Impact of Hyperlocal Food Sources on Hong Kong Restaurants

Executive Summary 

The study aimed to ascertain the effect of hyper-local food sources in Hong Kong restaurants. The three objectives guided the research (1) To determine the present-day attitude towards hyperlocal food in Hong Kong, (2) To assess the viability of embracing sustainable agricultural activities in Hong Kong and (3) To determine the local restaurant owners readiness in integrating hyperlocal food. A descriptive research design was used to study a sample of 90 participants comprising of the local restaurant owners. Data analysis was carried out using SPSS version 20.0. The data collection methods used in the study included a follow-up survey, questionnaire, interview, and literature review. The data was presented in a descriptive form comprising tables, graphs, and numbers. According to the study, it found out that the restaurateurs preferred using organic foods. They believed that the food was healthy and did not have negative impacts on the environment. The participants also cited that they would choose local food sourcing over conventional farming. More importantly, this was because organic food helps increase their revenues as customers are conscious about their health hence leading to a positive reputation for their businesses. The participants also cited that the installation of hyperlocal food systems is expensive, as it ranges from US$300-US$1000 depending on the food source. Moreover, the participants mentioned the government had done very little towards laying down frameworks for the use of hyperlocal food sources.

Introduction 

The global foodservice industry is expected to reach a value of trillion of dollars within the next five years. Food service refers to the sale of beverages and food that have been already prepared for takeaways or immediate consumption. One of the major factors driving the global food services industry is the growing demand for innovation and customization in the food menu. The customers have an opportunity to customize their food needs basing on their preferences, budget, dietary, and taste. A substantial number of food service operators target working professionals and millennials. Commercial restaurants have become the top food service choice for young professionals, families, and teenagers to socialize as they relax hence leading to the growth of the sector. Other factors that are catalyzing the expansion of the food service sector includes the increasing number of working women that have reduced the home-cooked meals practice.

Hong Kong is home to over 7 million people. Hong Kong's territory is about 1,104 square kilometers. In addition, Hong Kong is a major tourist destination. Hong Kong's rich culture and impressive skyscrapers have been a major source for tourist attraction, which seems more than 60 million people streaming in the area annually.

Hong Kong is forced to import over 95% of its food (Li, Lai & Hernandez, 2018). The most common imported foods include dairy products, tree nuts, poultry, pork, beef, prepackaged products, and wines. In 2017, Hong Kong imported agricultural related products amounting to US$ 27 billion. According to Yee (2016), the main reason behind Hong Kong's food importation is the lack of arable agricultural land. It is estimated that Hong Kong has only 4,500 hectares of arable land, translating to 4% of the region's total territory (Yee, 2016). Out of these only, 729 hectares are under active farming. Over the years, productive farming has continued to decline with only 0.1% (4300) of the total workforce practicing agriculture (Yee, 2016). Yee (2016) has cited that the lack of available farmlands is the main challenge affecting the agricultural sector. The landowners do not provide enough land as they have opted to rezone the farms and set up real estate development due to the soaring house prices.

According to the Food and Environmental Hygiene Department (2019), there are over 11,610 licensed restaurants in Hong Kong. In 2017, there was a 4.9% increase in Hong Kong restaurant receipts amounting to US$14.45 billion (Li, Lai & Hernandez, 2018). The average Hong Kong family monthly expenditure was US$640, representing 18% of the total household expenditure (Li, Lai & Hernandez, 2018). The continuous growth of the hotel, restaurant, and institutional sector is supported by the region's residents' preference to dine outside the house and the massive number of visitors. The softening rents are making it easier for restaurant operators to expand their markets. However, they are forced to continually expand their menu options for Hong Kong's avid "foodie" customers that demand novel and first-class cuisines.

In 2014, “A New Agricultural Policy: Sustainable Agricultural Development” was formulated by the Hong Kong government amid declining agricultural production. The policy aimed at ensuring that it is sustainable and modernization of local agriculture and ensures it becomes a primary source of food production (Food and Health Bureau Agriculture, Fisheries and Conservation Department, 2014). Under the proposal, it would see the government beginning an agricultural park that would be used towards the experimentation of new farming practices. Moreover, there was a need to develop a Sustainable Agricultural Development Fund (SADF) (Food and Health Bureau Agriculture, Fisheries, and Conservation Department, 2014). The fund would assist in providing financial support to help boost agricultural production. The existing farmers would receive assistance to market their farm produce and brand building.

Moreover, the increased need to maintain better health and prevent environmental degradation customers are turning to restaurants providing organic cuisines. The business owners have been forced to seek their foods from farmers producing organic, eco-conscious, and sustainable products. The local business owners have also been forced to come up with other means through which they can grow the foods such as rooftop farms.

The rooftop farms support the production of hyper-local foods. This supports the growth of food grown in-house in places such as restaurant gardens. Hyperlocal takes the concept of organic and local foods and even improves on them. Hyper-local food is not only organic due to its on-site production but is also local. The growth of hyper-local foods is supported using advanced technology that enables one to grow soilless foods using aeroponic and hydroponics. Restaurants implementing hyper-local food sourcing have adopted these two soilless growing strategies.

The Rooftop Republic is a Hong Kong-based urban farming enterprise that aims to pioneer urban farming movements across the region. The organization aims at revolutionizing and transforming Hong Kong's food system. Since its foundation, it has implemented and managed more than 40,000 square feet of rooftop farms in Hong Kong (Rooftop Republic, 2019). Hyperlocal foods have been cited as having positive impacts on the environment. This arises from their ability to reduce carbon emissions resulting from the transportation of foods to restaurants and even farming. Similarly, the restaurants reduce operational expenses, which include purchasing and importing foods, and reduction of food waste.

Rational 

A majority of the Hong Kong population opt to eat in restaurants instead of at home. Similarly, the large tourist numbers flock into the country to enjoy the sumptuous cuisine offered by the region. However, Hong Kong’s active agricultural land represents a mere 729 hectares out of the 4523 hectares (Food and Health Bureau Agriculture, Fisheries and Conservation Department, 2014). Hong Kong is forced to import 95% of its agricultural produce from the USA, China, and Brazil (Li, Lai & Hernandez, 2018). In 2017, restaurants made purchases amounting to US$4.7 billion up from US$4.5 billion in 2016, representing a 2.0% increase (Li, Lai & Hernandez, 2018). There is a need to boost agricultural production in Hong Kong. Nations such as the United States and the United Kingdom have begun adopting a new food trend referred to as hyperlocal sourcing. This enabled restaurants to grow their food in-house instead of purchasing. According to the Hong Kong government's 2014 New Agricultural Policy and the Hong Kong 2030+, it acknowledges a need for practicing rooftop farming (Wang & Pryor, 2019). About 60 rooftop farms have emerged since 2008, covering most of the industrial and institutional buildings within Hong Kong's wider district (Wang & Pryor, 2019). This is a clear indication that most of the Hong Kong residents have not yet adopted rooftop farming.

This research is significant as it will outline the adoption of hyperlocal farming in Hong Kong among restaurant owners. The findings from the study will enable the government in formulating policies and even funding options for restaurant owners who would like to practice hyperlocal farming. This is important as the government has instead focused on economic productivity, and it has not laid down regulatory, technical, or instructional support to restaurant and small scale farmers who would like to practice hyperlocal food sourcing. Moreover, the findings from the research shall enable restaurant owners to make informed decisions before adopting hyperlocal farming.

Aim 

The research aimed at determining the viability of implementing in-house and hyperlocal food sourcing in Hong Kong restaurants. The research also sought to determine whether the local restaurant owners were inspired to integrate the hyperlocal and in-house food sourcing practices.

Objectives 

The research had three main objectives;

To determine the present-day attitude towards hyperlocal food activities in Hong Kong 

To determine the viability of embracing sustainable agricultural undertakings in Hong Kong 

To determine the local restaurant owners readiness in integrating hyperlocal food sourcing. 

Research Questions  

The study was guided by the following research questions: 

What are the impacts of hyperlocal food sources on Hong Kong restaurants? 

What are the present-day attitudes of hyperlocal food practices in Hong Kong? 

Are local restaurant owners in Hong Kong ready to adopt hyperlocal food sources? 

Literature Review 

A study by Dessart, Barreiro-Hurle & Van Bavel (2016) aimed at determining the role of behavioral factors that influence farmers' decisions on adopting sustainable agricultural practices. Sustainable farming practices are those that have positive impacts on biodiversity, climate change, landscapes, soil, and water. According to the study, various factors determine the farmers' decisions on whether they will embrace more sustainable agricultural activities such as hyperlocal farming, or organic farming. The farmers' choices to embrace such undertakings are mainly founded on business outcome needs, such as the short and long term economic and personal consequences. Before farmers decide to use sustainable agricultural practices, they determine whether they will make more money or not from the ventures.

The study found out that three main behavioral factors determine the decision-making abilities of farmers; dispositional social and cognitive (Dessart, Barreiro-Hurle & Van Bavel, 2016). Dispositional factors comprise inner elements associated with a farmer, including general preferences, beliefs, values, motivations and personalities. Social factors are based on the interaction of the farmer with other people, and they can include signaling motives and social norms. The cognitive factors are based on a farmer's learning and reasoning abilities. This includes variables such as the farmers' understanding of the risks and costs linked to practicing a particular sustainable agriculture undertaking. Farmers who have negative dispositional, social and cognitive factors will most likely become resistant to change and will not convert to sustainable agricultural practices. This is different from those who develop positive attitudes basing on the dispositional, social, and cognitive factors. Dessart, Barreiro-Hurle & Van Bavel (2016) concluded that it is essential for policymakers to apply the behavioral insights of farmers as they implement policies targeting the farmers.

Kumar et al. (2019) carried out a study in Pokhara, Nepal, to ascertain whether rooftop agriculture was a substitute to traditional agricultural practices for urban sustainability. According to Kumar (2019), more than 54% of the global population is urbanized, and by 2050, it is expected to reach 88% in developed nations and 66% in less developed countries. Nonetheless, the current state of urbanization has led to limited space for most urban dwellers. Urbanization has brought about massive destruction of fertile soil. Kumar et al. (2019) state that rooftop farming is the only solution for increasing food security demands in urban centers. Rooftop farming is a significant leap towards combating the increased climate change threats hence leading to sustainability.

Kumar et al. (2019) also found out that rooftop farming is not only a means of supplementing food but also an environmental conservation strategy. Rooftop farming reduces carbon emissions by 30%. Moreover, other environmental degradation issues such as waste generation, massive pollution, and destruction of natural resources is minimized. The carbon emitted by various infrastructures within urban centers is absorbed by the rooftop crops, which are later used for photosynthesis. The main greenhouse gases removed from the environment include sulfur dioxide, nitrous oxide, and carbon monoxide.

According to the researchers, food production is expected to drop by 50% in the coming three decades, and the population is going to increase to 9 billion (Kumar et al., 2019). However, the researchers found out that there are major obstacles among the urban dwellers in Pokhara towards adopting rooftop farming. There was no help from the government in allowing the farmers to access the technologies that can help support rooftop farming, such as hydroponics and aeroponic. The rooftop has been cited as being a relaxation place for families and a recreation center for children. 31.66% of the participants also cited they do not have the technical expertise in rooftop farming (Kumar et al., 2019). Generally, the study found out that despite rooftop farming being a potential means of increasing the growing demand for food in urban centers, it still faces a lot of challenges.

Alfnes & Sharma (2010) conducted a study to determine whether customers were ready to incur additional costs on food produced locally in the restaurants. Restaurants are in a business making their sole goal to maximize profits. Restaurants have adopted a differentiation strategy by increasing the use of locally produced foods. According to the study, it used the term locally produced food referring to its geographic origin, social, or political environment. The study found out that consumer's preference for local food has continued to increase over the years and are ready to pay more for organically produced foods. Another study by Chiciudean et al., (2019) discovered that modern day consumers are concerned with their hygiene and health issues. This has made the consumers motivated to purchase organically produced foods. Chen, Lobo & Rajendran (2014) also found out that a substantial number of Chinese consumers have opted to buy organically produced food. The consumers have access to vast information on organic foods and their relevance to good health, which influences their buying behaviors.

According to the literature review, it is an indication that urbanization has brought about a need for coming up with more advanced means of improving food security. The studies have also focused on the impacts of consumer attitudes towards the adoption of quality foods. The study by Kumar et al. (2019) found out that urban farming, such as rooftop farming, is vital towards increasing food security in urban centers. However, there is little research on the willingness of local restaurant owners to adapt to urban farming strategies such as rooftop farming. It is this literature gap that this study intends to filling by using a sample of restaurateurs from Hong Kong to ascertain their attitudes towards hyperlocal food sourcing and the challenges they think affects this new global food trend.

Methodology 

Research Design 

The research used a descriptive survey research design. This type of research allows the researcher to observing the respondents and describing their behavior without having any control over their actions (Mitchell & Jolley, 2015). Heppner et al. (2015) state that a descriptive research design allows the respondents to act naturally within their study environment. Moreover, the research design helps in eliminating research bias as the researcher does not have any role to play in manipulating the respondents' actions

Study Area, Sampling Design and Sample Size 

The study was carried out in Hong Kong. It involved independent boutique restaurants in the region as Hong Kong has a large restaurant industry making it hard to study all the establishments.

Suresh & Chanrashekara (2012) states that a sample comprises the selected group of participants from an entire population who become part of a study. Sampling enables a researcher in eliminating extra costs that would have been used in studying an entire population. Other essential advantages of sampling include time-saving and ability to gather valid results as compared to using an attire population. The study used purposefully sampling to select a sample of 100 restaurateurs. Palinkas et al. (2016) state that this type of sampling technique allows a researcher in getting access and identifying information-rich participants. A researcher selects respondents who know about the respective study topic. Other factors used in choosing this type of sampling technique include the willingness and availability of the participants to become part of the study, the ability to communicate views and experiences in an expressive, contemplative, and coherent manner.

A need for participants was advertised in local print and broadcast media stations. Flyers were distributed to restaurant owners and also hung on public notice boards. Selected participants were given three days to go over the study's terms and conditions. On the fourth day, the participants signed an informed consent form. This was to show that each participant was taking part in the study under his or her own will and to ensure that privacy and confidentiality were to be maintained by the researcher (Fouke & Mantzorou, 2010).

Data Collection 

A researcher must ensure that the methodology selected for gathering data is one that will provide valid and accurate results. The study employed four data collection strategies; literature review, questionnaire, follow up survey, and interview.

Ponto (2015) states that surveys are used in gathering respondents' ideas, statements, or responses. A survey is essential and in this study, it was used in gathering the respondents' attitudes, opinions, beliefs, and emotions. The research used a survey with a five-point Likert scale, whereby the participants had to respond (1= strongly disagree to 5= strongly agree). Each participant took 20-25 minutes to fill the survey.

A questionnaire was also used in the study. The aim of using a questionnaire was to ensure that anonymous gathering and answering of the questions. Questionnaires are also very cheap data. In the study, the questionnaire had three segments A, B, and C. The respondents' demographical information was filled under section A, segment B comprised of questions regarding the participants' perceptions of organic food and if it is probable for them to use locally sourced food. Segment C sought to gather information on whether hyperlocal food us an excellent investment to the restaurant. Each participant took 30-45 minutes to fill and submit the questionnaire completely.

The third data collection technique was the interview. A standardized interview was used in the study whereby the researcher read out the questions aloud to the interviewees. Each participant interview lasted for 30-40 minutes and was carried out for two weeks due to the busy schedules of the restauranteurs. Audio and video recording devices were used during the interview. Interviews allow a researcher to getting more information on the study topic. A researcher is also able to note the non-verbal cues of the participants and determine whether they are truthful. The interviews were used in gathering information about the costs of implementing hyperlocal food sourcing.

The final data gathering technique was a literature review. It was used in gathering data related to the feasibility and adaptability of implementing hyperlocal food sourcing. Articles for the literature review were gathered from database sites such as Market Line, Proquest, EBSCO, Emerald, JSTOR, and Sage.

Data Analysis 

The result from the completed survey, interview, questionnaire, and literature review underwent a sorting process. They later underwent editing processes to ensure the data was consistent and complete. Interview data was coded using content analysis to come up with similar themes. SPSS Version 20.0 was used to analyze the data, which was later displayed in the graphical, tabular and numerical formats.

Response Rate 

The study had 100 participants. All the participants were involved in the interview, survey and questionnaire. Out of the 100 participants, 90 fully participated throughout the entire process. This represented a 90% response rate. A response rate above 60% is enough to produce valid and reliable data (Fincham, 2008).

Demographical Information 

Out of the 90 participants, 60% were male, while 30% represented females. Moreover, 90% of the participants were 30 years, and above and only 10% were 26-30 years. Similarly, 70% of the participants stated that they served organically produced food more than 20 times in a week, another 15% more than ten times, and the remaining 15% less than ten times a week.

Questionnaire Data 

Organic Foods and the Possibility of using Organic Foods

	1	2	3	4	5
Does organic farming require more land than conventional agriculture?			5	15	70
Do organic farms have lower yields than conventional farms?	10			30	60
Is organic food beneficial to my health and customers?				30	60
Would you eat organic foods?		5	10	15	60
Would you engage in local food sourcing?		17	13	30	30
Does local food sourcing help protect the environment?				10	80

Section C: Investing in Local Food Sourcing

	1	2	3	4	5
Is local food sourcing expensive?		50		30	10
Would you invest in local food sourcing?	20		30	40
Does local food sourcing help improve your restaurant image?			10	40	40

Survey Data 

	1	2	3	4	5
Are clients ready to pay premium prices for organic foods?		10		50	30
Has the government set in place frameworks for adopting hyperlocal food sourcing?	60	30
Do you have the technical know-how of implementing a hyperlocal food source?	60			10	20
Do you understand what hyperlocal means?	20			40	30
Would you engage in hyperlocal food sourcing?	5	10	15	35	25
Does local food sourcing help protect the environment?	20			30	40

Interview Data 

What are the costs of starting a hydroponic garden?

What are the costs of starting an aeroponic garden?

Are there additional costs involved in hyperlocal food sourcing?

66.67% stated that the extra expenses they felt would be engaged in hyperlocal food sourcing are labor and training. However, 33.33% said they had no idea of additional costs.

Is hyperlocal food sourcing expensive as compared to purchasing imported food?

45% of the respondents felt that hyperlocal food sourcing is expensive during the initial period of setting up the farms. However, they believed that with time, the costs are bound to reduce once one has already set up the systems in place. Additionally, 35% stated that they do not think the costs are expensive as they spend more purchasing imported food due to transport costs, food wastage, and need to construct refrigeration warehouses for some foods. Another 20% stated they do not know the cost differences as they had never heard of hyperlocal food sourcing before.

Literature Review Data 

Out of the 250 articles analyzed, 200 articles showed that the emerging theme was such as the USA, Europe, Nepal, Israel, Some African Countries, and European nations have begun adopting hyperlocal food sources. However, in most countries, local farmers are adopting the food sourcing, after which the product is sold to the restaurant and other local food owners. 44% stated they would invest in local food sourcing, and another 44.4% believed it has a positive impact on their business's image.

Discussion 

There have been little studies that have tried to determine the perceptions of restauranteurs towards adopting hyperlocal farming. Moreover, few studies have also studied the challenges local restauranteurs can face while trying to implement the local food sourcing. This study contributes to the research base by using a study sample of 90 restauranteurs from the Hong Kong region. 77.78% of the restauranteurs believed that organic farming does not require more land than conventional agriculture. This is attributed to the fact that one can only use a small portion on the roof and set up hydroponics and aeroponic, which will bring in more yields. In the case of conventional farming, it requires vast land for cultivation.66.67% of the respondents believed organic foods have higher yields and are beneficial to one's health. The results match a study by Chiciudean et al. (2019) that found out customers have begun becoming conscious about their health, and this has made them start purchasing organic foods. Moreover, 66.67% of the participants cited they would eat organic foods. 88.89% of the participants believed that local food sourcing helps to mitigate environmental degradation. This is similar to a study by Kumar et al. (2019), who found out that rooftop farming reduces greenhouse gas emissions by 30%.

55.56% of the respondents stated that customers are prepared to incur additional costs for organic foods. This is similar to a study by Alfnes & Sharma (2010), which found out clients identify local foods as having a high superiority and fresh thus are ready to pay premium prices. However, 66.67% of the restauranteurs cited they do not have the technical know-how of implementing hyperlocal firms. Moreover, another 66.67% stated the government has not laid down frameworks for supporting hyperlocal farming among restaurant owners. However, 55.57% believed setting up local food sourcing platforms is expensive, with the costs ranging from US$300-US$1000.

Conclusions and Managerial Implications and Recommendations 

This concludes that hyperlocal food sourcing is critical to increasing food production in Hong Kong. Hyperlocal food sources will not just bring about improved health outcomes among the locals and tourists but have positive environmental impacts being a major tourist destination, Hong Kong is going to witness an increase in population, and there is need to ensure all dietary needs of the visitors are met. Introduction of hyperlocal food sources shall help the restauranteurs in cutting on costs used in purchasing imported foods hence increasing their revenues. 

Recommendations 

The Hong Kong government drafted a policy back in 2014, aimed at improving agricultural production. One of the strategies was to support hyperlocal food sources ( Food and Health Bureau Agriculture, Fisheries and Conservation Department, 2014) . However, the government is yet to allocate funds for supporting the program. There is a need to ensure that farmers and restauranteurs are given access to information on how they can adopt these local food sources. This includes launching massive media campaigns and even arranging for expos by inviting farmers from countries such as the USA, or the UK to showcase how farming is implemented. 

Managerial Implications 

The study observed the impact of hyperlocal food sources in Hong Kong restauranteurs. The results of the study have several managerial implications for restaurant owners who would like to adopt this type of farming. The restaurant owners should ensure that they seek more information about hyperlocal food sources in Hong Kong from nations that have developed the farming practice. Most of the information is available online. 

Limitations 

The study did not use a randomly selected sample. This is an indication that it might have laid a foundation for selection bias; random sampling helps to ensure that every individual gets an equal chance of becoming part of the study. Moreover, Hong Kong has more than 11,000 restaurants. Therefore carrying out a study on all the restaurants is not feasible. The research was limited to independent, boutique restaurants. There is a need for carrying out more research using larger sample size and also involve not only restaurant owners but also consumers. 

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