The Importance of Short Food Supply Chain: Examining Logistics Strategies for Competitive Advantage and Sustainability

Abstract

The Short Food Supply Chain (SFSC) has increased in recent decades, significantly impacting the environment, CO2 emissions, and biodiversity loss. This study focuses on the SFSC and its components by examining the logistics strategies and the value of simple communication strategies in the SFSC. The study aims to gain insight into how these strategies can provide competitive advantages for food producers and align with the desired perception by customers. The SFSC is a direct and shortened food distribution system from producer to consumer, reducing the number of intermediaries involved in the supply chain and promoting a more sustainable and efficient food supply chain system. The study analyses case studies of Swedish food producers and intermediaries to understand the impact of SFSC on reducing food waste and packaging research. The growth of SFSCs is expected to lead to a more locally produced food industry and improved small business development, product range, and energy efficiency.

1. Introduction

In recent decades, the Short Food Supply Chain (SFSC) has grown faster than the countries’ GDP [1]. The SFSC significantly impacts the environment, CO₂ emissions, eutrophication, and biodiversity loss [2]. According to Eurostat 2009, road freight transport will increase by approximately 16% annually. The distance increase and the number of deliveries between the countries [3]. Meat consumption within Europe has also increased. About 365 million animals were transported within the E.U. market, of which about 67% were transported by road. The increased quantity and distance significantly impact the load on the environment, safety and quality. The transport sector generates approximately 25% of greenhouse gas emissions related to worldwide energy consumption. 75% of greenhouse gas emissions come from road transport [4, 5].

Increased transport, in turn, impacts the environment [6], logistics costs, quality and safety [7]. The demand for locally produced food has recently increased [8, 9]. The efforts to mitigate climate change risk [10] from transport related to the agricultural sector should receive more attention. The Swedish agricultural industry [11] uses about 20% of the total energy consumption. Effective utilisation of SFSC would reduce fossil fuels and greenhouse gases [12]. In addition, new national goals of self-sufficiency [13], creating logistics services, infrastructure solutions, freight transport systems and design challenges. Coordination of locally produced foods would improve competitiveness and quality for customers and consumers [14, 15].

This study focuses on Short Food Supply Chain and its components by examining the logistics strategies in the short food supply chain (SFSC), focusing on communication, environmental sustainability, and innovation. The study aims to gain insight into how these aspects can provide competitive advantages for food producers. Through case studies on a few Swedish food producers, intermediaries, and point-of-sale, the study analyses the value of simple communication strategies and how SFSC can align with the producers’ desired perception by customers. The study does not consider the financial implications of SFSC. However, one key factor is to reduce food waste [16] and to service providers in logistics activities.

The ecological problems related to waste have led to [17] focus on packaging research that has increased [18, 19, 20]. On the other hand, packaging has a protective and informative role in showing the environmental impact [21, 22] for SFSC. However, several studies demonstrate the indirect importance of packaging that reduces environmental impact [23, 24, 25].

2. Short food supply chain

Short Food Supply Chain (SFSC) is a concept in food systems that refers to a direct and shortened food distribution system from producer to consumer. It emphasises local production and distribution, reducing the number of intermediaries involved in the supply chain [26]. SFSC aims to create a more sustainable and efficient food supply chain system by reducing the environmental impact of food transportation and promoting closer relationships between producers and consumers.

Short food supply chains (SFSCs), as legally defined by (E.U.) Regulation N. 1305/13 is considered a model of agricultural production that can achieve environmental, economic and social benefits, such as mitigating marginalisation inefficiencies and reducing transportation costs and CO₂ emissions.

SFSCs sales-end can be divided into individual direct sales, collective direct sales and locally organised associations. The main goal is to reduce the middleman and direct transactions between the farmer and the consumer. These transactions can occur inside or outside the farm, for example, at farmers’ markets within a particular relation with the customer or in a collective form, involving cooperatives of producers selling their products to consumer groups, informal agreements and variable quantity levels between producers and consumers. Traditional SFSCs tend to be farm-based in rural areas and take the form of on-farm sales, roadside sales and ‘pick-your-own’ systems. Most typically, designated pages on social media are applied to inform the consumers about what is in the farmers’ stock and how the items pack and distributed to rural marketplaces. SFSC management covers the entire chain of activities from production on the farm to processing, distribution, and marketplace to the consumer.

Locally produced food means that the food is grown or produced close to where you make your purchases. What is considered close is not defined, but in Sweden, close is usually regarded as regional or local. Choosing locally produced food benefits producers and businesses in the home area and reduces the environmental impact that long transports would otherwise entail. But it should be mentioned that the concept does not necessarily positively impact the environment.

2.1 SFSC local associations

Several non-profit member associations have emerged supporting local farmers with the mission to increase the volume and quality of food production in various parts of Sweden. The association’s goal is for those who live in the region to partake of the locally produced food. They have mapped all food producers within the country so that one, as a private person, can know where to shop, experience and eat food produced in local areas.

The association aims to respond to the growing interest and demand for locally produced food requiring increased production and processing. This development must also be ecologically, economically and socially sustainable in the long run. According to one member, the growth of SFSCs will lead to more employment. The ripple effect will improve the development of small businesses, increase a broader product range, increase attractiveness for the rural area, and a more energy-efficient society will positively affect the hospitality industry, expand research activities and a higher level of education.’

2.2 Sales channels

New sales channels with short supply chains have grown as a reaction to long-distance food supply chains. The discussion about SFSCs raises the question of finding alternative ways to supply food by reducing the distance between restaurants and private customers or consumers. In recent years the use of digital ordering systems for buying food has increased in combination with the increased interest in consuming locally produced food.

2.3 Virtual food platform

In Sweden, the virtual food platform “REKO-Ring” has been popping up, connecting consumers and producers interested in selling and buying locally-produced food using social media groups.

Reko-Ring is a sales channel that food producers can use to sell their products. With a predetermined date and place, all transactions are done in about an hour, where possible payment and pick-up of goods occur.

The Reko-Ring can be said to be a mobile farm shop where all business is settled in advance, which reduces the amount of food waste and saves the producers a lot of time as the period for picking up the products is predetermined. Moreover, producers can plan deliveries in a time-efficient and environmentally friendly way and coordinate these instead of going to several locations. The orders are made through the local Reco-Ring social media group, where the producers have their payment approach.

2.4 Farm shop

Farm shop means that the producer has his shop, usually on his farm, where the producer’s goods, often self-made, are sold as other belongings. The purchase then occurs locally, with the transaction and the goods being given directly to the hand at the time of sale.

2.5 Community kitchen

The community kitchen means food produced for publicly owned kitchens serving preschools, elderly care, healthcare, and hospitals. This is another interesting sales channel for locally grown food, as public opinion exists for this type of set-up system. The local authority tenders locally produced food and distribution activities to benefit small-scale businesses.

2.6 Retail

Grocery stores mean Swedish retail, such as, e.g. ICA, Coop, Willys and Hemköp. Also, these actors are working closely to benefit the local food industry.

2.7 Public market halls

A market hall is a public sales outlet where products such as meat, fish and seafood, fruit and vegetables, delicacies, spices and flowers are sold.

2.8 Packaging

Packaging influences all logistics operations throughout SFSC and helps the customer in decision-making. Well-functioning packaging systems play an increasingly vital component in succeeding in creating a well-functioning logistics process. The packaging design is crucial to transporting the goods from local farms to customers in a thoughtful, smooth, and cost-effective way. With well-designed packaging, waste and transport are reduced, which in turn means that costs for producers are reduced.

Standardisation is needed to achieve a functioning logistics chain with simple packaging for handling and use. It is vital to jointly develop a maximum packaging size and weight for smooth handling for the producer, transport company, and customers.

3. Case study

3.1 Logistics model for locally produced food

One study was conducted in the western region of Sweden. The study had various hubs/central warehouses where producers deliver their products themselves or a third-party logistics company, such as transport and last-mile distribution companies. The goods from several local food producers were collected with a separate shipping company. The thought process here was to reduce the environmental impact and cost and make it possible for the producers to use the shipping company.

From the various hubs, the goods were transported to the customers with the help of the shipping company, and these deliveries were made directly to the customer’s desired location.

Locally produced is a resource centre for small-scale food producers that advise, train and develops small-scale food companies to create growth and employment in the region. The vision is to become the leading region in locally produced food. It currently has seven hubs that deliver to customers and consumers. In addition, three different transport companies were used depending on the goods to be sent.

3.2 Reko-rings in the central region of Sweden

A site visit was made when Reko-Rings had an event where the producers and customers met for sales and picked up groceries. Approximately five local food producers came there, and all five used their means of transport. One producer cooperated with another and pooled farmed products. The means of transport used by all producers were fossil-fueled cars, but there was an interest in a more environmentally friendly alternative.

One of the food producers took payment on the spot. While with the remaining four producers, the goods had already been prepaid for in advance by the customers. One of the producers had surplus food with him and was, therefore, able to sell beyond his predetermined orders.

An observation that was made was that there was a low amount of customers concerning what the producers wanted. Several people pointed this out during the interviews.

3.3 Small-scale fishery

In Grundsund, on the west coast of Sweden run, fishermen have a small-scale coastal fishery. In this area, small-scale fishing held the key to living in the archipelago.

The longitudinal canals leading into the well-protected harbour are houses and boathouses. The fishing gear on the wooden quays testifies to the professional fisherman. Here is a fisherman who believes in a bright future in the profession, and fishing becomes a lifestyle.

• The fisherman says we still have a living archipelago with small-scale fishing.

He used to work in trawling but has been fishing with cages primarily for lobster and crayfish for several years. Occasionally, he also engages in net fishing for flounder, mackerel, and other types of fish.

He has his mother, a small-scale professional fisherman, with him out to sea-his father also fishes, which he has done since the 1980s. During parts of the fishing season, he brings tourists from a nearby hotel. The tourist then learns more about what type of species swim in these parts and life as fishermen.

He grew up with small-scale coastal fishing, but for a few years, he tried a slightly different type of fishing in Scandinavia.

• It is simply this fishing that is closest to my heart. But, I also have the opportunity to come home daily to my family, different from those out fishing from Sunday to Thursday or Thursday to Tuesday, which is a regular work schedule.

He takes the herring fishery in the southern part of the Baltic sea as an example of how large-scale fishing can wipe out small-scale fishing.

Once upon a time, herring fishing generated work for many families in southern parts of Sweden. Nowadays, most of the herring is caught by a large trawler, as they catch in Denmark.

• Even if it is fishermen from these parts with Swedish-owned boats flagged, it generates either more work for more people on land in Sweden or tax revenue for Sweden.

• From the authorities’ point of view, it may be more manageable to control 10 larger boats than 100 smaller ones.

The interviewee still sees a clear swing that speaks for small-scale fishing. More private individuals, restaurant buyers, and fish markets are asking for fish caught in cages. Traceability becomes an essential factor when customers are demanding cage fishing.

3.3.1 Protected zones for sustainable fishing

The fisherman advocates protected zones where cage fishing can occur during parts of the year. This fishing method has little impact on the bottom’s environment and animal and plant life. It also offers more people an opportunity to make a living from small-scale fishing that is sustainable in the longer term.

Another advantage is that shellfish that do not measure up are thrown back alive. But, unfortunately, that opportunity is not given to the animals caught in single trawls, where bycatch is thrown back dead into the sea.

Because large-scale fishing fleets are often prioritised in fisheries policy centres, it is easier for the E.U. to control and fit them like a glove in many situations. But large fishing boats trawling far out at sea do not contribute similarly to the old, classic fishing modes.

• There are no more fishing boats out there. And the prawns come frozen from Greenland. So then we understand that fishing and vessels are essential in this, states the local fisherman.

The interviewee has a positive vision of the future of this sector. The possibility of changing the direction of fishing and aiming it more precisely at selected species also reduces the pressure on fish species that need to be protected. In this way, the stocks can grow larger and more robust.

• In some regions, combining overburden fishing and trawl fishing may not be possible. But for us, as it is here now, I think it works well. Of course, from a sustainable point of view, trawl fishing should cease, limit, or move out elsewhere. However, we are optimistic that many will still be able to adapt.

4. Discussion

Short Food Supply Chain (SFSC) refers to a direct and shortened food distribution system from local producer to consumer, reducing the number of intermediaries involved. It aims to create a more sustainable and efficient food supply chain system by reducing the environmental impact of food transportation and promoting closer relationships between producers and consumers. SFSCs can be individual direct sales, collective direct sales, or locally organised associations. New sales channels for SFSCs have emerged, such as virtual food platforms, i.e. Reko-Ring and farm shops, retail stores, and public market halls. Packaging plays an essential role in SFSC, influencing all logistics operations and helping customers in decision-making.

This study presents two case studies on short food supply chains and small-scale fishing conducted in central and western parts of Sweden. The case studies were conducted on the spot by mapping the short food supply chain channel from the producers to the point of sale. In the first case, local food producers meet for sales and deliver at an event, with five participating suppliers in the study. As a result, the producers face low customer turnout and interest in a more environmentally friendly means of transport. In the second case, a fisherman and his family run a small-scale fishery, focusing on cage fishing for lobster and crayfish. The fisherman advocates for protected zones for sustainable fishing and has a positive outlook on the sector’s future, as there is a growing demand for traceable fish caught in cages.

The study highlighted the challenges of large-scale fishing and its impact on the environment and the overfishing of certain species.

The Short Food Supply Chain (SFSC) is a direct and shortened food distribution system from producer to consumer that reduces the environmental impact of food transportation and promotes closer relationships between producers and consumers. The trend has been to minimise distribution and transport distances by bringing more locally consolidated food production and becoming more self-sufficient. The interest in locally produced food led to the development of non-profit member associations supporting local farmers and new sales channels like the virtual food platform. The increased use of SFSC can lead to improved employment, small business growth, reduced food waste, and lower greenhouse gas emissions. In addition, SFSC can offer a more sustainable and efficient food supply system by decreasing the distance between food producers and consumers.

5. Conclusions

The study focuses on Short Food Supply Chain (SFSC) and its impact on logistics strategies, communication, environmental sustainability, packaging, and innovation. The study aims to understand the competitive advantages of SFSC for food producers through case studies of Swedish food producers, intermediaries, and point-of-sale. The SFSC exemplifies a direct and shortened food distribution system that emphasises local production and distribution and reduces the number of intermediaries involved. It aims to create a more sustainable and efficient food supply chain system by reducing the environmental impact of food transportation and promoting closer relationships between producers and consumers. There are three types of SFSCs: individual direct sales, collective direct sales, and locally organised associations. The growth of SFSCs could lead to more employment opportunities, improved small businesses, and a low-emission food supply for consumers.