New directions in the agricultural food supply chain: Why competitors need to cooperate to survive

For decades, competition has been at the core of the agricultural and food industry. Retailers compete for market share, suppliers protect their margins, and logistics networks are often regarded as core advantages that require strict confidentiality. However, according to James Rothwell, Head of Supply Chain at the Institute of Grocery Distribution (IGD) in the UK, rising costs and growing pressure for sustainability are forcing companies to rethink this model.

Recent research by IGD indicates that agricultural supply chains are entering a new era where companies must "do more with less." This means handling increased transport volumes, improved service levels, and greater supply chain resilience, all while facing tighter financial pressures. Rothwell stated: "When you look at the market, you see a balance forming between downward cost pressures and the need for increased investment."

Multiple pressures are converging. Agricultural companies face rising costs for labor, energy, and transportation, while also dealing with geopolitical tensions, extreme weather, and shifting consumer expectations. In recent years, the vulnerability of global supply chains has been exposed multiple times: disruptions to key routes like the Red Sea have forced ships to take detours, increasing costs and uncertainty; geopolitical hotspots such as the Strait of Hormuz have highlighted the risks of relying on fragile supply chains. At the same time, climate change is affecting crop planting, harvests, and the supply of key raw materials through unpredictable weather.

Bottlenecks in Efficiency Improvement

Many large retailers and manufacturers have been optimizing their supply chains for years, investing in automation, forecasting systems, large vehicles, warehousing technology, and data platforms. But Rothwell believes these companies have already squeezed out most of the obvious efficiency gains. "Companies that have been continuously improving have already squeezed the juice out. Your network is already highly efficient—pallets, inventory, and new data science technologies have been optimized to the extreme."

The next step for improvement, he argues, will come from going beyond corporate boundaries and improving connections between companies.

Practical Cases of Collaborative Sharing

Rothwell cited the example of French retailer Carrefour: Carrefour invested in a natural gas-powered fleet as part of its decarbonization strategy, but the infrastructure needed to support the fleet came with significant costs. Instead of keeping the charging station network entirely to itself, Carrefour opened it up to competitors, generating additional revenue while helping other companies reduce emissions. Rothwell believes similar thinking could emerge in the UK, especially in the area of electric freight. "If I have 30 trucks and you have 30 trucks, you can charge at my place, and I can charge at yours—that creates a mutual aid network."

Sharing infrastructure can make expensive investments more affordable and help smaller suppliers participate in the transition to clean transport.

Collaboration May Become a Business Necessity

However, Rothwell does not believe the entire industry will suddenly become open collaborators.However, Rothwell does not believe the entire industry will suddenly become open collaborators. Instead, he thinks collaboration will first occur among the enterprises that need it most. "Previously, or even now, such collaboration is limited to elite companies with the widest networks," he notes. He points out that the opportunity lies with the thousands of small and medium-sized suppliers between large retailers and global food companies. "At least 60% of a retailer's sales come from small and medium-sized suppliers, yet these suppliers are entirely outside the scope of the collaboration we are discussing."

This issue is critical because retailers face increasing pressure from sustainability commitments, including reducing supply chain emissions. Rothwell cites suppliers in regions like southwest England: areas that maintain important food production due to tradition, quality, and agricultural conditions, but where large-scale logistics infrastructure is difficult to establish. "To achieve emission reduction targets, large retailers still need to help these suppliers decarbonize." Collaboration can lower the costs and risks of the transition.

Technology and Infrastructure

Technology will also play a central role, but Rothwell warns companies not to invest blindly before laying a solid foundation. "The most common mistake is when companies say 'we are focusing on AI' without understanding what they actually need AI to achieve. It should be: What do I want to use AI for? Is my data ready? How do I build on that?"

His advice for food companies is to start preparing now. "Lay the groundwork now: prepare your data, assess your data points, integrate strong data integrity principles, and ensure clean data flow at key decision points in the supply chain." He also warns that as supply chains become more interconnected, cybersecurity risks become a new potential source of disruption. Technology can improve efficiency but also creates new vulnerabilities.

Rothwell believes that successful companies will be those that balance investments in efficiency and resilience. "Planning work starts now." The future of agricultural supply chains is not just about who can operate efficiently alone, but more likely about who can build the strongest collaborative network around themselves.

Industry ImpactThe cooperative sharing model will significantly impact agricultural production efficiency: by sharing charging stations, storage, and transportation resources, small and medium-sized farms and suppliers can reduce operating costs, improve equipment utilization, and thereby enhance overall supply chain efficiency. In terms of farm operation models, small-scale producers no longer need to invest in expensive infrastructure themselves; instead, they can connect to the shared network through cooperation with large retailers or logistics companies, focusing on production. The agricultural labor structure may be adjusted due to automated logistics and digital scheduling, with some traditional transportation positions replaced by technology, but new positions in data management and network coordination will emerge. The resilience of the food supply chain will be enhanced; the shared network can diversify risks and prevent the paralysis of the entire chain due to the disruption of a single node. Regarding food prices, in the long run, efficiency improvements and cost sharing will help curb price increases. Agricultural investment will shift toward shared infrastructure, digital platforms, and clean energy logistics. In the global trade landscape, regions with advantages in shared networks may attract more investment in food processing and distribution. For sustainable agricultural development, sharing electric truck charging networks can significantly reduce carbon emissions and promote the achievement of decarbonization goals.