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The scope and structure of the food supply chain

- To define the term ‘supply chain’
- To define the term supply chain management
- To identify the various sectors of the food supply chain in
the UK
- To discuss the issues for each sector, at each stage in the
food supply chain

The value of spending on food and drink in the UK, whether
on food designed to be eaten in the home, or away from home,
has increased substantially year on year. People’s disposable
incomes are rising, and one consequence of this is their ability
to spend relatively more on sophisticated styles of eating. This
increased ‘spend’ is reflected in the industries which provide
this food at increased profitability; and with this comes
increased complexity. The customer is now more demanding,
and no longer relies on ‘seasonal’ foods. It is now possible,
in fact, to purchase foods from every corner of the globe, at any
time of the year, generally at an affordable price. We are used
to being able to shop seven days a week, and in most urban
areas of the UK, 24 hours a day. The consumer does not expect
to see empty shelves at any time. When eating out, the UK
customer has a very wide choice of eating experiences: takeaways,
bistros, restaurants and coffee shops offering cuisine from
all over the world, and this trend has been replicated by the
major supermarkets who offer packaged takeaway meals to
challenge the traditional outlets. This article explores how organizations
meet these challenges, identifies the issues at every
stage, and considers how the use of partnerships is harnessed
to achieve this. In the first instance, it is necessary to examine
some terminology, and to define exactly what is meant by the
term ‘supply chain’.

Definition of the food supply chain
The food and drink supply chain has been a linear relationship
involving the primary producers, or farmers, the manufacturers
or processors who ‘fabricate’ the food for the table, and the
retailers who gather a range of such products and sell them to
the consumer. Food supplies have traditionally been sourced not
only from within the UK, but widely from all parts of the world.
Indeed the UK was the traditional market for its colonies until
it joined the European Economic Community in 1973. Figure 3.1
shows that the UK continues to import a substantial quantity of
its food.
The food and drink supply chain can be sub-divided into a
number of sectors. Agriculture, horticulture, fisheries and aquaculture
are the ‘primary producers’, the manufacturers who
process the food into products ready for the table or further
cooking, together with the packaging companies, are an intermediate
stage, and the wholesalers, retailers and caterers are the
end stages of the supply chain. At each stage in the chain the
food is passed into a new ownership and ‘value’ is added to
allow for the costs of the journey, and also to provide a small
margin of profit.
In 1999, excluding imports and exports, the entire food chain
was worth £56 billion, contributing towards 8% of the UK’s GDP,
and it employed 3.3 million people (12% of the workforce). It
provided 6% of the country’s total exports, worth £9 billion
(MAFF 1999a).

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