Co-operation and economic relationship as determinants for competitiveness in the food sector: the Spanish wheat to bread chain

The objective of the paper is to investigate the impact of co-operation amongst stakeholders of the food chain on enterprise competitiveness. The analysis focuses on the Spanish wheat to bread chain. A theoretical model is developed which covers the main components that define competitiveness (profitability, turnover, market share, customer loyalty and product quality), quality supply chain relationship (trust, commitment and satisfaction) and the main factors explaining supply chain relationship (i.e. quality and frequency of the communication, personal bounds, etc.). The Spanish wheat to bread supply chain has been chosen to empirically test the model. This sector is very fragmented all along the chain, with a high number of wheat farmers, millers and bakers. Exchanges in the sector are mainly done in the open market but there is an increasing tendency to maintain stable relationships with suppliers to assure quality. Therefore, stakeholders in the wheat to bread chain are mainly using two types of economic relationships: “repeated market transactions” and “spot market” but the former is by far the most used. Based on data from a standardised survey with farmers, processors and retailers a structural equation modelling approach has been applied to empirically test the influence of relationship quality on stakeholders’ competitiveness in the Spanish wheat to bread chain. The main conclusion of the study is that, as the quality of the relationship in the Spanish wheat to bread chain improves the stakeholder’ competitiveness increases. The results also reveal that quality of the relationship in the Spanish wheat to bread chain is based on trust, satisfaction and commitment with buyers/sellers and strongly influenced by communication quality and quantity. In addition, the outcome shows that the quality of communication has an indirect positive effect on stakeholders’ competitiveness through the relationship quality. Finally, the only factor that will influence the quality of the relationship is the equal power distribution along the chain. Moreover, personal bounds positively influence the quality of communication in the bread Spanish supply chain