To address sustainability, traditional supply chains need to be extended to include consumers. Responsible production is not enough for sustainability – we need responsible consumption. Changing consumer behavior plays a key role in transitioning to sustainability.
In today's growing economy, overconsumption and overproduction have accelerated environmental deterioration worldwide. Consumers, through unsustainable consumption patterns, and producers, through production based on traditional resource depleting practices, have contributed significantly to the socio-environmental problems. Consumers and producers are linked by supply chains, and as sustainability became seen as a way to reverse socio-environmental degradation, it has also started to be introduced in research on supply chains. We look at the evolution of research on sustainable supply chains and show that it is still largely focused on the processes and networks that take place between the producer and the consumer, hardly taking into account consumer behavior and its influence on the performance of the producer and the supply chain itself. We conclude that we cannot be talking about sustainability, without extending the supply chains to account for consumers' behavior and their influence on the overall system performance. The “Extended Sustainable Supply Chain” (ESSC) is as an extension to the traditional concept of sustainable circular supply chain that includes behavioral aspects of consumers.
To demonstrate the practical implications of the proposed concept, we develop a multi-scale complex system model for wine industry. In viticulture, since the introduction of chemicals in the 19th century, it has significantly contributed to a wide range of environmental issues particularly those related to land and water pollution. Organic agriculture as a part of the solution can partly moderate the overall environmental impacts of vineyards by increasing biodiversity and improving the quality of soils. Wines produced with organically grown grapes are not only less environmentally harmful, but they are healthier with higher content of antioxidants (30%) and better taste than conventional wines. Despite the health and environmental benefits of organic wines, their global market share is lower than 10% and only 5% of the World's vineyards are organically certified. Conversion to organic vineyard is entailed with significant upfront costs for gaining organic certifications, lower yields of crop in comparison to conventional, and high risk of loss due to diseases. Without additional support and incentives from consumers, it is unlikely that organic conversion can be financially viable for farmers. Consumer choices and their willingness to pay more for organic wines can offset initial investment and motivate them to establish organic vineyards.
We simulate adaptive behavior of farmers , wine makers, distributors, retailers, and customers to analytically show that changing consumers preferences for green products feed backs into the design and organization of the supply chain. A multi-method approach including agent-based modelling, discrete-event simulation, system dynamics and life cycle assessment are used for the model development. The model can be used to explore the dynamics of organic/conventional wine demands and prices derived by farmers, retailers, and consumers decisions and highlights the economic, sociol, and environmental performance of the entire wine supply chain.
To the best of our knowledge, this is the first preliminary study that incorporate the preferences of consumers for organic wine as well as the farmers decisions about conversion to the organic farms into the modelling of food supply chain. While most of studies conducted in the field of food supply chain have ignored the changes in the willingness to pay for organic products, demand substitutions, organic land use, and agricultural intensification, they are taken into account in this study.