During the last lecture, we had the chance to analyze and confront different Supply Chain in the agrifood industry. This lead to the discovery of this new concept of business. Globalization, along with rapid demographic changes and evolving regulatory and legislative interventions, dictates the increasing demand for high quality, value-added and customized agrifood products. It is only during the last ten years that the agrifood industry has recognized and started embracing this model of supply chain as a key concept for its competitiveness.
What is Agrifood?
This is the business of producing food agriculturally. These chains are designed to increase competitive advantage through collaboration in a venture that links producers, processors, marketers, food service companies, retailers and supporting groups such as shippers, research groups and suppliers. In general, this is comprised of a set of activities in a “farm-to-fork” sequence including farming (i.e. land cultivation and production), processing/production, testing, packaging, warehousing, transportation, distribution, and marketing. The basic characteristic is the market-focused collaboration, these businesses enterprises work together, combining market products and services, effectively and efficiently.
Grounding their business with these ideas, Bontà Viva, is expanding in the market. This is an Italian company, based in Rivoli and born in 1990. They have a solid experience in the sector and their idea is to become an excellence in the fresh vegetable soups. Their strength is in what they offer, directly related to how they offer it.
The idea comes from the States, where these ready-to-eat foods are very popular, with the added value of genuine and healthy food.
The company is split into two areas: the conventional and the organic-gluten free. The first account circa 100 recipes of soups, side dishes and salads while the second, ranks first in Italy in terms quality and number of recipes, at present 30. The company works in a factory of 12.000 square meters of which 6.000 are dedicated to the production facilities. Everything is equipped with tools using renewable energy and all the packaging are recyclable.
The Business Model
This company is working to be highly innovative, being sustainable is of great importance, as well as offer great quality of food and make profit from it. Their supply chain is completely transparent, they buy from certified firms and the ingredients are always prepared, cooked and preserved within 8 hours of arriving in the factory.
The preservations modes are two different:
- Blast chilling: from 80°C to 4°C for all the products that will be sell in the Italian market (this method guarantee 60 days of shelf life)
- Pasteurization: products that will be exported outside Italy and this method guarantee a shelf life of 120 days
Agrifood Supply Chain
Agrifood supply chains exhibit a set of unique characteristics that differentiate them from classical supply networks and raise the need for special managerial capabilities.
- Unique nature of the products as in most cases they refer to short life-cycle goods,
- High product differentiation, seasonality in harvesting and production operations,
- Variability of quality and quantity on farm inputs and processing yields
- Specific requirements regarding transportation, storage conditions, quality, and material recycling
- Need to comply with national/international legislation, regulations and directives regarding food safety and public health, as well as environmental issues (e.g. car- bon and water footprints)
- Need for specialised attributes, such as traceability and visibility
- Need for high efficiency and productivity of the expensive technical equipment, despite the long production times
- Increased complexity of operations, and the existence of significant capacity constraints.
This is an example of a general Agrifood Supply Chain.