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Communities in Transition 

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Vertical integration - supply chains
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General
Case studies
Media
General

Vertical integration in agribusiness. Is it a bargain? 2016, Felicetta Carillo, Francesco Caracciolo, Luigi Cembalo

This paper aims to test whether vertical integrated farms show a significant higher economic performance when compared with those not integrated. The Italian Farm Accountancy Data Network was used, for the years 2008-2011, focusing on farms producing durum wheat. Empirically, a propensity score-matching model was implemented in an attempt to estimate average differences, in some farm performance indexes, including costs and profitability, between vertical integrated and non-integrated farms. The analysis on the effects of a vertical integration showed that supply chain integration increases farms' competiveness and profitability.)

Business Case -  Expansion Through Vertical Integration, InnoVeg Horticulture Australia Limited

Guide to help decide whether to expand business activities through additional sorting and packaging into small packages for sale to existing wholesale and retail market places. This example examines the costs and benefits associated with the sweet corn market and opportunities to do some simple ‘value adding’ to create more profit.

Consolidation in agriculture: impacts to the farm, research and agribusiness, 2017, UWA Institute of Agriculture – Industry Forum

ACCC Commissioner Mick Keogh discusses the challenges consolidation presents for Australian agriculture, and the tools to preserve and promote competition in the sector.

Successful Models of Vertical Integration in the Beef Industry Rewards, risks and opportunities for value chain creation in the Australian beef industry, 2016, John R.M. Finlayson, Nuffield Scholar

This report initially examines the fundamental factors that determine the present nature of the Australian beef industry: climatic volatility; export dependency; competition and distrust; and consumer consumption trends. Secondly, the report investigates international models of vertically integrated red meat value chains that have successfully responded to the changing landscape of food culture. It explores businesses that: own the entire supply chain from production to retail; work with trusted suppliers to add value to all partners in the supply chain; develop alliances to market their differentiated products; and cooperatives where members work together to benefit producer and processor.

Vertical integration with joint-venture finance: an alternative business model for the sheep industry, 2017, WA Department of Primary Industries and Regional Development's Agriculture and Food 

An alternative business model is proposed for the Western Australian (WA) sheep industry whereby a vertically-integrated company structure is coupled with joint-venture finance, with off-take agreements at either end and effective marketing to increase profits and restore confidence of producers and consumers. 

Case studies

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Wide Open Agriculture, Williams, West Australia 

Wide Open Agriculture 100% owns and operates three subsidiary companies that allow a complete vertical integration from regenerating landscapes to providing informed customers with a meaningful food experience. The company manages land assets by purchasing land through innovative financing platforms and partnering with regenerative farmers to restore the natural ecology and long-term productivity of the Wheatbelt. By acquiring land to lease back to it's farmer-partners, they hope to transition up to 100,000 hectares of land to natural functionality and deliver 4 returns to the environment and the regional community.

Growing juice company squeezes more from premium market, 2019, Adelaide

Ceravolo Orchards (300ha) produces apples, pears, cherries, strawberries and nectarines. It also has a packing facility and cold storage, which is also used by other nearby orchards. They upgraded their small processing plant (Ashton Valley Fresh) and now have access to a network of local growers and suppliers. They pay around 400% more for the fruit as they understand the costs involved in growing seasonal produce and want their suppliers to be sustainable. Ashton Valley Fresh was recognised at the recent 2018 South Australian Food Industry Awards, winning in the Sustainability and Innovation categories  for achieving zero waste in its juice processing such as water and waste recycling. (installation of an aseptic filler as well as the in-house design and fabrication of an enzyme dosing system to increase juice extraction by up to 7%). 

Value in Value Chains, 2017, MLA

The purpose of this study is to help livestock producers, Meat and Livestock Australia (MLA) and others involved in the red meat industry gain a better understanding of the value that can be derived from direct participation in red-meat value chains, and the characteristics of value-chains that deliver greater benefits.

Case Study 1 – Contract Grower – PORK

Case Study 2 – Branded Product - BEEF

Case study 3 - Integrated production and marketing operation – direct to food service - GOAT

Case study 4 – Integrated production and marketing operation, retail supply and export markets (B2B) - BEEF

Case study 5 - Integrated production and marketing operation, consumer direct supply (B2C) - LAMB

Media

2017

Vertical integration the answer to big changes ahead for beef, Farm Online National

Beef up your exposure to agriculture, Investment Magazine 

How vertical farming reinvents agriculture, BBC

 
 
 
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2018