How shared value and value co-creation are transforming agricultural B2B relationships

Emerging research highlights the pivotal roles of shared value creation and collaborative approaches in reshaping agricultural supply chains, fostering innovation, trust, and economic satisfaction amid growing global food demands.

The intricate dynamics of business-to-business (B2B) relationships in the agricultural sector are increasingly influenced by concepts of value co-creation (VCC) and the creation of shared value (CSV). A recent empirical study aims to bridge th...

e existing research gap by analysing how these constructs impact economic satisfaction, loyalty, and the overall quality of relationships between agricultural companies and input suppliers.

Agricultural inputs such as seeds, fertilisers, and agrochemicals play a pivotal role in equipping farmers to meet both predictable and unpredictable challenges in food production. The global demand for food is expected to increase by 56% between 2010 and 2050, underscoring the importance of efficiency and knowledge transfer in these B2B relationships. These transfers not only influence farm profitability and competitiveness but also have wider implications for rural development, employment, environmental sustainability, health, and food safety. Despite this critical role, the marketing of agricultural inputs often experiences “commoditisation,” especially in developing countries, where value propositions among suppliers are poorly differentiated, leading to knowledge gaps and limited innovation.

In this context, CSV emerges as a strategic framework that integrates economic success with social and environmental progress. Coined by Porter and Kramer, CSV advocates for business policies that simultaneously enhance company competitiveness and improve the conditions in the communities where they operate. Unlike traditional corporate social responsibility (CSR), which tends to focus on social benefits often disconnected from a firm’s core strategy, CSV is embedded in business models and seeks new value creation opportunities by reconceiving products, markets, and value chains. This dual focus is particularly relevant in agriculture, where companies are integral to the rural communities they serve and sustainability is becoming a market standard rather than just a competitive advantage.

The study posits that CSV positively influences value co-creation by fostering collaboration between agricultural companies and input suppliers. This collaboration goes beyond transactional interactions and is crucial given the high fragmentation of the agri-food supply chain and the growing consumer demand for socially and environmentally responsible food production. Empirical findings from other research highlight that equitable relationships, shared responsibilities, and trust significantly enhance value co-creation. For instance, studies show that equity fosters collaborative value creation, while a shared sense of responsibility aligns partners toward mutual goals. The role of trust and commitment in these relationships is emphasized as fundamental to building what is referred to as relationship quality (RQ).

RQ captures the intangible elements of business relationships including trust, commitment, and satisfaction, which are dynamic and cumulative. The importance of RQ is well-documented in B2B marketing, as it governs how relationships develop, their longevity, and the profitability they generate. Agricultural companies and their suppliers often navigate asymmetrical dependencies due to the essential but commoditised nature of agricultural inputs, making trust and long-term commitment critical for sustaining these collaborative efforts.

Economic satisfaction (ES) is a key outcome of high-quality relationships and value co-creation. Defined as the positive evaluation of business relationships based on efficiency and profitability, ES is driven by perceived benefits outweighing relationship costs. While social satisfaction also plays a role, in agricultural supply chains, rational economic decisions often dominate due to the limited competition and financial dependencies among partners. Research in service and industrial relationships supports a model where RQ influences ES, and VCC enhances ES by improving information sharing, service quality, and profitability.

However, the path is not without challenges. The potential for value co-destruction exists when mistrust or poor resource management undermines collaborative efforts, which can be particularly detrimental in sectors with limited bargaining power and low profit margins such as the upstream agri-food chain.

Additional insights from related studies reinforce these points. For example, collaborations in platform-based agricultural services have demonstrated improvements in production and sales capabilities, highlighting the commercial benefits of co-creation initiatives. Agricultural cooperatives also underscore the role of transparent information exchange and mutual trust in creating competitive advantages through shared value creation. Furthermore, systemic approaches to selling within B2B contexts reveal that value co-creation is a multi-actor phenomenon, propelled by digital ecosystems and involving complex integrations beyond simple dyadic relationships.

Collectively, these perspectives affirm that CSV and VCC are interdependent constructs vital for the sustainable and profitable development of the agricultural input supply chain. By prioritizing relationship quality and fostering collaborative innovation aligned with sustainability goals, agricultural companies and input suppliers can improve economic outcomes and strengthen their competitive positioning while contributing to broader social and environmental objectives.

This evolving understanding challenges firms operating within traditional, firm-centric models to embrace a more integrated, network-based approach to value creation—an approach that is increasingly necessary to meet the complex demands of modern agri-food systems and the global imperative for sustainable food production.

Source: Noah Wire Services