Impact of COVID-19 on the Internationalisation of the Spanish Agri-Food Sector
Abstract
:1. Introduction
2. Theoretical Framework
2.1. Industry Analysis
2.2. Literature Review
3. Materials and Methods
3.1. Literature Review
3.2. Method Selection
3.3. Case Selection
3.4. Data Collection
3.5. Data Analysis
4. Findings
4.1. International Context: Challenges and Opportunities
“Obviously, we have a long history in Spain, where the company’s activity is huge, but we already have a ceiling here… well, we found a ceiling that has been leading to higher marginal costs every year. Therefore, commercial operations have been internationally expanded to nearby countries at the beginning, and yes… the purpose of the company is to go out to all exporting markets because they are where growth opportunities can be found”.
“We go more to developing markets because there are more opportunities. Agri-food sector is highly mature in developed markets”.
“At the international level, each year we have increased exports and they have gone from representing less than the 10% of the company’s activity, to represent a 30% in 5–6 years”.
“The brand “Spain” related to agri-food products is always well seen in the international market, it is sold very easily and at relatively high prices”.
“One of the most important challenges in international markets is that the business models that are progressing faster are mainly based on retailers’ brands or distributors’ brands, so that, our private brands have to compete with these brands that are very powerful. And if we produce retailer brands, margins and recognition are lower”.
4.2. COVID-19 Impact on Internationalisation of Spanish Agri-Food Sector
4.2.1. Main Changes and Adaptations to Be Faced Due to COVID-19
“To sum up, in international markets, we need to adapt 100% to our clients according to their new requirements because of the COVID-19 pandemic, what supposes an important challenge”.
“Well, the initial challenge was that efficiency was lost, especially in large companies like us. There are companies that are smaller and may have had more flexibility. In factories like ours, which are huge, highly technical and with very large volumes, it was a challenge to adapt the production losing the least possible efficiency”.
“Regarding culture, there is a part that I have told you before about habits, like we like orange and others like apple, what also implied different changes in demand depending on the country. And there is another cultural part of the negotiation. Negotiating with a Chinese is not the same as negotiating with an Arab or an American. All of them started to demand new different requirements related to the COVID-19. So, you must adapt to preferences and cultures, and that is why I told you before that the main basis of international business are in people with experience and who know the dynamics of negotiation with different cultures in dynamic environments”.
“In the end, you have a peak of demand, it is true, but it does not benefit you at all because operations cost you much more than before. I mean, moving factories that can also be infected, or stopping the factory workers get infected are very costly issues. You also have to spend more money in cleaning, dressing, employees shifting, you have to put buses because otherwise they mix with people over who you don’t have control, it is a must to provide EPIS, COVID-19 tests… Moving and organizing industrial operations that involve many people in a big factory is very expensive, because it cannot be tele-worked”.
“To the extent that this economic crisis will produce changes in consumer buying behaviour and companies, we will have to be attentive to accommodate our offer to the changes that can occur in consumer behaviour, because of a decrease in available income among other factors. In that sense, we can say that it is the most immediate future that we have to face now”.
“Normally your company is adapted to certain levels of demand. Then, when demand changes a lot like in the lockdown, you have to adapt the factories and production processes and sometimes it is not easy”.
“The demand does not usually have such sharp peaks as now in the pandemic, they tend to be more attenuated curves and to which you can adapt over time whether they increase or decrease. But the pandemic is being so extreme, it is very important to forecast and adapt new demand as good as possible”.
“During the lockdown we experienced an important decrease of national demand. Then, the company tried to increase international operations, and thanks to an increase in exportations we were able to keep the company’s turnover”.
“Since there were no containers in China, they sent ships full of empty containers to China, so if you wanted to get on the ship to carry products the cost was much higher. The operational cost was increased because in the end it is different to share a ship in which the costs are going to be distributed among all the companies that have a space on that ship, than taking the empty container shipping company to China. Then if you want to take one your cost will be much higher, being affected till the point that the price was almost double comparing with few months ago. A few months ago, a freight to China could cost you around 1000 or 1100 euros, in confinement it rose to 1300 and now it goes for about 2100 euros. So that container deficit is another factor that affects us a lot.”
4.2.2. Main Risks Faced during the COVID-19
“The main risk during the COVID-19 pandemic is being the payment risk. You have to try to have the risk insured either in an insurance company or with a form of payment that ensures your credit, such as a letter of credit”.
“Regarding payments, it is the risk about which we are more worried always, and during the lockdown it has become even more important. We have started to mistrust more new clients and clients from developing countries, which normally fail more payments. However, in some countries like the US, this risk is being also increased as legal issues are very expensive, there are companies that do not pay you because they know that you will not claim it if the amount is not very high”.
“The greatest risk for us, or what scares us the most is a sanitary or health problem, what has been intensified during the pandemic. We take our products and our processes forward, but logically the logistics chain is long, and things can happen in your customers’ stores, and many things can happen that finally affect your product. Further, sometimes the legislation, depending on the countries, is different, what can also generate any type of problem. For example, listeria in meat products is a risk of intoxication, and sometimes the rates of diphtheria that I handle in Spain in any sausage may be higher than those that can handle in other countries. We are always afraid of coming out in some negative news, as in news of that type, that is what scares us the most… For instance, now if many workers of a company get infected, the image of the company can be highly damaged, and sales will also decrease, what will have much worse effects now, because due to the pandemic people is much more worried about sanitary issues. We offer many guarantees, we never run any risk for that to happen, but such problems can always happen”.
“We have a super exhaustive quality control policy with all our approved suppliers. And for the business with our clients, we have a monthly control review. For example, we also use specific devices to control the temperature of the products during the transport. Besides our current COVID-19 protocols are very exhaustive and we require the same to our suppliers”.
“Before starting a relationship with a new client, we audit their accounts to avoid possible payment defaults. Nevertheless, we have even stopped the credit to very important clients because they were paying with so much delay”.
5. Discussion
6. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
References
- Las Exportaciones Agroalimentarias, Pesqueras y Forestales Continuaron su Tendencia al Alza en 2019 y Alcanzaron 53.180 Millones de Euros. Available online: https://www.mapa.gob.es/es/prensa/ultimas-noticias/las-exportaciones-agroalimentarias-pesqueras-y-forestales-continuaron-su-tendencia-al-alza-en-2019-y-alcanzaron-53.180-millones-de-euros/tcm:30-542609 (accessed on 2 March 2022).
- Sanz, A.V. El sector agroalimentario español frente al reto de la internacionalización. Alimentaria. Rev. Tecnol. E Hig. Aliment. 2018, 490, 66–68. [Google Scholar]
- Calderon, H.; Fayos, T.; Mir, J. Valoración de las políticas de promoción de la internacionalización del sector agroalimentario. La dirección de empresas ante los retos del siglo XXI. Homenaje al profesor Juan José Renau Piqueras. Publ. Univ. Valencia 2009, 3, 465–476. [Google Scholar]
- Preciado, L.B.; Caderón, L.F.E.; Casella, J.A.L. Gestión del riesgo cambiario en una compañía exportadora. Estud. Gerenc. 2011, 27, 219–238. [Google Scholar] [CrossRef] [Green Version]
- Peng, M.Y.-P. Understanding Small and Middle Enterprises’ Internationalization Process at Food and Restaurant Service Industry. In Proceedings of the 2019 16th International Conference on Service Systems and Service Management (ICSSSM), Shenzhen, China, 13–15 July 2019; pp. 1–5. [Google Scholar] [CrossRef]
- Serrano, R.; Olmos, M.F.; Pinilla, V. Internationalization and performance in agri-food firms. Span. J. Agric. Res. 2018, 16, e0107. [Google Scholar] [CrossRef]
- Magnusson, P.; Westjohn, S.A.; Semenov, A.V.; Randrianasolo, A.A.; Zdravkovic, S. The Role of Cultural Intelligence in Marketing Adaptation and Export Performance. J. Int. Mark. 2013, 21, 44–61. [Google Scholar] [CrossRef] [Green Version]
- Samiee, S.; Chabowski, B.R.; Hult, G.T.M. International Relationship Marketing: Intellectual Foundations and Avenues for Further Research. J. Int. Mark. 2015, 23, 1–21. [Google Scholar] [CrossRef]
- Tang, C.F.; Abosedra, S. Logistics performance, exports, and growth: Evidence from Asian economies. Res. Transp. Econ. 2019, 78, 100743. [Google Scholar] [CrossRef]
- Ulloa, I.J.F.; Rojas, C.E.V. Diagnóstico de la cadena logística de exportación del banano ecuatoriano hacia estados unidos de américa. Saber Cienc. Y Lib. 2014, 9, 77–90. [Google Scholar]
- Weersink, A.; von Massow, M.; Bannon, N.; Ifft, J.; Maples, J.; McEwan, K.; McKendree, M.G.; Nicholson, C.; Novakovic, A.; Rangarajan, A.; et al. COVID-19 and the agri-food system in the United States and Canada. Agric. Syst. 2020, 188, 103039. [Google Scholar] [CrossRef]
- Hossain, S.T. Impacts of COVID-19 on the Agri-food Sector: Food Security Policies of Asian Productivity Organization Members. J. Agric. Sci. Sri Lanka 2020, 15, 116. [Google Scholar] [CrossRef]
- Coluccia, B.; Agnusdei, G.P.; Miglietta, P.P.; De Leo, F. Effects of COVID-19 on the Italian agri-food supply and value chains. Food Control. 2021, 123, 107839. [Google Scholar] [CrossRef]
- Zhang, Y.; Diao, X.; Chen, K.Z.; Robinson, S.; Fan, S. Impact of COVID-19 on China’s macroeconomy and agri-food system—An economy-wide multiplier model analysis. China Agric. Econ. Rev. 2020, 12, 387–407. [Google Scholar] [CrossRef]
- Poppe, K. COVID-19 will Change the Agri-food System—But how? EuroChoices 2020, 19, 20–25. [Google Scholar] [CrossRef]
- Coopmans, I.; Bijttebier, J.; Marchand, F.; Mathijs, E.; Messely, L.; Rogge, E.; Sanders, A.; Wauters, E. COVID-19 impacts on Flemish food supply chains and lessons for agri-food system resilience. Agric. Syst. 2021, 190, 103136. [Google Scholar] [CrossRef]
- Corchuelo Martínez-Azúa, B.; López-Salazar, P.; Sama-Berrocal, C. Impact of the COVID-19 Pandemic on Agri-Food Companies in the Region of Extremadura (Spain). Agronomy 2021, 11, 971. [Google Scholar] [CrossRef]
- Montanari, F.; Arayess, S.; Barbarasa, T.; Clavarino, A.; Ferreira, I.; Mahy, A.; Stelios Michałowska, A.; Schröck, C.; Servé Arthur, A.; Wesolowska, V.; et al. The Response of the EU Agri-Food Chain to the COVID-19 Pandemic: Chronicles from the EU and Selected Member States. Eur. Food Feed L. Rev. 2020, 15, 336. [Google Scholar]
- Informe Económico. Available online: http://fiab.es/es/archivos/documentos/INFECO_2019.pdf (accessed on 2 March 2022).
- Ministerio de Agricultura, Pesca y Alimentación. Available online: https://www.mapa.gob.es/es/default.aspx (accessed on 2 March 2022).
- El Sector Agroalimentario Español Demuestra su Solidez en Plena Crisis del Coronavirus. Available online: https://www.elconfidencial.com/economia/2020-11-03/sector-agroalimentario-espanol-coronavirus-bra_2809711/ (accessed on 2 March 2022).
- Los Cinco Retos Futuros de la Industria Alimentaria. Available online: https://www.eleconomista.es/aragon/noticias/10552985/05/20/Los-cinco-retos-futuros-de-la-industria-alimentaria.html (accessed on 2 March 2022).
- La Industria Agroalimentaria Española: Estructura Empresarial y Productividad. Available online: https://www.caixabankresearch.com/es/analisis-sectorial/agroalimentario/industria-agroalimentaria-espanola-estructura-empresarial-y (accessed on 2 March 2022).
- Calderón García, H.; Fayos Gardó, T.; Mir Piqueras, J. La internacionalización de las cooperativas agroalimentarias. Nece-sidad y problemática. Mediterráneo Económico. Colección Estud. Soc. 2013, 24, 61–76. [Google Scholar]
- Juliá, J.; García, G.; Meliá, E. La globalización y los modelos de crecimiento de los grupos cooperativos. Las cooperativas agroalimentarias en España y la Unión Europea. Ekon. Rev. Vasca Econ. 2012, 79, 82–113. Available online: http://hdl.handle.net/10251/29657 (accessed on 2 March 2022).
- Fayos Gardó, T.; Calderón García, H.; Mir Piqueras, J. El éxito en la internacionalización de las cooperativas agroalimentarias españolas. Propuesta de un modelo de estudio desde la perspectiva del marketing internacional. CIRIEC-España Rev. Econ. Pública Soc. Y Coop. 2011, 72, 42–72. [Google Scholar]
- Jack, L.; Florez-Lopez, R.; Ramon-Jeronimo, J.M. Accounting, performance measurement and fairness in UK fresh produce supply networks. Account. Organ. Soc. 2018, 64, 17–30. [Google Scholar] [CrossRef]
- Segovia-Villarreal, M.; Florez-Lopez, R.; Ramon-Jeronimo, J.M. Berry Supply Chain Management: An Empirical Approach. Sustainability 2019, 11, 2862. [Google Scholar] [CrossRef] [Green Version]
- Alza Collantes, C.J.; Manayay Azabache, C.D.P. Factores Críticos que Afectan las Exportaciones de la Empresa J&L Agroexpor-Taciones SAC Durante la Pandemia de la COVID-19, Trujillo; Repositorio de la Universidad Privada del Norte. 2020. Available online: https://hdl.handle.net/11537/25161 (accessed on 2 March 2022).
- Cruz, J. Las empresas cárnicas se vuelcan en la exportación ante la evolución del mercado nacional por la COVID-19. Eurocarne Rev. Int. Sect. Cárnico 2020, 289, 15–30. [Google Scholar]
- Quevedo-Barros, M.R.; Vásquez-Lafebre, L.M.; Quevedo-Vázquez, J.O.; Pinzón-Prado, L.T. COVID-19 y sus efectos en el comercio internacional. Caso Ecuador. Dominio Cienc. 2020, 6, 1006–1015. [Google Scholar]
- Abu Hatab, A.; Lagerkvist, C.; Esmat, A. Risk perception and determinants in small- and medium-sized agri-food enterprises amidst the COVID-19 pandemic: Evidence from Egypt. Agribusiness 2020, 37, 187–212. [Google Scholar] [CrossRef]
- Lehmann, R.; Hauser, C.; Baldegger, R. Managing Export Risks: Export Risk Management Guidelines; Glob. Enter Prise PostFinance AG: Bern, Switzerland, 2013. [Google Scholar]
- Yüksel, S.; Dinçer, H.; Meral, Y. Financial Analysis of International Energy Trade: A Strategic Outlook for EU-15. Energies 2019, 12, 431. [Google Scholar] [CrossRef] [Green Version]
- Sokhatska, O.; Bashynska, I.; Stepanova, T.; Malanchuk, M.; Rybianets, S.; Sobol, O.; Stepanova, T.V. Modelling the risks of international trade contracts. Int. J. Eng. Innov. Technol. 2019, 8, 2278–3075. [Google Scholar]
- Quinlan, C.; Babin, B.; Carr, J.; Griffin, M. Business Research Methods, 2nd ed.; South Western Cengage: Andover, UK, 2019. [Google Scholar]
- Barrett, D.; Twycross, A. Data collection in qualitative research. Évid. Based Nurs. 2018, 21, 63–64. [Google Scholar] [CrossRef]
- Merly, C.; Chapman, A.; Mouvet, C. An End-Users Oriented Methodology for Enhancing the Integration of Knowledge on Soil–Water-Sediment Systems in River Basin Management: An Illustration from the AquaTerra Project. Environ. Manag. 2011, 49, 111–129. [Google Scholar] [CrossRef]
Structure of the Interview | Sample of Questions Used |
---|---|
Personal and company information | Previous work experience Working responsibilities What is the present situation of the company? What is the future of the company? |
COVID-19 impacts on internationalisation process | What is the percentage of international activities in the company? What have been the main impacts of COVID-19? What are the main changes of selling products to international clients before and after COVID-19? How has been coordinated and managed international activity with the COVID-19 pandemic? How has changed the way final consumer is reached?What has been the impact of different cultures on businesses? How have relationships with international clients changed? Did relationships with other companies (externalisations, collaborations, other suppliers…) suffered from COVID-19? What external factors influencing the company changed due to the COVID-19? How is the negotiation of international contracts? |
International risks related to COVID-19 | What are the main risks that your company has to face during COVID-19 pandemic in the international markets? What about legal/political/demand/price fluctuations/sanitary/exchange rate/climate/production risks in relations to COVID-19 crisis? How were those risks managed? |
What are the main risks management systems used by the company? |
Manager Position | Duration of the Interview | Size of the Company | Product Categories | |
---|---|---|---|---|
Interview #1 | Export Manager | 1:02:14 | Medium | Oils |
Interview #2 | Financial and International Manager | 1:51:48 | Large | Preserved food |
Interview #3 | Export and Sales Manager | 1:01:12 | Medium | Oils |
Interview #4 | Export Manager | 0:54:38 | Large | Milk and dairy products |
Interview #5 | Export and Sales Manager | 1:05:29 | Large | Meet products |
Interview #6 | Export Manager | 0:53:21 | Large | Fruit juices |
Interview #7 | Export Manager | 1:00:22 | Large | Chocolate products |
Interview #8 | CEO | 1:13:51 | Medium | Chocolate products |
Interview #9 | Export Manager | 1:07:49 | Medium | Oils |
Interview #10 | International Manager | 0:33:02 | Medium | Drinks and chocolates |
Interview #11 | Export Manager | 0:53:04 | Large | Poultry meat products, eggs, and milk dairy products |
Interview #12 | International Manager | 1:08:57 | Large | Berry Products |
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. |
© 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
Share and Cite
Ballesteros-Bejarano, J.; González-Calzadilla, A.C.; Ramón-Jerónimo, J.M.; Flórez-López, R. Impact of COVID-19 on the Internationalisation of the Spanish Agri-Food Sector. Foods 2022, 11, 938. https://doi.org/10.3390/foods11070938
Ballesteros-Bejarano J, González-Calzadilla AC, Ramón-Jerónimo JM, Flórez-López R. Impact of COVID-19 on the Internationalisation of the Spanish Agri-Food Sector. Foods. 2022; 11(7):938. https://doi.org/10.3390/foods11070938
Chicago/Turabian StyleBallesteros-Bejarano, Javier, Ana Cruz González-Calzadilla, Juan Manuel Ramón-Jerónimo, and Raquel Flórez-López. 2022. "Impact of COVID-19 on the Internationalisation of the Spanish Agri-Food Sector" Foods 11, no. 7: 938. https://doi.org/10.3390/foods11070938