This article explores the role of a specific Localised Agri-food System (LAFS) in the provision of Environmental and social benefits (ESBs) in densely cultivated, industrialised, and populated areas by analysing the core of the processing tomato supply chain of northern Italy (Parma and Piacenza). The research examines how the interplay of market drivers, public policies, and collective actions favoured farming, technological, and organisational innovations geared to support long-term economic growth and tackle, at the same time, environmental challenges. The tomato supply chain is characterised by a favourable convergence of attitudes, policies, and market conditions that over time allowed for fruitful interactions between private stakeholders and between the supply chain and public players. Decades of key stakeholders’ interconnections within the tomato supply chain led to a success story of economic growth and attention to a new balance between agro-industry and environment, for the benefit of producers/processors, consumers, and natural resources. Profitability strategies inevitably imply intensification of farming in order to maximise profit levels per hectare, however, the tomato supply chain found a collective motivation that could grant profitability and concurrently reward producers and processors for attention paid to safeguarding the environment—giving evidence that intensification does not necessarily conflict with requirements in support of sustainability.

The paper aims to analyse the functioning of territorial agri-food chains through an institutional lens. The approach tries to explore the influence of endogenous and exogenous factors on the capacity to respond to complex transition challenges. Our working hypothesis is that agri-food supply chains are embedded in the territory they belong to, economic performances and market competitiveness are strongly influenced by a combination of organisational capabilities and good governance solutions. These topics are developed by examining the innovative socioeconomic features of two of the largest world and European supply chains: the processing tomato supply chains of Northern Italy and Extremadura (Spain), both representing most of the processed tomato national production, governed by an overarching organisation gathering producers and processing firms on a parity basis, characterised by an innovative path developed to face the changing conditions of policies and markets. The paper shows how governance capabilities and their implications on the competitiveness and chain’s performance need to be explored by combining qualitative and quantitative analysis and indicators.