Food and Retail Operations Lab

Typical supply chain network-design models focus on minimizing costs without considering the cost and implications of changes in consumer behavior. Small retailers account for 50% of the world market share and are the main source of consumer-packaged-goods in urban areas around the world. Our work aims to understand and design optimal supply chains in this complex market to create high-performance operations based on consumer choice.

Consumers choose retailers based on socioeconomic variables and the availability of retailers in their geographic areas. Typical supply chain models focus on cost minimization without considering the implications of changes and variability in consumer behavior. Given increasing urbanization and the rising number of retailers, selecting one retailing source for regular purchases is becoming more complex. Thus, understanding the significant factors of consumer choice and analyzing their evolution over time becomes critical to designing forward-looking retail operations with data-driven, customer-centric supply chains, inventory management, and distribution systems.

A mom-and-pop store, or "nanostore," is a small, family-owned retail outlet. We estimate there are 50 million nanostores around the world. While there are more nanostores in emerging markets, in developed markets they are primarily present in under-resourced communities and located in "food deserts". The high fragmentation of nanostores causes substantial distribution inefficiencies, especially in congested megacities. We study how nanostores may be more efficient and effective considering commercial and logistics strategies as well as technical challenges. We are developing projects throughout Latin America with CPG manufacturers, retailer associations, and other organizations. The goal is to develop models that would increase nanostore survival rates and develop new business approaches for owners to continue serving their main patrons, people who live in food deserts, or who live on less than US$8 per day. The models we're developing consider scarce storage capability, limited budget, shopkeeper's mindset, and owner preparation among other features that can shape the future of these widely-used supply chains.

Farmers play a primary role in food supply chains. Often they are small businesses, fragmented, and exhibit business operations challenges. Their supply chains underperform compared to larger producers. We believe access to market, price, dependence on big intermediaries, lack of credit access, along with poor agricultural practices are causes of this gap in performance. In several projects, we understand how alternative distribution channels, the creation of food hubs, and the implementation of data-driven, go-to-market logistics strategies might help farmers to be more competitive and grow their businesses. Projects are underway with collaborators from UTEC and Universidad del Pacifico (Peru), INSPER and UFRGS (Brazil), Wageningen University (the Netherlands), the startups Sumá and Frexco (Brazil), the company Claro Energy (India), among others.

One in three fresh produce items is lost or wasted annually. This equates to roughly 1.3 billion tons of food waste globally each year. Along with nanostore optimization, our work aims to address the significant gap in the study of food supply chains related to loss and waste. We aim to design novel strategies that,

(*) reduce the number of intermediaries and inventory levels, and
(*) improve logistics operations of food across the supply chain.

Understanding interactions between key food supply chain stakeholders in diverse regions will foster support for improving food supply chain efficiency, reducing malnutrition, and balancing the accessibility, availability of food for all population segments.