*Article* **The Importance of Digitalization for the Sustainability of the Food Supply Chain**

**Nebojša Zori´c <sup>1</sup> , Radenko Mari´c 2,\*, Tijana Ðurkovi´c-Mari´c <sup>3</sup> and Goran Vukmirovi´c <sup>2</sup>**


**Abstract:** This paper aims to define the negative impact of various indicators on the sustainability and functioning of the traditional food supply chain (FSC) in the segment of wholesale and retail activities and to propose a set of measures and incentives for the digitalization of its business processes. After a systematic review of the literature, the most common indicators significant for the functioning of the FSC were defined, primarily in the segment of wholesale and retail activities. Empirical research examined the influence of given indicators on the FSC. The obtained results showed that indicators such as poor coordination and transfer of information among FSC participants, food loss, economic performance, transaction costs, external elements, chemical and microbial contamination, and control of raw material, food, and waste flows significantly complicate the sustainability and functioning of the FSC. Based on the obtained results, a set of measures and incentives is proposed that the management of the supply chain should undertake to digitalize business processes, primarily in the segment of wholesale and retail activities. This paper also lists shortcomings of the research and gives guidelines for future research.

**Keywords:** food supply chain; digitalization; sustainability; global market

**1. Introduction**

In recent years, a significant number of academic studies have appeared with a focus on the functioning and sustainability of the Food Supply Chain (FSC), particularly those related to its segment of wholesale and retail activities [1–5]. The traditional FSC shows a lot of shortcomings, primarily in the segment of food safety and security [6], losses in the fruit and vegetable placement system [2], dysfunctionalities caused by the COVID-19 pandemic [3,4], inadequate food labeling [7], downtime in production, distribution and retail [8], etc. Two major global events have significantly changed the way the traditional FSC operates. The gap that appeared on the demand side for durable food products (rice, flour, canned food, etc.) as a result of the lockdown due to the coronavirus epidemic, pointed to the dysfunctionality of the FSC as well as its weak response to market needs and the lack of cooperation and timely transfer of information between participants [3,4,9]. Geopolitical turmoil and the Ukrainian conflict have shown the vulnerability of the FSC [10]. The influence of external elements led to a complete halt of the grain supply to the global market, and the safety of food and the safety of shipments were called into question.

The traditional FSC is not ready to mitigate all shocks and uncertainties that appear in the market [1,10]. Authors point out that the flow of information between participants is not at a level that will enable supply chain management to react in time in terms of adequately finding alternative supply channels for raw materials and final products [1,2,4,7,8,11]. The speed at which an uncertainty appears in the market is inversely proportional to the speed of FSC's reaction to eliminate the consequences of that uncertainty. The FSC is characterized by robustness, non-transparency, weak coordination of cross-channel activities, and lack of

**Citation:** Zori´c, N.; Mari´c, R.; Ðurkovi´c-Mari´c, T.; Vukmirovi´c, G. The Importance of Digitalization for the Sustainability of the Food Supply Chain. *Sustainability* **2023**, *15*, 3462. https://doi.org/10.3390/su15043462

Academic Editors: Fred Amofa Yamoah, David Eshun Yawson and Jacopo Bacenetti

Received: 27 December 2022 Revised: 25 January 2023 Accepted: 8 February 2023 Published: 14 February 2023

**Copyright:** © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

digitalization [11,12]. All of this points to the need to transform the traditional FSC into a modern digitized chain based on modern IT technologies (blockchain, IoT, etc.).

The objective of this study is to define how critical indicators influence the sustainability and functioning of the traditional FSC and propose a set of measures and incentives for the digitalization of its business processes, primarily in the segment of wholesale and retail activities. The basic research objective is supported by three specific goals: (1) defining the impact of critical indicators on the sustainability and functioning of FSC; (2) defining how the implementation of the digitalization process affects the analyzed indicators; (3) defining the impact of the digitalization process on the sustainability and functioning of the FSC. Through a systematic review of the literature, the indicators that most strongly influence the sustainability and flexibility of the FSC in the segment of the wholesale and retail activities were indicated. The results of empirical research show the positive and negative sides of the influence of each indicator. Based on the results obtained in this way, a set of measures and guidelines are proposed for the gradual digitization of the FSC to eliminate and minimize negative impacts and make the supply chain more transparent and flexible.
