Food waste is a topic it seems many countries have now begun to consider. It is clear to see why, with an estimated £19 billion worth of food and drink wasted each year in the UK, £43 billion in US supermarkets alone & £4 billion in Australian households.
With waste now firmly on Government agendas, we see attempts to deal with the symptom rather than the cause. Legislators in France recently passed a law that makes it illegal for Supermarkets to discard or destroy all unsold but still edible food. Already popular with the public in France, it may soon be seen in the UK. However, we should consider whether dealing with the symptom is this best way to tackle food waste or is it simply eye-catching legislation with more symbolism than substance?
The figures are staggering when talking food waste in the UK, with 0.25 million tons of total waste attributable to the retail sector and 3.9 million tons as a result of the manufacturing and supply chain process (into factory gate through to supermarkets). It is clear that the substantial waste reductions will be made by targeting this sector; however supermarkets will continue to feel the weight of pressure to do more to reduce their food waste from consumers, who by design remain largely ignorant of the source of their food.
It is a competitive race against the clock, for suppliers into supermarkets to have to consider how they can take even more product waste out of their processes whilst still adding the same value. Do too many suppliers and Retailers believe that cutting cost is incompatible with value adding high quality food products?
It is unwise to believe that taking cost out of operations is a zero-sum game. Waste reduction delivered effectively will not compromise the value adding element that distinguishes a business from its competitors. In fact it can further add value by enabling flexibility around customer demands, keep overheads low and maintain product point of sale. Where’s the profit in the use of excess resources?
There are two clear and simple ways to reduce resource waste:
1) A manufacturing process modified and streamlined aimed at reducing defects, damage, rework and giveaway will lead to lower line waste and mean that operational efficiency will naturally increase as more saleable goods are produced. Factories typically build 5-8% into their cost price and addressing this is a straight EBITDA gain. That’s a significant motivator.
2) Effective Resource Planning & Procurement will ensure raw material, packaging and finished goods inventory remain optimal, reducing write offs and servicing production Just In Time. Businesses that integrate their planning model; taking customer forecasts into the production plan will reduce the volume produced that is not matched with customer demand and also the accompanying labour bill.
There is the other obvious link, suppliers that control product and resource waste can, to their ever enlightened customers, access the crucial silver bullet when tendering for business, enabled through a more environmentally sustainable model & consequential greener image.
There can be no doubt and especially following the global recession, all players from the Farmers in their field right through Manufacturers, Supply chain, Retailers and the ultimate Consumers with their forks, each stakeholder group are now acutely aware of both their upstream and downstream costs and will continue to seek ways to reduce those. For winners, this is a game of speed and trust and for those failing to engage on this agenda, they await their fate.
Written by Chris Allen