Received: 18 May 2023 Revised: 6 September 2023 Accepted: 7 September 2023

DOI: 10.1111/jscm.12310

SOCIETAL IMPACT ARTICLE

Transforming food supply chains for sustainability

mez 1
Miguel I. Go | Deishin Lee 2

1
Dyson School of Applied Economics and
Management, Cornell University, Ithaca, Abstract
New York, USA Modern food supply chains—infused with scientific and engineering
2
Ivey Business School, Western innovations—have made food increasingly more affordable and accessible. Yet
University, London, Ontario, Canada
there is growing concern about the long-term sustainability of our food system.
Correspondence Over time, the inputs (e.g., water, fertile soil, fossil fuels, and chemicals) and
Deishin Lee, Ivey Business School, working resources (e.g., land and labor) required for industrial food production
Western University, London, Ontario,
Canada. and its associated supply chain structure have become more scarce and hence
Email: [email protected] more expensive. At the same time, the by-products of these farming and supply
chain activities (e.g., farm runoff and greenhouse gas emissions) have often cre-
ated negative externalities on the environment and human health. To improve
the sustainability of food production, research from the life sciences recom-
mends adoption of transformative farming methods that incorporate ecological
principles in a sustainable approach to farming. Operationally, this approach
leverages economies of scope. In order to maintain strategic alignment, changing
food production methods should be complemented with appropriate changes in
the rest of the supply chain, including consumption habits. We propose a
research agenda informed by findings from the life sciences, which integrates
approaches from supply chain management as well as food and agricultural eco-
nomics, to align all food supply chain partners with sustainable food production.

KEYWORDS
environment, food supply chains, social responsibility, sustainability

1 | INTRODUCTION employment (USDA-ERS, 2022a). Modern food supply

chains in the United States—infused with scientific and
Food is a central part of our global society. It is not only a engineering innovations—have made food increasingly
life-sustaining necessity but also culturally significant, more affordable and accessible.1 Yet there is growing
playing an essential role in traditions and rituals around concern about the long-term sustainability of our food
the world. Thus, it is not surprising that societies
1
prioritize the functioning of food supply chains and their In the United States, the average share of income spent on food has
declined from 17% in 1960 to under 10% in 2019 (USDA-ERS, 2019).
contribution to the economy. In 2020, food accounted for
Compared to the rest of the world, US households spend less of their
12.4% of the expenditures of US households, and agricul- income on food (World Economic Forum, 2016), yet the prevalence of
ture and agriculture-related industries accounted for 5.0% undernourishment in the United States is among the lowest in the
of US gross domestic product and provided 10.3% of US world (FAO et al., 2022).

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© 2023 The Authors. Journal of Supply Chain Management published by Wiley Periodicals LLC.

J Supply Chain Manag. 2023;59:79–92. wileyonlinelibrary.com/journal/jscm 79

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80 JOURNAL OF SUPPLY CHAIN MANAGEMENT

system. In particular, will we be able to produce and pro- processes that are engineered, food production is primar-
vide access to enough food to feed a growing population ily a biological growth process. Agricultural science has
while preserving scarce natural resources critical to sus- advanced our understanding of plant and animal physiol-
taining food production and distribution? ogy, allowing farmers to control many aspects of the bio-
The purpose of this article is to propose a research logical growth cycle (within a range). However, unlike
agenda that integrates approaches from supply chain engineered production processes, farming is bound by
management (SCM) as well as food and agricultural eco- biological limits in terms of output rate, production
nomics (FAE) for improving the long-term sustainability schedule, quality, and quantity, among others, and sub-
of food supply chains. We focus on the US context, as a ject to the uncertainties of weather and natural disasters.
particular approach to food production has become prev- Moreover, farming is regulated by policies that encourage
alent there. Additionally, we focus on supply chains with certain behaviors (e.g., what and how much to produce)
land-based farming of crops and livestock for the purpose (Gardner, 2006).
of providing food. Given the important and distinctive nature of food
Although this topic could benefit from the work of production, we expand the canonical supply chain frame-
many fields (e.g., rural sociology, soil science, agricultural work of aligning product and supply chain characteristics
engineering, and mechanical engineering), we limit our to an alignment of three interdependent pillars of a food
agenda to SCM and FAE because there are ample oppor- supply chain: food producers (farmers), non-producer
tunities for productive collaboration between these areas businesses (e.g., distributors and retailers), and con-
to improve the sustainability of food supply chains. SCM sumers (Figure 1). This expanded framework explicitly
and FAE together cover the process, product, material, distinguishes food producers from other supply chain
and consumer aspects of food supply chains and their businesses. For a successful FSC, how food is produced
interdependencies. These areas and this context are also should align with the characteristics of how it is delivered
where our expertise lies, and thus, we can better identify to the market, which in turn should align with consumer
specific and relevant areas of study. We do, however, preferences and the demand for food.
draw heavily on research from agricultural and life sci- In the United States, FSCs over time have evolved to
ences to identify farming practices that may be unsus- embody their current strategically aligned form. The
tainable and also to provide insights on sustainable dominant food production model in the United States is a
farming methods. In particular, we apply operational and large single-crop or single-animal (monoculture) opera-
economic lenses to examine the findings from a compre- tion (Knudsen et al., 2006). The term “industrial farming”
hensive study of agricultural systems by the National is widely used to refer to these large-scale, specialized
Research Council (NRC) of the National Academies of operations that make intensive use of agrochemicals and
Sciences and reports from the Food and Agriculture physical capital (NRC, 2010).3 The underlying opera-
Organization (FAO) of the United Nations and the tional concept that is leveraged to create value in mono-
European Commission (European Commission and culture operations is economies of scale. An investment is
Directorate-General for Research and Innovation made in fixed, specialized assets to produce a particular
and Group of Chief Scientific Advisors, 2020; FAO, 2018; product at low marginal cost. The measure of efficiency
NRC, 2010). is typically applied to the investment asset (usually
machinery or land) and maximizing the utilization of the
asset is critical to profitability, often focusing on
2 | S T R A T E G I C A L I G N M EN T I N the short term.
FOOD SUPPLY CHAINS Farm policies in the United States have contributed
substantially to the dominance of industrial farming,
It has been long established that for any well-functioning particularly in the second half of the 20th century. These
supply chain, there must be strategic alignment between policies included price supports and crop insurance
product (demand) and supply chain characteristics
(Fisher, 1997). In a food supply chain (FSC),2 food pro- 3
Our focus is on the United States, where industrial farming is
duction (i.e., land-based farming of crops and livestock) prevalent. However, there are examples of industrial farming methods
characteristics drive much of the operations in other being used in other countries, for example, soybean production in Brazil
parts of the supply chain. In contrast to other production (Spanne, 2014), pig farming in China (Standaert & De
Augustinis, 2020), coffee in Vietnam (Vu Le et al., 2021), and chicken
meat in the United Kingdom (Wasley & Davies, 2017). The
2
In this paper, “food supply chain” refers to all processes (e.g., sustainability issues related to industrial farming in the United States
production, processing, distribution, and retail) done to bring food from would likely also be relevant in those areas where industrial farming
a farm to the end-consumer. practices are used.
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
TRANSFORMING FOOD SUPPLY CHAINS FOR SUSTAINABILITY 81

F I G U R E 1 Three interdependent pillars of

a food supply chain.

programs for selected major commodities such as feed visits but larger quantity of food purchased), the super-
grains (primarily corn and soybeans), wheat, cotton, and market retail format was conceived. The supermarket
rice, among others (Gardner, 2006). These policies were sector experienced substantial economic concentration
intended to increase productivity (e.g., output per acre with a few large firms dominating the market, similar to
and output per worker), improve the competitiveness of other businesses upstream in FSCs. In recent years, the
the US agricultural sector in international markets, increase in online grocery shopping (accelerated by
stabilize farm level prices and income, and address the the COVID-19 pandemic) has further cemented the
vulnerability of the farm sector to macroeconomic events advantage of large grocery chains who have the resources
(Bonnen & Schweikhardt, 1998). An important feature of to offer the online channel (Hamstra, 2023).
these policies is that the level of subsidies increased in Thus, we have today a holistic supply chain strategy
the size of the farm operation, further increasing the ben- where large, single-crop or single-animal production
efits of economies of scale in industrial farming. operations go hand-in-hand with large-scale input sup-
Industrial farming (food production) is matched in pliers, and large-scale processing, distribution, and retail
scale by economic concentration of food processing and networks, to service households that can store food for
distribution (downstream buyers) and agribusiness sales longer periods (Figure 2a). There is no doubt that the
to farmers (upstream suppliers). Thus, farmers must fre- industrial food production model has substantially
quently buy inputs from large companies with selling increased the productivity and cost-efficiency of FSCs
power while also facing large—sometimes global—food and has contributed to improvements in food security. It
processors and retailers with greater buying power has increased the amount of food produced and distrib-
(McLaughlin & G
omez, 2014). In fact, it was because sup- uted (often over long distances), offering a wide assort-
ply chain partners consolidated, resulting in small- and ment of foods available year-round at affordable prices to
medium-sized farmers being subjected to market pres- consumers, including low-income individuals (USDA-
sures, that the size and specialization of food production ERS, 2022b). Moreover, the increased scale of farms and
(farming) operations increased throughout the 20th cen- of processing, distribution, and retail operations has
tury. In the 1920s, there were over six million farms in facilitated the coordination of supply chain activities via
the United States, and the average size was less than contracts and other mechanisms, further increasing the
200 acres. By 2021, however, there were fewer than two productivity and cost-efficiency of modern FSCs.
million farms, with an average size of nearly 500 acres
(USDA-ERS, 2021). This was accompanied by farm
specialization4 (monoculture) and the decoupling of crop 3 | W H A T I S U N S U S T A I N A B LE?
and livestock production (De Roest et al., 2018).
Changes in food retailing paralleled the increase in A distinctive feature of FSCs—food production—is the
scale along the rest of the FSC. Before 1950, the predomi- part that most heavily uses scarce natural resources
nant food market consisted of service grocery stores (e.g., land, soil, and water5) and is therefore the most
(i.e., where clerks filled each order separately). But as prone to cause negative environmental impacts
labor became more expensive, home refrigeration became (Forssell & Lankoski, 2015). There is growing scientific
widespread, and time-starved consumers began to evidence that the dominant industrial food production
demand “one-stop shopping” as well as greater conve- model is undermining the resource base it depends on to
nience in their food purchases (i.e., less frequent store be productive.

4
In 1900, farms in the United States grew five commodities on average,
5
typically a mix of crops and livestock, but by 1992, the average had In the United States, 52% of the land area and 85% of water
dropped to less than two commodities per farm. consumption are used for food production (USDA-ERS, 2022a).
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
82 JOURNAL OF SUPPLY CHAIN MANAGEMENT

FIGURE 2 Strategic alignment of two different types of food supply chains.

Industrial food production is primarily a linear consumers. Therefore, food is often transported long dis-
process that often involves applying synthetic inputs to tances, which may have negative environmental impacts
accelerate the biological growth process to produce large- (e.g., from logistics or spoilage, King et al., 2010; Özbük &
scale quantities of a single output. The focus on a few Coşkun, 2020; Weber & Matthews, 2008).
commodity crops, planted successively at scale, year after Over time, the inputs (e.g., water, fertile soil, fossil
year using tillage, reduces soil fertility and soil health fuels, and chemicals) and working resources (e.g., land
and hinders the land’s future productive capacity and labor) required for industrial food production and its
(Lobb, 2008). Linear food production also produces associated supply chain structure have become more
concentrated amounts of by-products that harm the envi- scarce and hence more expensive. At the same time, the
ronment, further eroding future food production capacity. by-products of these farming and supply chain activities
Moreover, input-intensive farming can be expensive, par- (e.g., farm runoff and greenhouse gas emissions) have
ticularly for smaller farms, especially as weeds and pests often created negative externalities on the environment
develop resistance to agrochemicals. This forces farmers and human health. These are chronic consequences of a
to increasingly apply synthetic inputs, often increasing linear approach to value creation—consumption of
the farmer’s financial burden (Tilman et al., 2002). inputs without replenishment and generation of by-
For example, intense use of chemical fertilizers and product and end-of-life waste streams (Ellen MacArthur
pesticides creates farm runoffs that can pollute the water Foundation, 2023). Even food itself is wasted—in
supply and alter local natural ecosystems (Hladik et al., shocking amounts. In 2021, 80 million tons of food
2014; Keiser et al., 2019). Concentrated animal-feeding (approximately 40%) was wasted in the United States
operations produce animal waste in amounts that can be (ReFED, 2023). As consumers and producers viscerally
toxic to humans and life in local ecosystems (Gilchrist feel the impacts of climate change and deteriorating nat-
et al., 2007). Animal waste can be anaerobically digested ural ecosystems, there is growing demand for account-
to produce biogas for energy use and soil products to alle- ability for more environmentally and socially responsible
viate the environmental impact, but these systems have FSC processes (e.g., Chaudhary et al., 2018; Lakhani
yet to become widespread on farms (Pennington, 2021). et al., 2022). Many nongovernmental and private organi-
Moreover, farm policies that have supported the emer- zations that are concerned about the economic and envi-
gence of industrial food production have largely ignored ronmental sustainability of the current model have called
negative externalities such as soil degradation, water con- for more sustainable food production and distribution
tamination, and environmental pollution, among others practices (e.g., Elks, 2013; United Nations, 2014).
(Bonnen & Schweikhardt, 1998).
In terms of global impact, farming activities generate
significant amounts of greenhouse gas emissions (e.g., in 4 | H O W TO BE SU S T A I N A B L E ?
the United States, it accounts for 11.2% of total green-
house gas emissions, USDA-ERS, 2022a). The geographic To improve the sustainability of FSCs, the first step is to
concentration of food production necessitates large distri- understand how food production methods should change
bution networks that transport the food globally to to become more sustainable. The changes to food
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
TRANSFORMING FOOD SUPPLY CHAINS FOR SUSTAINABILITY 83

production will require new farming processes, equip- may not be sufficient to achieve the long-term goal of
ment, and training of farmers. The extent of the farming sustainable food production (and may in fact create a
changes required will be considerable. Moreover, before rebound effect, inducing more harmful activities).
any changes can be implemented, farmers must be con- Achieving this long-term goal also requires a transfor-
vinced to undertake them—this could be biggest chal- mative approach that is fundamentally different from
lenge of all. To help change the mindset of farmers and industrial methods. The words “regenerative,” “circular,”
facilitate a successful transformation to sustainable FSCs, and “polycultural,” among other descriptors, have been
we need to develop the ability to connect sustainable used in the context of transformative food production
farms with consumers.6 Therefore, it is critical to under- methods. We use the NRC (2010)’s definition of transfor-
stand how the operational nature of sustainable food pro- mative food production methods as those that “capitalize
duction methods differs from the current industrial on synergies, efficiencies, and resilience characteristics
method, so that strategies can be developed to align the associated with complex ecosystems and their linked
supply chain to make food accessible to consumers. Con- social, economic, and biophysical systems.” The key dif-
sumers may also have to change their consumption ference between transformative approaches and indus-
habits to maintain alignment (see Figure 1). We draw on trial farming is the use of production methods that
research from the life sciences to understand the opera- incorporate ecological principles, that is, agroecology
tional principles of sustainable food production (below). (Wezel et al., 2009). The NRC (2010), FAO (2018), and
We use these principles to inform a research agenda on European Commission and Directorate-General for
how to align the rest of the supply chain and consump- Research and Innovation and Group of Chief Scientific
tion characteristics with sustainable food production Advisors (2020) all emphasize agroecology as a promising
practices (Section 5). sustainable approach to food production. In fact, agro-
Recent reports from the Food and Agriculture Organi- ecology is one of the few operating-level recommenda-
zation (FAO) of the United Nations (FAO, 2018) and the tions in these reports.
European Commission (European Commission and Among the proliferation of terms, the word “regener-
Directorate-General for Research and Innovation ative” best captures the essence of food production using
and Group of Chief Scientific Advisors, 2020) reinforce ecological principles—these processes can regenerate and
and build upon the tenets of sustainable food production therefore sustain or even strengthen themselves. How is
presented in a research report by the National Research this possible? By combining multiple symbiotic biological
Council (NRC) of the National Academies of Sciences processes that produce a diversity of crops or livestock,
(NRC, 2010). After a comprehensive study of FSCs, the the waste stream of one process becomes the input of
NRC proposed two parallel approaches to sustainable another. Thus, resources regenerate each other by simulta-
food production: incremental and transformative. The neously solving the waste proliferation and input deple-
incremental approach incorporates efficiency concepts tion problems. This can only happen if we combine
that are familiar to the SCM discipline. For example, effi- different biological processes to jointly produce a diver-
cient water use and precision farming techniques use sity of products. Examples of regenerative processes
inputs more efficiently and create less waste (Hatfield & include the use of the symbiotic relationship between
Dold, 2019). Conservation tillage systems can reduce soil animals and crops to close the nutrient cycle, for exam-
erosion (Mitchell et al., 2009). The techniques in the ple, rice-duck farming (Hokazono & Hayashi, 2012).
incremental approach seek to reduce the unintended neg- Thus, increasing biodiversity and integrating livestock
ative externalities caused by industrial food production. and crop production are core principles of regenerative
Although helpful, these incremental approaches alone agriculture (McGuire, 2018; Newton et al., 2020).
The economic concept reflected in these ecological
principles is economies of scope. Panzar and Willig (1981)
6
Agricultural and food policies can play a critical role to promote
defined economies of scope as being “less costly to com-
changes in production practices. For example, government can increase
support to farm conservation and farmland protection programs; make
bine two or more product lines in one firm than to pro-
investments in research and extension to train farmers on sustainable duce them separately.” This definition implicitly assumes
agriculture methods; and subsidize farmers through Payments for the outputs are the same, but they are produced using
Ecosystem Services to monetize benefits of sustainable agriculture two different production methods with differing costs
including drawing down carbon from the atmosphere, improving soil (i.e., jointly or separately produced). However, in an agri-
health, and increasing water retention and aquifer recharge, among
cultural operation, how food is produced affects its qual-
others. In addition, government can implement Pigouvian taxes on
foods that generate negative externalities (e.g., environmental pollution) ity. Therefore, a comparison of production costs for a
to incentivize increased consumption of foods produced using bushel of corn grown using ecology-based farming versus
sustainable farming methods. monoculture farming, for example, would not capture all
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84 JOURNAL OF SUPPLY CHAIN MANAGEMENT

the relevant comparison dimensions. Not only are the understanding the factors that influence FSC perfor-
outputs of the two production methods different, the mance. The SCM literature has a strong foundation of
externalities generated by the two methods differ work on the efficient management of (perishable)
(e.g., impact on the environment and human health and inventory, production, and distribution of food at the
impact on soil health and future capacity to produce operating level (see excellent surveys in Ahumada &
food). For this reason, it is difficult to do a strict cost com- Villalobos, 2009; Akkerman et al., 2010; Karaesmen
parison between sustainable farming methods and indus- et al., 2011). More recent work has taken a systems level
trial farming (examples of attempts at comparison are perspective (including policy) on FSCs (e.g., Ali et al.,
given in EIT Food, 2020; Lee, 2012; Starmer et al., 2006). 2023; Beske et al., 2014; Gereffi & Lee, 2012) and empha-
Nonetheless, we use the term “economies of scope” in a sized the use of technology in FSCs (e.g., Ben-Daya et al.,
broader sense here because it captures the operational 2019). There is also a strong body of literature emerging
essence of food production using ecological principles— on sustainable FSCs (e.g., Akkas & Gaur, 2022; Beske
that jointly producing different products can create more et al., 2014; Jain & Gualandris, 2023; Lee &
value than producing each product separately. Tongarlak, 2017; Krishnan et al., 2020; Pullman &
In contrast to industrial food production that mostly Wu, 2011). Recent work on transformational change in
leverages economies of scale to produce a single product, supply chains is particularly critical to moving towards
ecology-based food production leverages economies of more sustainable FSCs (e.g., Gualandris & Klassen, 2018;
scope to jointly produce multiple horizontally differenti- Melkonyan et al., 2019; Wieland, 2021).
ated products (Lee, 2016). Importantly, the relative The literature in FAE has also generally taken the
quantities produced are determined by ecological viewpoint of the system or supply chain (including
relationships. Currently, farms using ecology-based consumption). The focus has been on agricultural indus-
methods that leverage economies of scope tend to be trialization and the resulting externalities (e.g., Fuglie &
smaller and make less use of specialized capital equip- Clancy, 2017; Gollin et al., 2014; Wang et al., 2015),
ment (Conser, 2021; Granperrin, 2023). They also competitiveness and market power of product and input
typically use fewer purchased inputs, relying instead on markets (e.g., Swinnen & Vandeplas, 2010; Sexton &
natural ecosystem services for inputs (which synergisti- Xia, 2018), risk management along FSCs (e.g., Goodwin
cally provides waste management). Managing such oper- & Hungerford, 2015; Just & Pope, 2013), consumer
ations requires deep knowledge of the ecological and preferences and demand for sustainable attributes of food
biological process interactions, which tend to be highly (e.g., Cecchini et al., 2018; Fan et al., 2019; Van Loo
location-specific (based on climate, soil conditions, and et al., 2020), and also an emerging stream of research on
the natural landscape). sustainable FSCs (e.g., Atallah et al., 2014; Barrett, 2021).
Although there are strong complementarities between
the research in SCM and FAE, these literatures rarely
5 | A L I G N IN G T H E intersect, particularly to conduct research on how to
SUPPLY CHAIN improve FSC sustainability. We argue that the increasing
urgency of developing more sustainable FSCs—which
Although research from life sciences has uncovered the involves changing food production, processing, distribu-
principles of sustainable food production, implementing tion, retail, and consumption—calls for increased inte-
these principles on working farms is a significant and gration of these two disciplines. We suggest the following
ongoing challenge. This challenge is exacerbated by poli- high-potential areas for interdisciplinary collaboration.
cies that incentivize farmers to maintain the current
method of industrial farming and focus on particular
crops that are subsidized. Therefore, effecting changes in 5.1 | Changes to supply chain structure
food production will require changes in process and
policy. In parallel with and to complement these efforts Modern supply chains consist of complex interconnec-
in food production, we also need to conduct rigorous tions of multiple organizations. Ultimately, the goal is to
research on how to align the rest of the supply chain with match supply and demand. Although the demand signal
sustainable food production practices. We submit that often becomes distorted by differing incentives along the
integrating the perspectives of the SCM and FAE disci- supply chain, organizations primarily manage their activ-
plines can be productive for conducting research to meet ities to produce and deliver the right quantity of product
this challenge. to the right place at the right time. In that sense, the
The literatures in SCM and FAE in the food and agri- demand for the product acts as an imperfect coordinating
culture domain have made substantial contributions to signal. For example, the forecasted demand for eggs
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
TRANSFORMING FOOD SUPPLY CHAINS FOR SUSTAINABILITY 85

provides information to facilitate the coordination of more from vertical integration or disintegration? Will the
activities in the supply chain and the value created for structure of a food supply chain fundamentally change
the egg consumer is captured and split among the various from being aligned by demand for particular food item
supply chain partners (albeit usually unevenly). Food (e.g., eggs) to being aligned by demand for a composition
items are typically considered commodities; therefore, of food items for a particular region? Or will some other
their supply chains are configured for efficiency. form of alignment emerge? What organizational forms
Ecology-based food production methods that leverage should retail purchasing departments adopt—product
economies of scope are more complex than the single- focus (e.g., fresh vegetables and meat) or supplier focus
output industrial approach. For example, suppose eggs (e.g., Farm A and Farm B)?
are produced with chicken, beef, and field crops in a joint
production process based on ecological principles
(e.g., Lee & van Sice, 2010). The operational complexity is 5.1.2 | Buyer–supplier relationships
exacerbated as we extend to downstream supply chain
businesses who connect producers to consumers. The The nature of buyer–supplier relationships in FSCs can
demand for eggs can no longer be used as the primary span from arms-length (e.g., spot market) to vertical
signal to coordinate the scale, rate, and timing of activi- integration (Zilberman et al., 2019). Arms-length
ties along the supply chain because of production inter- relationships are exhibited in the traditional terminal
dependencies with chicken, beef, and crops. Moreover, markets.7 Transactional relationships can also be facili-
because farms leveraging economies of scope tend to be tated through brokers who arrange the sale of food items,
smaller than industrial farms, they cannot leverage scale matching the demands of buyers with goods of sellers.
efficiencies in transportation to reach distant markets. Informal relationships between buyers and sellers can
Thus, there is poor operational alignment between develop over time through regular interactions. One step
ecology-based food production and large-scale processing, further would be the use of formal contracts—either
distribution, and retail networks. This means that the short or long-term. For many years, large retail food
adoption of ecology-based food production methods chains have established long-term, formal contracts
(leveraging economies of scope) will require significant with big food producers and processors to increase
changes to all parts of the supply chain. We offer research coordination, including in the fresh produce category
questions related to the challenges presented by changes (Sheldon, 2018). Some retailers even share forecasts with
to supply chain structure below. partner farms so that farmers can plan what to grow
accordingly (Kurtuluş, 2017). There is also an increased
trend of retailers vertically integrating in selected product
5.1.1 | Sourcing strategy categories to control costs, increase transparency, or
innovate on product offerings (e.g., Costco’s poultry sup-
Food items are generally sourced as individual items, ply chain for rotisserie chicken; Kroger, Albertsons, and
similar to how an auto-mobile manufacturer would Meijer’s dairy supply chain) (Dongoski, 2019; Dutzler
source common parts such as screws. Typically, a food et al., 2019).
item (e.g., eggs) is sourced from a large supplier Another form of supplier organization is agri-
(e.g., large egg producer) by a large distributor (often cultural cooperatives. Although cooperatives can take
owned by a large retail grocer), who then “breaks bulk” many different economic forms and have varying
and distributes the item throughout its retail network. governance structures, the general notion is the forma-
Suppliers for a particular item are chosen for quality, tion of a farmer-owned organization where resources
(combined) availability, and price characteristics. Those are shared for the purpose of producing and selling
suppliers adjust their operations to align with buyers’ crops and livestock. Examples of agricultural coopera-
(negotiated) terms for quantity, quality, and delivery tives in the US include dairy (Wadworth, 2017),
requirements. grain and energy (e.g., Cooperative Producers, Inc, 2023;
A shift to ecology-based food production breaks the Sunrise Cooperative, 2023), and cranberries
single-item alignment of the supply chain. Moreover, (e.g., Oceanspray, 2023). The coalition of farmers benefits
there may be less “bulk” to break. What will be the opti- from shared resources on the production side, but also
mal or even feasible sourcing strategies for distributors increased market power and marketing resources on the
and retailers? How will the role of distributors change if selling side (Candemir & Duvaleix, 2021).
breaking bulk ceases to be a key functional requirement
in the supply chain and how will this affect the power 7
A terminal market, usually located near a major transportation hub, is
dynamics in the supply chain? Will large retailers benefit where agricultural products from a region are brought to be traded.
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
86 JOURNAL OF SUPPLY CHAIN MANAGEMENT

Regardless of the nature of the buyer–supplier operations on a business-as-usual basis. To manage this
relationship, its basis is typically the exchange of a complexity, a promising new area of research would be
particular food item. Using ecology-based farming to integrate the natural ecosystem services into supply
practices, farms will no longer be oriented around one par- chain models. For example, the Indigenous practice of
ticular food item or even one type of food item (i.e., there jointly growing corn, beans, and squash can increase the
would likely be a mix of crops and livestock). What type of yield of corn by using squash leaves to ward off pests and
buyer–supplier relationship is most effective with beans to fix nitrogen in the ground. It also reduces cost
increased operational complexity? Will more relationship- by decreasing the amount of synthetic fertilizer required
based partnerships in food supply chains develop to allow (Mt. Pleasant, 2006). Even though ecosystem services are
for flexibility to manage the complexity? If so, what not “business” activities, productive work is done. Explic-
organizational capabilities would be needed to build trust itly modeling ecosystem services can help researchers
into the relationship? Will vertical integration become better characterize supply chain behavior and design
more or less prevalent? Complex farming operations could mechanisms to improve sustainability performance.
be a source of competitive advantage for an independent
farmer. However, vertical integration of farming and
distribution or retail could be more effective because 5.1.4 | Example: local food supply chains
operational complexity increases transaction costs.
Alternatively, could terminal markets increase in The emergence of local (or regional) FSCs provide an
popularity again? These markets provide a platform to example of an alternative supply chain structure, which
bring together many buyers and sellers, thereby increasing can align well with ecology-based production methods,
the possibilities for productive exchange when there are and can coexist with and complement the industrial
many different product offerings. In this case, there would model. In local FSCs, food is produced and consumed
be a powerful intermediary between buyers and suppliers. within a geographic area (Cleveland et al., 2015). Geo-
What would be the best mechanism design to ensure graphic limits have several important implications on
equitable distribution of gains across the supply chain? supply chain characteristics, and there is evidence of a
strategic fit between local FSCs and ecology-based food
production methods used by small to medium-sized
5.1.3 | Managing complexity farms producing a variety of products (Fassio et al., 2022).
Often, there is a strong relationship between farmers and
In single-crop or single-animal farming operations, other retailers, with information sharing and flexibility, each
than the biological growing process, activities typically side accommodating the other’s operational constraints
require human intervention (e.g., waste management, when feasible (King et al., 2010). This is simplified by the
pest control, and application of fertilizer). In ecology- proximity of the various organizations involved, and for-
based farming, some of these activities performed mal contracts are not often used as a result. Meanwhile,
through human intervention would be done by natural consumers increasingly care not only about the price and
ecosystem services (e.g., chickens incorporating manure quality of food but also about who, how, and where the
into fields for fertilization) (Costanza et al., 1997; food was produced, and some are willing to pay more for
Harrison et al., 2014; Matthies et al., 2016). In effect, local and regional foods (Feldmann & Hamm, 2015; Fan
much of the “work” required in food production would et al., 2019; Meyerding et al., 2019; Printezis et al., 2019).
be performed as part of natural ecosystem services. This Thus, the food production, non-production supply chain
is the crux of the sustainability benefits of ecology-based activity, and consumption characteristics are aligned in
farming, but it also increases the complexity and uncer- local food supply chains (Figure 2b). Nevertheless,
tainty (e.g., quantity and timing) of food production. retailers procuring locally typically complement local
Sourcing from a single-crop or single-animal farming suppliers with industrial suppliers to ensure product
operation is about getting a specific food item in the right availability and variety, as well as affordable prices for
quantity at the right time. This is already quite compli- consumers (Ata et al., 2012).
cated because of unpredictable external factors such as
weather and pests. With ecology-based food production
methods, distributors and retailers will need to manage 5.2 | Markets
even more supplier complexity. In addition to reacting to
demand changes or supply disruptions on an ad hoc Several markets could fundamentally affect and be
basis, the supply chain will have to adapt to the inherent affected by the transition to ecology-based food produc-
output unevenness of ecology-based food production tion systems.
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
TRANSFORMING FOOD SUPPLY CHAINS FOR SUSTAINABILITY 87

5.2.1 | Food consumers example, ecology-based farming can be used as a way to

capture carbon in the soil (Wiltshire & Beckage, 2022).
Consumer demand and preferences are critical for the This practice could enable farmers to participate in the
transformation of FSCs. A body of literature in FAE exam- carbon trading market. Therefore, farming could provide
ines consumer stated preferences for sustainable attributes income from selling food items and selling carbon credits.
of food products and the implications for FSCs The economics of farm operations could be significantly
(e.g., Cecchini et al., 2018; Fan et al., 2019). Nevertheless, affected by the market for ecosystem services
consumer intentions to pay more for (or choose) foods (e.g., carbon markets). The interaction of how environ-
with these attributes do not always translate into actual mental markets affect the prices, assortment, and avail-
purchase behavior. Behavioral research in marketing, eco- ability of food items is an interesting and important area
nomics, and psychology propose ways to align behavior to of study.
stated preferences, including using social influence, chang-
ing consumer habits, and using emotional levers to change
behaviors, among others (White et al., 2019). Another 5.2.3 | Farm inputs
challenge is that consumers may not be willing to change
their diets because changing dietary habits and behaviors A shift to ecology-based farming would replace some syn-
is difficult (Springmann et al., 2018; White, 2018). For thetic inputs (typically extracted from mines) with those
example, it may be hard to reduce consumption of meat in provided by natural ecosystem services (which are renew-
high income countries because of strong consumer prefer- able). The market for farm inputs would be less signifi-
ences for animal protein and high consumer purchasing cant in FSCs and farmers would be less dependent on
power (Godfray et al., 2018). However, recent studies show agrochemical firms. In fact, farmers themselves could
that it is possible to change diets to support transforma- become suppliers of agricultural inputs in the market for
tional farming by making food products more appealing, organic inputs. Again, the use of ecology-based produc-
easier to consume, and more “normal” (i.e., not segregat- tion methods opens up opportunities for farmers to
ing them from other foods) (Vermeulen et al., 2020). restructure.8 How will this affect the power dynamics in
Researchers can extend the notion that consumers are FSCs? How will this change the distribution of gains
part of the FSC to incorporate behavioral economic princi- along FSCs?
ples to address questions such as the following: Would
consumers be willing to pay price premiums to support
transformational food production and what are the impli- 5.3 | Balancing conflicting goals
cations for FSC configurations and operations? Would over time
consumers be willing to make the necessary dietary
changes to promote FSC sustainability and what are the The NRC (2010)’s report identified four goals to increase
implications for how FSCs operate? What behavioral the sustainability of food production:
nudges (e.g., use of social media and marketing to the
heart) could influence consumers so that stated prefer- 1. Satisfy human food, animal feed, and fiber needs and
ences and actual purchases are aligned? What marketing contribute to biofuel needs.
interventions (e.g., making these products more appealing 2. Enhance environmental quality and the resource
and easier to consume) are more cost-effective for chang- base.
ing consumer habits? What would be the effect of infor- 3. Sustain the economic viability of agriculture.
mation or education initiatives (e.g., mandatory or 4. Enhance the quality of life for farmers, farm workers,
voluntary food labels on sustainable attributes of food and society as a whole.
products) on demand response and the ensuing FSC struc-
ture? What policies can be implemented to change con-
sumer behavior, either on the demand-side (consumers 8
Many advocates of sustainable agriculture also emphasize growing
making different choices) or through the supply side perennial crops (Davis, 2023) to promote soil conservation and increase
(producers offering different choices or changing pricing)? carbon sequestration in the soil. Farmers would also avoid the recurring
cost of purchasing hybrid seeds for each planting. Hybrid seeds are
patented technology that farmers must pay for in each growing season.
This is the dominant form of crop farming in the United States. The
5.2.2 | Markets for ecosystem services
shift to perennial crops or any type of crop from a non-hybrid seed
(i.e., heirloom plants that produce seeds that can be used for future
Transformational farming has the potential to provide plantings) would disrupt the hybrid seed market, likely giving farmers
ecosystem services that create positive externalities. For more market power.
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
88 JOURNAL OF SUPPLY CHAIN MANAGEMENT

Embedded in these criteria is the notion that there coordinate FSC partners during the transition process to
are many stakeholders in the food system, including ecology-based food production and how should they
consumers and communities (Goal 1—meeting demand; evolve throughout the transition?
Goal 4—societal health), the natural environment (Goal
2), farmers and post-harvest businesses (Goal 3), and
workers in all stages of FSCs (Goal 4). The NRC report 6 | SOCIETAL I MPLICATIONS
notes that there can be tension among the four goals and AND CLOS I NG REMARKS
that sustainability is not an end-state to be achieved, but
a continual rebalancing among the four goals. Our proposed research agenda has implications for soci-
The notion of sustainability not being an end-state— ety, given the social and environmental responsibilities of
that it cannot be achieved once and for all—is both pro- supply chains in the 21st century. SCM researchers can
foundly insightful and daunting. We are used to finding make unique contributions to improve the sustainability
the optimal solution for a problem, but given the tensions of FSCs to deliver nutrition and food security for all with-
among the four goals and changing social and environ- out compromising the environmental, economic, and
mental conditions, the priorities among the four goals social bases for future generations. The integration of
will inevitably shift over time. Thus, an important SCM and FAE research approaches proposed here can
research question is how to incorporate the temporal provide valuable information for businesses and policy-
dimension as we oscillate among priorities. makers so that FSCs with sustainable food production
For example, there is often tension between Goal 2 are profitable for all supply actors, have positive impacts
(environment) and Goal 3 (economic). There have been on the natural environment, and generate benefits for
calls in the SCM literature to reprioritize according to society. This is important, as sustainable FSCs will con-
“ecologically dominant logic,” placing environmental tribute to many of the United Nations’ 17 Sustainable
and social needs ahead of economic performance (Gao & Development Goals (SDGs) including “ensure sustainable
Bansal, 2013; Montabon et al., 2016). This approach consumption and production patterns” (SDG 12); “pro-
rejects instrumental logic that assesses all (sustainability) tect, restore, and promote sustainable use of terrestrial
activities based on their impact on economic perfor- ecosystems” (SDG 15); and “end hunger, achieve food
mance and explicitly makes sustainability the central security and improved nutrition, and promote sustain-
objective, with the acknowledgement that there could be able agriculture” (SDG 2) (UN General Assembly, 2015).
short-term tradeoffs to achieve long-term environmental Lessons from the United States can be used to promote
or social outcomes. In line with this approach, our broad- sustainable FSCs globally, as methods of food production,
ened notion of economies of scope could be formalized to distribution, and consumption are experiencing rapid
include benefits as well as costs of food production changes with economic development worldwide.
methods. Thus, the concept of economies of scope can be In closing, a word of caution on sustainable food sup-
extended beyond cost measures to capture economic and ply chain research. A common characteristic of the extant
non-economic value. research is that the data is often drawn from case studies.
The FAE literature has a long tradition of examining This reflects the nature of food production and consump-
inter-temporal tradeoffs on the benefits and costs of tion processes—they are highly location-specific. A chal-
alternative food production practices that depend on lenge to research in this area is therefore to understand
biological and natural processes (e.g., Ang & Oude which insights are specific to a particular locale and
Lansink, 2018; Arellano-Gonzalez & Moore, 2020). Since which are generalizable and to what degree. More impor-
a critical characteristic of ecology-based practices is that tantly, researchers should realize that practical insights
environmental benefits tend to accrue over time and specific to a particular region can be equally and perhaps
generally exhibit higher costs in the short run even more helpful than generalizable—but generic—
(e.g., improvements in soil fertility to support sustainable insights in terms of actionable recommendations towards
production practices may take years), incorporation of more sustainable food supply chains.
this approach would be a productive way to consider We are past the time for a call to action. SCM and
questions such as the following: How can FSCs balance FAE scholars have the opportunity and the
tradeoffs between short-term higher costs and long-term responsibility—now—to help improve the sustainability
benefits of a transition to ecology-based food production? of food supply chains.
What should be the mix of transformative and industrial
production systems over time to keep the cost of food ORCID
affordable to consumers and to ensure food security and Miguel I. G
omez https://orcid.org/0000-0002-3591-5249
affordability? What mechanisms can be used to Deishin Lee https://orcid.org/0000-0002-6335-2877
 1745493x, 2023, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12310 by Jordan Hinari NPL, Wiley Online Library on [27/10/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
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