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Understanding Malaysian Food Retailers' Perception of and Attitude

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Understanding Malaysian Food Retailers' Perception of and Attitude Understanding Malaysian Food Retailers’ Perception of and Attitude Towards Organic Certification A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy of Marketing in the University of Canterbury by Muhammad Azman Ibrahim University of Canterbury 2016 ABSTRACT This research focuses on Malaysian retailers' perception of and attitude towards organic certification. Organic certification is one type of food certification that is used to demonstrate product attributes in order to obtain consumer trust and also to differentiate between organic and non-organic products. The primary purpose of food and organic certification is to provide greater information and certainty to consumers as to the origins and nature of food as well as to differentiate the product from those that do not fulfill certification requirements. Certification also provides opportunities for retailers to develop operational and product differentiation strategies that focusing on other qualities instead of pricing such as convenience, providing variety, consistency, quality and safety. In addition, food and organic certification may be important for retailers in strengthening their structural power in food retail and as a retail sustainability strategy that influences consumer behavior related to organic and related food products. The overwhelming majority of studies on food and organic certification focus on consumer and producer perception rather than the retailer, yet retailers contribute to consumer knowledge of, preferences for, as well as trust/mistrust in organic products, as well as the overall availability of organic foods in the food supply chain. In addition, previous research that has been conducted on the importance of food and organic certification in food retail was mainly undertaken in developed countries, with organic food retailing in developing countries and Malaysia specifically, little understood. Therefore, the purpose of this research retailers' perception is to understand Malaysian food retailers’ perception of and attitude towards organic certification. This research took a two-stage mixed method approach to collect data in order to fulfill the research objectives. Research was undertaken by the use of a semi-structured interview with public and private stakeholders in Malaysian food retailing as well as a survey of 102 Malaysian retailers. This research found that organic certification attributes are related to trust, credibility, food safety and quality, environment and traceability. Participants perceived that organic certification is important to ensure the safety and quality of organic food products. Participants also noted that other food certifications have their importance in determining the safety and quality of food products. In Malaysia, where the majority of the population is Muslim, halal certification is perceived to be the most important assurance. However, this research also suggested that organic certification is significant in its own right for some markets while there are potential overlaps between different certifications. However, respondents felt that consumers required greater education on the concept in order to not only ii encourage consumption of organic products but also to help give consumers greater confidence in their purchasing. In addition, potential needs for improvements in the certification and regulation framework were also identified. Keywords: Food certification, alternative food networks, food retailing, organic certification, retailer, Malaysia. iii Table of Contents Abstract ............................................................................................................................... ii Table of Contents ............................................................................................................... iv List of Figures .................................................................................................................. viii List of Tables ..................................................................................................................... ix Acknowledgement ............................................................................................................. xi Acronyms .......................................................................................................................... xii Chapter One: Introduction ............................................................................................. 14 1 Introduction ....................................................................................................................... 14 1.1 Food Certification Concept ........................................................................................ 14 1.2 Organic Principles ...................................................................................................... 17 1.3 Malaysian Organic and Food Retailing ...................................................................... 19 1.3.1 The Development of Organic Food Retailing ..................................................... 21 1.4 Research Objectives ................................................................................................... 22 1.5 Significance of the Research ...................................................................................... 23 1.6 Thesis Outline ............................................................................................................ 23 1.7 Chapter Summary ....................................................................................................... 24 Chapter Two: Food Certification and Standards ......................................................... 25 2 Introduction ....................................................................................................................... 25 2.1 Food Safety and Private Standards ............................................................................. 26 2.1.1 Functions of private standards ............................................................................ 27 2.2 The Development of Food Certification .................................................................... 30 2.2.1 Roles of third party certification ......................................................................... 31 2.2.2 Third party certification in food markets ............................................................ 32 2.3 The Organic Concept and Types of Certification ...................................................... 34 2.3.1 The Development of Organic Certification ........................................................ 36 2.3.2 Organic food as credence product ....................................................................... 38 2.3.3 Consumers trust on organic food products and certification .............................. 40 2.4 Other Types of Food Certification ............................................................................. 43 2.4.1 Sustainability certification .................................................................................. 43 2.4.2 Religious food certification ................................................................................. 51 2.5 Chapter Summary ....................................................................................................... 55 iv Chapter Three: Food Retailing: Organic and Food Certification .............................. 56 3 Introduction ....................................................................................................................... 56 3.1 Emergence of Retail Power in Food Industry ............................................................ 57 3.1.1 Oligopoly ............................................................................................................ 57 3.1.2 Consumer preferences ......................................................................................... 58 3.1.3 Quality ................................................................................................................. 58 3.1.4 Private standards ................................................................................................. 59 3.2 Organic and Food Retailing Strategy ......................................................................... 62 3.2.1 Organic Retailing ................................................................................................ 63 3.2.2 Organic Food Products Barriers in Food Retailing ............................................. 66 3.3 Organic and Food Certification in Food Retailing ..................................................... 68 3.3.1 Third Party Certification (TPC) .......................................................................... 70 3.3.2 The Advantages of Organic and Food Certification ........................................... 71 3.4 Chapter Summary ....................................................................................................... 73 Chapter Four: Malaysian Retail Industry and Organic Certification ....................... 75 4 Introduction ....................................................................................................................... 75 4.1 Retail in the South-East Asia and Malaysia ............................................................... 76 4.1.1 The South-East Asia organic food industry ........................................................ 80 4.1.2 Certification .......................................................................................................
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