Overcoming Liability of Foreignness within the Vegan Food Industry

Abstract

The world has become more global due to technological changes and industrialization. Thus, the food industry that used to be local has moved towards globalization as well. However, the industry is still strongly influenced by local preferences which makes the internationalization for companies within the food sector difficult. The increased awareness for environmental issues derived from the food industry has resulted in a higher demand for plant-based food products. Thus, several new firms offering vegan food substitutes have entered the international market. Though it has become a fast-growing subsector, very few studies have been done within this area. Hence, this study seeks to address how providers of vegan food substitutes overcome liability of foreignness in their internationalization. This is completed by a multiple case study including three Nordic providers of vegan food substitutes. Additionally, two expert interviews were conducted. The study is qualitative and uses a deductive approach. The result shows that these companies suffer mainly from liability of foreignness in terms of costs derived from geographical distances, lack of legitimacy and limited knowledge regarding regulatory frameworks. The companies mainly overcome these liabilities by own experiences that generate market knowledge, by recruiting external competence and by having local collaborations. This study contributes to the existing literature by enhancing the understanding of liabilities that providers of vegan food substitutes face when entering foreign markets.