abstract

A regional supply of high-quality food products is considered sustainable and desirable by consumers and policymakers. Geographical Indications and other origin labels help communicate the regional origin of foods to consumers. Nonetheless, the adoption of these labels by small and medium-sized enterprises (smes) in the food sector is low. Based on an extensive review of the literature, this article provides a synthesis of existing empirical findings related to the adoption of Geographical Indications and other origin labels by small and medium-sized enterprises in the food sector. It presents a conceptual framework to reflect the adoption decision and lay the groundwork for identifying barriers faced by these firms. Adoption factors are divided into internal and external factors from the firm's perspective. Internal factors are CEO personality, firm characteristics, economic aspects, and strategic goals. External factors are structured along the value chain into primary production, competitors, indirect marketing distribution channels (such as retail, wholesale, and export), and consumers. Additional external factors capture the larger institutional environment in which the firm operates and includes consortia and cooperatives, certification companies, and government. The literature has identified economic and marketing strategy aspects as critical adoption factors, and evidence suggests that altruistic motives of ceos play an important role. Limited knowledge of Geographical Indications and other origin labels and the effort required to obtain/use such labels was identified as a significant barrier to adoption. This article concludes with recommendations for label licensors and, more generally, policymakers. Improved communication along the value chain is required for higher levels of label adoption.

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