Economic benefits from food recovery at the retail stage: An application to Italian food chains

Abstract

The food supply chain is affected by losses of products near to their expiry date or damaged by improper transportation or production defects. Such products are usually poorly attractive for the consumer in the target market even if they maintain their nutritional properties. On the other hand undernourished people face every day the problem of fulfilling their nutritional needs usually relying on non-profit organizations. In this field the food recovery enabling economic benefits for donors is nowadays seen as a coherent way to manage food products unsalable in the target market for various causes and thus destined to be discarded and disposed to landfill thus representing only a cost. Despite its obvious affordability the food recovery is today not always practiced because the economic benefits that could be achieved are barely known. The paper aims at presenting a deterministic mathematical model for the optimization of the supply chain composed by retailers and potential recipients that practice the food recovery, taking into account the benefits recognized to donors and the management costs of the food recovery. The model determines the optimal time to withdraw the products from the shelves as well as the quantities to be donated to the non-profit organizations and those to be sent to the livestock market maximizing the retailer profit. The results show that the optimal conditions ensuring the affordability of the food recovery strategy including the tax reliefs and cost saving for the retailers outperforms the profit achievable in absence of such a system.