1. Introduction
The agricultural sector is currently under pressure to be sustainable and, at the same time, provide safe food to meet the demand of a growing world population. The efficient management of agri-food supply chains is a key concept for the agri-food sector’s competitiveness, while also generating increasing interest among researchers and practitioners due to the growing demand for high quality, freshness (local), added value and customized agri-food products. It is important to highlight that the concept of a sustainable supply chain currently seems to encompass a wide range of possible aspects, on the one hand requiring actors to fulfill environmental and social criteria, while on the other hand expecting that competitiveness will be maintained by meeting customer needs and related economic criteria [
1]. Emphasizing the environmental dimension, the literature suggests a new “green” or sustainable supply chain paradigm [
2]. Including a social point of view, the sustainable supply chain paradigm is defined as a set of supply chain practices aimed at reducing environmental impact (measured in terms of carbon dioxide emissions, waste reduction, water consumption, etc.), as well as at improving the social condition of different stakeholders while contributing to the long-term economic development of the chain [
3].
Numerous theoretical studies have attempted to determine what must be done to be both sustainable and competitive, yet few have analyzed the strategies that are actually applied in practice [
4]. The present work seeks to fill this gap. From the practical point of view, the concept of sustainability within supply chains is quite broad, given that traditional strategies such as increasing flexibility, transparency, stock management, and so on may also affect environmental and social dimensions [
5].
The distribution of agri-food products in Europe is currently undergoing a restructuring process, which affects retailers [
6,
7]. One of the most prominent changes is the growth of large-scale distribution. In contrast, more than half of the European farms specializing in horticulture measure less than two hectares, and they commercialize their products primarily through small-scale marketing cooperatives [
8]. This restructuring implies drastic changes in supply chain processes [
9], which affect the participation and collaboration of its participants [
10,
11,
12]. In this context, suppliers are weak links that must find a way to adapt if they wish to survive when facing increasingly demanding customers with respect to product quality and safety, strict supply and environmental requirements, and low prices.
This article describes various supply chain management (SCM) strategies of retail distribution companies, focusing on the most prominent firms in Europe and on perishable products, specifically vegetables. Spain is the main European exporter of fruit and vegetables and its southeast region supplies around 64% of all horticultural exports. This specific area in southeast Spain comprises many small-scale suppliers (mainly cooperatives), whose production represent approximately 35% of all vegetables consumed in Europe in autumn–winter. In order to determine whether small-scale suppliers are able to provide sustainable, flexible, and efficient service to large-scale distributors, we analyze how the horticultural supply chain operates, beginning with the grower/seller in southeast Spain to its final destination in the supermarkets of other European countries.
The modern supply chain of horticultural products has well-defined phases that have been simplified in recent years (
Figure 1) [
7,
13]. In the first phase, consideration should be given to the companies that sell horticultural supplies to growers, given the importance they have acquired in terms of marketing and their dominant presence (e.g., ChemChina, Syngenta and Bayer, and Montsanto). Moreover, seed and biotechnology companies increasingly design the final product with the end consumer in mind. The second phase of the supply chain is local trade, which involves cooperatives and auctions that receive products directly from growers and sell, for the most part, to purchasing groups and distributors (currently accounting for 70% of sales). Purchasing centers are companies run by distributors with the goal of concentrating and optimizing orders. Most large-scale retailers have main offices in Spain, such as Socomo (Carrefour), Edeka Fruchkontor, Zenalco (Auchan), Valencia Trading Office (Metro), Coop. Trading, among others.
Within this scenario, the grower/seller is an intermediate stakeholder with little influence due to the existence of a clear imbalance of negotiation power [
14]. However, there is a lack of in-depth knowledge on these relationships and there are few recent studies that analyze strategies related to the SCM of large retail distributors in Europe. The present study aims to fill this gap in the literature by focusing on the existing relationships between large-scale distribution and small-scale fruit and vegetable suppliers in this case of southeast Spain. The goal is to study the challenges that these small suppliers must face in order to remain part of the supply chain. The results obtained contribute to the knowledge regarding some of the most critical issues that need to be addressed by the members of vegetable supply chains in order to be efficient and sustainable. In addition, they allow for the identification of future research areas.
The remainder of this paper is structured as follows:
Section 2 presents a literature review of the peculiarities and tendencies of the perishable supply chain, the conceptual framework, and the hypothesis;
Section 3 explains the proposed methodological framework; and the results and discussion are shown in
Section 4. Finally, the main conclusions, some limitations, and future lines of research are summarized.
2. Literature Review: Perishable Supply Chains
The current supply chain structure is characterized by the variability of consumer demands, increased technology, and external socio-economic factors. This context requires closer relationships within supply chains and supply networks, which are understood as the series of operations necessary to produce and distribute products in correct quantities to chosen destinations in as little time as possible, all with the goal of satisfying the needs of the consumer [
15]. This relationship is basically an inter-organizational network composed of multiple supplier–supplier–customer combinations, in which the improvement of an individual firm can only be achieved by optimizing the system as a whole [
16]. One of the features of such a network is that one of the members, usually the retailer, exerts an influence over the remaining members; this is referred to as the “hub firm” [
17]. In the specific case of agricultural products, the dominant firm is the retailer [
18].
In terms of agricultural products, the chain must make maintaining quality and food safety standards of merchandise a top priority throughout the entire process from seed to fork [
19]. With respect to perishables, consumers prefer products that are the freshest and have a reasonable price, which requires careful “fine-tuning” of SCM in terms of production planning and scheduling [
13], in addition to coordination–collaboration–communication among companies [
7,
20]. Kumar et al. [
21] found that coordination strategies are positively correlated with performance. In fact, the perishable supply chain is very complex due to the nature of the product, high uncertainty in demand and cost, and the increased consumer concern for food [
22]. Thus, stakeholder cooperation is an important issue for optimal SCM performance [
23]. In this sense, Manzini et al. [
24] highlighted the interdependency of implications and decisions on food quality and environmental sustainability of supply chain processes and activities. This process is complicated even more so by the high number of intermediaries operating as fruit and vegetable brokers [
25,
26]. In this context, the fact that the products are perishable substantially reduces the time allowed for storage and transport processes [
27], so much so that there is a general understanding that a certain amount of loss is inevitable [
28]. One way to avoid this situation is to treat these products with special care along the supply chain, paying closer attention to certain aspects such as transport time, transportation systems (multimodality) [
29], intermediary storage, and a reduction of handling processes [
30], always taking into account the reduction of environmental footprint [
31].
The complexity of resolving these issues, combined with the presence of consumers that are more concerned about sustainability and the environmental impact of the foods they buy [
32,
33], is prompting retail distribution to increase its use of short supply chains (SSCs). These chains are characterized by the existence of direct grower–consumer relationships, a reduced number of intermediaries, and minimized use of transportation. The incorporation of new digital business models supports this trend [
34]. Such chains are made possible by the fact that products are grown in the same area in which they are consumed (proximity sales), which, in turn, fosters significant local social and economic benefits [
35]. Short supply chains of proximity (SSCP) are normally associated with the sale of specific products that are not standardized. Recently, various studies have questioned the fact that this type of chain is linked to local development and the reduction of environmental impacts [
36]. Viewed from another perspective, the term “short” might not refer to spatial proximity, but rather to keeping consumers completely informed about location and systems of production [
37,
38]. These chains are sometimes categorized as spatially extended (SSCE). In general, SSC may be seen as an approach to resolve problems that affect supply networks, particularly for the commercialization of European horticultural products. In addition, the consumer, in practice, identifies this type of chain with the concept of sustainability.
In sum, in the case of perishables, the relevant literature recognizes a series of both generic and specific trends that are closely related to each other, such as quality [
39,
40], uncertainty handling [
41], health, SSC, CO2 footprint, and inter-modality [
42], whose degrees of actual implementation in the chain are unknown.
Conceptual Framework and Hypothesis
Taking into account the particular characteristics mentioned above, six factors can be considered as playing a fundamental role in designing of a perishables supply chain [
11]. These factors are (see
Figure 2): (i) production scheduling [
43,
44], (ii) transportation [
29,
45,
46], (iii) location of intermediate facilities [
47,
48]; and, transversally, (iv) guarantee of quality and food safety [
49,
50,
51], (v) sustainability [
4,
39,
52], and (vi) coordination–collaboration–communication among actors, including the end customer [
53,
54,
55,
56]. It is important to note that quality and food safety are differentiated from other sustainability variables, primarily because these concepts are so vital to the agri-food chain that they become a separate entity (that is, they are a necessary condition). Retailers must establish their own policies regarding actions aimed at improving these variables, essentially urging their suppliers to adopt such practices. How quickly the latter adapts to this system is crucial for maintaining a satisfactory relationship for both parties [
39,
57].
With this framework in mind, we may ascertain whether the small enterprise supplier of perishables is capable of satisfactorily responding to the requirements of their client (the retailer) with respect to the fundamental aspects that define the strategic plan of the supply chain. Diverse studies have analyzed the unequal relationships within perishable product supply chains, thus making supplier–client collaboration within the supply chain difficult [
8,
10,
11]. As well, difficulties related to investment in conforming to protocols of quality, traceability, and other requirements that the customer considers indispensable are evident [
27]. Subsequently, such research assumes as a point of departure the hypothesis:
Hypothesis 1 (H1). There is a gap between the priorities of the retailer and the response of the small supplier enterprises with respect to sustainability in supply chain management.
Other works emphasize the necessity for growth of the supplier in order to improve negotiation capacity and, in parallel, to increase functional efficiency [
7,
13,
18], which improves the competitiveness of the supply chain as a whole in the face of competition from other supply chains [
58]. Therefore, the following sub-hypothesis is assumed:
Hypothesis 1a (H1a). Small supplier size and low efficiency can impede an agile response to the demands of supplier clients.
5. Conclusions
This work has centered on the disequilibrium of the relations between small supplier enterprises and retailers, and the difficulties of strategic management in perishable supply chains. As a new contribution, this article has analyzed the capacity of small suppliers of perishable vegetables to satisfactorily respond to the demands of their clients (retailers) with respect to the fundamental aspects that define the strategic planning of sustainable supply chains. We have shown the diversity in the approaches taken to sustainability, as well as demonstrating the potential role of collaboration.
The fruit and vegetable suppliers of European retail distribution chains must respond to their customers’ requirements if they wish to maintain their position. At present, the demands made on such suppliers are increasing. This trend is visible in the rigorous audits that companies conduct on suppliers prior to signing business agreements, which are typically followed by periodic inspections. In addition, the supplier–customer relationship is undergoing changes. Retailers tend to establish supply chains that are shorter and more vertical (SSCE-type), eliminating not only intermediaries and brokers, but even local marketing firms (cooperatives), with the aim of dealing with growers directly. There is also a growing trend towards SSCP given its high acceptance rate among consumers, although these are still currently a minority. It should be noted that, among consumers, there is a growing recognition of SSCs as sustainable chains. In sum, retailers are aware of the importance of a sustainable chain, yet they also understand the difficulty of implementing such a system, both for them and their suppliers. Indeed, they are “translating” the concept into direct sales and the simplification of processes, without directly addressing the issue.
On the other hand, the suppliers, the majority being cooperatives or social enterprise entities of small sizes, have problems in responding to their clients. They have had to concentrate their efforts in operational problems, centered on food safely, leaving aside those strategic aspects related to environmental and social sustainability. In this framework, the attitude of the retailer is contradictory, because it favors the atomization of its suppliers, when on the contrary it has been shown that large enterprises can better respond to their demands for sustainability.
From the point of view of practical implications, this context requires a more proactive attitude by suppliers. Furthermore, it is necessary to have properly qualified and dedicated human capital to know, understand, and manage what is required by customers. In parallel, the retailer should be involved in improving the competitivity of its suppliers through collaboration, not simply limiting themselves to imposing requirements without providing or supporting the means to implement such demands. The gap between customer demands and supplier response may increase in the future if mutual collaboration links in the chain are not improved. Changes made locally should not be imposed by customers, which is precisely the current situation, and retailers might be jeopardizing their entire supply as local firms do not appear to be prepared to respond in the medium and long terms. The sharing of strategic information between retailers and suppliers, so as to improve integration, may be a first stop to close the gap, given that it would free up the resources of suppliers who could then dedicate themselves to improving other processes. In general, retailers should select their suppliers and initiate a much more stable relationship.
Although the results obtained may be of interest to other similar agri-food supply chains, this work has several limitations that could serve as references for future research. For example, since the present work focused on the largest retail distribution chains in Europe, a comparison with other international supply chains could be of interest (that is to say, to determine if such strategies are geographically stable). Additionally, future work could focus on expanding the strategies and variables considered and also determining their evolution over time. As well, the sample of products could be expanded beyond perishables to determine the strategic differences, both for the retailer and supplier, given that the product could have an influence on SCM. Finally, the role of technology and ICT in enhancing collaboration in sustainable SCM should be explored.