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

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.

Given the interconnected nature of the food and beverages manufacturing (FBM) industry, the proposed research is expected to deliver a range of direct and indirect knowledge, people, economic and societal impacts. Industrial partners will be supported in trialling new technologies, process flows and business models relevant to FBM systems nationwide. These new approaches to achieving the circular economy will drive demand for new skills and jobs benefiting the region and beyond; the results of our work will inform and inspire effective, efficient and sustainable practices across the UK FBM industry. Key societal benefits of the transition towards a CE in the food industry include improved human health and wellbeing through reduced dependence on hazardous chemicals, reduction in waste and better protected ecosystems.

Within the South West England region, the University of Exeter already engages with 700 small and medium-sized enterprises (SMEs), enabling our work on the CE, and its beneficial impacts, to be replicated across wider agri-food businesses and other sectors. The University's Innovation, Impact and Business service would apply for further investment from the European Structural Investment Fund (ESIF) through which we have successfully obtained support in the past. We would also seek industrial match-funding through various regional funded RD&I programmes. Further investment is also possible given Exeter's membership of the 'Great Western 4' Partnership (along with Bath, Bristol and Cardiff Universities) which has been accepted into the first phase of the Government's Science and Innovation Audit in recognition of regional research strengths in resilience, environment and sustainability.

In addition, a variety of awareness-raising activities are planned in the region to complement the research, communicate key findings and disseminate impact comprising: public workshops at major SW food festivals (with a combined attendance of over 150,000 visitors); interviews on BBC and independent radio stations (with weekly audiences in the 100,000s); and meetings with regional Local Enterprise Partnerships (LEPs), local authorities and Food Enterprise Zones tasked with boosting economic growth, job creation and prosperity. The liaison with the LEPs will be particularly relevant due to the recent identification of the food industry as a key 'SMART specialisation' sector, i.e. scope exists for growth, development and specialisation through connecting business with the region's science and knowledge infrastructure.

At the national level too we have formulated an impact strategy including a dedicated project website and social media presence (via Twitter and Facebook accounts) where progress will be reported, contacts and other useful links shared, and project outputs for academics, industry and the public will be released and promoted. Web-based outputs for the national audience will encompass a final report, a series of practical case studies, accompanied by short YouTube videos about the case partners; simple data analytics tools will capture impact. We will also write at least one news or feature articles in a leading trade magazine, ideally Food Manufacture (delivered to c. 4,000 UK manufacturing sites). Further impact will be achieved through a series of presentations at key events including: the annual Food Manufacture Excellence Awards ceremony in London (November 2017) which attracts hundreds of industry professionals; the All-Party Parliamentary Sustainable Resource Group in London, a leading forum connecting parliamentarians, business leaders and the sustainable resource community; and three events with representatives of the Ellen MacArthur Foundation (EMF), an influential champion of the circular economy. The aim of the final EMF event (scheduled for September 2018) will be to direct and tailor the Foundation's future work for SMEs and the wider FBM industry.