The Impact of Supply Chain Efficiency on Food Losses

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Table of Contents

Introduction
Literature Review
Discussion
Conclusion
References

Introduction

Food waste within the food supply chain is becoming a worrying trend given the consistency with which the world population is increasing. According to Kummua et al. (2012), over ten million people often suffer from malnutrition in parts of Sub-Saharan Africa, Asia, and South America. Sometimes the situation is so dire in parts of Africa that children starve to death. It is unfortunate that a significant amount of food is lost within the supply chain while at the same time millions of people around the world suffer from malnutrition. A report by Meyer et al. (2017) indicates that about 50% of the total amount of food produced ends up as waste instead of being put to use. It may not be easy to have a precise estimation of the amount of food that goes into waste, especially after it has been purchased by the final consumers who rarely provide such data.

Strange (2016) strongly believes that a significant amount of food is lost during transportation and when it has been delivered to the final consumer. It is important to find ways of addressing this issue. In the Middle East and North Africa (MENA) region, food security is one of the main concerns that each government is keen on addressing (McKenzie, Singh-Peterson & Underhill 2017). The region does not receive regular amounts of rainfall. The agricultural sector is supported by irrigation and emerging technologies to enhance its sustainability. Some of the food products are imported from Africa and other parts of the world. It is, therefore, critical to find ways of eliminating food losses within the supply chain. This paper focuses on the impact of supply chain efficiency on losses in the food supply chain.

Literature Review

In this section, the focus is to review the works of other scholars who have investigated this issue before. The researcher will look at the emerging trends in the food industry at a global level, which have affected supply chain losses and the estimates of supply chain losses.

Emerging Trends that Impact Supply Chain Losses

According to Kummua et al. (2012), some of the emerging global trends have a significant impact on the food supply chain and the losses that occur at stages of harvesting, processing, transporting, and making the products available to the final consumers. Göbel et al. (2015) emphasize that one of the most significant trends that are negatively affecting food supply is urbanization, which causes the contraction of labor supply in the agricultural sector. In both developed and developing countries, young men and women prefer staying in large cities. Most of them resent agriculture as it is considered a less lucrative job that is meant for people with limited education or with less ambition in society. As such, the agricultural sector is starved of a workforce. Although the use of machinery has reduced overreliance on human labor, people are still needed in farms and production plants to undertake various tasks that can only be done by human labor.

The dietary transition in modern society has also had a significant impact on food wastage within the supply chain. As living standards of people around the world continue to improve, their diet is also changing. Food previously considered as a staple in some regions such as rice and fish are becoming less popular. Fast food such as hamburgers and pizzas are gaining popularity. Unlike traditional meals that can last long, such as rice, these new types of food highly perishable. They are often lost in the hands of the final consumers. According to Meyer et al. (2017), post-harvest waste is common in developing countries. After working tirelessly for several months to grow crops, harvesting and storage become major issues that result in a serious wastage of food.

Estimates of Food Supply Chain Losses and Policies in the MENA region

It is not easy to come up with the exact estimates of the amount of food lost within the supply chain. Gilmont (2015) says that to have such estimates, one would need to determine, with accuracy, losses made during harvesting, storing, transporting, processing, selling, and consuming the food item. It may be possible to have the estimates when products are still in the hands of farmers or traders. They can come up with the estimates of their losses quantitatively or in a monetary form. However, that cannot easily happen when the food item is sold to the final user. Once the food item is sold, it is rare to find cases where consumers report about the wastage, especially if the loss is caused by their irresponsible practices. Some do not even realize that they are wasting food. In most of the affluent families, almost half of the food served always goes to waste. Dernini and Berry (2015) say that they do not consider this waste because it is part of their lifestyle. As such, when one is interested in getting such data, it may not be easy to obtain it because responsible individuals do not even realize that they are wasting food. However, recent studies suggest that the post-harvest losses of perishable products around the world are higher than 50% (Lacirignola et al. 2014).

Wastage of food occurs at different stages in the supply chain. Studies suggest that it is most common at the final stage within the supply chain after the product is sold to final consumers. Food wastage is most common in households after products are purchased from the market. Capone et al. (2014) argue that the hospitality sector is another area where wastage of food is common. Clients are served food that they rarely consume to the last bit. It is an ethical and hygienic requirement that food remains cannot be recycled and presented to other customers once they are served. As such, the remains often go to waste. Some hotels have come up with ways of giving away such remains to the homeless and street children. A significant amount of food is also wasted at the point of sale (wholesalers and retailers) due to excessive handling and long periods at the warehouses. Food is also lost during transportation, distribution, and warehousing stages of the supply chain majorly through poor packaging, high temperatures, and physical handling (Bacaria, Aynaoui& Woertz 2015). Another portion is lost during processing and while the product is at the farm, especially during the time of harvesting.

According to Dernini and Berry (2015), each of the countries in MENA has developed policies and regulatory frameworks to reduce food loss and enhance food security. In the United Arab Emirates, the government- working closely with Food and Agriculture Organization- has developed an initiative in line with the country’s vision 2030 to improve food security in the country by increasing production and reducing wastage through the use of emerging technologies. In Saudi Arabia, the government has developed King Abdullah bin Abdulaziz introduced Food Security Initiative in 2009 to help in ensuring that the country relies less on imported food (Bacaria, Aynaoui, & Woertz 2015). Other regional countries have also developed relevant policies. These policies have had a positive impact on the food supply chain processes. They have improved the production, processing, and transportation of food within the MENA region.

Discussion

According to Kummua et al. (2012), the Middle East and North Africa have registered the impressive growth of the economy over the past two decades. Countries such as the United Arab Emirates, the Kingdom of Saudi Arabia, and Egypt have strong economies, which are predicted to grow even further. Regional cities such as Dubai and Mecca have become major centers for tourists from all over the world. Dubai is currently one of the leading business hubs that have been attracting people from various countries in North America, Europe, Asia, and Africa (Gilmont 2015). The current population in MENA is about 381 million (Meyer et al. 2017). The report shows that it is expected that it will grow to about 500 million in the next few decades because of the rapid rate of population growth in the region. Food security is going to become a major issue that stakeholders will need to address. In this section, it is important to look at specific areas where food is commonly lost.

Dairy Products

Dairy products form an important part of the diet of the people in the MENA region. Although farmers in the United Arab Emirates have embraced modern technologies to improve their production, dairy products are often lost at this initial stage of the supply chain. Spillages and poor storage are some of the common causes of wastage at the production stage. The processing and storage stage also causes significant loss of dairy products. Some of the top milk processing companies in the country are Al Rawabi Dairy Company, Marmum Dairy Farm, and Gulf & Safa Dairies (Bacaria, Aynaoui & Woertz 2015). At this stage, wastage is caused by wrong packaging, the use of wrong proportions of the additives, spillage, and many other factors. During the transporting stage, loss of dairy products is often caused by spillage, especially when the vessels used are poorly maintained. Strange (2016) says that at the final stage when the product is delivered to clients, another significant amount of dairy products is lost. The lead-time for most of the dairy products is short given that it is highly perishable. According to Gilmont (2015), fresh milk can last for about seven days after processing if kept refrigerated.

Cheese slices, on the other hand, can last for one or two months under refrigeration. Sour cream can be successfully kept in a freezer for about three weeks. It is important to note that these dairy products must be kept in perfect storage conditions for them to last for the stated period of time. Some must be kept in their original containers without opening for them to last that long, such as ultra-heat-treated milk. Once their container is opened, their lifespan drops significantly. The loss in dairy products often occurs in the last stage of the supply chain when it has been delivered to end-users because of poor storage approaches that they often employ. Efficiency in the supply chain for dairy products can be improved by reducing the time taken to process and deliver the products to the market. The packaging should indicate the manner in which these products should be kept to enhance their durability.

Fruits and Vegetables

Fruits and vegetables are part of the basic diets in the MENA region. The region still relies significantly on fruits imported from Africa and parts of Asia. However, Sheahana and Barrett (2017) note that many farmers have started producing vegetables locally. At this initial stage of the supply chain, fruits and vegetables can be lost due to poor handling or storage systems. Fruits and vegetables are some of the most perishable food products that can easily be lost if proper care is not taken. Once harvested, fresh fruits and vegetables to not go through extensive processing, hence this stage does not account for the substantial loss of the products. However, transportation is always a major issue when handling these products. Kastner, Erb, and Haberl (2014) say that transport and distribution of fresh fruits and vegetables is the most delicate stage in the supply chain where a significant amount of the product is lost. Once they reach the market, traders can use various strategies to extend their lifespan. Barakat, Mammy Traders, and Ali Heidari Traders are the top traders in the fresh fruits and vegetable market (Strange 2016).

At the final stage of the supply chain, consumers also face some challenges that may lead to the loss of these products. Apples, one of the popular fruits in the MENA region believed to be highly perishable, can last for about six months if properly stored. Other common fruits and vegetables that can last for a long time if stored well include potatoes, which can last for five weeks, garlic, for seven weeks, carrots, for seven weeks, cabbages, for six months, lemons, for one month, and celery, for about one month (Kastner, Erb& Haberl 2014). The most important thing is to ensure that all produce is stored in appropriate conditions. The lead-time for each of these fruits and vegetables varies. In many cases, farmers and traders often make an effort to ensure that their products reach the market within the shortest time possible. They strive to reduce or sometimes eliminate storage costs. A significant amount of fruits and vegetables is lost during transportation: in the market, as traders wait for buyers to purchase products, and at home when they have been delivered to consumers. Many consumers have limited knowledge about the best practices they need to employ to ensure that fresh produce can last as long as possible. According to Göbel et al. (2015), to enhance efficiency in the supply chain of fruits and vegetables, traders need to package these materials properly. They should always advise their customers on how these products should be stored once they have been purchased.

Fast Foods

According to Meyer et al. (2017), fast food is becoming popular in the MENA region, especially among teenagers and young adults. The initial stages of the supply chain (production and delivery to the fast-food stores) are not relevant when looking at wastage that happens in this sector. Massive wastage happens in the last three stages of the supply chain (processing, storage and distribution, and consumption after the product are sold by the retailers). Some of the popular fast food outlets in the country include Starbucks, Subway, Pizza Hut, Papa John’s, ChicKing Dubai, and Wendy’s. According to Göbel et al. (2015), fish and chips, fried chicken, sandwiches, pitas, French fries, hamburgers, onion rings, tacos, chicken nuggets, pizzas, ice creams, hot dogs, salad, and mashed potatoes are some of the popular kinds of fast food in the region. Once prepared, it is crucial to ensure that it is consumed within the shortest time possible. Fast food accounts for a high proportion of food lost within the supply chain. The loss mostly occurs once these products are sold to consumers. Some of them can only remain in a good state for a few hours after preparation, such as fruit juice that is not refrigerated. With limited knowledge on how to preserve these foods, consumers are often forced to throw them out after eating small portions. Health experts have also warned against the excessive consumption of fast food because of its impact on one’s health. Improving efficiency in the supply chain of fast food will require the empowerment of the public. Consumers of these products need to be reminded that they should always purchase what they need to consume within a specific time period because most of the losses occur at the consumption stage.

Fresh Meat

Fresh meat is a popular diet in the MENA region and is a common meal during festive seasons such as Eid al-Fitr. The emerging technologies have made it possible to have local animal farms in the country instead of heavily relying on imported meat. Al-Ain Farms for Livestock Production is one of the leading firms that are specialized in keeping animals for meat (Bacaria, Aynaoui & Woertz 2015). At this stage of the supply chain, wastage is not very common. Wastage is often witnessed at the processing and transport stages, mainly because of poor strategies and structures used. Kastner, Erb, and Haberl (2014) say that waste is also common when the product is in the market and at the final stage when it is delivered to the final consumers. The product is very perishable and if it is not stored in the right conditions, it cannot be in good condition for long. The lead-time for fresh meat, without taking into account the amount of time needed for the cow to be mature enough for slaughtering, is about one or two days. Once fresh meat is made available in the market, consumers are expected to purchase small portions that they need to use within a specified period.

Fresh meat should last for one or two days before it is consumed. If it is roasted, it can last a little longer, for about five days. However, some may consider drying it using salt, as was done traditionally in this region, to ensure that it can last for several days. However, the dried meat has become less popular in the region. It is important to improve efficiency in the supply chain of fresh meat to eliminate possible losses. Gilmont (2015) says that traders should be encouraged to understand the market needs to avoid overproduction. They should ensure that the meat they have in their retail outlet does not last for more than two days. If possible, their stock should be sold out completely by the end of each trading day. That will ensure that they deliver fresh products to their customers that can last for one or two more days in refrigerators before they are prepared for consumption.

Gaps in Research

The review of the literature demonstrates that a gap exists in the current research that needs to be addressed. Researchers have done impressive work trying to investigate how efficiency in the food supply chain can be improved to eliminate or at least reduce the loss of food. However, their work primarily focuses on how the loss can be eliminated from the time of production to the time it is sold to customers. The researcher came across resourceful books and articles on how farmers can reduce the loss of their products to increase their returns and improve food security. Resources on how logistical and storage issues can be addressed to eliminate cases where food is lost during transportation or because of poor storage also exist. Moreover, retailers have a wealth of knowledge on what they need to do to improve efficiency in the food supply chain and eliminate losses that can affect their profitability. However, there is not enough information on how families (individual consumers or end-users) can contribute to improving the efficiency of the food supply chain. Current studies suggest that a significant amount of food is wasted at the final stage of the supply chain. However, it is not yet clear how the loss can be accurately assessed, and what can be done to help address the concern. Future researchers will need to find ways of addressing this problem. Future scholars also need to focus their study locally within the MENA region because most of the existing studies were conducted in the United States and Europe.

Conclusion

Food security is becoming a major concern in modern society as countries struggle to ensure that their citizens have enough food to meet their basic needs. However, it is of concern that almost half of the total food produced globally goes to waste within the food supply chain. The study strongly suggests that it is important to improve efficiency in the food supply chain to eliminate such waste at every stage of the supply chain. Extra care should be taken when handling dairy products, fruits and vegetables, fast food, and fresh meat because they are highly perishable. The improved efficiency in the supply chain will help promote food security regionally and at the global level.

References

Bacaria, J, Aynaoui, K & Woertz, E 2015, ‘Introduction to the special section food trade relations of the Middle East and North Africa with countries of the tropics: opportunities and risks of South-South Cooperation’, Food Security, vol. 7, no. 6, pp 1097–1099.

Capone, R, Bilali, H, Debs, P, Cardone, G &Driouech, N 2014, ‘Food system sustainability and food security: connecting the dots’, Journal of Food Security, vol. 2, no. 1, pp 13-22.

Dernini, S & Berry, M 2015, ‘Mediterranean diet: from a healthy diet to a sustainable dietary pattern’, Front Nutrition, vol. 2, no. 15, pp. 1-5.

Gilmont, M 2015, ‘Water resource decoupling in the MENA through food trade as a mechanism for circumventing national water scarcity’, Food Security, vol. 7, no. 6, pp 1113–1131

Göbel, C, Langen, N, Blumenthal, A, Teitscheid, P & Ritter, G 2015, ‘Cutting food waste through cooperation along the food supply chain’, Sustainability, vol. 7, no. 2, pp. 1429-1445.

Kastner, T, Erb, K & Haberl, H 2014, ‘Rapid growth in agricultural trade: effects on global area efficiency and the role of management’, Environmental Research Letters, vol. 1, no. 20, pp. 1-20.

Kummua, M, Moel, H, Porkkaa, M, Siebert, S, Varisa, O & Ward, P 2012, ‘Lost food, wasted resources: global food supply chain losses and their impacts on freshwater, cropland, and fertilizer use’, Science of The Total Environment, vol. 438, no. 1, pp. 477-489.

Lacirignola, C, Capone, R, Debs, P, Bilali, H &Bottalico, F 2014, ‘Natural resources-food nexus: food-related environmental footprints in the Mediterranean countries’, Front Nutrition, vol. 1, no. 23, pp. 1-18.

McKenzie, T, Singh-Peterson, L & Underhill, S 2017, ‘Quantifying postharvest loss and the implication of market-based decisions: a case study of two commercial domestic tomato supply chains in Queensland Australia’, Horticulturae, vol. 3, no. 44, pp. 1-15.

Meyer, C, Frieling, D, Hamer, M &Oertzen, G 2017, ‘Food losses in supply chains for fruits, vegetables, and potatoes between field and retail shelf in North-Rhine Westphalia Germany’, International Journal On Food System Dynamics, vol. 1, no. 2, pp. 24-30.

Sheahana, M & Barrett, C 2017, ‘Review: food loss and waste in Sub-Saharan Africa’, Food Policy, vol. 70, no. 1, pp. 1-12.

Strange, R 2016, ‘Alerts for policy makers extracted from papers published during 2015 in volume 7 of food security’, Food Security, vol. 8, no. 1, pp 5–9.

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