Value transformation in agriculture

The agricultural supply chain that has dominated the way we get our food has evolved as a fragmented, opaque series of transactions that occur to fill the gap between the producer and the consumer. Many of these transactions add no value to the consumer, rather, they serve to capture value for some link in the supply chain.

As they add no value, it is fair to ask “are they necessary”, and in many cases the answer will be “No”, in others it will be that whilst it may add no value, it is a necessary cost, like transport.

Were we to set out to re-engineer the supply chain with consumer value as the driving force, what would we change?

Well, a fair bit, much of it as a result of the communication and data transfer capabilities that have exploded in the last decade.  There is now absolutely no reason a grower cannot see where his product goes, each transformational stage, every point at which it is moved, and the costs and margins involved.

Whilst there are sensitive commercial implications in all this, the technical capability is there, and using those capabilities to eliminate costs and margins that do not serve the consumer will increasingly become the focus of competitive activity and innovation.   

Wool is the archetypal Australian commodity,  and it is also representative of the worst of commodity “marketing” where each link in a very complicated operational  chain is a set of strand-alone transactions. However, even in this conservative, institutionalised chain, there are rays of light, enterprises like WoolConnect    that have evolved over a considerable period, to deliver a transparent, collaborative chain that has eliminated much of the cost that adds no consumer value, becoming far more productive in the process.

I am working with a small group of horticulture growers and specialist retailers in Sydney on a pilot, a transparent, demand driven chain that responds to consumers,  not what growers have on the floor, or what wholesalers think they can squeeze a good margin out of, but real demand.  It is a fascinating exercise, one that is hopefully successful and commercially scalable.

This will deliver tree ripened fruit to consumers the day after it has been picked, and similarly, veggies harvested this morning, on your plate tomorrow.

“Sydney Harvest” brand, get used to seeing it in your  greengrocer.    

Innovation in a horticulture supply chain, who would have thought??