The paper outlines current challenges in Romanian food industry, its potential to overcome them and be competitive on both the national and international market using a key performance indicator (KPI) methodology. Although it has the capacity to assure internal consumption and competition on the market is high the Romanian food sector is struggling to meet internal demand, imports heavily exceed exports while food consumption is decreasing. The retail sector is an important part of the supply chain, but the harsh competition among the different stores has made them pass the risks only towards the upstream links which is straining food processors and producers and threatening the sustainable development of the food supply chain. High taxation, unfair competition and delayed payments towards food processors add extra pressure on the weaker links of the chain. Moreover authorities are inefficient in assuring duly market conditions whereas scandals further degrade industry image and cause important losses. The lack of synergic efforts within the industry and the scarce collaboration efforts between business partners affect individual company performance and thus global industry competitiveness. The research provides solutions that address its structural issues and develops performance indicators to improve the efficiency of companies in order to assure their sustainable development within the supply chain and become more competitive on the global food.