Sustain Module 4

This programme has been funded with
support from the European Commission
Module 4:
Maximising
Local & Short Food
Supply Chains

INNOVATION FOR THE FOOD SERVICE SECTOR
Module 4
In this module you will learn
about the key types of supply
chains and why short supply
chains are so important in
creating & maintaining a
circular economy.
We will also discuss food
waste & how the ‘Just-in-
time’ helps in eliminating
waste in the food service
industry.
01 UNDERSTAND FOOD SUPPLY CHAINS
02 CREATING A CIRCULAR ECONOMY FOR
FOOD WASTE
03 LEAN PRINCIPLES & ‘JUST-IN-TIME’
PROCESSING & LOGISTICS

1. Understanding Food Supply Chains
The food supply chain connects three main sectors: agriculture, the food-processing
industry (including food service) and the distribution sector, and involves a wide
diversity of stakeholders:
• Farmers
• Food processors and
food service
• Traders and wholesalers
• Retailers, with both independents and very large companies.
There are often significant imbalances in bargaining power within the food supply
chain, which can lead to unfair trading practices. Small farmers or cooperatives, as well
as food service businesses, often deal with large buyers which represent their only
access to the market and can exert strong pressure on prices and margins.

Where do you source your food
supplies?
Many chefs and food service businesses are very
mindful of sourcing local food from local farmers,
fishers, growers, herders and other local suppliers.
It is part of their unique selling point.
Others are budget confined and purchase from
large wholesalers who source mass goods from all
over the world.
This module takes an arial view of both short and
long supply chains and enables learners to make
more informed decisions about their purchasing.
Take influence from the trends in Module 1 –
consumers value local and sustainable approaches.

What is a Short Food Supply
Chain ?
Short food supply chains involve very few intermediaries. The
definition of the European Commission:
“Short supply chain means a supply chain involving a limited number of
economic operators, committed to cooperation, local economic
development, and close geographical and social relations between
producers, processors & consumers In many cases produce only travels a
short distance.”
Such supply chains typically involve local producers working together
to promote local food. These partnerships help boost the local
economy, creating new ways of selling local produce and attracting
new types of customer. They also foster cooperation between local
farms, the hospitality industry and the food sector.
Why do they matter?
In the UK, the Government puts the social and environmental costs of food transport at £9 billion a year. Food
is responsible for a quarter of the distance lorries travel in the UK, and shoppers drive around 12 billion miles a
year to buy it.
Buying locally produced food supports sustainable development by reducing:
• transport costs and CO2 emissions
• wear and tear on roads
• traffic congestion and road accidents

Long Supply Chains... the
negative impact
• Contribute excessively to climate change,
especially when food travels by air
• Widen the gap between consumers and
producers.
• Can compromise animal welfare by transporting
livestock long distances.
• Unjustly harm local & economies & the
communities they support.
• Natural environments of poorer countries suffer
• Depend on dwindling oil reserves and are
geopolitically vulnerable e.g. Brexit

Long Supply Chains can be very complex &
typically can have high Carbon Footprints…
Growers and
grower-shippers
Imports
Exports General line
grocery
wholesalers
Direct Markets
Retail
Specialty produce
wholesalers
General line
grocery
wholesalers
Food Service
establishments
Agents /
Brokers

The Carbon Cost of Food
Food's carbon footprint, is the greenhouse
gas emissions produced by growing, rearing, farming,
processing, transporting, storing, cooking and
disposing of food for consumption.
To learn more about the Environmental Impact of the
Food System refer to Module 2.
There are excellent apps now available to help
consumers calculate their carbon footprint.
https://www.evocco.com/
Evocco have published a free guide for Food Service
businesses on how to make more informed decisions
https://evocco.hubspotpagebuilder.com/food-businesses

Benefits of Short Food Supply Chains (SFSC):
Farmer/Producer
Receive Fairer Prices
Less Energy costs
Less Transportation costs
The Consumer
Receive fresher Produce
Increased transparency
Communication with producer
The Community
Creates Sustainability
Employment/ economy
Reduces CO2 emissions

Short Supply Chains & Local Food
Systems
Your food service business can shorten your food
supply chain by
• Direct purchases from local growers and
producers
• Collective direct sales via a local food system,
a collaborative network that integrates
sustainable food production, processing,
distribution, consumption, and waste
management in order to enhance the
environmental, economic, and social health of a
particular area.
• Partnerships

DIRECT PURCHASING
Direct purchasing is the simplest form of SFSC
and involve a direct transaction between
farmer and your food service business.
They can take place on the farm, via online
ordering, or indeed at a farmers' markets.
Food products can also be delivered to food
service businesses through a basket or box
scheme.
The benefits are manyfold - produce is locally-
grown, very fresh, without packaging and sold
directly by the producer themselves.

Advantages of
Collective Direct Sales
Direct Sales on your own as a
farmer or producer can be
isolating, slow & difficult. Forming
groups, networks or co-operatives
allows for greater potential to
gain access to buyers whether
domestic or food service
businesses. Collective sales makes
it easier for the buyer too as it
saves time, motion and effort to
source the quality products they
desire.
01 Initiative creates a cooperative &
network of artisan food producers
02 Producer gets Nationwide reach,
increased exposure, increased sales
03
The buyer gets access to quality artisan
products, a single non- disruptive
method, one invoice/ payment

Case Study from Slovenia
The Dobrina Ecological Box is a cooperative for the
development of sustainable local supply. The core purpose of
the cooperative is to develop small farms, fair food trade and
provide opportunities for fair payment to growers and
producers.
Simultaneously the Co-op connects the countryside with the
urban centre and consequently promotes and develops organic
farming. It encourages the principles of sustainable local food
supply and social-entrepreneurial activities in food production
and processing, and the preservation of cultural, technical, and
natural heritage in agriculture.
READ THE FULL STORY 71-Ecological-Box.pdf (foodinnovation.how)
Click
link
here
CASE STUDY – BE INSPIRED

Case Study from Slovenia
It was established by growers and processors from
small traditional farms within Slovenske gorice.
With the desire to offer residents in an urban
environment a fresh, seasonal, local and healthy
crops, they combined their produce and
established their co-operative market.
Today, they supply many public catering
establishments https://www.zadruga-dobrina.si/zabojckis
with local food. They offer their products through a
system of boxes with fresh vegetables and fruits via
an online store.

Powering a new food system
OPEN FOOD NETWORK is an open source
platform to enable new, ethical supply chains.
Food producers can sell online, wholesalers
can manage buying groups and supply produce
through networks of food hubs and shops/food
outlets. Communities can bring together
producers to create a virtual farmers’ market,
building a resilient local food economy.
OFN is operating in 9 countries, with 1000’s of
local producers using it to reach markets to sell
their products and support their local food
economies in these difficult times.
VIEW Example of an OFN
The Open Food Network Ireland webinar
from July, 2020.
North Tipperary Online Farmers Market - Open
Food Network
WATCH

Partnerships
Community Supported Agriculture (CSA)
WATCH
EU Farm 2 Fork - Community supported agriculture - YouTube
The EU Farm 2 Fork
Strategy is a roadmap
for making European
food systems more
sustainable by turning
climate & environmental
challenges into
opportunities for
farmers & food
producers:
https://europa.eu/!gf93pw

SUPPLY CHAIN PARTNERSHIPS
A supply partnership is a deeper commitment – by definition, it is a commitment
over an extended time to work together to the mutual benefit of both parties,
sharing relevant information and the risks and rewards of the relationship.
Partnering with suppliers to develop deep, mutually beneficial relationships over the
long-term is frequently cited as a means by which to lessen that risk and develop true
supply chain excellence. Build strong partnerships between your food service business
and producers can bring advantages for you both.
1. Opportunities for long term contracts - The carrot for many small suppliers is to
get a long-term contract that guarantees volume. This is a good thing for many
suppliers and allows them to schedule their production.
2. Achieve the product/specification you want - By collaborating, you get the
chance to work with the supplier to improve innovation and create joint value.

DRIVERS of CHANGE…
To summarise
Supply chains of the future need to produce healthy and nutritious
food that has been grown in an environmentally friendly and ethical
way, while also dealing with the significant challenges of a growing
population, climate change and declining natural resources.
Consumers have become more health- and environment-conscious and
demand more locally produced, less processed food of known origin.
Longer supply chains are resulting in a declining understanding of
agricultural processes, challenges faced by farmers and an
environmental impact.
Short food supply chains have the potential for the food industry to act
as a driver of change.

IMPACT of CHANGE…
Changes in supply chain systems are bringing
more transparency to the food production process,
improving incomes and profitability and minimizing
environmental impacts
This is leading to a ‘circular economy’ where the
feedback between supplier and consumer is
continuous, resource consumption and waste are
minimised, and the supply chain is no longer one-
directional.
We find out more in the next section.

“Through the circular economy, our food systems can better deliver nutrition
and combat climate change”. Carlos Moedas, EU Commissioner for Research,
Science and Innovation.
Changing our food system is one of the most impactful things we can do to address
climate change, create healthy communities, and rebuild biodiversity. The current
food system has fuelled urbanisation, economic development, and supported a
fast-growing population. This has come at an enormous cost to society and the
environment.
The future of the
food industry
2. Creating a Circular
Economy

A Linear Economy Model
A linear economy traditionally follows the “take-
make-dispose” step-by-step plan. This means that
raw materials are collected, then transformed into
products that are consumed with byproducts/surplus
discarded as waste. Value is created in
this economic system by producing and selling as
many products as possible.
Recognise this ?
TAKE DISPOSE
MAKE

Why a Linear Economy
Model is bad!
In a linear economy, materials flow in a straight line
from resource extraction through production to
landfill. This model is characterised by two
unsustainable processes, resource scarcity &
excessive pollution load.
LINEAR
ECONOMY
CIRCULAR ECONOMY
sustainable
use
sustainable
production
recycling
raw materials
production
use
residual waste

Food & The Circular Economy
By examining the true cost of the current approach (the linear model) to food
production we can explore the catalytic role of the food service sector and how
we can seize the opportunity to change the inefficient food system through
three ambitions:
1.Sourcing food grown regeneratively, and locally where appropriate
2.Designing and marketing healthier food products
3.Making the most of food and minimizing waste.

Food Waste:
In Module 2, we discussed ways in which food service
businesses can better manage, both their packaging
and food waste. Remember, food waste can be
broken down into pre-consumer and post-consumer
waste. Pre-consumer food waste includes anything
thrown away before food is served to guests, like
rotten food that wasn't used, by-products from the
prep process, or the packaging your ingredients came
in. Post-consumer food waste includes the food scraps
guests leave behind.
Addressing both food and packaging waste is the most
impactful action you can make in reducing your
impact on the planet.

• Once you have engaged in
minimising your waste by
consistently reviewing
your processes (See
Module 2), it is time to
look towards circularity to
direct your unavoidable
waste towards a new life.
• This pyramid shows the
key steps by which food
waste can be directed to
more beneficial outcomes,
with landfill/incineration at
the very bottom!
Food & The Circular Economy

From Waste to Resource
• Despite making reductions, some waste is unavoidable, and so through
the circular economy, we can find a source for this waste to turn it into a
resource.
• While companies such as Food Cloud offer a service linking surplus food,
with charities feeding people in need, they tend to deal primarily with
large retailers and accept a limited amount of food stuffs.
• A better option for food service businesses is to look directly within your
community to see who you might be able to repurpose your excess
servable food with. Throughout lockdown, we have seen food service
businesses pivoting towards providing meals for healthcare workers and
vulnerable members of the community. This initiative is needed to find
sources for excess food.
Where can you redirect food in your community?

From waste to resource:
• Having already looked at how you might
redistribute excess food to vulnerable members
of the community, the next route for excess and
waste food is back into production cycle.
• First, ensuring your waste is pollutant and
pathogen free, engage first with your suppliers to
see if you can design out the waste.
• Composting is a popular stream for excess
organic waste which are growing in popularity as
sharing initiatives are becoming increasingly
prevalent in communities and smaller cities.

Spotlight on Food Systems Innovations
THERE BE GOLD IN THAT WASTE
Pasta manufacturer Barilla have teamed up with
paper company Favini to produce a line of quality
packaging & paper products call ‘Cartacrusca’ using
the by-products of pasta production.
DESIGN BETTER FOOD OPTIONS
Blending mushrooms into burger patties adds
delicious ‘umami’ & Vitamin D and means fewer
calories. Mushrooms can be grown on spent coffee
grounds, therefore combined with a lower meat
content can enhance health and that of the planet.
HEALTHY FOR PEOPLE AND PLANET
Yuba- also known as bean curd robes – is the skin
collected from the tofu making process. Layered and
bound together, yuba can be made into an imitation
chicken breast – it evens gets a crispy chicken-like skin
when you pan fry the outside. Delicious!
REGENERATING NATURAL SYSTEMS
Designers need to create products with ingredients that
are, regardless of their source (animal or vegetable),
produced regeneratively. Where possible they need to be
obtained locally and seasonally, to be safely used as
inputs for new uses. It is these processes which will
contribute to a thriving bioeconomy

Circularity in Business
The Circular Economy is about designing
out waste and making the best use of
our resources.
Within Circular Models, LEAN Business
Principles are a framework through
which you can analyse the efficiencies of
your food service business and design
out waste.
3. Lean Principles
‘Just-in-Time’ Producing & Logistics

Lean Principles
The term Lean refers to the application
of Lean practices, principles, and tools to
the development and production of
physical products and services.
Producers use lean principles to:
• eliminate waste
• optimize processes
• cut costs
• boost innovation

The 8 wastes - TIMWOODS
T I M W
O O D S
TRANSPORTATI
ON
Moving items or
information
INVENTORY
Items or info that
customer has not
received
MOTION
Excessive movement
within workspace
WAITING
Waiting for info or
items to arrive
OVERPROCESSI
NG
Doing more work
than necessary
OVERPRODUCI
NG
Doing work before
it is needed
DEFECTS
Mistakes and errors
that need to be
reworked
SKILLS
Not using workers to
fullest of abilities
The 8 Wastes (or Muda)
of the Lean Process
To create a seamless flow of value that
goes all the way to the customer without
interruption, waste needs to be reduced.
By Reducing or eliminating waste in the
food sector a more effective process is
created.
The acronym TIMWOODS helps to
identify each type of waste.

1. Transport
So as mentioned already transport or Long
Supply chains have many negative impacts in
the Food Sector, including food service.
• Defects & damage to products can happen
when materials travel unnecessary
distances
• Transportation also requires packaging to
protect items & can require fuel to
transport the items.
• Transportation time is not improving the
value of the item, so it takes time which is
a delay for you.

2. Inventory/stock
Since value is being stored (in a
warehouse/store-room/cold-storage),
inventory/stock waste is common in the food
industry.
Inventory is any value, whether ingredients or
finished products, that either needs to be
turned into something more valuable or sold
to customers. An overhead is being paid to
store the products or materials, & so their
value is reduced the longer they remain in
there since their profit margin declines with
each passing day.

3. Motion
When machinery, equipment and people
move unnecessarily, it leads to Motion
Waste.
The movement can be anything, such as
moving, stretching, bending, reaching,
lifting and walking, that doesn’t bring any
value.
Creating organized workspaces can reduce
this motion waste by having what you need
within reach.

4. Waiting:
When producing a product for consumers, any
inaction that increases costs is known as
Waiting.
This is waste because while the product awaits
its transformation, the business is incurring
cost.
Waiting occurs in service processes as well,
such as waiting for approvals, and waiting due
to confusion or indecision about what to do
next in a process that is not well-defined.

5. Overprocessing
When there are more steps, components
or there’s work being put into the
production of a product that the
customer doesn’t require,
overprocessing occurs.
In the case of food service, this includes
adding in more functionality into the
product than needed. e.g. effort involved
in latte art but putting a lid on the coffee
cup, so the customer never sees it!

6. Overproduction
If there’s one waste that can negatively
impact the success of a business as a whole, it
is Overproduction.
When more food products or materials have
been produced than customers are willing to
buy, that is when overproduction happens.
If you overproduce other wastes can occur as
well. These include Motion, Waiting and
Inventory.
The goal is to do work “just in time”.

7. Defects
Defects are the most recognisable forms of
waste when it comes to Lean.
In the food service sector, instances of Defects
include details missing in food orders resulting
in meals that need rework and/or scrapped
ingredients and products.
This waste is one of the biggest when it comes
to food service as it can also lead to
Overprocessing, ‘Transportation’ and
Overproduction waste.
Defects is another way to lose customers!

8. Skills
Skills waste or Non-Utilized Talent. This waste
happens when management doesn’t use all its
staff to their fullest ability. (E.g., a qualified chef
washing dishes).
Or when management decides to improve their
processes while ignoring feedback from their
employees.
If employees who directly deal with the
processes are not allowed to voice their input
when it comes to improving them, this is
considered non-utilized talent a waste.

Lean Method & Just-in-Time
The Lean concept can be applied to the food
industry to reduce waste throughout the food
service process and maximize efficiency. Doing so
can create greater profits and a higher level of
satisfaction for the customer.
The Just-In-Time (JIT) method can be used in the
food service sector to help improve production
rates & efficiency. Due to the high turnover rates
that are associated with raw materials and the set
date that raw materials must be used by, they are
some of the costliest and wasted items in the food
service industry.

A Just-in-time supply chain
A just-in-time supply chain is a simple concept: if you minimise the number of
goods held in stock. Perishable goods (meat, fruit, dairy) become part of a fluid
supply chain and never sit for long periods in storage. This reduces the time
between harvest and consumption, minimising waste & maximising
freshness for all the meals that your customers order.
But running a just-in-time supply chain is no easy feat. It requires on-the-
minute coordination. Each step needs to be synced: from sourcing, receiving
orders from suppliers, stock rotation, turnaround (cooking and creating), to final
delivery…serving your customer.
This approach guarantees freshness and reduces waste.
The Just-in-Time approach works best with a Short Food Supply Chain

Summary of the Benefits of Short Food Supply Chain
(SFSCs)
• SFSCs - The premise of local food is minimising the distance between agricultural
producers and final consumers – food service is a key intermediary.
• As a rule, local foods use less processing and packaging which results in a fresher,
healthier product & less waste.
• Local food builds community vibrancy and retains local traditions while establishing
a local identity through a unique sense of community.
• A SFSC helps establish a Just-in-time system within Food SMEs and can help in the
fight against food waste.

This programme has been funded with
support from the European Commission

Sustain Module 4

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