Intensive Study Program: Challenges and Opportunities for Modern Agribusiness Firms
Bolzano, South Tyrol, Italy.
13 March (Monday) – 17 March (Friday) 2017, Academic Year 2016-2017.
General Information
The Intensive Study Programme (ISP) “Challenges and Opportunities for Modern Agribusiness
Firms” (COMAF) will present a thorough overview of the different aspects characterizing the
modern agribusiness sector. The topics (illustrated in detail below) will cover different aspect of
quality in agribusiness, which include communicating and signaling quality to buyers and
consumers, innovation to achieve quality, standards and industrial quality, and different aspects
of the interactions and coordination among actors in agro-food supply chains.
The course activities encompass a mix of lectures, study visits, interactions with private sector
speakers, group work, and in-class discussion and presentations.
The team of instructors is comprised of:
Francesco Bimbo: PhD student in Business Economics at Wageningen University, and Postdoctoral researcher in Agricultural Economics at University of Foggia. His expertise is in applied
industrial organization, economics of food retailing, and of food, health and quality. He teaches
MS level course in Corporate Finance Management.
Chenguang Li: Lecturer of agricultural economics and international food marketing at the School
of Agriculture and Food Science in the University College Dublin (UCD), Ireland. Her areas of
expertise are industrial organization of food markets and retail chain analysis. She teaches
international food and agribusiness marketing.
Luisa Menapace: Professor of Governance in International Agribusiness at TUM. She focuses on
institutional and governance issues in the agro-food sector and internationalization and teaches
“Agribusiness Governance” and “Value Chain Economics” for the agro-food sector.
Cesar Revoredo-Giha: Senior Economist and Team Leader of Food Marketing Research at
Scotland’s Rural College (SRUC) and lectures at the MSc on Food Security at the University of
Edinburgh. His areas of expertise are in industrial organization of food industries, operation of
agro-food supply chains, and agricultural economics.
Carlo Russo: Associate Professor of Agricultural Economics, Department of Economics and Law
of the University of Cassino and Southern Lazio. His main interests concern the industrial
organization of agro-food chain, collective action in agriculture and the regulation of imperfectly
competitive agro-food market.
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Course Learning Objectives
This course is designed for master students who intend to have a more in-depth background in
modern agribusiness firms’ economics and have a high interest in the European agro food supply
chain. It aims to provide a comprehensive overview of trends, issues and challenges, faced by the
stakeholders operating in the agro-food industries. Students will apply economics principles to
understand the mechanisms of coordination of agro food chain stakeholders, and will be
encouraged to examine critically how agro-food policies affect stakeholders’ behavior along the
food supply chain.
Students Learning Outcomes:
At the end of this course students should be able to:
 Explain the EU agro-food system and highlight challenges from the perspective of its
stakeholders (e.g. farmers, retailers, consumers)
 Discuss, using economic theory and principles, challenges of the EU agro-food sector
including (but not limited to) asymmetric information, environmental externality, contracts,
standards, strategic pricing, innovation and evolution in food consumption trends
 Analyze and discuss the role of policies implemented by the EU relevant for the issues
covered in the course and their effects on all stakeholders
 Explain the coordination mechanisms among the stakeholders
 Synthetize the analysis of a complex problem concerning agro-food chains by means of an
oral presentation
Assessment:
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Students will be assessed by means of a group presentation and an individual report. The
class presentation is planned on the last day of the ISP (Friday).
Students will be asked to address a specific topic using: concepts and terminology
acquired throughout the week and information collected during the study visit and the
interaction with the speakers from the private sector.
Students will receive a list of 4 topics. Students can order topics in order of preference.
This ranking will be used to create the groups. More details on the expectations regarding
the research report and the presentation are summarized in the attached file on
“assessment”.
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Lessons Schedule, Class Activities and Specific Lesson Objectives
Day 1 - Monday Mach 13
Morning Section – Introduction, Case study (The Linde Group) and Lectures
Introduction to the Intensive Study Programme (ISP); presentation of topics to the students and
allocation of topic (Luisa Menapace). This session additionally introduces macro trends in the
food supply chain.
Company presentation: The Linde Group
Firm description: In the 2015 financial year, The Linde Group generated revenue of EUR 17.944
bn, making it one of the leading gases and engineering companies in the world, with
approximately 64,500 employees working in more than 100 countries worldwide. Linde
industrial gases are used worldwide in virtually every branch of industry, commerce, science and
research.
In food and beverage industries, food-grade industrial gases are an effective and natural way of
meeting rising consumer demands for quality, variety and freshness in the food and beverage
industry. Increasingly, consumers are looking for low or zero-additive alternatives to
conventional preservation techniques. In particular, gases are proving indispensable in the
growing market for convenience, home-inspired foods.
With a strong team of dedicated field and in-house specialists, Linde can help to meet specific
challenges. Linde state-of-the-art technologies and applications optimise processes, improve
quality, increase yield, protect quality during transport and extend shelf life. Whatever section of
the food & beverage industry – from dairy, meat and fish through bakery and fruit & veg to the
packaged business, Linde has answers in its extensive portfolio.
This session additionally introduces the structure of the food supply chain by means of an
example.
Lesson: Communicating food quality under asymmetric information (Luisa Menapace)
Content: Asymmetric information between producers and consumers is known to be an important
problem for the provision of quality in agro-food markets and is a cause of market failure.
Depending upon the nature of the product attributes (search, experience and credence attributes),
different market tools can be used by firms to communicate quality to consumers thereby
alleviating market failures. These include private and collective brands, geographical indications,
quality seals, etc. Geographical indications represent as the main pillar of the EU’s quality policy
on agricultural products.
Topics:
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 Product attribute classification
 Market-based solutions to market failures due to asymmetric information
 Geographical indications: relevance in the EU agro-food sector, EU regulation
framework, main features of GI protection in EU and their economic implications
Learning outcomes: after completing the lesson, students will be able to classify product
attributes, explain which market-based tools can be used to prevent market failures due to
asymmetric information. Students will be able to explain the concept of geographical indication
and the main features of the EU system of protection of geographical indication.
References:
Akerlof, G. 1970. The markets for “lemons”: Quality Uncertainty and the Market Mechanism,
The Quarterly Journal of Economics 84(3).
Cabral, L. The Economics of Trust and Reputation: A Primer. Notes 2005.
Moschini, G., Menapace L., and D. Pick. 2008. Geographical Indications and the competitive
provision of quality in agricultural markets. American Journal of Agricultural Economics,
90(3):794-812.
Menapace, L., and G. Moschini. 2012. Quality certification by Geographical Indications,
trademarks and firm reputation. European Review of Agricultural Economics, 39(4):539-566.
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Afternoon Section - Lectures and Group work
Lesson: Standards and Industrial Quality (Cesar Revoredo-Giha)
Content: The production, processing, distribution, retail, packaging and labelling of foodstuffs are
governed by a mass of laws, regulations, codes of practice and guidance. This mass of coded
information regulates all transactions between buyers and sellers along the entire food supply
chain and is created to obviate to market imperfections mainly generated by asymmetric
information and externalities. The purpose of this lecture is to provide an overview of quality
regulations, standards as well as private protocols in the EU food and drink industry.
Topics:
 Product quality, information asymmetries and quality standards
 Public and private standards
 Standards and compliance costs
 Examples of the use of standards in the food and drink chain
Learning outcomes: after attending this lesson, students will be able to explain the reasons for the
need of regulations and standards, the economic incentives to implement them, how they are
implemented in EU system as well as their costs. Students will be able to distinguish public and
private standards and understand how standards interact with each other’s.
References:
Alvarez, G. (2010). Fair trade and beyond: Voluntary standards and sustainable supply chains.
Delivering performance in food supply chains. Woodhead Publishing Limited, Cambridge, the
United Kingdom of Great Britain and Northern Ireland, 478-510.
Caswell, J. A., Bredahl, M. E., and Hooker, N. H. (1998). How quality management metasystems
are affecting the food industry. Review of Agricultural Economics, 20(2), 547-557.
Fulponi, L. (2006). Private voluntary standards in the food system: The perspective of major food
retailers in OECD countries. Food policy, 31(1), 1-13.
Henson, S. (2008). The role of public and private standards in regulating international food
markets. Journal of International Agricultural Trade and Development, 4(1), 63-81.
Malorgio, G., and Solaroli, L. (2012). Policies and regulations in the Mediterranean:
complementarity and coherence. MediTERRA 2012, Chapter 21. Available online:
https://www.academia.edu/5397538/chapter_21._
policies_and_regulations_in_the_mediterranean_complementarity_and_coherence
Smith, G. (2009), Interaction of Public and Private Standards in the Food Chain, OECD Food,
Agriculture and Fisheries Papers, No. 15, OECD Publishing. Available online at:
http://dx.doi.org/10.1787/221282527214
Young, L. M., and Hobbs, J. E. (2002). Vertical linkages in agri-food supply chains: changing
roles for producers, commodity groups, and government policy. Review of Agricultural
Economics, 24(2), 428-441.
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Lesson: Innovation and food quality (Francesco Bimbo)
Content: Innovation is widely viewed as a major competitive parameter in the agri-food sector
and it is mainly targeted to increase the quality of products and/or the efficiency of the processes
by creating new ones or modifying existing ones. The minimum requirement for an innovation is
that the “innovative” improvement must be new to the firm. Innovation process involves multiple
actors whose joint efforts are aimed to increase the market performances of the firm. Sectorial
and regional expects also influence innovation outcomes.
Topics:
 Economics of Innovation
 Innovation Process Models
 Innovation in the EU agro-food sector
Learning outcomes: after completing the lesson, students will be able to define innovation and
explain the difference with related terms, understand and recognize the main types of
innovations. Further, students will be able to identify the drivers of the innovations in the EU
food sector; how innovations are developed and how sectorial and regional factors affect
innovative outcomes.
References:
OECD, 2005. Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd
Edition.
Muscio, A., Nardone, G., and Dottore, A. (2010).Understanding demand for innovation in the
food industry. Measuring Business Excellence. 14(4) 35-48.
Group work session:
With professor: Students revisit with professor the information collected during the company
visit.
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Day 2 - Tuesday Mach 14
Morning Section - Lectures
Lesson: Coordination, contracts and incentives (Carlo Russo)
Content: Quality in the agro-food supply chains is a complex achievement, often requiring the
joint effort of several independent firms and individuals. Coordination is required to produce
complex food products, meeting industry standards and consumers’ expectations. Yet, bringing
together heterogeneous agents for a common goal is a non-trivial task because each individual
has specific and potentially incompatible objectives. Producing quality implies that all agents
comply with a stated (or implicit) production plan regardless of private incentives. The design of
a coordination mechanism such that all agents can agree on a production plan based on individual
profit (or utility) maximization is a complex task. Economists refer to this issue as the incentive
alignment problem (cfr. Salanié).
Topics:
 The coordination continuum: vertical integration, spot market, contracts, other hybrids
 Basic notions of contract theory
 Setting incentives and using contracts as coordination devices
Learning outcomes: students will be able understand and explain the multiple ways to organize
transactions as well as indicate the optimal choice according objectives and specific conditions.
Further, students will be able to explain the incentives that may influence the outcome of the
transaction as well as the role of a contract to set and manipulate incentives.
References:
Stiglitz (1974): Incentives and Risk Sharing in Sharecropping. The Review of Economic Studies,
Vol. 41, No. 2 (Apr., 1974), pp. 219-255 [Advanced]
Bogetoft, P., & Olesen, H. B. (2002). Ten rules of thumb in contract design: lessons from Danish
agriculture. European Review of Agricultural Economics, 29(2), 185-204. [Basic]
Company presentation: BayWa AG
Firm description: In the 1920s, a revolution in the agricultural industry was just starting. Until the
beginning of the 1900, the work in the fields was carried out mostly by hand or with the aid of
animals. During these years the mechanisation of the agricultural sector increased. In was in this
context that BayWa was founded in Munich in the 1923. Based in Munich (head office), BayWa
AG is a German company which operates in the agriculture, building materials and energy
sectors. It provides trading, strategic and other miscellaneous services in these sectors. The
BayWa Group is spread across 14 countries. Agricultural products, building and constructionrelated products and the energy industry are its core business areas where it operates in both the
retail and wholesale segments. It has a turnover of approximately € 8 billion and about 2,700
sales locations. The major portion of the group’s profits comes from its Agriculture division.
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Afternoon Section – Group work and industry visit
Lesson: Food quality: a consumer perspective (Chenguang Li)
Content: Agricultural products are long from being recognized as homogeneous goods, branding
is used widely for product differentiation and quality representation. The brand development
starts with identifying target customer segmentations and characteristics based on knowledge of
consumer demands, and evaluation of the company’s own strengths and limitations compared to
his competition. However, sustainable brand management requires continuous and effective
communication with the consumer.
Topics
 Product differentiation and positioning
 Brand personality
 Brand development and consumer connection
Learning outcomes: After completing the lesson, students will be able to explain the basic
concepts of product differentiation and positioning, characterize the main dimensions of brand
personality, understand the process of brand development, and evaluate the effectiveness of brand
development and consumer connection.
References:
Aaker, J.L., 1997. Dimensions of brand personality. Journal of marketing research, pp.347-356.
Gwin, Carol F., and Carl R. Gwin. "Product attributes model: a tool for evaluating brand
positioning." Journal of Marketing Theory and Practice (2003): 30-42.
Keller, K.L., 1993. Conceptualizing, measuring, and managing customer-based brand equity.
Journal of Marketing, pp.1-22.
Keller, K.L., 2016. Reflections on customer-based brand equity: perspectives, progress, and
priorities. AMS Review, pp.1-16.
Group work session:
With professor: Students revisit with professor the information collected during the company
visit.
Independently: Students work independently on group project and prepare questions for the next
visit.
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Day 3 - Wednesday Mach 15
Morning Section – Industry visit
Study visit: Melinda, Cles.
Firm description: Melinda is a consortium of producers whose vital structure is made up of
member farmers, namely of around 4.000 families of fruit-farmers who live and grow apple trees
in the Noce Valleys. The scopes of activities that are undertaken by Melinda include: harvesting,
storage, packaging, marketing and communications, and sales of fruit. The consortium owns bins
for harvest of over 360 000 tons of fruit, refrigerators with the total capacity of 340 000 tons of
fruit, and scientific, computerized selection and packaging systems. In total Melinda has 6
processing centers, which operate in compliance with strict international certification
requirements (Haccp, ISO 9001, BRC, IFS), and it has a turnover for around 300€ mil.. The
given technology makes it possible to package up to 1500 tons of fruit per day, six days a week.
In total there are three main business sections: apples, berries and apple based snacks.
Afternoon Section – Industry visit
Study Visit Session: Rotary, Mezzocorona
Firm description: Mezzacorona S.c.a is founded in 1904 and is one of the first cooperatives of
winemakers born in Italy. It has 2600 hectare vineyard located in Trentino Alto Adige and 900
hectares in Sicily. Mezzacorona S.c.a has over than 300 employees and, with a turnover of 174,7
mil. €, is one of the firms lead in the production of sparkling wine using the Metodo classico by
using sustainable practices. In fact, Mezzocorona’s wines follow production processes that pay
great attention to preserving the natural environment lowering chemicals inputs in the soil and
carbon dioxide emissions in the air. To reach these goals, firm uses biological systems of
combatting harmful insects in the vineyards, uses locally produced materials as well as uses
renewable sources of energy. Further, All structures built by Mezzacorona S.c.a group are
perfectly in synthesis with its surrounding natural environment.
Group work session:
With professor: Students revisit with professor the information collected during the company
visit.
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Day 4 - Thursday Mach 16
Morning Section – Industry visit
Study Visit Session: VOG, Association of South Tyrolean Fruit Growers’ Co-operatives
Firm description: South Tyrol has a long tradition of fruit growing. As far back as the 16th
century, couriers from the region around the River Adige brought fresh and preserved fruits to the
courts of the Austrian and Russian monarchs. However, the opening of the railway over the
Brenner Pass in 1867began the triumphal procession. To take advantage of this wider
marketplace Algund as first fruit growers' co-operative was founded in 1893, followed by many
other co-operatives. Even the Second World War could not hinder the success of South Tyrolean
fruit. For it was already on August 24th 1945 that several fruit growers' co-operatives joined
together under a new umbrella organisation. "Strength through unity" was the guiding principle
behind the foundation. The Association of South Tyrolean Fruit Growers’ Co-operatives, VOG,
was born. From its relatively modest beginning with nine associated co-operatives, VOG has
grown quickly to become the largest apple-marketing organisation in Europe. Since the merger
with ESO in 1999, the company has experienced ongoing change. As the result of a number of
mergers, the 33 fruit grower co-operatives that formed VOG in 2000 have become the 16
members that we see today in 2011. These members actually represent 5200 growers who harvest
annually between 550,000 and 600,000 tonnes of precious fruit of highest quality on 10,600
hectares of production area and who continuously strive to guarantee high quality standards,
increase efficiency and reduce costs. With the starting signal for the new distribution strategy on
August 1, 2010, the VOG rose to the new challenges set by the market in the new, limitless
Europe.
Afternoon Section – Group work
Group work session:
With professor: Students revisit with professor the information collected during the company
visit.
Independently: Students work independently on group project and work on final presentation.
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Day 5 – Friday Mach 17 – Presentation finalization, Assessment and Course Wrap-up
Morning Section – Group work
Group work session:
Independently: Students work independently on group project and work on final presentation.
Afternoon Section – Presentation, assessment and class evaluation
Students’ Course Evaluations
Presentation of group project
Final wrap up
Attachment: ISP Schedule
Abbreviations
Francesco Bimbo
(FB)
Chenguang Li
(CL)
Luisa Menapace
(LM)
Cesar Revoredo-Giha (CRG)
Carlo Russo
(CR)
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