The World Wide Web in the Food and Beverage Sector in Spain

By Rodriguez-Ardura, Inma; Ryan, Gerard A. | International Advances in Economic Research, November 2000 | Go to article overview
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The World Wide Web in the Food and Beverage Sector in Spain


Rodriguez-Ardura, Inma, Ryan, Gerard A., International Advances in Economic Research


GERARD A. RYAN [*]

Despite its potential, the World Wide Web is not yet a real or viable alternative for marketing channels in Spain. This research attempts to identify and evaluate the factors that contribute and facilitate the development of the Web as an environment for commercial activities in the food and beverage sector in Spain. Spanish consumers have traditionally shown little interest in all forms of distance buying and direct marketing. A range of factors may facilitate this development such as continuous growth in access to the Internet, continued evolution of computer technology, reductions in Internet connection tariffs, and communication speed. Consumers' income, the availability of information online, and the online consumption experience may also act as an impulse for commercial developments on the Web. (JEL M31)

Introduction

The interactive nature of the World Wide Web facilitates a permanent dialogue with the consumer and represents significant opportunities to explore new sales opportunities [Brady et al., 1997, p. xix]. According to Whinston et al. [1997, p. 21], the Internet can be used to adapt products to the precise needs of the consumer, forecast future demands, and define business strategies. Nevertheless, in spite of its potential, the Web is not yet a real or viable alternative for marketing channels in Spain. Still, a small number of consumers have access to this virtual channel, and even fewer are using it for buying goods.

This research attempts to identify and evaluate the factors that contribute and facilitate the development of the Web as an environment for commercial activities in Spain. The analysis of these factors is a vital first stage in understanding business success in this new environment.

The Approach to Food and Beverage Sales Systems in Spain

According to research carried out by the Ministerio de Agricultura, Pesca, y Alimentacion (Ministry of Agriculture, Fishing, and Food) (MAPA) [1996], the most commonly used channels by Spanish consumers when buying food and beverage products are, on one hand, traditional retail outlets and, on the other hand, hotel and restaurants, a growing industry sector in Spain.

Though the frequency of eating out by Spanish consumers is increasing (representing approximately 26 percent of total food expenditure), the level is relatively low compared to other countries such as the United Kingdom (32 percent) and the U.S. (47 percent) [MAPA, 1996, p. 41]. On average, European consumers' food expenditures represent 20 percent of their total income. In Spain, this proportion is about 23.5 percent [MAPA, 1996, p. 42].

The total food expenditure in 1995, including home consumption and consumption by hotels, restaurants, and institutions, was 7.9 billion pesetas (ESP), 74 percent of which was spent on domestic consumption. This represents, an approximate annual expenditure of 149.877 ESP per person [MAPA, 1996, pp. 42-4, 69].

Consumers' Eating Habits

General eating habits for both Spanish and European consumers suggest the following trends [MAPA, 1996, p. 39]:

1) There is a general desire for natural and healthy food products and a reduction in total consumption levels.

2) Eating is integrated with leisure activities. High-quality food consumption is linked with prestige and status.

3) Time dedicated to preparing meals is reduced.

4) Eating out has increased.

These changes in buying habits and food consumption do not provide any predictions of consumers' reaction to the possibility of purchasing food products over the Web. [1] In fact, Spanish consumers have traditionally shown little interest in distance buying and direct marketing, as shown in Table 1. The lack of confidence in these selling methods is mainly due to their limitations in terms of product presentation, the popularity of traditional shopping, and the geographic proximity of most retailers, among other reasons.

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