Keywords

Organic Food, Environment Factors, Sustainability, Mediation, Customer Purchase Intention.

Introduction

Consumers today live in an environment with unparalleled and extraordinary individual comfort, choice and convenience. The increase in the rate of obesity and sedentarily lifestyle people have become health conscious and on the other hand there are reports of environmental hazards. The thought of consumption through sustainability has garnered a huge amount of attention. The various policy makers of international organisations, like organisations for Economic Co- Operation and Development, United Nations, National Research Programs (e.g. in the United States, Norway, and the Netherlands) and Commission for Sustainable Development have started realising that the levels and patterns of modern consumption are not sustainable (Lim, 2017).

Many researchers have tried to understand consumption and also the ways in which sustainable changes are happening. Research done in this area are. ethical consumption (Cherrier, 2005; Shaw & Shiu, 2003), environmental consciousness (Schlegelmilch, & Diamantopoulos, 1996), ecological intelligence (Jacobs, 2009), irrational desires (Elliott, 1997), consumption values (Lee, et al. 2015), place identity (Lee, et al., 2016), extended self (Kunchamboo, et al. 2017), social loading (Wilhite & Lutzenhiser, 1999), cognitive dissonance (Thogersen, 2002), experiential meanings (Ger, 1999), ecological marketing (Chouinard, et al.2011), pro-social marketing (Dibb & Carrigan, 2011), and plenitude consumption (Schor, 2010, 2012), among others (Lim, 2017). The careful mining of natural resources, with a worry for the next generations has poised a gigantic task for organisations who often struggle to balance the equation of environmental concerns and growth (Kumar, & Manrai, 2017).

However, sustainability is talked about in all nooks and corners. Food has been one of the most talked about forms of sustainability.

The ever-increasing population has put a lot of pressure on farmers to over produce food without taking the environment into consideration. This has led to soil degradation, massive chemicals in the foods causing of imbalance in the environment and human life. Presently, food systems have created 2 billion humans with micronutrient deficiencies and 805 million humans constantly hungry (IFOAM 2019). This has forced many organisations to start going back to the roots of growing organic food. As per Ecovia Intelligence the market research firm according to International Federation of Organic Agriculture Movements (IFOAM 2019), mentions that the global market for organic foods has approximately touched 90 billion euros in 2017. The US is the market leader with 40 billion euros, after which is Germany, France and China with 10 billion, 7.9 billion and 7.6 billion euros respectively. The year 2017, many of the biggest organic markets continued its growth rate of 18 percent. Demark recorded the highest market share approximately 13.3 per cent of the total food market. Producing food without exploiting the environment is the way to go as it follows the principles of sustainability.

The Brundtland commission’s (Balderjahn, et al. 2013) definition of sustainable development, “development that meets the needs of the present without compromising the ability of future generations to meet their own needs,” The triple bottom line approach by (Elkington’s, 1997) further emphasizes the main three components of sustainability are social justice, environmental quality and economic prosperity which are closely interlaced. All three components’ people, planet and profit have to and should be met together (Balderjahn & Buerke 2013). Sustainability, therefore defined by the United Nations (UN, 2012) “a principle of a society that maintains the characteristics necessary for a fair social system, environmentally balanced and economically prosperous for a long period of time and indefinitely”. Organic foods supply chain is basically agro friendly as well as ecological, hence it protects the environment, farmers and provides a fair income (Zakowska-Biemans, 2011).

Numerous terms are used to explain sustainable consumer behaviour, green consumption (Peattie 2010; Roberts 1996), political consumption (Micheletti 2003; Micheletti et al. 2004), voluntary simplicity (Iwata 2006), concerned consumers (Connolly & Shaw 2006), ethical consumption (Devinney et al. 2010; Newholm & Shaw 2007), mindful consumption (Sheth et al. 2011), and citizen consumer (Webster & Lusch 2013). The concept discussed by other researchers provide detail in the study of sustainability, nonetheless, they are focused only on a particular characteristic/s of the behaviour of sustainability. In contrast, we are looking at Sustainable Food Consumption in relation to Organic Foods, and plan to understand the whole framework in India, where currently there are many states focusing on getting organic, like the state of Sikkim, is India’s first state to become completely organic, after noticing the various benefits of converting to organic many other states like Gujarat and Madhya Pradesh are going organic. States like Uttarakhand are going back to basics by criminalizing the use of chemical fertilisers. A new law in the state of Uttarakhand will impose Rs. 1 lakh fine and a prison sentence of one year for those violating the law including using chemical fertilizers, insecticides and pesticides in select areas (newindianepress.com, 15 Nov 19). India is becoming one of the major exporters of organic foods in the world.

As the demand for organic foods in constantly increasing, India has exported organic products worth $515 million in the financial year 2017-18, from $370 million in 2016-17, which is a hike of almost 35 per cent (Agricultural and Processed Food Products Export Development Authority (APEDA), 2019). The organic food market in India is constantly growing at a CAGR of 25 per cent and it is likely to reach ₹10,000-₹12,000 crore by 2020 from the current market size of ₹ 4,000 crore (Assocham et al.,2019)

The availability of organic food online and the change in the preference of consumers towards organic food are some of the few foremost attributed that is likely to push demand for organic food products. The ever-increasing distribution and marketing including the increasing number of health-conscious people are some reasons fuelling this demand.

This phenomenon of organic however, studied in various research work is mostly related to health. However, there is a lot of talk regarding sustainability, the question today is do consumers really take sustainability seriously and are they intending to purchase organic food for their health purpose, environmental purpose or their hedonic satisfaction. This research tries to identify the determinants of purchase intention and actual purchase behaviour of organic foods. This paper focuses on the urban Indian purchase behaviour of organic grocery though online channel.

Literature Review

Consumers purchase intention and actual purchase for organic grocery varies across the globe. (Radojević, et. al (2021), based on the random sample carried out in the major cities in Serbia ie. Novi Sad and Belgrade, demonstrated that consumers of organically grown products could possibly grouped into clusters based on specific attributed connected to the product characteristics. Based on the research the attribute of education where in consumers with higher education are the ones who cared about health food. A particular segment in the US had strong correlations with the environmental concerns, knowledge and health related concerns along with demographics like age, gender age etc. However, the research also mentions a segment of consumers those individuals that are negligent, these were fairly younger with high level of education and did not demonstrate much interest for nutritional value, quality etc. The research findings by Govindasamy, et. al (2020) also mentions that variables related to demographic along with a graduate or advance degree have a higher likelihood of purchase certified organic produce. Even though there are a certain set of consumers not experimenting with organic food this is due to multiple factors and the consumers are to be informed about the same (Ashraf & Joarder 2019) states that trustworthiness, self – efficacy, attitude, normative structure, perceived behavioural control and subjective norm, from this only subjective norm is not significantly statistical to influence organic food behaviour purchase. Studies carried out by (Li & Jaharuddin, 2020) states that intent to purchase hugely mediates the connection with every point of purchase, attitude, perceived behavioural control and culture of food therapy, along with the purchase decision with regards to organic food, thus implies that the effects of the three factors on purchase decision on consumer purchase with respect to organic food is most surely to depend on the mediating aspect of intent to purchase. (Nguyen et. al. 2019) the attitude – behavour gap, connecting to the organic food consumers consumption and purchase. The attitudes of consumers of Vietnam with regards to purchase organic grocery does not significantly transfer to actual purchase. Price to bares negative effect on consumer purchase frequency of organic food. The factors reiterated by (Nguyen, et. al. (2019) are environmental concern, health consciousness, food safety concern and organic food knowledge radically reinforce attitudes towards purchasing organic food. As Ham, (2019) fostering purchase and consumption of organic food, the major mission is in educating the consumers, thus leading to believe that the food grown without toxic substances has multiple positive effects not only on their health but the health of the families too. Additionally, consumers would want to change their dietary options to environmentally friendly and organic foods if convinced that organic food taste equally good in Table 1.

Consumers having an attitude which is positive towards organic food products are mostly going to buy organic foods. (Gomathi & Kalyani, 2013).

Similarly, marketplace knowledge is likely to endorse organic foods by telling either the possible advantages from organic methods (good / positive framing) or the possible bad / negative outcome of traditional agriculture (bad /negative framing) (Gifford, & Bernard, 2006). The advantages of organically grown foods are advantageous to different stake holders, the environment, consumers and farmers (Vasudevaraju, & Padashetty, 2013). The consumers of today are well informed and educated to choose the products of their choice keeping in mind the quality, price and other advantages of the products. (Vasudevaraju, & Padashetty, 2013). Increasing use of the internet in India has led to the growth for E – Marketers. Targeted advertising regarding the product warranties, product features, certifications of websites and options for customer complaints and feedbacks are the factors that will go a long way in building confidence in the E- shopping sector in India (Kiran, et al. 2008).

The conceptual study of this paper is built on the fundamental principles of marketing, the marketing mix the four P’s of Product, Price Place and Promotions (Anderson & Taylor 1995) and the new marketing mix which is the four C’s which include Concept, Cost to the consumer, Channel and Communication (Wasmer & Stevenson, 1997) and the framework of UTAUT (Venkatesh, Thong, et al. 2011). The UTAUT model (Venkatesh, et al. 2003) was derived after a review of 8 models. This model is drawn on the theory of reasoned action (TRA), the technology acceptance model (TRA), the motivational model, the theory of planned behavior (TPB).

Using the UTAUT model we identified two constructs that we used for our research, there are facilitating conditions and social influence. Facilitating conditions is defined as the degree to which an individual believe that an organizational and technical infrastructure exists to support use of the system (Venkatesh, et al. 2003). In the similar way social influence is explained as the degree to which an individual perceives that important others believe should use the new system (Venkatesh, et al. 2003). However, social influence had to be dropped as it failed the validity test.

The literature review also identifies the gap to understand and study the mediating effect of Trust between the purchase intention and purchase behavior (Kumar, et al. 2017).

Conceptual Framework and Hypotheses

Following is the conceptual framework based on the literature review- to be empirically tested in Figure 1.

Figure 1 Proposed Framework

Environmental Factors - Comprise of Environmental concern, Safety, Health and Quality.

Environmental concern

The process used to produce organic food has less or minimal adverse effect on the environment (Laheri, & Arya, 2015); (Paul & Rana 2012); (Regine, 2011); (Nasir & Karakaya, 2014); (Gomathi, & Kalyani, 2013); (Wee, et al. 2014).

Safety

Any organic food involves less risk to consume (Canavari, et al. 2002) Heath- Consumption of organic food will result in good health (Nasir & Karakaya, 2014); (Paul & Rana, 2012).

Quality

Perception that Organic food has some unique attribute which are better than conventional food products. Canavari & Bazzani et al. (2002); Ali, et al. 2010; Paul & Rana, 2012).

Social factors

Hedonic motivation and Social acceptance Hedonic motivation- Self-gratification obtained by consuming organic food (feeling of pampering yourself) (Nasir & Karakaya, 2014) Social acceptance- Ones belief about whether others think that one should engage in this activity. (Fusilier, & Durlabhji) (2005); Paul & Rana (2012). Social influence (Venkatesh & Morris et al. 2003) is a part of Social factor however, social influence was dropped as it failed the validity test.

Therefore, the construct of social factor is defined by only two antecedents’ hedonic motivation and social acceptance.

Availability

Availability of the Organic Food (ease of availability in the online shopping channel) (Paul & Rana 2012).

Facilitating conditions

The degree to which an individual believe that an organizational and technical infrastructure exists to support use of the system (Venkatesh & et al. 2003).

Promotion

Any type of marketing communication or campaign to persuade the customer to purchase the product. (Ramus & Asger Nielsen 2005).

Purchase intention

Intention to buy – is defined by the information followed by instructions given by the consumer to himself to act in a particular way (Paul & Rana, 2012); (Marques et al. 2013).

Trust

Consumer’s belief that the product is organic based on the Labels and Certification (Hamzaoui Essoussi, & Zahaf, 2008), Ku (2012).

Actual purchase

The actual behaviour exhibited by the customer to buy the product. (Ralston & Abha, 2018).

The Price is not considered as it failed the test of validity. The consumer does not mind paying the price since the consumer sees value in it.

Hypotheses

H1 Environmental factor, Social Factors, Availability, facilitating conditions of the online mode/portal, and marketing promotion positively influences the Purchase intention of Organic food.

H2 Trust of the customer mediates the direct relationship between the purchase intention and actual purchase of the organic food.

Methodology and Measurement

Data Collection and Sample

We used questionnaire survey to collect the data and examine the conceptual framework shown in Figure. 1 consisting of direct and mediating relationships.

The research setting was Indian urban cities, Mumbai and Pune. These cities were chosen as the literature review showed that demographic of the customers the Generation Y consumers Regine et al. (2011), who are educated and tech savvy and have disposable income. On the other hand, the metro cities of India are fast developing and provide a variety of options to the customers.

The content validity of the questionnaire was ascertained before mailing it to the respondents by discussing it with a few respondents who had previously purchased any environmentally sustainable product to remove ambiguity in the questions. The questionnaire was then administered through an online survey to a sample consisting of 600 customers. The questionnaire also captured the demographic profile of the respondents. The number of responses obtained was 392 making the response rate equal to 65%. Table 2 displays the demographic profile and sample descriptive statistics in Table 2

Instrument.

Established validated scales were adapted from the literature used for the studies on topics related to organic food consumption and environmentally conscious consumer behaviour, environmental knowledge, Technology adoption model, subjective norm and social factors, product promotion, product distribution and availability, purchase intention and purchase behaviour. The scales used were measured on a 5-point Likert scale where 1 denoted strongly agree and 5 denoted strongly disagree. The construct Environmental factors in this study was defined as comprising of health, safety, environmental friendliness and quality, in which health had four items, safety had three items, environmental friendliness had three items and quality had three items, which was a total of thirteen items. The scale for health were cited in (Nasir, 2014 & Karakaya, 2012), the scale for safety was cited in (Canavari, & Bazzani, et al. 2002), for environmental friendliness was cited in (Laheri, & Arya, 2015; Paul, & Rana, 2012; Regine, 2011; Gomathi & Kalyani 2013; Wee et al. 2014; Nasir & Karakaya, 2014) however, for the construct validity for one item was dropped. The scale of quality was cited in (Canavari, Bazzani, et al. 2002); Ali, et al. 2010, Paul & Rana 2012).

The construct of availability was cited in (Paul, J., & Rana, J. 2012), this initially had seven items however to maintain a strong validity three items were dropped and only four items were considered. The construct of Facilitating Conditions includes ease of use and security, ease of use was cited in (Fayad, & Paper. 2015) and security in (Lallmahamood 2007; Kalakota & Whinston 1997). Promotion being the next construct had three items in all cited in (Ramus & Asger Nielsen, 2005). Social factors is a combination of Hedonic and Subjective norms or Social Acceptance and Social influence each of them have two items, however the items of social influence were dropped as they could not make it in the validity test.

Thus, the social factor scale in this study landed up being a scale comprising of only hedonic motivation and social acceptance. Hedonic and subjective norms have been cited in (Nasir & Karakaya 2014); (Fusilier & Durlabhji, 2005), Paul & Rana, (2012) respectively. Purchase intention as a construct was adopted from (Paul & Rana 2012) & (Marques Vieira & Dutra De Barcellos, et.al. 2013), it has a total of five items. Actual purchase had five items in all which were borrowed from (Brown & Ralston 2003); Abha (2018). The last construct trust has six constructs in total however, one had to be dropped to maintain the validity leaving five items in total, and the construct was borrowed from (Hamzaoui Essoussi, & Zahaf, 2008 & Ku, 2012. The other construct of taste was taken in the actual analysis however, it did not show in the validity, hence the entire construct was dropped from the model.

This study also included constructs like Emerging Markets (Thogersen, et al. 2015) and Price (Ramus & Asger Nielsen, 2015). However, both these constructs were dropped as they failed the validity test.

Empirical results

Structural equation modelling (SEM) was used to verify the conceptual framework and the hypotheses using AMOS software with maximum likelihood estimation (Joreskog & Sorbom, 1996). The two-stage process suggested by Anderson & Gerbing (1988) was adopted and the measurement model along with the structural model was investigated using AMOS 20.

Measurement Model

The CFA model was operationalized which included all the constructs in the model. The resulting model produced good fit indices: χ²=1600.841, degrees of freedom (df)=758, Tucker-Lewis Index (TLI) =0.924, comparative fit index (CFI)=0.933, goodness of FIT (GFI)=0.835, root mean square error of approximation (RMSEA)=0.053. The t-values corresponding to all the items were significant (p<0.01). Convergent and discriminant validity, average variance extracted (AVE), and composite reliability.

Table 3 above reports the correlation and square root of average variance extracted (AVE). There is positive correlation between environmental factors, social factors, facilitating condition, promotion, purchase intention, trust and actual purchase. There are two measures to look at the reliability of the constructs. The first measure is ascertained by examining the loading of items of each construct.

The item loadings of all the constructs reported in Table 4 below are significant as the t-values corresponding to all the items were greater than 2 (Anderson & Gerbing, 1988) and above a minimum cut-off value of 0.7 (Hair et al. 2011) except in few items where the values tended to 0.7.

One item each from environmental factor, availability, trust, and two items from social factors were deleted due to the value of the item loading being less than 0.7. The second measure, Cronbach's α is also the measure of reliability. The minimum cut-off value for Cronbach's α is 0.7 (Hair, et al. 2011). As shown in Table 2, value of Cronbach's α for the constructs in this study vary from 0.71 to 0.96. The measurements for all the constructs are acceptable for reliability as the numerical values of these are more than 0.7 (Hair, et al. 2011). The value of composite reliability of the constructs in this study ranges from 0.72 to 0.96 which is more than the recommended level of 0.7 suggested by Gefen et al. (2000). To verify the validity of the constructs in this study, convergent and discriminant validity were assessed.

To assess the discriminant validity, the square root of AVE shall be greater than the correlation between the construct and the other construct in the model (Fornell & Larcker, 1981). On examining Tables 2, it can be found that the square root of AVE is greater than the correlation between the constructs in all the cases. Therefore, the discriminant validity of all the scales was supported. For assessing the convergent validity of the scales, it is necessary that the value of AVE shall be greater than 0.5 (Bagozzi & Yi, 1988). As per the data displayed in Table 2, the values of AVE vary from 0.5 to 0.72 for the constructs which confirm the convergent validity of the constructs. The composite reliability and the value of Cronbach's α in al the scales were acceptable. Thus, all the scales demonstrated the reliability, convergent validity and discriminant validity.

The Structural Model

The estimation of the structural model was done using AMOS using maximum likelihood estimate (MLE). The test of overal fit of the model produced a chi-square (χ2) value of 2003.307 with 776 degrees of freedom, and the model had a p-value less than 0.000. The value of Goodness-of-fit index (GFI) was 0.80 which was as per the recommended acceptable value of 0.80 (Byrne, 2001; Kline, 1998). The value of Comparative Fit Index (CFI) was 0.903, and the Tucker-Lewis Index (TLI) was 0.900. Both of these indices were within the acceptable limit of 0.9 (Hair et al., 2011) and thus can be considered satisfactory. The value of the Root Mean Square Error of Approximation (RMSEA), which is an absolute measure of the parameter of fit, was equal to 0.064. Thus, it was within the acceptable cut-off level of 0.08 (Hair et al. 2011). The ratio of chi-square (χ2) and degree of freedom was 2.582, which was below the recommended upper cut-off value of 3 (Kline, 1998). An examination of the value of different fit indices and comparing the values with recommended acceptable limits described in the extant literature, it can be concluded that the data fits the conceptual framework well. Table 5 below provides the path coefficients and influencing factors of the structural model. Mediating effect of Trust on the relationship between Purchase Intention and Actual Purchase for organic food.

The mediating effect was tested using the bootstrap technique in AMOS 20 with the Bias corrected percentile method. The Two tailed Significance value for purchase Intention and Actual Purchase was 0.009 which is less than 0.05, hence it is significant, which indicates that Trust mediated the relationship between Purchase Intention and Actual Purchase. Again, shown in the table 6, the result of the structural model shows the relationship between purchase intention and actual to be significant without the mediator and the path coefficient is 0.624. After mediation with trust the relationship between purchase intention and actual purchase, purchase intention with trust, and trust with actual purchase, all three are significant with path coefficients 0.674, 0.154 and -0.333 respectively, which indicates that there is mediation effect. Table 7 shows the total effect and indirect effect of the mediation trust on the relationship between purchase intention and actual purchase. The variance account for was calculated, which indicated that the effect of the mediation is only partial to the extent of 8.3%. The finding substantiates the Hypothesis H2, but only partially to the extent of 8.3%. Table 6 and Table 7 below provides the results of the mediation.

Discussion

Contribution to Literature

This study customers of urban India determined the antecedents that drive the purchase intention and actual purchase of organic foods.

Environmental friendliness, health, quality and safety were highly significant which was taken together under one construct Environmental concerns which was supported by in Paul & Rana (2012); Fusilier, & Durlabhji, (2005) in their study. This was also proved by Regine, (2011). This shows that the consumers of the Indian subcontinent are aware of the benefits of the environmental friendliness towards well-being of health, quality, and safety factors related to consumption of organic foods.

Price and Taste constructs were dropped as they failed the validity test. This is contrary to study by (Paul, & Rana, 2012) which was conducted in the northern part of India where these factors proved to be significant. India is a very big country with lots of diversity in culture, food habits and economic growth. The urban cites in the western part of the country, Mumbai and Pune are considered to be the economically advanced cites and the consumer behaviour here does not consider factors as price and taste. In terms of availability the factor was insignificant which again is a contrast to the study by Paul & Rana (2012). It can be noted that their study was done in the year 2012. In 2012 the mobile and especially data penetration was significantly poor, and data was not very affordable. In the past eight years India has seen a great disruption in the technology and telecom industry and the mobile and data penetration has increased exponentially and has become extremely affordable. This has led to mushrooming of many start- ups who have ventured into various businesses making products and services available through online shopping portals as well as mobile apps. The consumers also have become very tech savvy. The factor availability of organic food is insignificant in this study as availability through online channel is considered as hygiene factors by the consumers.

The same applies to the factor Facilitating conditions, this factor is also insignificant as the organic products are purchased through online channel and internet and mobile networks penetration is almost 100% (Wireless Data Services in India – An Analytical Report, 2018) in cities of Mumbai and Pune and data is very affordable (Wireless Data Services in India – An Analytical Report, 2018).

Promotion plays a crucial role in the purchase intention of organic food products which is supported by (Ramus & Asger Nielsen, 2005) and (Paul & Rana, 2012), which is significant in the purchase intention that means consumers are looking for bargains and best possible offers to purchase organic food products.

Social Factor which comprises of Hedonic motivation and Social acceptance is a significant predictor of the purchase intention contrary to the results of the study by (Kumar, et al. 2017) where the direct influence of subjective norms was insignificant.

Conclusion

In the empirical study trust does mediate the relationship between purchase intention and actual purchase but only to an extent of 8.9%, which is very low. Practically, it can be concluded that the factor which are potentially influencing purchase intention will lead to actual purchase. The service provider need not focus on building trust even though the product is an organic product.

Overall, the conceptual framework proposed in the study based on the basic marketing mix and UTAUT models explains the purchase intention and actual purchase of customers for organic food.

Managerial Implications

The study provides very good insights for the service providers / retailers / producers of organic food products and who will be able to make the most of the growing market in this developing economy of the urban Indian consumers.

Environment sustainability is becoming the need of the hour as every part of the globe is experiencing climate change, increase in the pollution levels and the health problems arising from the artificial use of fertilizers and pesticides. This study can provide insights to policy makers to understand the consumers perception towards consumption of organic food and how they can device policies to encourage and facilitate the consumption of organic product both for the producers and consumers to build a future sustainable ecosystem.

Limitations and Further Scope of Research

This study is only limited to the urban metros of western Indian. In comparing the results of the earlier study in the cities of the northern part of the country showed some contrasting results on few factors. India being a of diverse ethnic cultures and traditions further studies can be conducted in the other regions to understand the behaviour and perception of people in the Indian geography. This will provide insights to the business and policy makers in that part of the country.

Food delivery apps and businesses have also grown rapidly due to the technology and mobile penetration and data affordability. A further study of ready-made food delivery using organic products can be explored. The current dominating brands of food delivery apps like Swiggy and Zomato work on the aggregator business models. They have a tie-up with all the restaurants and they are the common delivery arm to these restaurants. There are not many brands who run their own kitchens and delivery too. This can be a big opportunity to tap as the customers segment who prefer organic food which guarantee health, safety, quality and environment concern can be tapped. Market estimation studies of such customer segments can be conducted.

Further studies of understanding the consumer’s attitude towards the moral responsibility and questions like who will bear the social cost of the business and farming practices which focus only on increasing the yield and business profitability can be done. These studies will provide insights to the Government and environment policy makers on designing the road ahead towards an environment and social sustainability.

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