Modelling supply chain optimisation in the food and beverages industry: Helping SMEs in South West England work towards the circular economy

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This two-year interdisciplinary research project, led by the University of Exeter Business School, will explore how small and medium sized enterprises (SMEs) in the food and beverage manufacturing (FBM) industry of South West England can move towards the circular economy (CE), the benefits of the transition and enablers and barriers to progress. The circular economy is defined as one in which maximum value is extracted from resources during use, avoidable waste is eliminated and unavoidable waste reused or recycled. Given the planet's finite capacity to provide resources and absorb wastes, CE is thought preferable to the traditional linear business model of resource exploitation, manufacture, consumption and disposal. A continuous improvement process, driving innovation and competitiveness, the CE concept is gaining traction in many countries and industries. But, until now, the principles and practices for achieving CE have been little explored within the FBM industry. The opportunities are substantial in this industry due to its various economic, environmental and social impacts. These encompass use of land, water, energy and raw materials; toxic emissions; as well as packaging and food waste arisings, including significant losses of product and value across the supply chain. At the same time, the industry is vulnerable to many external factors from changing climates, land use and seasonality to perturbations in cost and availability of raw materials, energy, water, labour and other inputs. Many innovations are now available, or in development, to mitigate these impacts and help manufacturers retain value in their processes. These approaches include the reprocessing of waste, by-products and surpluses into new products; packaging innovations; the installation of renewable heat and energy technologies; and sophisticated IT-based systems to streamline supply chains. But almost 96% of FBM businesses are micro- to medium-sized (FDF, 2016) and most are unable to access, and benefit from these innovations, due to limited financial, technical and other resources. Our research will examine the challenges faced by eleven FBM SMEs in South West England, a region where FBM is significant in terms of employment and gross value added. Our partners, varying from a one-woman micro-business to a medium-sized firm of 200 employees, make dairy, bakery and meat products for regional, national and international customers sold through multiple channels (including traditional retail and online), and thus offer a valuable snapshot of the industry. These companies are committed to achieving CE, together pledging some £64,000 of in-kind support towards the work. A research team of sustainable supply chain experts, mathematical modellers, social scientists and engineers will work closely with these businesses, exploring and testing new technologies, processes, tools and product designs. A highlight will be the first application within the FBM sector of a 'circularity indicators tool' developed by the Ellen MacArthur Foundation. In addition to one-to-one collaborations with our partners, we will bring them together for 3 workshops over the course of the project, to share ideas, solve problems and elucidate exactly what CE means to FBM SMEs. The challenges faced by our project partners are not unique to the region and our findings will apply nationwide. In addition to academic outputs, we will maximise the impact of our research through public workshops at regional food festivals, an event with the All-Party Parliamentary Sustainable Resource Group at Westminster, articles in the food industry trade press and at a major food industry awards ceremony. We will launch a website, write case studies (both technical and for the lay reader), produce web-based videos about the case companies and publish quantitative and qualitative datasets enabling others to explore the CE as it pertains to FBM.