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New business models for Short Food Supply Chains: enhancing the competitiveness and sustainability of the European agri-food system
Fri 09 Jul 2021
Most Europeans buy their food from supermarkets, where they can access many different products and brands under one roof. But, despite this convenience, many consumers are becoming more aware of the environmental and economic impacts of this model on our food systems and are demanding alternative options that include fresh, locally-sourced products. One of these options include (re)emphasizing Short Food Supply Chains (SFSCs) to improve the competitiveness and sustainability of the agri-food system in Europe. For the H2020 SMARTCHAIN project, this included exploring ways to accelerate the shift towards collaborative SFSCs, as well as introducing new business models and innovative practical solutions.
Throughout Europe, SFSCs vary in practice and nature, differing in terms of products, process steps and distribution channels. The function and success of these SFSCs depend on many different factors, such as territorial conditions, resources, governing structures, market access and market conditions, etc. Initially, the business models of the 18 case studies from 9 European countries involved in the project were examined and analysed. Their application of ongoing innovation as well as how they create, deliver and capture value considering their particular context was explored along with the relationship between farmers, food producers and consumers. This provided valuable insight into perceptions of SFSCs and possible innovative solutions and business models to improve the success factors of SFSC.
Bottlenecks relating to Labour
Bottlenecks for SFSCs highlight that there is still little knowledge and experience in how to manage and develop human resources, and that there is often a lack of professional staff for designing and operating a business model for a specific case. Whilst the competent application of the business models can serve as a tool for the improvement of competitiveness, the lack of business models for recruitment and human resources management can be an issue for the SFSCs. To address these barriers and provide solutions to SFSC practitioners, a “Best practice guide for improve business
performance in short food supply chains” has been developed to support the application of reference exploitation models, improving business performance in SFSCs and helping farmers, food producers and regions to capitalise on their distinctive territorial capital. This guide will be soon available on the project innovation platform.
Understanding the purchasing behaviour of both rural and urban consumers can help address consumer demands which, in return, improves the competitiveness of SFSCs. Consumer awareness is also important, with many placing values on local food not only for its health and environmental benefits, but also because of the support that it provides to their local community. For those in urban areas who may not have a strong connection with rural areas or direct awareness of the struggles of local farmers, improving their motivation to purchase local food can have a wider positive impact not only on revenue for SFSCs, but also on rural development. This can take the form of increased job opportunities thanks to increased support for local farmers and direct sales.
Five different exploitation models outlining possible new directions for SFSCs were identified:
1. Cooperative of producers; in which members who produce the same or similar products, produce, process, distribute, market and sell the products cooperatively.
2. Individual producers: the most common model, in which many farms operate as individually owned businesses.
3. Community supported agriculture; places emphasis on sustainable agriculture, shared production risk, consumer involvement with production activities and authenticity of local sourcing.
4. Online and offline marketplace; where independent producers are offered a platform/market to sell goods without the burden of a brick and-mortar store.
5. Promotion of on-farm selling; maintaining a primary objective to promote/support on-farm and online selling by individual producers and also to improve the visibility of the farm.
By the end of the project, SMARTCHAIN hopes to have positively impacted the capacity of SFSC practitioners to design new processes leading to new business models and more efficient, equitable, sustainable and better performing value chains. At the same time increasing stability in the agri-food sector, ensuring that rural areas across Europe will be territories where people can live and work freely, and ultimately contributing to job, growth and investment in the local economy.
SMARTCHAIN’s new booklet “Insights & recommendations to support collaborative Short Food Supply Chains” will spur further initiatives aimed at changing the European food supply chain model. This booklet presents the main applicable results and recommendations coming from the project for farmers and other SFSC practitioners. The booklet will be soon available on the Platform in nine languages: Dutch, French, English, German, Greek, Hungarian, Italian, Serbian and Spanish.
The project recently held its European multi-stakeholder Final Conference.
This article was composed by SMARTCHAIN project team members, and intersects with the ROBUST Community of Practice focused on New Business Models and Labour Markets.
Dr. F° Javier Casado Hebrard, SMARTCHAIN
Branwen Miles, SMARTCHAIN