The System Integration feasibility project analysed findings from the food, energy and water feasibility studies using 2 kinds of methods in order to find technical synergies among the different processes.  It also looked at common learning within smaller-scale technologies and identified opportunities and challenges for localising food production. Data tend to be more available on bio-physical resources (water/energy) and economic production costs but, external cost benefits related to issues such as health, pollution and local employment are less easy to assess.

The final systems feasibility study report is available. The Executive Summary of the report is provided:




Executive Summary

Food, energy and water are among the most essential requirements for the thriving of every society. Under the pressures of a growing world population, the improving living standards in emerging economies and the changing climate, the grand challenges in meeting the three essential requirements have been widely recognized in the last few decades. The inter-connectedness between the three sectors has in recent years been coined with the term “food-energy-water (FEW) nexus”.

Re-distributed manufacturing (RDM) is another emerging trend: Manufacturing of goods via small decentralised production facilities in contrast to the nowadays prevalent large scale industry.

This study is part of a larger project focusing on the combination of these two emerging trends by assessing the opportunities and challenges in localising food manufacturing. Since RDM centres on manufacturing, the focus will be on processed food products. Apart from the interconnectedness of the physical resources food, energy and water, the way food supply systems are organised does also have a large impact on socio-economic factors. In addition, policies can influence both the physical and socio-economic aspects in food supply systems. Therefore, within the LNN project a multilayer approach has been adopted in which food supply systems are evaluated from the physical, socio-economic and policy layer. This study builds on earlier work done within the project which evaluated food, energy, water, business and policy aspects separately. In addition, this study adds a new layer of research from a system perspective.

Most processed food products are produced via large global supply chains. In basically each process step within the food supply chain there is water and energy involved, either direct or water embedded in energy production and vice versa. Also, each process will have a specific resource efficiency, meaning that each step will create losses or waste. Local food manufacturing could offer opportunities to create industrial symbioses in which waste materials of a process become a resource for another process nearby, for example waste heat could be used in another process requiring heat.

Life cycle analysis (LCA) and material flow analysis are engineering methods which can give insights into the amount of resource use in the complete supply chain. These insights can be used to compare whether localised food supply chains offer advantages in terms of resource efficiency. A LCA can be extended by including environmental and socio-economics factors. Due to the various factors involved, assessing which supply chain configuration delivers the best overall result is a difficult task. It will often encompass trade-offs among the various factors or design criteria.

Since assessing the pros and cons of an alternative food supply system is already a complex and time-consuming task, designing and optimising a food supply system from the FEW nexus perspective becomes a very complex task. Especially if factors from the physical, socio-economic and policy layer are taken into account. Most FEW nexus design methods focus on the physical layer. Based on a literature study, we distinguished two kinds of methods: integration based on footprints (IBF) and integration based on co-design (IBC). The former focuses on the design of a main system (e.g. an energy system) and includes the impact on other resources into account by their footprints. The latter is more complex since it aims to optimise the resource usage of the whole system simultaneously. The extra complexity in IBC requires also more detailed information of the underlying processes in order to capture the potential linkages with and trade-offs on other processes and resources.

Part of the difficulty in designing food supply systems from the FEW nexus perspective is related to the selection of the system boundaries. This is strengthened by the data required to model and assess the system, which might be lacking or might be available at different temporal and spatial scales. Furthermore, the optimal system boundaries might contain multiple political regions, which often affects data availability but also the decision-making processes in the case of implementing a specific food supply system design.

A range of metrics related to the FEW nexus can be found in literature. They are often used to assess a countries’ performance and to benchmark them with other countries. Three of these metrics have been analysed in order to study which factors have been taken into account and which data sources are used.

A case study on local bread production has highlighted some of the opportunities and challenges for localising food production. While the use of bio-physical resources such as global land use, water and energy consumption decreases, the socio-economic resources labour and production costs increase. However, the case study has not included a quantification of the external cost benefits of localising food manufacturing which can be related to healthier food, better quality control, increased local employment and less (global) pollution. The increased use of socio-economic resources holds in general; however, the decrease in the bio-physical sphere highly depends on the specific food product, local water footprint and crop yield. Since food products are very diverse, each product would need careful consideration to evaluate the feasibility of producing the product locally.

For RDM in the food sector there are plenty of opportunities, however in the short term RDM business models should not focus on price competition with mass manufactured food products. It should focus on benefits such as better quality food (e.g. fresher and healthier) to make a business case and justify higher prices. In the long term, technological innovations such as smart robotics could change the economics of local food manufacturing in the future, helping to reduce the cost barrier.

From the policy side, the evidence that RDM will provide benefits for a region as a whole (e.g. more employment, better environment, less pollution, better health, less spending on health care) should become stronger. If it proves to be better for specific food products, this will allow politicians to take measures to transition towards more local food production systems. One prominent issue to tackle would be the energy price differences for large and small energy consumers in order to create a level playing field.