The client
The client on this project was a major Saudi Arabian investment group with an extensive portfolio in food processing, agricultural commodities, supply chain logistics, and food storage. They have collaborated with, and invested in, numerous regional and international food companies and are closely aligned with Saudi Arabia’s food security and domestic production goals.
The group wholly owned two KSA-based grain companies. The first is a major national importer and distributor of barley, commanding a significant portion of Saudi Arabia’s barley market. The second is a leading national compound animal feed manufacturer.
The problem
In 2021, the Saudi Arabian government phased out its barley subsidies. This decision significantly impacted our client’s existing business model and brought the long-term commercial viability of their barley operations into question. In addition to this, the two companies’ business models were misaligned, positioning them as market competitors rather than collaborative partners.
To tackle these issues, our client sought to align both businesses under a unified strategy and operating model. In doing so, they hoped to improve operational efficiency, develop synergies between the companies, and strengthen their combined market position.
To achieve this goal, the client required an in-depth assessment of both businesses’ sales, marketing, and operational strategies, as well as a clear, actionable roadmap for integration and growth.
The solution
Our consultants designed a comprehensive three-phase plan to address the strategic objectives of both organisations. The first phase focused on aligning the supply chains, sales and marketing activities, and organisational structures of both businesses. The second phase centred on developing an ESG framework that aligned with Saudi Vision 2030 and embedding sustainability into core operations. The third phase involved evaluating growth opportunities in adjacent markets.
Phase 1: Strategic review
The team conducted a comprehensive analysis of both companies’ strategies and business models, evaluating key elements such as target customer segments, value propositions, competitive positioning, and operational structures. This assessment revealed critical alignment gaps between the two organisations, an overreliance on legacy equipment, fragmented supply chain processes, and insufficiently integrated sales and supply chain functions. Inefficiencies were further compounded by siloed work practices, a lack of strategic collaboration, and overlapping and misaligned workflows.
Following the strategic review, the team performed a bottom-up assessment by engaging with department heads and stakeholders to identify operational bottlenecks, evaluate workflows, and assess team coordination. The team also examined how well the current organisational structure supported the company’s strategy. This included a thorough analysis of reporting relationships and responsibilities.
The team uncovered significant operational inefficiencies, including disconnected supply chain and sales functions, inefficient barley offloading procedures, unclear carrying costs, and fragmented warehouse management processes. At the same time, the absence of a clearly defined performance management framework and a reliance on outdated systems and manual processes resulted in inconsistent execution across teams, hindering the companies’ ability to optimise costs and improve service delivery.
Based on these insights, the team designed a new operating model integrating both companies under a single management structure. Job descriptions and reporting relationships were redefined to eliminate overlaps and strengthen accountability.
Phase 2: ESG alignment
An ESG framework aligned with Saudi Vision 2030 was established to focus on sustainability, stakeholder value, and national economic priorities. This framework sought to ensure the integration of ESG principles into core business operations. Key elements of the framework included enhancing sustainability reporting standards, improving corporate transparency, and adopting responsible environmental management practices.
The ESG strategy incorporated best practices from global reporting standards such as the Global Reporting Initiative (GRI), which would enable the client to benchmark performance against industry peers. The ESG strategy also identified ways to minimise greenhouse gas emissions, and optimise waste management processes. It identified ways to improve labour engagement, health and safety measures, and foster community engagement. By embedding these ideas into their operations, the client aimed to enhance their long-term sustainability while meeting investor and stakeholder expectations. At the same time, aligning with Saudi Arabia’s Vision 2030 goals positioned the client as a leader in the region’s transition towards more sustainable and transparent business practices.
Phase 3: Opportunity assessment and recommendations
After completing the strategy and ESG reviews, the team conducted a detailed opportunity assessment to identify areas for growth and diversification. Saudi Arabia’s increasing focus on domestic food production had created numerous opportunities for value-added products in adjacent markets. We identified several high-growth opportunities that aligned with the companies’ core capabilities and supported national economic and ESG targets.
We performed a comparative advantage analysis to determine where the companies would have the best chance of success, focusing on opportunities where they had clear advantages and a straightforward route to market. Each opportunity was ranked based on market size, growth potential, and ease of execution. A prioritised roadmap was then developed to outline actionable steps, resource requirements, and implementation timelines. The roadmap also detailed key performance indicators to monitor progress and contingency plans to mitigate potential execution risks.
Result
Our recommendations provided the client with a new unified operating model that combines the strengths of both subsidiaries. This realignment solidifies the client’s market position in Saudi Arabia, allowing them to continue to profitably operate without relying on barley subsidies. This new model will also ultimately improve decision-making processes, increase operational efficiency, and create a more agile, responsive, and streamlined business.
On the ground, the companies’ ability to leverage synergies across supply chain management and sales functions, has resulted in better warehouse utilisation, reduced logistical costs, and enhanced procurement processes. Sales and marketing functions have transformed from a transactional, price-based approach to a consultative, value-driven strategy. This, in conjunction with data analytics and market intelligence tools has improved customer segmentation, enhanced demand forecasting, and ensured better alignment with market needs.
The implementation of an ESG framework has helped align the organisations with national economic goals. This will not only bolster the client’s reputation, but also ensure compliance with increasingly stringent regulatory demands and provide a significant competitive advantage in the years to come.
Ultimately the strategic realignment has enabled the client to capitalise on emerging trends, pursue new opportunities, and contribute to national food security goals.
Forge ahead with Farrelly Mitchell
At Farrelly Mitchell, our food and agribusiness experts provide actionable insights and strategy integration advice to some of the world’s most successful and ambitious agrifood businesses. Our team is highly experienced in agribusiness management, operations improvement, strategy integration, sustainability, and much more. We provide tailored solutions that ensure our clients are perfectly positioned to seize growth opportunities, optimise processes, and build competitive advantage.
To find out how your organisation can develop long-term commercial value, reach out to our team today.
