At the heart of our global food system lies the agri food industry. An industry made up of farmers, processors, traders and all kinds of crucial suppliers, together providing our daily food – whether its dairy, meat, fruit, vegetables, bread or any other kind of food you can think of. Do you want to better understand how this complex, innovative industry that is pivotal to our future works? Find a clear overview of its structure on this page.
As the agri food industry covers foods and food processing operations, there is no easy way to provide a clear definition of this industry. In general, one could say the agri food industry covers all companies that in either way contribute to the current food offerings in our supermarkets and restaurants — with the sole purpose of feeding our population. Part of the agri food industry are industries such as the dairy, meat, fish, fruit, vegetables and bakery industry. In total, the agri food industry is worth 8 trillion dollars and employs 40% of the total workforce worldwide (source).
Over the last few decades, the agri food industry has developed from a mostly regional orientation into serving a global market. As a result, agri food companies have not only seen their market grow exponentially, but also noticed the number of competitors increasing – and complexity in general. Due to this global landscape, the agri food market is constantly shifting and adapting to changing market needs. At this moment in time, the biggest challenge for the industry is to scale up and improve the production process in such a way that we can feed a population that keeps on growing. At the same time, more sustainable ways of production need to be found to be able to keep on feeding the population in the future as well.
The agri food industry consists of various supply chains that all contribute to the industry’s sole purpose: delivering a finished product that consumers can enjoy.
Overall, the agri food supply chain can be divided into five main players:
Genetics providers: companies that provide the starting ingredients, such as seeds or sperm.
Primary producers: the farmers, who grow crops or raise cattle.
Processors: the companies that turn the produce, milk, or meat into the food we know – like bread, cheese or a steak.
Traders: companies that match supply & demand by buying and selling products, often international.
Suppliers & service providers: all the crucial suppliers and service providers, like crop protection, machinery for in factories and conditioned logistics to get fresh products from A to B.
All members of the agri food supply chain have to work together in order to optimize their processes and better serve consumers’ needs. However, their level of flexibility in adapting to the changing needs of consumers vary greatly. Whereas the primary producer can quite easily decide to start producing a different type of crop, the processor has invested in a certain infrastructure and cannot switch that easily. The trader is the most flexible of all, as they can buy and sell what is most in demand at the time.
Due to these movements taking place at every level of the agri food supply chain, it can turn into a quite complex system. For all members of the supply chain, it, therefore, is a constant process of searching for the right balance between meeting consumers’ changing needs, and building a strong foundation in the overall agri food supply chain.
The agri food industry is always evolving. Despite that, three larger movements can be distinguished that most likely will shape the future of all players within the agri food industry:
Increasing demand: due to an overall growth in population and prosperity, the demand has increased significantly. Companies in the agri food industry have to come up with ways to produce food more efficiently, and find ways to enter new markets.
Sustainability: responding to the growing demand, companies must find more sustainable ways to produce without exhausting the world’s resources.
Shorter supply chains: consumers increasingly wish to get their food closer to the source. How does this shape the existence of some players in the agri food supply chain?
The agri food industry is ever-evolving. In order to keep-up with the competition, it is of vital importance to know what's happening in the industry so you can act accordingly. Our trend reports share insights on the performance of the agri food industry during COVID-year 2020 and share a strategic outlook for the industry. Based on our in-depth analysis of data from 2015-2020, we published a report for each of the main sectors in the agri food industry: bakery, dairy, fruit & vegetables, and meat. Download the reports for free via the button below.