The concept of sustainable food value chains (SFVC) is key to durable food systems (FAO, 2014), yet food value chains are complex and often disconnected from systemic sustainability understandings. Existing assessments either neglect sustainability’s multi-dimensionality or are too complex for broad use. This study addresses the gap through a systemic and participatory adaptation of the Wuppertal Institute’s hotspot analysis (WU-HSA). Focusing on smallholder farmers’ perspectives in Zambia’s dairy and groundnut value chains, we integrated their sustainability values to identify hotspots, trade-offs, synergies, and innovations for transformative change. Part of the NAMAGE project, funded by BMZ under SEWOH, the study tested a participatory hotspot analysis (pHSA) tool. Smallholders identified necessary resources, supporting systems, sustainability aspects, and threats, evaluated by scope, severity, permanence, and trend. Complementary methods included transect walks, seasonal calendars, and Venn diagrams, alongside interviews and a validation workshop with downstream stakeholders. The pHSA proved robust, simple, and adaptable, revealing multi-dimensional sustainability threats, with social and ecological issues dominant. Findings aligned with agroecological principles and highlighted the need for expert validation of participatory insights. Key recommendations include improving water resources, promoting drought-resistant fodder, supporting farmer organisations, and scaling innovations like COMACO’s groundnut approach. Outlooks suggest that Zambia’s agricultural sector is moving toward sustainable intensification, aligned with agroecological principles. Future interventions should focus on diversification and sustainable practices to enhance smallholder resilience and ecosystem services.