Numerous forces are driving change within grocery supply chains. These forces may ultimately determine which supply chains survive. Survival may depend on: 1) supply chains based on channel push and channel pull strategies, and/or 2) supply chains based on huge mega-retail formats and focused specialists.

All firms in the food supply chain must cooperate to deliver/maintain/enhance food safety, while making a reasonable profit. Food safety involves avoiding accidental contamination, considering the incidence of chronic diseases that comes with quality diets (diabetes, heart disease), and protection from deliberate contamination (bio or chemical terrorism).

Competition within the global food system is shifting toward vertical alliances in supply chains. Alliances are formed to create value in the supply chain, as well as to improve competitive position. Firms join such alliances to gain advantage by sharing knowledge, resources, and/or capabilities. These shifts present challenges for management and inter-firm relations.

Agricultural supply chains seek to find a balance between risk and reward sharing among participants that minimizes transactions costs. A framework for understanding the tradeoff between internal transactions costs of ownership and external transactions costs of risk sharing is explored. Implications for producers and processors suggest an increased move to vertical arrangements and a consolidating industry.

Consumers are demanding more customer service from firms throughout the supply chain. Firms who understand their demand, recognize stockout costs, and carry appropriate levels of inventory are ultimately better able to effectively manage inventory and provide the desired service level to customers.