Value Chain - Descriptions

 
 
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Value chain approaches | Retail value chain | Food service value chain | Retail and food service links
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The Value Chain Unit is part of the Processing Industry & Workforce Development Branch. Staff members deliver key value chain information and coordinates with Alberta businesses to build value chains in the agri-food industry in Alberta.

Our clients are:

  • Small to medium-sized companies
  • Retailers
  • Food service operators
  • Processors
  • Suppliers (producers)
  • Marketing Boards and industry organizations
We help support industry sectors involved in:
  • Bakery
  • Dairy
  • Eggs
  • Grains
  • Meats
  • Natural health products
  • Produce
  • Other
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Value Chain Approaches

Internationally, many definitions are used to describe value chains. The aim of a value chain is to realign the agri-food chain to the end consumer where the emphasis is on value creation and innovation.

A value chain occurs when companies need to collaborate to improve quality, increase systems efficiencies, or develop differentiated products to achieve a more rewarding position in the market place.

In essence, companies are working closer and smarter.
Value chain approaches are widely recognized as a leading-edge business strategy, requiring that every link in the chain create value for the end consumer. No one link – retail, processor, supplier or producer – can go it alone. Risks and benefits are shared among chain members.

Value chains accelerate innovation by involving the end customer (such as retailer or food service operator) who understands the demand of the market. This results in a chain that is very responsive to the market needs.

A product is easy to copy, but in a value chain, a company has more strategic options, greater opportunity for differentiation and higher rates of innovation. This is impossible to replicate.

The value chain, not the individual company is the unit of competition.

Three key attributes:
  1. Strategy: Focus on creating value for your customer and consumer through product and process innovations and developing differentiated products.
  2. Capabilities: Chain partners assemble existing and new skills and capacities to deliver enhanced value.
  3. Relationships: Strategic relationships are formed between partners, link capabilities, and become an integral asset that can’t be bought or sold.
These combined attributes result in a strengthened competitive advantage that is unique and benefits all chain partners.

Read "Value Chain Leadership - Balance five value trade-offs," here (912 KB PDF).

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Retail Value Chain

Fresh food innovation in retail requires links to the chain to become part of the value-added process. The retailer is an active participant and is key to the fresh food innovation process. It is retailers who mostly determine the role of the supplier and the rate of innovation in fresh food chains. Additionally, the retailer plays a role in the product idea, product development, and launch cycles in fresh food innovation

Benefits to the retailer encompass:
  • being first to market with product innovations
  • having limited exclusive listing on new products
  • providing a test market for product and process innovations that drive category growth
  • securing sustainable supplies for the entire chain
  • benefiting from locally-sponsored advertising that supports local growers/producers
  • applying the cost savings to the bottom line, and applying the value chain to other category procurement.

Goal:
Category Leadership in the marketplace. There is a great potential to add value and profitability to new categories through merchandising and value-added products. Value Chain projects are the beginning of a closer and smarter working relationship between the retailer and identified suppliers. Each project has the potential to grow into a long-term relationship. The goal of these relationships is to provide a win for the stores, a win for the supplier, and a win for the consumer.

To view the Fresh Food Innovation Paper that the Alberta Value Chain Initiative was involved in creating, click here (110 KB PDF).

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Food Service Value Chain

Innovation in food service requires every link in the chain to become part of the collaboration process, ensuring improved product innvations and streamlined kitchen processes. The aim is to establish value chains with food service chains, explore collaboration between food service operators, processors and suppliers, and others involved in these innovations.

Retail and Food Service Links: Funding sources and program support
Many public and private sector groups are available to offer technical assistance or sources of funding. These groups have been established as tools to encourage growth and competitive development in the agriculture and agri-food industry.

Value Chain proponents can draw from a variety of funding sources to assist with their specific value chain projects. Below are links to some of these programs: top of document

Staff Contact

For more information contact:

Margurite Thiessen
Phone: 780-968-3513
Email: margurite.thiessen@gov.ab.ca
 
 
 
 

Other Documents in the Series

 
  Value Chain - Descriptions - Current Document
Value Chain - Education/Training
Value Chain - Frequently Asked Questions
Value Chain - Success Stories
 
 
 
 
For more information about the content of this document, contact Margurite Thiessen.
This document is maintained by Joan Bates.
This information published to the web on January 30, 2008.
Last Reviewed/Revised on July 3, 2013.