From ‘Additive’ to ‘Multiplicative’ Patterns of Growth

Abstract

Growth processes are uniquely problematic for small-scale farms due to their impacts on a delicate balance of basic internal resources. Most of these resources, such as permanent labour, machinery, structures, and livestock cannot be increased incrementally in linear processes. Additionally, farms with the lowest levels of production have the most problematic task of resource realignment. Due to higher transaction costs and inconsistent quality, market partners are not eager to meet increased demand by increasing the number of suppliers. Instead, these partners ask current suppliers, such as small-scale farmers, to increase the volume of production or they threaten to replace them with larger producers. Thus, small-scale farmers often feel growth is forced upon them. However, there are examples where supply chain actors actively engage to preserve small-scale structures by developing a distinct growth strategy based on increasing the output of an entire network rather than placing the onus on single suppliers. Such novel growth accommodations may contribute to a future food system increasingly sustainable in economic, social, as well as environmental dimensions.

This article uses the case of the cooperative Bioalpin, located in Tyrol, Austria, to examine how such regional networks may be constructed successfully. Bioalpin sells a full range of organically grown mountain products under their own brand, mainly via a family-owned regional supermarket chain. Bioalpin has grown substantially while concurrently supporting small-scale regional production and processing structures. We use the theoretical concept of netchain analysis to explore the organizational structure and the mechanisms of horizontal and vertical coordination in this values-based supply chain. The results of our analysis may shed light on the obstacles or complications associated with a focus on network growth, versus the growth of individual units.