RESEARCH “VALUE ADDED

RECOVERY” IN NI FOOD SUPPLY

CHAINS

Prepared: Dr Jelena VlajicQueen’s Management School

Scope (May 2015 – Sept. 2016)

Region: Northern Ireland (28 companies)

• Food producers (growers) (6)

• Food processors (5)

• Wholesalers and retailers (7)

• Food services (4)

• Food banks (4)

• Food recycling companies (2)

Large companies

Medium companies

Small and micro companies

Acknowledgement: This work is supported by the Centre for Irish Business and Economic Performance, Queen’s University Belfast (QUB) under grant for the project: “Waste Not, Want Not: Contributing to a Sustainable Food Industry by Managing Food Waste”We would also like to thank Belfast Food Network, the Science Shop at QUB and companies in Northern Ireland which supported this research by granting us interviews and allowing observation of their work.

Framework for managing perishable products in circular supply chains

Waste prevention

No value added recovery

ProducersProducers Processors Wholesalers

Value Added Recovery (VAR) activities

Reuse – VAR of a product– a process in which recovered product is used again for a

purpose similar to the one for which it was originally designed

– commercial returns and lease returns, reselling and second-hand trading (usually at discounted price), or donations of surplus

Remanufacturing – VAR of a component– a process of reducing a product into its constituent parts, i.e.

it requires disassembly. – recovered components may serve as spare parts for a new

production output - (e.g. fruits -> fruit salad), thus, functionality and identity of the end product is changed

Recycling – VAR of material– the process of collecting and disassembling used products,

components and materials, separating them into categories and processing them into the recycled material

– Recycled products: compost

Disposal with energy retrieval– energy recovery through incineration of products that could

not be used otherwise

Based on Carter and Ellram, (1998), Fleischmann et al. (2005), Huge Brodin and Anderson (2008), Rahman (2012)

Quantity

Market

Value

Product Residual

Value

Wholesaler Retail Consumers

Forward logistics flows: product intended for sale to key customers

Remanufacturing flow

Recycling flow

Reuse flow

Return flow

Legend:

OUT OF SPECOUT OF SPEC

PRODUCT Type of products in Value Added Recovery

Washer,Packer

Producer (potato, carrot)

Potato & carrot supply chain network

RETURNS

OUT OF SPEC

Wholesaler Retail Consumers

Food service

Forward logistics flows: product intended for sale to key customers

Remanufacturing flow

Recycling flow

Farmer

Recycling and energy recovery facility

Fresh food processor

Inte

rnal

use

Reuse flow

Return flow

Legend:

To recycling facility

Charity/ Food Banks

OUT OF SPECOUT OF SPEC

RECOVERED PRODUCTS Type of products in Value Added Recovery

INEDIBLE PRODUCTS OR BY-PRODUCTS

UNSELLABLE PRODUCTS

UNSELLABLE PRODUCTS

INEDIBLE PRODUCTS OR BY-PRODUCTS

Importer and distributor

DAMAGED, 2 CLASS PRODUCTS

POTATO SALAD

UNSELLABLE PRODUCTS

To large retail systems

Other food businesses

INEDIBLE PRODUCTS OR BY-PRODUCTS

Food processor (e.g. bakery)

SURPLUS AND CLASS 2 PRODUCTS

Washer,Packer

Producer (potato, carrot)

SURPLUS AND CLASS 2 PRODUCTS

SURPLUS AND CLASS 2 PRODUCTS

Recycling and energy recovery facility

COMPOST ENERGY

ANIMAL FEED

COMPOST

Other food businesses

To recycling facility

INEDIBLE PRODUCTS OR BY-PRODUCTS

UNSELLABLE PRODUCTS

SURPLUS AND CLASS 2 PRODUCTS

PROCESSED FOOD

ALCOHOLIC DRINKS AND BEVERAGES

COMPOST ENERGY

SURPLUS

To the market

Potato & carrot supply chain network

RETURNS

OUT OF SPEC

Producers: growers, farmers

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

▪ Medium size producers: Evidence of good practice to increase yield and produce high quality products0

▪ Small producers: lack of regular customers, limited access to knowledge on VAR, regulationsand market opportunities

▪ ALL: No or small disposal costs –creates perception of no waste

▪ ALL: No recording and monitoring of waste (financially and physically)

▪ ALL: Better utilisation of overproduction

▪ ALL: Loss of crops (not worth of harvest) and small quantities

▪ ALL: Market for the second class products

▪ ALL: Possibilities of remanufacturing: animal feed

▪ ALL: Reuse: donations to food banks or soup kitchens

▪ ALL: Low market price of agricultural products

▪ Small and medium producers: Large customers – large investments; limited resources

Note: these are preliminary findings based on the sample of 6 companies

▪ ALL: Diseases (Low diversity of seeds)

▪ Mixed types of farms: Possibility of recycling on the fields

Processors: raw materials

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

▪ Medium size companies Integration of production and packing/washing activities

▪ Medium size companies –Accuracy of grading: rejects from washing, grading machines

▪ Small companies: Managing small quantities of surplus or second graded products

▪ ALL: Efficiency and effectiveness of grading and sorting

▪ ALL: No recording and monitoring of waste (financially and physically)

▪ ALL: The greatest opportunity: Matching the product and the customer▪ For reuse and ▪ For remanufacturing

▪ ALL: Possibility of recycling on the fields

▪ ALL: Low market price of agricultural products

▪ ALL: Product knowledge - Good estimation of product residual value

▪ ALL: Market(s) exploration

Note: these are preliminary findings based on the sample of 5 companies

Wholesalers and retailers

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

▪ Large companies: managing the (local) supply chain

▪ ALL: Low visibility: No or very limited insights into quality and shelf-life of imported products before the shipment reaches the destination

▪ Small companies: limited supply base, small negotiating power in relation to the supplier

▪ Small companies: No recording and monitoring of waste in most of the cases (financially and physically); limited resources

▪ ALL: Remanufacturing -collaboration with manufacturers of processed foods and pet foods

▪ Small companies: good knowledgeof local customers

▪ ALL: Reuse - donations to food banks or soup kitchens

▪ Medium size companies – limited/ selective recording of costs of waste

▪ ALL: Upcycling activities (from surplus of fresh fruits and vegs to fresh juices, salads, …)

▪ Large companies: complex supply chain to manage efficiently

Note: these are preliminary findings based on the sample of 7 companies

Thank you for your attention

If you have any questions, or you would like to join us in this part of the study, please contact

Jelena Vlajic, Queen’s Management School

Email: j.Vlajic@qub.ac.uk