THE IMPACT OF STRATEGIC ALLIANCES IN THE AGRI-FOOD INDUSTRY: CO-CREATING ECONOMIC, SOCIAL AND ENVIRONMENTAL VALUE

According to the Sustainable Development Goals (SDGs) and the Paris Agreement of the United Nations Framework Convention on Climate Change 2015, some of the social challenges facing the agri-food industry are: eradicating hunger, achieving food security, improving nutrition and promoting sustainable agriculture by 2030 (OECD-FAO, 2019).

These challenges are configured as a call to generate alliances between companies in the sector to redesign their business models in such a way that, in addition to creating economic value, they also create social value. This invitation becomes even more relevant when it is recognized that, in addition to meeting basic food needs, the agri-food industry provides livelihoods for close to two billion people (OECD-FAO, 2019), contributes to social cohesion in rural areas and preserves traditions and cultural heritage (Van Huylenbroeck et al., 2007).

In the academic literature on business strategy, it is possible to identify various theories that have tried to address the social challenges of the territories by positively impacting the economic benefit of their companies. For example, the Shared Value strategy identifies social challenges as an opportunity to create economic value, while the Co-opetition strategy finds in the relationship between competitors an opportunity to cooperate in the creation of value for the collective benefit.

These two theories are relevant for the creation of economic and social value in the agri-food industry, as they involve local companies competing in the same market – co-opetition theory – and therefore share the same social challenge of encouraging conscious and responsible consumption of their products – shared value theory.

In this context, the generation of alliances between companies in the agri-food sector would allow the promotion of the culture behind each local product and would give rise to a new market niche characterized by conscious and responsible consumption in which customers would value products for the added social impact they represent and would therefore be willing to pay a higher price.

The economic attractiveness of this new market would incentivize cooperation between competing companies within the agri-food industry to adopt sustainable business models and develop a socially responsible local market. In this way, beyond the economic benefit that companies would seek with their co-opetitive strategy, the establishment of partnerships for cooperation would contribute to the social benefit of the territory in which they operate by creating shared value.

Finally, the implementation of alliances based on co-opetitive strategies and shared value in the local Agro-Food Industry, in addition to contributing to the competitiveness of its business fabric, also encourages the development of a Sustainable Food System in accordance with the standards proposed by the United Nations: economic sustainability (it is always profitable), social sustainability (it offers broad benefits for society) and environmental sustainability (it has a positive or neutral effect on natural resources).

Ultimately, the implementation of partnerships in the local agri-food industry will ensure food security and nutrition for all people in a way that does not compromise the economic, social and environmental foundations for future generations.

Written by Mondragon Unibertsitatea (MUE), Spain

Original article: https://samexperience.eu/the-impact-of-strategic-alliances-in-the-agri-food-industry-co-creating-economic-social-and-environmental-value/