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SAGE © Paul G. Barretta & Molly Barrett 2016

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Rich's Products and Healthy Eating Consumers: Corporate Ethnographic Techniques of 12

Rich's Products and Healthy Eating Consumers: Corporate Ethnographic Techniques

Case

Paul G. Barretta & Molly Barrett, 2016, SAGE Publications: SAGE Business Cases Originals

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes. 2018 SAGE Publications Ltd. All Rights Reserved.

Case

Introduction

Rich's Products is a family-owned business that was founded in 1935 as a dairy company and began to grow substantially ten years later when the owner, Robert E. Rich, invented the first frozen, non-dairy whipped topping. The initial expansion fueled development of additional products, which in turn resulted in high growth. By 2014, Rich's Products had grown through acquisitions and product development to include more than 50 locations spanning six continents, selling more than 2,000 products in 100 countries, with annual sales greater than $3 billion. According to Rich's website, in 2011 the company began planning a strategic realignment to more effectively take advantage of global market opportunities. The conversion to a unified global structure prepared the company to leverage its enterprise-wide infrastructure and talented workforce to facilitate the flow of knowledge and best practices across its expanding global footprint.

Abstract

Rich's Products, a food producer with global reach, is interested in learning about consumers who focus on healthy eating choices. A multi-billion dollar company, Rich's Products places importance on being aware of consumers’ needs and habits, as well as being able to deliver food products to consumers through distributors. Accordingly, the company commissioned a market research project, in the form of corporate ethnography, to investigate the growing trend of health-conscious eating. The company's research method and findings are presented for analysis and readers are tasked with assessing how Rich's Products can strategically use the data on different consumer segments.


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An important ingredient in the success of Rich's Products has been its understanding of markets, including direct customers as well as the end consumer. Rich's Products’ direct customers are food distribution companies that sell to retailers, from grocery store chains to specialty food-and-beverage establishments such as coffee shops and restaurants. Rich's Products focuses its attention on the needs of the distribution company customers, and is also committed to understanding the desires of end consumers by staying on top of food trends. This dual focus helps the company strike a fine balance between push and pull strategic opportunities (push strategies involve communicating marketing messages through distributors to consumers; pull strategies involve reaching consumers with information that leads them to seek out a company's product). Rich's Products manages this by simultaneously focusing on the wants and needs of its direct and indirect customers, the speed with which they react to those wants and needs, and the efficiency of their production management process.

Harvey Bailey, Rich's Senior Manager of Research and Insights, is responsible for understanding food trends that affect the company's end consumers. He uses a variety of techniques to investigate trends from a consumer perspective. The growing popularity of organic foods came to Harvey's attention and he decided to do some preliminary research. Most of his research indicated that the upward trend in organic food consumption is expected to continue; for example, according to the U.S. Department of Agriculture, organic food sales were $28 billion in 2012, up 11% from the prior year, constituting greater than 4% of total at- home food sales (Greene, 2013).

Harvey worked to understand what these current and expected trends meant from the perspective of Rich's Products. The company strives to produce and supply quality food products and support environmental sustainability. According to the company's website, Rich's “goal is to drive continuous improvements that are good for business and good for the environment, with a focus on long-term, efficient use of resources; reducing waste; and creating products that delight our customers and have minimal impact on our surroundings.” Although Rich's Products does not currently have an organic product line, one reason for the present research is the rising importance of meeting this growing need. Harvey was confident that Rich's focus on sustainability was consistent with how the U.S. Department of Agriculture (2015s) defines organic agriculture: “producing products using methods that preserve the environment and avoid most synthetic materials, such as pesticides and antibiotics. USDA organic standards describe how farmers grow crops and raise livestock and which materials they may use.” Harvey knew that some consumers were drawn toward organic food choices because of this focus on environmental sustainability.

In reviewing the research on these trends, Harvey observed that there were a wide variety of healthy eating options, and there seemed to be many reasons consumers chose to follow them. He knew this would be something that must guide the research he was planning to accomplish. It was becoming clear to him that consumers of organic foods, and other healthy trends, constituted a culture within itself. With his strong background in research, Harvey knew the best way to learn about a culture was to conduct ethnography of that culture. He set out to find someone with the skills and motivation to conduct a corporate ethnography to improve the company's understanding of this growing consumer segment.

Rachel O’Brien is an inventory analyst for Rich's Products. Her responsibility focuses on finding the most effective ways to get the company's products through the supply chain of distributors and retailers. Rachel is in the final stages of her MBA program, where she has focused her studies on marketing, and is particularly interested in marketing research. During her marketing research class, Rachel learned about a number of qualitative research methods, including ethnography. When she learned that his department sometimes


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conducted corporate ethnography research, Rachel made her interest known to Harvey Bailey. After several meetings, Harvey and Rachel began working together to plan the objectives and process for conducting a corporate ethnography of organic and healthy food consumers. Harvey's understanding of the relationship between organics and sustainability impressed Rachel, and they agreed that the two concepts overlap as the farming practices of organic farmers and organic agriculture seek to preserve the land and natural resources. Rachel acknowledged that this focus on sustainability is often missed by consumers because the term organic has become so widely used in marketing, and thus its meaning has been diluted. Harvey and Rachel chose to accomplish their research by having Rachel temporarily locate in New York City for eight weeks. They chose New York City because organic and healthy food consumption was a strong trend in that location and it would be easy for Rachel to immerse herself in the culture there – and consequently obtain better research results.

Corporate Ethnography

Ethnography is a research method that developed in, and is the hallmark of, anthropology. It is a method by which a researcher immerses him or herself in a culture to learn about its norms, activities, values, and ways. Unfortunately, the term ethnography is often misused and any form of observational research is incorrectly termed “ethnography.” A proper ethnography often includes a number of research techniques, including participant observation, interviews, surveys, and others. Academics in other disciplines, particularly consumer behavior, began to adopt these ethnographic techniques in their research, and over the past 15 to 20 years, corporations have begun using ethnographic techniques as well. Ethnographic techniques have become valuable tools to corporations and other organizations as they have been applied in a variety of settings to study organizational cultures and customer bases. Another form of ethnography, known as netnography, has developed over the past 15 years. This method involves the researcher conducting an online ethnography and shows potential for marketing research into consumer behavior. More than simply a structured search of the Internet, netnography draws on specific methods and is establishing a set of norms and guidelines as it continues to develop (Kozinets, 2010).

Rachel's Field Research

Rachel planned to conduct the more traditional form of corporate ethnography by immersing herself in the culture she was studying. One of the strengths of ethnography is that the researcher is able to decrease the effect of being viewed as an outside observer by becoming a part of the culture, while still maintaining an appropriate level of researcher distance. Rachel accomplished this by first identifying a number of restaurants that offered healthy eating options, which she could visit frequently during the beginning of her study. As time progressed she visited a number of different establishments, often returning to the same places multiple times. In this way, Rachel was able to build a rapport with the owners and managers of eateries that were visited by consumers concerned with healthy eating.

Managers and owners

The relationships that developed over time were very fruitful for Rachel's study. For instance, through unstructured interviews and participant-observer research, Rachel discovered that sustainability was very important to eatery managers and their consumers. Sustainability was important in terms of the food that found its way to their tables, but it was also important to their general approach to business. One of Rachel's field notes describes her observation that one of the eatery owners, now a franchisor, had some parts of the restaurant built in an eco- friendly manner with reclaimed materials, including light fixtures built from old cutlery and a ceiling


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constructed with reclaimed walls from tin barns. Sustainability is a common general thread throughout the healthy eating culture; in this case the reused silverware avoided waste and provided material for the fixture instead of relying on newly manufactured material. These and other examples are included in the samples of Rachel's field notes at the end of this case (see Exhibit 1). In her notes, Rachel also observed that fact sheets usually accompanied menus and food options. Such fact sheets included information that generally fell into one of two categories:

the food itself; the suppliers of the food being served.

With these printed materials, and in conversations with Rachel, the managers and owners conveyed that they felt strongly about the type of food they served and the accompanying lifestyle as well. Whether the focus of an eatery was on vegan, organic, vegetarian, or gluten- free foods, managers expressed with great sincerity their respect for the food choices of their patrons. Rachel noted that menus had information about food choices, including organic produce and hormone-free meats that came from family-owned farms.

In addition, Rachel observed that eatery managers had a strong overall preference for “buying local” as a sustainability initiative. This limited the supply chain the eateries had to work with. Although the prices paid to local growers were not very different from those of larger suppliers that were producing food products on a much larger scale, the number of suppliers they could deal with was limited by a geographic constraint. On the positive side for the eateries and local growers, there was an important relationship management aspect that benefited both parties; the eateries were confident they knew how their ingredients were sourced, and the growers maintained a network of outlets where their fresh ingredients were in demand.

Suppliers

To further understand the supply chain for locally sourced ingredients, Rachel visited a number of local growers. One of these was a rooftop farm at the Brooklyn Navy Yard. She met with the managers of this farm to learn about the importance of local growers to their direct customers. The farm managers positioned themselves at an important step in the food supply chain for the local economy, providing an option for consumer-level eateries and retailers to source restaurant ingredients and grocery produce. An important aspect of the relationships the farm managers maintained with their customers was the level of transparency in how the foods were grown. The managers indicated that the eatery owners, especially, wanted to be prepared to provide information to their customers.

Consumers

Another important source of information for Rachel was access to consumers who followed a variety of different healthful diets. During her eight weeks in New York City, Rachel took a participant-observer role in restaurants and grocery stores. In addition to conversational techniques used to gather information from consumers, she also arranged to interview some of the consumers to understand their reasons for their eating habits. Using a semi-structured interview approach, Rachel learned from a number of consumers that the decision to follow organic, vegan, vegetarian, and similar types of diets was a combination of health-related concerns and lifestyle choices. For example, some consumers chose these diets because of specific dietary needs resulting from biological conditions (e.g., celiac disease suffers have an autoimmune disease which necessitates a gluten-free diet; lactose-intolerant individuals have a condition that requires the avoidance of dairy due to digestive difficulties). In other cases, consumers made cognitive decisions to avoid certain foods as part of lifestyle choices (e.g.,


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vegans avoid eating meats and consuming animal by-products because of a concern for the ethical treatment of animals and the ecologically harmful and unsustainable effects of animal farming; others are concerned with the environmental impact of their food choices and choose local, organic foods that are grown and produced with sustainable practices to minimize ecological impact). In each case, it was important for consumers to understand where their foods (and each of the ingredients) came from and how they reached their table.

Other food manufacturers

To achieve research triangulation, Rachel also investigated mass-produced foods that were designed to meet the needs of health-conscious consumers. One example of particular interest to Rachel was a company that produced a line of chips made from kale and other healthy, organic ingredients which had been granted a “Non-GMO Project Verified” seal. GMO stands for Genetically Modified Organism, and to earn the right to display this seal, the owners of the company were required to provide documentation of the supply chain of ingredients, originating with how and where each raw material was grown.

According to the Non-GMO Project's website (nongmoproject.org), their verification “is an assurance that a product has been produced according to consensus-based best practices for GMO avoidance” and indicates that a rigorous process is undertaken to ensure that the products bearing the seal reflect high standards. According to Rachel's interview subject, it is important to the chip makers that they are able to communicate this adherence to their customer base. In addition, the chipmaker indicated that in his personal opinion, the term organic is one that will have the most staying power in the minds and preferences of consumers.

Interpreting the Initial Findings

At the end of the eight-week period, Rachel returned to the headquarters of Rich's Products and began to compile her findings. The objective of ethnographic techniques is to interpret the data received in a holistic manner. As expected, Rachel noticed that her early exposure to the culture being studied was general in nature; as she studied her field notes she was able to note that her techniques became more directed and the information gained was in greater depth than information gathered during her first week.

Interpretation of ethnographic data is accomplished through content analysis, yielding information presented as major categories and minor categories. It is common to organize findings this way so that the researcher can then present results in a structured manner. Using between-case and within-case comparisons, noting similarities and differences, Rachel identified the following categories and descriptive information from a consumer perspective:

Major Category I: Reason for Choice. The reasons most consumers choose to follow a particular diet fall into one of three minor categories:

Minor Category 1: Health Related. In this category are consumers who require special dietary restrictions that are physiological in nature. For example, people whose bodies do not tolerate gluten-based food products must purchase grocery items that are stated to be gluten-free; when they dine out they must seek eateries that offer gluten-free menu items. Other physiological restrictions of note are lactose intolerant consumers and restrictions due to disease or conditions such as sugar-free or salt-free diets.

Minor Category 2: Cognitive Related. In this category are consumers who choose to

http://nongmoproject.org/


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impose dietary restrictions on themselves based on a conscious, thought-induced preference that is the result of their awareness of food intake. The consumption choices for consumers in this category may have some overlap with Minor Category 1, but for different reasons. For example, a consumer with diabetes would be restricted from consuming sugar due to a physiological condition; however, a consumer in the cognitive-related category would choose to limit his or her sugar intake as a conscious choice based on long-term health goals.

Minor Category 3: Lifestyle Related. In this category are consumers who self- impose dietary restrictions as a lifestyle choice. Some consumers in this category reported an emotional basis for their decisions; however, there is a cognitive aspect to their choices as well. For example, consumers who follow a vegan lifestyle have emotional as well as cognitive aspects to their food consumption choices. They feel emotionally connected to preventing cruelty to animals; in addition, they are cognitively aware of matters such as animal testing of non-food products. Although some of their choices, such as avoidance of products which rely on animal testing, are not food related, their food choices are consistent with and driven by their chosen lifestyle.

Major Category II: Source of Food Products / Ingredients. Consumers who are aware of their healthy eating habits often place importance of varying degrees on knowledge about the source of the food they are eating. There are three categories of reasoning for this emphasis:

Minor Category 1: Buy Local. Within the buy local category there are two sub- categories: economic and pride. For economic purposes, consumers believe they are supporting their local economy by serving as an outlet for the labor that is provided in their locale. Even without knowing the details of where ingredients and raw materials are derived, they make a connection between the money they are using to purchase the food being consumed and the livelihood of those engaged in the production and distribution of that food. This viewpoint is supported by a recent study which found that consumers may place greater importance on locally produced food products than on organic food products grown outside the local area (Blomberg, 2013). The second category is related, but in a non-monetary way. Pride in community is a theme which indicates that consumers feel that purchasing foods that are at least partially sourced from local producers has a communal feel to it.

Minor Category 2: Health Consciousness. The second minor category under the source category is health consciousness. It is obvious to note that health consciousness is at the front of the minds of those consumers who fall into the healthy eater's consumer segment; however, what is important about this category is that consumers recognize that health consciousness starts at the level of raw materials and ingredients. Many consumers dedicated to a healthy eating lifestyle pay close attention not only to the outlet where they obtain their food, but also to the source of the food they are consuming. In terms of eateries and prepared foods from a retailer, this presents itself in the form of knowledge about ingredients; in terms of raw materials this can present itself in the form of knowing where the raw product was grown / harvested.

Minor Category 3: Freshness. Some consumers recognize that the freshness of the dish they are eating, whether purchased raw and prepared themselves, or consumed at an eatery, the freshness of the ingredients is an important factor. This category has some overlap with the other two minor categories in this major category, as they


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relate freshness with locally produced, healthy foods. This category is distinguished from the other two by the consumer's emphasis on attention paid by the seller to how fresh the food looks and tastes.

Conclusion

Two months after Rachel returned from New York City to Rich's Products’ headquarters in Buffalo, New York, she presented her findings to a group of approximately 50 employees. These employees were from a variety of departments, each person in some way connected to efforts related to direct customer contact or product development. Some members of the audience came from product development, others from production management, and others worked with Harvey Bailey in Research and Insights, the department of Rich's Food responsible for understanding its consumers. All of the meeting participants had an interest in hearing about the healthy living customer segment that Rachel had explored. The presentation was well received and generated a number of questions over the following weeks. These questions were gathered and framed for senior management. Rachel and Harvey set out to answer these questions and draw on the insights of their corporate ethnography to better steer Rich's Products toward the healthy foods market segment.

References Blomberg, L. (2013). Shoppers choose local. E – The Environmental Magazine. Earth Action Network. Retrieved on July 7, 2015, from http://www.emagazine.com/daily-news/shoppers- choose-local. Greene, C. (2013). Growth patterns in the U.S. organic industry. U.S. Department of Agriculture. Retrieved on July 14, 2015, from http://www.ers.usda.gov/amber-waves/2013- october/growth-patterns-in-the-us-organic-industry.aspx#.Vav5B_lViko Kozinets, R. V. (2010). Netnography: Doing ethnographic research online. London: SAGE Publications Ltd. Rich's. (2015). Our environmental stewardship. Rich Products Corporation. Retrieved on July

http://www.emagazine.com/daily-news/shoppers-choose-local

http://www.emagazine.com/daily-news/shoppers-choose-local

http://www.ers.usda.gov/amber-waves/2013-october/growth-patterns-in-the-us-organic-industry.aspx#.Vav5B_lViko

http://www.ers.usda.gov/amber-waves/2013-october/growth-patterns-in-the-us-organic-industry.aspx#.Vav5B_lViko


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17, 2015, from http://www.richs.com/about/sustainability/ USDA. (2015). Organic agriculture. USDA. R e t r i e ve d on Ju ly 19, 2015, f rom http://www.usda.gov/wps/portal/usda/usdahome?navid=organic-agriculture http://dx.doi.org/10.4135/9781473977716 Resources

Exhibit 1: Excerpts from Rachel O’Brien's Field Notes

The following are excerpts from Rachel O’Brien's Field Notes. They were taken during her ethnographic study of healthy eating establishments in New York City. These notes in particular are from Rachel's visit to “Bareburger,” a restaurant in the Astoria section of Queens, one of New York City's five boroughs. Field notes are crucial in Ethnographic Studies because they capture the researcher's immediate observations and reactions to be analyzed at a later time. This analysis takes the form of comparing initial analysis of multiple places (between cases) as well as more in-depth analysis of observations made at a particular field site (within a case). Captions below each photograph indicate Rachel's immediate reactions to these particular observations.

The menu has a wide range of options for all types of eaters and is clearly notated for those with dietary needs. All options for meat and bread are complete with gluten-free and vegan notations. Most menu items also include the amount of calories in it. Guests are provided a fact sheet on why to eat organic food and the local food artisans they support.

The wait staff had on shirts that had a picture of a cow and said “I love grass.” Each table had FAQ sheets on them with ingredients and information on it. The menu also gives information about the restaurant's “friends,” which are actually the farmers, local food vendors, and businesses they partner with.

First, you choose your “style.” I went with the Habanero Express: pepper-jack cheese, green leaf lettuce, tomatoes, poblano pepper relish, red raw onions, spicy pickle chips, and habanero chipotle mayo. Next, you get to choose the meat you want, instead of getting typical beef, the waiter suggested I try bison, since it is a much leaner meat. This restaurant offers a wide range of meats to choose from: beef, turkey, panko-crusted chicken tenders, buttermilk fried, grilled chicken, jerk chicken, black bean patty, farmers quinoa veggie patty, portabella mushroom, lamb, wild boar, elk, bison, ostrich. Lastly, you choose your bread. The options are brioche bun, multi-grain roll, green leaf lettuce bread, wheat flour wrap, and tapioca rice bun. I chose the tapioca rice bun since it was gluten-free.

Figure 1. Light fixture made from re-utilized silverware.

Source: Molly Barrett.

http://www.richs.com/about/sustainability/

http://www.usda.gov/wps/portal/usda/usdahome?navid=organic-agriculture

http://dx.doi.org/10.4135/9781473977716


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Figure 2. Posters explaining the value of organic products.



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Figure 3. Mostly organic, vegan, and gluten-free alcohol.



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http://dx.doi.org/10.4135/9781473977716

http://dx.doi.org/10.4135/9781473977716

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