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Economic sustainability of food supply chains: Life cycle costs and value added in the confectionary and frozen desserts sectors

Konstantas, Antonios, Stamford, Laurence, Azapagic, Adisa
The Science of the total environment 2019 v.670 pp. 902-914
biscuits, cakes, eco-efficiency, food industry, food supply chain, frozen desserts, global warming potential, ice cream, life cycle costing, manufacturing, packaging, raw materials, supply chain, sweets, value added, waste management, United Kingdom
The confectionary and frozen desserts sectors are important parts of the food industry but have received relatively little attention from a life cycle cost perspective. Thus, the purpose of the current study is to evaluate the life cycle costs (LCC) and value added (VA) in these sectors in the UK, focusing on four major product categories: biscuits, cakes (ambient and frozen), chocolates and ice cream. In total, 18 products are considered along their life cycles, including the raw materials, manufacturing, packaging, distribution, retail, consumption and waste management stages. The results suggest that cakes have the highest LCC (£1.52–2.64/kg) and the biscuits the lowest (£0.72–0.91/kg). The LCC of chocolates and ice cream fall within a similar range (£1.16–1.46/kg and £1.03–1.30/kg, respectively). Divergent trends are noted between LCC and VA: for instance, ‘premium’ ice creams have only 18% higher costs than their ‘regular’ counterparts, but a four-fold higher VA. For all the products, raw materials contribute most to the costs (43%–95%), followed by packaging (1%–29%) and manufacturing (1%–14%). The annual LCC at the sectoral level are estimated at £3.455 billion, to which biscuits contribute 42%. The share of chocolates and cakes is 24% and 19%, respectively, with ice cream contributing the remaining 15%. By contrast, chocolates contribute more than 50% of the total sectoral VA, which is five-fold higher than that of ice cream. The study also demonstrates how LCC can be used to evaluate the eco-efficiency of products and sectors. With respect to global warming potential, whole cakes are the most eco-efficient and vanilla regular ice cream the least efficient products. Overall, the confectionary sector is nearly 60% more eco-efficient than the frozen desserts sector. These results can be used for benchmarking and to drive innovation towards more economically-sustainable and eco-efficient confectionary and frozen desserts supply chains.