GLOBALIZATION IN THE FOOD INDUSTRY: The impact on market structures and firm strategies

by Arjen van Witteloostuijn

Paper presented to OECD/NL Food Economy Conference 2007

Economic globalization is argued to have gained importance in the 1990s and 2000s due to market liberalization and technological progress. In this essay, I reflect on the likely impact of economic globalization on the food industry. The emphasis is on the consequences for market structures and firm strategies. Applying a resource-based theory of market structure and firm strategy generates five propositions, predicting that, on average, economic globalization in the food industry will increase both market concentration and density, due to worldwide consumer preference convergence and regional differentiation. As a result, the expectation is that large generalist food companies will grow and that the viability of small specialist food incumbents and newcomers will increase.

Available for download here

October 2007