Source: adapted from Humphrey, J. and O. Memedovic (2006) “Global Value Chains in the Agrifood Sector”, United Nations Industrial Development Organization Working Paper, Vienna. J.W. Grievink (2003) The Changing Face of the Global Food Industry, OECD Conference, The Hague.
The agri-food supply chain, which is a standard supply sequence in a food system ranging from inputs to the final delivery, concerns several actors. Since food supply can be considered the most extensive and prevalent, its consumer base is essentially the entire population. In the case of Western Europe, 89 million customers are using 170,000 retail outlets, which makes food available to 160 million consumers (e.g. members of a household).
There are about 3.2 million food producers in Western Europe, supplying tier suppliers and manufacturers. These suppliers are using the inputs of producers to make intermediary food products used to make final goods. However, despite the size of the food system, the purchasing power is concentrated in a rather limited number of buying desks, which are agencies responsible for purchasing food products on behalf of large retailers. 110 buying desks account for 85% of the total retail food in Western Europe. These food items are then distributed and sold to large supermarkets and retail outlets. In the United States, a large supermarket can carry 40,000 separate food items, while this number can be around 30,000 in Europe. The shape of this supply chain is similar to a funnel since a small number of actors have a high level of control and pricing power.