Shaping Agribusiness in the New Digital Era: Bridging Tradition with Innovation, for the Agribusinesses in Thessaly Greece

1. Introduction

1.1 Agri-Food industry

Food industry and agribusiness are considered as pillars of the economy for countries and society, influencing most of the sectors with their contribution to employment, trade and sustainable development. The European Commission (2007), defines the agri-food sector as the combination of the primary sector with the food industry. Agriculture and agri -  food contribute about 4% of the world’s GDP globally (Gyamati, 2024). While Bombaj F., (2018), argues that 'food markets are characterized by non-linear, unregulated and heterogeneous self-organized food value chains'. According to Tell et al., (2016) agribusinesses are exposed to increasing competition and are in need of new ideas and approaches in order to remain competitive. For that reason, European Commission (2018), defines the agri-food market as competitive and dynamic. Also, Goulas (2024), adds that rural communities and farmers, often face unique challenges, such as limited access to markets and global competition. The agribusinesses are also vulnerable to externalities, like energy crisis, climate change, consumer preferences. Furthermore, the agribusiness industry faces many challenges such as intense regulatory standards, time-sensitive supply chain demands, hygiene requirements, labor supply and cost constraints, and in most of the cases, pricing and margin pressures from highly elastic consumer demand (www.morrisanderson.com). While, the food industry holds a central position in policy debates around climate change, sustainability, food crises, hunger and food supply, still remains one of the main topics of the global news (Hansen, 2024; Sagit B., - S., and Erez B., 2024). Moreover, companies operating in the global and highly competitive market, need to develop unique capabilities and products, to gain competitive advantage, develop human resources and technology and try to be innovative (Kusnadar et. al., 2023). On the other hand, other academics, claim that agribusiness can develop innovation strategies based on tradition in the wake of sustainability (Palmi and Lezzi, 2020). And that is the main discourse in the recent years for the companies, to find the balance point between innovation, tradition and sustainability. Sustainability and the concept of sustainable development are related to industrial and agricultural production, which is integrated into environmental management (Schoor et al., 2023). Rey et. al., (2023), on their study, explore how agribusinesses can balance tradition and innovation to improve their operational, financial and social performance. In other words, the agribusiness sector, is crucial for facing global challenges and plays an important role in applying innovative solutions to its business process. In the following sectors tradition and innovation in the agribusiness sector will be presented.

1.2 Tradition and innovation as pillars for the modern agribusiness

Tradition is one of the most important pillars in agribusiness, shaping the identity, sustainability and competitiveness of businesses. Many academics tried to describe tradition, one commonly used is the term ‘terroir’ combining natural and human factors, which characterize the geographical area (Riviezzo et. al., 2017). Traditional practices and values ​​are closely linked to the way of life of local communities, the cultivation of the land and the production of products that maintain their authenticity and uniqueness. Local food markets typically involve small farmers, heterogeneous products, and short supply chains in which farmers also perform marketing functions, including storage, packaging, transportation, distribution and advertising (Martinez et al., 2010). That kinds of products, that are characterized as traditional, are at the center of consumer’s attention globally (Goulas, 2022). According to Gocci et., al. (2020), ‘attempts to define agri-food products are characterized by a paradoxical duality: on the one hand they must remain fixed in time, and on the other hand they can change their characteristics’. Indeed, despite the long-term global economic crisis, there is a growing interest in local productions and in the formality and provenance of food, especially by the middle and upper classes in developed countries, but also by some urban middle classes in emerging and developing countries (Sanz – Canada J., and Muchnik J., 2016). That demand from consumers globally for traditional flavors, traditional products and heritage, led many academics to support the idea of ‘tradition’ as a unique asset for competitiveness for the business (Goulas, 2021). Tradition in agribusiness is totally linked to the land and its history. Cultivation methods, harvesting techniques and processing are based on practices passed down from generation to generation. These traditions embody the wisdom of centuries, adapted to the local environment, and ensure high-quality products. There are many typical examples from cases around the world, like the dairy products, that became symbols of cultural heritage and synonyms for sustainability. And that is the unique asset those agri-businesses carry in the market, the tradition that passes from generation to generation and all the knowledge and culture that passes in the final product and makes its acquisition a unique experience.

On the other hand, recently, many scholars studied innovation in agribusiness. For instance, Nuvolari and Tartari, (2014), underlined the importance of innovation in agriculture as fundamental drivers for economic and social change. Kadriu et. al., (2019), consider innovation as a factor of economic development. Therefore, there is a prime importance to imbibing business acumen into agricultural production, through entrepreneurial activities, thereby making use of innovation to achieve better profit from farming (Banerjee et al., 2024). It is understood that, innovation plays a pivotal role in the process of economic and social transformation. The reasons are many and relate both to the globalized nature of the economy, which requires improved competitiveness, and to the need to address the social challenges that the economic crisis has created. The integration of innovation in the agricultural sector is not only a tool for improving productivity, but also a means for enhancing competitiveness and addressing social and environmental problems. That hypothesis is supported by many academics, which claim that technological changes usually convey to industries, like agribusiness industry, innovative transformations (Tardelli et al., 2023; Drath and Horch, 2014; Gauss et al., 2019). Agribusiness can increase results by managing strategy, innovation, operations, and other competitive priorities (Sellitto and Hermann, 2016). What is needed is a shift in the production process and its modernization, the production of diversified products, and the promotion of agricultural products. Many European countries have been moving in this direction for years, looking to the future and investing in new technologies. There are many examples from international reality and experience. Perhaps the most typical example is the Netherlands, which has been described as the great modern agricultural miracle, managing to be the second largest food exporter on the planet, after the United States of America. Italy, with precision agriculture and the use of modern technologies, such as satellite mapping of crops, sensors and GPS systems for various agricultural machinery that allows farmers to improve management and save costs. Even Denmark has created an international center for innovation and knowledge exchange in the fields of agriculture and food. As is known, Denmark, small in area and population, already produces enough food to feed a population six times larger than its own. Even European Commission (2023) claims that ‘research and innovation in the area of food and food-related matters can lead to the creation of new products and services. The rich cultural diversity and craftsmanship of local food products are highlighted in various documents as a source of local knowledge that needs to be nurtured and expanded. Innovation technologies, knowledge sharing and new agricultural technologies such as precision farming, are all areas that have gained in importance. The issue of training and providing workers in the food sector with new skills is addressed in documents also within the wider framework of enhancing opportunities and skills in the countryside. This can go hand in hand with advice from local universities and locally based experts. Enhancing opportunities and skills in the countryside through broadband connectivity, skilled personnel and research may bring new prospects to food-producing territories’. Investments in research and innovation are an investment in Europe's future (European Commission, 2019).

2. Methodology

Thirty agribusinesses located in the Region of Thessaly Greece and their executives participated in focus group discussions. With the term agribusiness for this study, is referred a company that operate in the various sectors of the agricultural sector, covering the entire value chain, from production to crop processing, distribution, sales and services. Regarding the executives, they were, owners of those agribusinesses, CEOs and executives from the top of the hierarchy participated in those focus groups. The methodology aimed to provide in-depth qualitative insights on how businesses operating in the agro-food industry are facing the new world trends of sustainability, balancing tradition and innovation at the same time.

Those thirty agribusinesses were of various sizes, small and medium-sized companies, all of them based in the wider region of Thessaly Greece. That way of selection guaranteed that a comprehensive representation of the industry was achieved. From each company participated in the focus groups executives, managers, CEOs, on some occasions owners of the businesses, each of them with a key strategic position in their organization. All of the participants, agribusinesses and executives, were willing to share their experiences and add to the topic their valuable information and insights.

Focus groups were conducted from December 2023 to September 2024, approximately over a period of nine months, in various locations in Thessaly, in order to make it more accessible for the participants. Each focus group session lasted approximately two hours and included 6 to 8 participants. Small and solid focus group participation, maintains and cultivates intimacy between the participants. At the beginning of each focus group session, an introductory to new EU policies was made, like Green Deal, Green Transition and Digital Transformation. After that, the discussions were structured on key themes like: Current challenges their organizations are facing, regarding the digital transformation, exploring their perception toward emerging technologies, examining how those agribusinesses balance between traditional methods and innovative solutions, discussing their attitude towards the development of an ecosystem based on collaboration and explore further their opinion about partnerships and government policies. Finally, at every focus groups session, participants were asked to express their vision of the future of their organization and of the sector they are operating. This results in the expression of many different opinions regarding the issues explored in the present research paper. The main idea of all that structure of every focus group session is to examine with the present study, the existence of a link between tradition and innovation in agribusiness, focusing on sustainability and strategic management.

All focus group sessions were recorded, having participants' consent and additional notes were also taken. In order to analyze the data collected from the focus groups, qualitative descriptive analysis was used. After the data collection, three steps were followed in order to examine, analyze and present the collected data. The first step is to start coding and categorizing the entire data set. The second step is to identify patterns and themes and the third step is to interpret and present the findings.

3. Results

3.1 Agribusinesses profile

The thirty agribusinesses selected for the present research paper very carefully and cover the geographical borders of Region of Thessaly. More precisely the companies selected, are located in the four major cities of Thessaly, Larissa, Volos, Trikala and Karditsa. Some of the thirty selected companies are new in the market, e.g. 2024 as year of establishment or 2023, and some have operated in the market for approximately twenty-five years, e.g. 1998 as year of establishment or 1999 (Table 1). Those thirty companies, have significant presence in the agri-food industry, at local, national and even international levels, for some of them.

Table 1: Agribusinesses participated in the focus group discussion (related to the terms of GDPR, agribusinesses that participated in the study are coded as AB1, AB2, AB3, AB4, ……. , AB30 – AB stands for Agribusiness)

Source: own elaboration

As already mentioned before, the thirty agribusinesses selected for the research, were of various sizes, small and medium size companies, all of them based in the wider region of Thessaly Greece and are operating in the various sectors of the agricultural sector, covering the entire value chain, from production to crop processing, distribution, sales and services. The size classification for the agribusinesses based on the number of employees is shown in Table 2. Some of the executives that participated in the focus groups, claimed that size of a company is a matter of operational years in the market. Also, they claim, especially those from the newest companies, that from 2020 and on, they faced a number of crises, either international (e.g., COVID-19, energy crisis) or local (e.g., flοοds, rinderpest outbreak in goats and sheep).

Table 2: Company’s size

Source: own elaboration

Analyzing the size of the companies of the research, it can be told that the majority of those companies are of small and medium size. As small companies are listed even very small family businesses with less than ten employees. The overall analysis of company’s size classification is with a total of twenty-two small companies and eight medium companies. Nevertheless, the size of the company, the impact on local society and economy, are undoubtable even for the very small, family agribusinesses operating on the market. They give jobs to members of the local community, they support the local market and they preserve the local tradition. That is quite important and cannot be measured easily.

Yet, another important information of those companies, is that all of them, at a specific time, received funding from EU or from national authorities. This highlights the importance given by the EU and the Hellenic state to the food sector, which is one of the most dynamic sectors worldwide. Also, financing may be a response to the challenges of the industry, such as the need to adapt into the new global market environment, global competitiveness etc.

Also, the executives who participated in the focus group discussions, where mostly men, with women presence at the top class hierarchy of those companies to be the minority. To be more precise totally participated 23 men and 7 women on the present research. It is indicative that the food industry and especially agribusiness is still dominated by men.

3.2 Key themes of focus groups

As already mentioned, the discussions of focus groups were guided by the following key themes:

-        The current challenges faced by organizations concerning green and digital transformation.

-        Participants’ perceptions of emerging technologies.

-        The balance between traditional practices and innovative solutions in agribusiness.

-        Attitudes toward developing a collaborative ecosystem.

-        Opinions on partnerships and government policies.

Each session concluded with participants sharing their vision for the future of their organizations and the broader agribusiness sector. This approach facilitated the collection of diverse perspectives on the issues explored in the research.

The primary objective of this structured approach was to examine the potential link between tradition and innovation in agribusiness, with a focus on sustainability and strategic management. These focus group sessions results are presented in this research paper.

3.3 Challenges in Green and Digital Transformation and on Emerging Technologies

Analysis of the focus groups discussion gave useful insights into the challenges in Green and Digital Transformation for the local agribusiness companies. It is quite crucial to analyze that parameter due to several academics’ opinion claiming that the application and use of digital technologies also have negative impacts on organizations (Bednarcikova and Repiska, 2021).

“Using and investing in Green and Digital Transformation is a necessity, we all understand that, but      the problem is, for us, small investors, that it costs too much for us to afford it. Can we apply those new technologies and methods in our company, or we will create another burden for our financial security? (AB14)” (The interview was conducted on 20 January 2024).

It is a fact that most of the participants on focus groups discussions claimed that on Green and Digital Transformation, they have insufficient financial resources, in order to decide to invest in them. But this is not the only claim they made.

“For our company is difficult to find workforce in general, imagine when we are talking about that kind of workforce that is needed to be trained in specific technical skills. It is not easy for a young person to leave a bigger city and a bigger company, with more perspectives, and join a small company in the county. Imagine that our accountant is on an outsourced contract and he is based in a city 30 kms away from our base. (AB3)”. (The interview was conducted on 10 February 2024).

Based on the above statements, small agribusinesses, that are located in smaller cities, face difficulties in finding the right workforce, especially when special technological skills are needed. A bigger city, or a city with a University based on, is more easy for the companies located there to find the right workforce.

3.3 Balancing between traditional practices and innovative solutions in agribusiness

On that topic, focus groups discussions revealed that most of the companies have a strong attachment to tradition and traditional methods. Those companies, tend to understand the importance of tradition, especially in terms of identity and quality. They have a crystal clear opinion that brings to their companies, competitive advantage that cannot easily imitated by competitors. On the other hand, they claimed that becoming innovators is a necessity for their sustainability.

“We keep doing our job, in our traditional way, the way our ancestors taught us. That is our identity, our companies dna and we cannot change it or neglect it. But, we realize the global context and the environmental aspect on producing. We are trying with technology, to find ways to do our products, more efficiently, and reduce our environmental impact. We have included new packaging for our products, aiming to reduce the volume of waste. (AB4)”. (The interview was conducted on 2 March 2024).

“Maybe it will sound funny, but for our company, we consider as the best strategic choice we ever take, the decision to expand on e-commerce and e-marketing. Entering the social media as a tool for promotion and marketing of our brand and our products, and start e-advertisement, boosted our recognizability and our products reached younger customers, from new generations, that are more keen into eating healthy, local products. Also, that new customers, are more sensitive regarding the environmental issues, and they are willing to award companies with such orientation, like our company. (AB22)”. (The interview was conducted on 3 February 2024).

3.4 Attitudes toward developing a collaborative ecosystem - Opinions on partnerships and government policies

For that part of the focus group discussion, many representatives emphasized the importance of creating strong alliances and partnerships with other companies in the agribusiness sector. They also, underlined that is crucial for those alliances to be embraced by local government bodies, in order to establish and secure a strong and solid bond for that. They claim that it is the nature of their business, that it is not just another market, but their industry, the agro–industry, is about tradition, culture, quality, biodiversity and preserving nature as well.

“In many cases, collaboration, can solve some of our problems, regarding costs, transport, training for our employees in new technologies etc. Also, that collaboration of our companies, will give us greater power in discussions with government and national and local levels. We will achieve more that way. (AB15)”. (The interview was conducted on 3 February 2024).

 “Our industry needs clear and sound policies. But those policies should be drawn from the base and not from top to down. Those policies should fix the unfair trading practices that we are facing. We are trying to be sustainable and produce with less environmental footprint, but at the same time, competition is not facing the same obligations. That is something that should be fixed. (AB11)”.

4. Discussion

Thessaly brings a long tradition in agri - food sector, and the agribusinesses of that region are considered as dynamic. They compete in the global market waving their traditional products. However, that is not enough in the new era, and modern markets, need diversity and innovative approaches. Climate change, globalization and sustainability created a shift in consumer behavior, and modern agribusiness management require a dynamic approach that bridges and brings together tradition with innovation. New, digital technologies have the potential to transform the agribusiness sector in Thessaly. Products from those companies, have the quality to compete in the global market. All that is needed is the right policy mix to bridge those technological gaps with tradition and boost competitiveness of those companies. It is crucial, for those companies to have the chance in training programs, supported by local authorities and local government. 

Funding: This research received no external funding.

Conflicts of Interest: The authors declare no conflict of interest.

Informed Consent Statement/Ethics approval: All subjects gave their informed consent for inclusion before they participated in the study.