What is a Value Chain?
A value chain is a business model based on collaboration. An agri-food value chain is a partnership between producers, processors and marketers created to improve quality, increase efficiencies or develop and market differentiated products to make all partners more profitable. Value chains allow members to be more competitive by seeking market opportunities and linking production and processing requirements to meet consumer demand.
The goal of a value chain is increased profits for all value chain partners, as they capitalize on market opportunities and deliver a quality product that consumers demand.
Comparison between a value chain and traditional business relationships:
| Value Chain | Traditional | |
|---|---|---|
| Communication | Extensive | Little or none |
| Value Focus | Value/Quality | Cost/Price |
| Product | Differentiated product | Commodity |
| System Driver | Consumer Pull | Production Push |
| Organizational Structure | Interdependant | Independant |
| Business Relationships | Collaborative | Adversarial |
| Source of Supply | Known and Traceable | Anonymous |
| Source of Risk | Relationships | Market and Price |
How a value chain can help your business:
- Increase efficiencies
- Reduce costs
- Consistency of supply
- Market differentiation
- Increase food traceability
- Knowledge and information sharing
- Reduce and share risk
Value Chain Success Stories:
- Canadian Prairie Bison – www.cdnbison.com
- Prairie Berries – www.prairieberries.com
- Canadian Prairie Lamb – www.sksheep.com/prairielamb
- Little Red Potato Company - www.littlepotatoes.com
