CSR, SMEs AND FOOD RETAILING: Multi-ethnic community

Posted by Kathryn Schwartz on January 06, 2014

For the small and medium-sized food retailers concerned about financing CSR initiatives, the ethnic food market also presents health-based marketing opportunities. As ethnic minority members become more affluent and as concerns about fitness, nutrition and obesity are on the rise, demand for health-oriented ethnic minority foods is likely to grow. Lifeway Foods is one example of developing both a socially responsible and profitable initiative, namely the promotion of two yoghurt/milk based drinks (Kefir from the Caucasus region of Russia and Lassi from northern India) as pro-biotic health drinks for Western consumers with fast lifestyles (Lifeway, 2007). Sales are to be targeted first at the Indian community, then at White consumers; Lifeway hopes to emulate the success of Activia, whose yoghurt brand was launched as a dietary supplement in January 2006 and a year later had sold US$ 100 million of their product. Youth in Peacebuilding

The supply of Halal-based foods represents another significant marketing opportunity. Manchester University main campus canteen serves Halal menu options, supplied locally, which are taken up by some 400 of the 2,500 daily customers and growing. Overall there are around 90,000 Muslim students in the UK, and the absence of Halal menu options meant many students had to go off-campus to get hot lunches meaning some missed the beginning of afternoon lectures. It has been suggested that some Muslim students based their university choices on whether or not Halal food was available on-campus; a crucial financial consideration for British universities in the era of student fees. On a wider scale, The Grocer retail trade journal reported on the expansion of the medium-sized Birmingham-based Pak supermarket chain, which in 2007 opened the UK’s largest ethnic food supermarket. (Lyons T, 2007:10). As well as catering for the considerable south Asian Muslim community, this store will cater for the culinary tastes of Somalis, Afro-Caribbeans and other ethnic minorities such as east Europeans. A great deal of the meat being sold to the

Muslim population a short while ago was not only sub-standard but some of it was not even Halal, and it came to light that poor quality animals were used that had been treated inhumanely. As the Muslim community becomes wealthier, suppliers such as Abraham Natural Produce are supplying organic Halal meats which have been slaughtered correctly and above all from animals that have been treated with compassion (The Grocer, 2007:63). Robust religious ties combined with a higher than average birth rate and increasing affluence render this specialised food sector highly attractive in terms of combining appropriate CSR initiatives with retail expansion in a generally saturated UK food market.

The local clawback of trade effect and a gradual rise in the per capita income of migrant groups relative to the UK average presents a significant opportunity for small independent ethnic shops, as spending power in local ethnic minority neighbourhoods continues to grow. Independent specialist stores are in the best position to compete against and, therefore co-exist with, local supermarkets such as Tesco Express. It is the generalist SMEs, selling little in the way of fresh fruit and vegetables, and often located in poor White areas, that may have most to lose from supermarket expansion. However stores such as The Polish Deli are not confident about the likes of Asda and Tesco stocking more Polish products; the manager of the Deli opined, “I have mixed feelings towards the competition we are facing”. Whether the outcome is positive or negative for small independent ethnic food stores will depend on various individual factors such as its location, local demographic make-up of its customers and not least of all, the manager’s business acumen.

Just as intangibles such as brand value form an increasingly important part of the balance sheet of large corporations, similarly companies of all sizes particularly SMEs need the intangible assets of customer and local community goodwill in order to trade successfully. Company spending on CSR initiatives may be regarded as ‘investments in a goodwill bank’ (Vaughn S, 1999). This ‘bank’ may not yield returns immediately, but then neither do many capital construction or corporate investment projects. If the possible short-termism or scepticism of financial investors and other stakeholders can be overcome, such a bank can eventually produce handsome returns, even giving the company a survival edge over its competitors in the long run.

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