Aimpoint Research’s Industry Wargame Reveals Insights and Future Dynamics on the Evolving Agri-Food Value Chain

Ripe for Disruption

The Industry Wargame revealed tremendous overlap and inefficiency across the agri-food value chain, which makes traditional industries and institutions vulnerable to disruption.

“The dynamic of overlap and inefficiency presents a significant vulnerability to disruption from players outside of the agri-food value chain given the tremendous monetary potential at stake,” shared Sciotto. “This vulnerability could be turned into an opportunity if a clear leader emerges in the industry to lead disruption from within.”

Transparency & Traceability

One visible theme throughout the wargame is that transparency and traceability will be the future standard for the food system. Therefore, the product for consumption includes not only the commodity, but also the production and input data.

“Transparency and traceability requirements will eventually be imposed on all sectors of the supply chain, including ag inputs. Currently, the industry lacks a clear leader to lead data collection and transmission. In the absence of a leader, food companies and retailers will likely develop and own the technology, setting the standards and requirements for the rest of the food system,” said Sciotto.

Food not Farms

Industry teams did not place an emphasis on saving struggling farms, with accelerated rates of consolidation generally accepted and acknowledged. Traditional farms received pressure from the value chain to meet future transparency and traceability requirements. Industry groups across the supply chain, including ag inputs, chose to focus on the consumer as their end customer, not the farmer. The future is about food, not farms.

Conceding the Consumer Relationship

In spite of recognizing the need to produce for the consumer, groups across the value chain largely conceded consumer relationships to food companies and retailers. This dynamic is likely to propel growth and increase vertical integration, shifting greater market share and power to food companies and retailers.

“Neglecting the consumer relationship will put segments of the agri-food value chain at a significant disadvantage in the industry,” cautioned Sciotto. “As consumers evolve, food companies and retailers are in the position to quickly adapt to consumer demands. Traditional organizations in agriculture will need to align more closely with consumers. The path to success centers around delivering what the consumer wants and fostering those relationships with a focus on shared values.”

Advocacy & Global Leadership

Wargame groups across the agri-food value chain made significant investments in policy in response to all three future wargame scenarios presented. During the wargame, U.S. government institutions were perceived to lack the proactive focus and agility to seize the initiatives proposed. This dynamic sets the conditions for other state actors and private global companies to bypass U.S.-based operations.

“There is a clear need for private and governmental organizations to proactively lead and advance U.S. food power that is being challenged by China and others across the globe. U.S. agriculture needs a unified and proactive advocacy effort pursuing opportunities, countering threats and preparing for contingencies to support a vibrant future for the industry,” shared Sciotto.

Urban & Vertical Farming

Throughout the wargame, participants gave little consideration to vertical and urban farming.

“This blind spot to disruption in the industry could prove to be a missed opportunity as vertical and urban farming continue to grow with significant capital backing their expansion. Urban and vertical farming also provide solutions to consumer concerns around climate, traceability, local foods, and they greatly reduce distribution costs,” explained Sciotto.