Scaling up agricultural supply chains in the private sector

PepsiCo is a global business operating in more than 200 countries and territories and rooted in creating and delivering iconic, great tasting foods and beverages. A critical aspect of its operations is the ability to take successes in one part of the business and scale them elsewhere. This is increasingly common in agriculture supply chains as participants replicate and adapt to ensure a reliable supply of raw materials that meet cost and quality standards. An important focus of the company’s scaling practices is that sustainability issues be factored in at the start of supply chain development.

The ability to scale makes an especially significant impact when the company expands to new markets and creates new products that demand the development of a sustainable agricultural supply chain to provide raw material ingredients. Emerging markets present great opportunities, but they also present significant challenges. The latter includes an insufficient number of farmers growing targeted crops, gaps in yield and crop reliability, minimal access to capital for purchasing inputs or technology, inability to meet quality criteria or properly store crops, and inadequate infrastructure to transport materials and finished goods through the value chain to market. The ability to scale up, replicate, and adapt business models is crucial to success.

Company agronomists, procurement specialists, and business development associates working in the field develop and execute business models that expand agricultural supply chains to meet market demands. Associates often contract directly with the growers, training them on agronomic best practices, quality criteria, and storage practices that will help increase yields, productivity, and economic returns.

The PepsiCo model for scaling up agricultural supply chains, technology transfer, and agronomic education is used in similar fashion across countries and regions. In each case, the process is adapted to fit local culture, agricultural maturity, politics, and market demands. Following a description of the general scaling-up model, this brief examines two examples.

This brief is one of series on scaling up in agriculture, rural development, and nutrition.

Author: 
Sauerhaft, Beth
Hope-Johnstone, Ian
Published date: 
2012
Publisher: 
International Food Policy Research Institute (IFPRI)
Series number: 
19(8)
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