Private eco-brands and green market development: towards new forms of sustainability governance in the food retailing

• Positive implications of private eco-branding for sustainable market development.
• Supply chain functions delivered by private eco-branding vs. third-party sustainability certification.
• Complementarities between private eco-branding and third-party certification.

This study seeks to analyze the role of retail eco-brands in the development of markets for sustainability certified food products. Building on insights from the New Institutional Economics (NIE) paradigm, but also broader literature in the supply chain management and marketing research, we suggest that private eco-branding and third-party certification can be explained as private institutional arrangements that motivate and enable sustainability governance by retailers both upstream and downstream in the value chain. Based on semi-structured interviews with Western European retailers, this study reveals critical functions of retailers' sustainability–oriented brands. These functions address a number of inefficiencies pertained to the third-party certification, making eco-branding a private product policy tool to proactively set and implement sustainability in food production and consumption practices. At the same time, limitations associated with the development and use of private eco-brands are identified. Based on these limitations, we suggest that while retailer's eco-brands are likely to play an important role in transforming food markets towards higher levels of sustainability in the future, the continuous value of third-party certification schemes in implementing sustainability in the food supply chain should not be underestimated. The role of the latter will be to reduce transaction costs and liability risks associated with retail efforts to govern product sustainability issues upstream in the supply chain.