The Business models and practice feasibility project identified the opportunities and constraints of relocalising food processing for two products – tomato paste and bread: from farm gate to place in 0 miles. It ran from January to December 2016.

The sustainability of local food supplies is a core issue for policy makers in relation to issues such as traceability, quality, customer safety and the resilience of the rural economy. This feasibility project has focused on understanding the opportunities, but also bottlenecks of shortening the value chains of two processed food products. This means exploring, under what conditions, localised food processing chains are desirable, as well as feasible. We have looked at the possibility of delocalising food processing in the areas of Cambridge and Oxford in line with the broader geographical focus of the project. The emphasis was on the design and management of food value chains and specifically the design of business models for sustainable relocalised food manufacturing.

The literature review has examined the development of national and local food chains in the UK and the multiple dimensions that affect the sustainable provision of foodstuffs. The main dimensions of concern are: economics, social, human health, and environmental and ethical sourcing. The key in understanding the potential to establish a sustainable food chain in the future is the extent to which market demand and supply will fluctuate and the level of resilience in any given food commodity chain. It is important to evaluate the strengths and weaknesses of the food chain under investigation to establish its reliability and potential for sustained development.

The literature review focused on the dynamics and performance of food chains in the UK and the particular characteristics of the two case studies: tomato paste and bread. This review has lead to a greater understanding of the challenges involved in creating a local sustainable food supply chain and inform our framework of analysis that will compare and contrast the sustainability of the chosen case studies. The literature review has also assisted in developing research questions for the fieldwork as well as future research questions.

A stakeholder workshop was held in Spring 2016 and a survey of business was carried out during the summer/autumn.

 

The final report is published and the Executive Summary is provided below:

Executive Summary

This report aims to identify the business opportunities for, and constraints of, relocalising food processing for tomato paste and bread.  The report explores the existing literature on food manufacturing, local food and sustainable supply chains, as well as the recent work on Re-distributed manufacturing (RDM).  The work focuses on two specific locations Oxford (retrofit) and Northstowe (new development).

Data was collected using a questionnaire.  Overall, in the case of Oxfordshire, our findings suggest that firms are already very much relying on local and regional suppliers and customers and that they have reached the limit of what they can source locally in terms of variety, quality and cost, but also that there might be glass barrier blocking further demand expansion due to competition especially from large retailers.

In order for RDM to be feasible we present the following business case:

There must be available resources in order for businesses to invest in RDM.  These resources extend from environmental e.g. water, land; labour with the necessary skills to carry out a job within RDM, a market demand for the product whether this is the local market or national market.  The suitability of Redistributed Manufacturing in the food sector is dependent on each specific product.

From our extensive literature search and the data collected we present the following key future research questions:

  1. How do we create dynamic Business models to take account of: incremental changes that could take place over 5 years; medium term changes 5-10 years; and, long term changes over ten years
  2. What are the trade-offs of redistributing food manufacturing for the entire supply chain of specific products in terms of economics, social, environmental, and cultural factors?
  3. Could redistributed food manufacturing alter the flow of power across food supply chains and provide opportunity for local and regional economic development?
  4. How can redistributed food manufacturing address the triple bottom line in any business model (firm, industry, or value chain)?
  5. Relocalising food manufacturing may enable the relocalisation of other actors within the value chain, what are the knock on resource effects of this process?
  6. What are the effects of changes in the political dimensions of the UK which could affect business decisions in relation to re-distributed manufacturing?
  7. How should RDM be implemented in a low margin sector (exclusion of artisan and specialist products) there would need to be a clear business case in terms of costs and returns on investment particularly for smaller enterprises. How can this be addressed for smaller firms, what business model?

 

Birmingham Business School