Creating loops with value recovery: empirical study of fresh food supply chains

In an era of increased scarcity of resources and pollution, the concept of the circular economy is re-emerging to steer supply chains towards more sustainable business practices. The potential of value recovery provides opportunities for the creation of circular supply chains. Reverse flows and value recovery processes are scarcely studied in the context of fresh food supply chains. In this paper, we report findings from an empirical study of three food networks regarding the nature of circular flows, as well as factors that affect their creation. These networks differ in their structure and organisation of value recovery processes. We analyse value recovery in light of following elements: product residual value, quantities available for recovery, value from recovery, and markets for recovered products. We show that 1) financial value from recovery is a necessary condition for profitability of operations of any value recovery process in fresh food supply chains, but not for the occurrence of the corresponding loop itself; 2) reuse and remanufacturing loops likely feed into alternative markets, while recycling loops likely feed back into fresh food supply chains.