Can “ugly veg” supply chains reduce food loss?

Abstract

The tradition of marketing only aesthetically agreeable produce by retailers contributes to a major source of food loss through “ugly veg”, i.e., the produce that does not look “regular”. In this paper, we examine the relations between different tiers of agri-food supply chains to study the impact of marketing ugly veg on different supply chain members and the food loss in the system. We examine and compare scenarios of a centralized supply chain, a traditional supply chain without ugly veg, an ugly veg supply chain with a single retailer offering both regular produce and ugly veg, and a two-retailer supply chain where an auxiliary retailer sells the ugly veg. We characterize the equilibrium decisions in these systems and also provide analytical results and insights on the effectiveness of different supply chain designs based on a comprehensive numerical study. We demonstrate the conditions under which the supply chain can reduce overall food loss. For sufficiently high cost of effort, selling ugly veg through the single retailer reduces food loss. Nonetheless, the grower is generally better off offering the ugly veg to an auxiliary retailer. We show that the ratio of food loss per cultivated land always decreases in the two-retailer supply chain, while the total food loss might increase for sufficiently high cost of effort.