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Reducing £6.9 billion in food and packaging waste

Date: 17/10/2013 | Author: Paul Sanderson

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WRAP is working on helping retail grocery businesses see the benefits of reducing food and packaging waste in their supply chain


A report released recently by WRAP found that food and packaging waste in the grocery retail supply chain is worth £6.9 billion.

This equates to 6.5 million tonnes of waste with 3.9 million tonnes arising from food and drink manufacturers with the majority of this food.

“The numbers show the huge scale of the opportunity here,” says WRAP food and drink programme area manager – manufacturing and retail Estelle Herszenhorn. “We are working with businesses on this and with our own research, it is showing that the reasons it is happening are complex.”

As a result, there aren’t necessarily any quick wins that can be identified at a holistic level by WRAP, as these will vary by the nature of the business and by its supply chain.

“The key is settling waste prevention targets,” she says. “Lots has been done to divert waste from landfill but much more needs to be done by supply chains to prevent the waste in the first place.”

A supply chain target was introduced as part of the Courtauld 2 agreement between retailers and some parts of the supply chain and grocers such as the major supermarkets are working to find solutions, and are now looking to make this happen faster.

According to WRAP, waste arisings can come at various stages of the chain such as wastage from raw ingredients used in food preparation right through to the fully packaged product but it is by looking at waste prevention at every stage where the benefits will be most realised.

But as it is the largest proportion, the biggest gains can be made by reducing the food waste.

“We would recommend the waste hierarchy is looked at and that is an important premise of the Courtauld Commitment,” says Estelle Herszenhorn. “That £6.9 billion that becomes waste, by preventing that in the first place is the obvious place to look.

“If you can’t prevent, then we suggest that surplus food is given to feed people where possible through charity schemes. We are working with industry and charities on that.

“After that, animal feed is the best option, followed by anaerobic digestion.”


Morrisons storeAs an example of waste prevention, she mentions a project undertaken by supermarket Morrisons with one of its ready meal suppliers Kerry Group.

Through changes in working practices, they were able to reduce waste at the point of manufacture by 33 per cent, increased forecast accuracy by 6 per cent and reduced packaging on some products by 20 per cent.

Teams from Morrisons and Kerry walked through processes and systems on site and face to face, looking at sales planning, production planning, ordering, factory product and store.

This gave better understanding of methods and timings, constraints and deadlines as well as waste issues.

To prevent supply chain waste, changes were made to ways of estimating orders, timings of orders were aligned with production schedules, communications were improved and packaging was changed to improve recognition.

Some of the measures that were introduced as a result included

  • Order estimates were accurate but rounding rules on certain lines distorted figures. Rounding rules for estimates have now been changed to match the order process. Forecasts are now 93 per cent accurate against an industry standard of 87 per cent for ready meals.
  • Order estimates were sent once per week and volatility could lead to issues. Changing to twice weekly helped reduced this.
  • Kerry had to produce Monday’s requirements on Saturday morning before the purchase order was received from Morrisons. This created issues with over production generating waste or short coded stock. Purchase orders are now sent on a Saturday morning instead.
  • The ready meal bags provided by Kerry were redesigned to be 20 per cent smaller saving material; were easier to put on the shelf therefore allowing more to be put on and different colour packaging was used to differentiate between meals for one, two and four when they had all used the same colour and font previously.

Following the redesign and pilot phase, a significant promotional campaign took place involving the launch of 20 product lines as the roll-out of the full waste minimisation project took place.

During this period reduced waste rates were maintained and reviews and adjustment was carried out throughout launch weeks to minimise waste and maximise sales.

But one of the other issues faced by the UK grocery sector in reducing this £6.9 billion is through packaging.

“The principles purpose of packaging is to protect the product,” says Estelle Herszenhorn. “Packaging can reduce food waste and we have done some work recently with Marks & Spencer and others in the industry on the Fresher for Longer initiative that showed the benefit of packaging on keeping food fresh.

“But we also look at optimising packaging to reduce waste and we have our Resource Efficient Innovations Database that can help with that.”

She also believes that grocers are also seeing much more opportunity in being resource efficient.

“Businesses are taking action, and have been taking action. They see resource efficiency as an environmental benefit, but also a benefit to their business. That is why we put a value [the £6.9 billion figure] on this to show the savings that can be made.

“There are 49 businesses that have signed up to Courtauld 3 and although there is a way to go yet, it is encouraging that these businesses are making the commitment to resource efficiency.”

 

WRAP infographic on grocery supply chain waste

 

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