Water Footprint Mitigation Strategies for Agrifood Products: The Application of System Dynamics in Green Marketing

Abstract

Water scarcity (WS), which leads to multiple environmental, social and economic ramifications, has emerged as an indisputable concern for both public and private stakeholders. In this context, the water footprint (WF) concept has been introduced for assessing freshwater consumption and pollution at national, corporate or product level. In the agrifood industry, freshwater is a pivotal constituent since agricultural activities consume 70 % of the global freshwater resources, while food processing operations account for significant freshwater utilization. To that effect, environmentally aware consumers are sensitive to the total product WF generated during agrifood supply chain (SC) operations, as well as to the manner in which the related freshwater exploitation impacts regional WS. Consequently, an increasing number of companies are implementing WF management policies across their agrifood SCs for mitigating freshwater utilization and promoting water-friendly commodities in order to enhance green corporate image and business financial performance. This study proposes a policy-making system dynamics (SD) model for monitoring both the WF of agrifood products and the profitability of the related SCs in terms of net present value (NPV). The model investigates the effect of various market behaviours in the relation between green image factor (GIF) and regional WS, when WF management strategies are implemented. The SD simulation results reveal that WF mitigation policies have a considerable impact on GIF in environmentally sensitive markets, thus increasing the relevant market share and the agrifood SC stakeholders’ profitability. Finally, this research provides managerial insights concerning green marketing interventions in the agrifood sector.