Supermarkets make perfect villains, don’t they? Callous and care free as they dump food out the back of their stores. Poor farmers sobbing into piles of imperfect parsnips as CEOs on multimillion-pound pay packets send them out of business.

It’s the food waste rhetoric routinely spun out to a baying public. But as figures from waste charity Wrap show, it isn’t exactly fair. It says 89% of food gets wasted long before it reaches the supermarket shelves. That’s a waste mountain scaling 1.7 million tonnes lying at the factory doors of manufacturers.

And the scandal is 51% of this waste was avoidable, equal to 1.5% of output across the sector. Even worse only 42,000 tonnes (1.8%) of total surplus and waste found its way on to people’s plates via redistribution. So where is all this waste coming from? Who should take the blame? And what can be done to stop it?

Weak spots in the supply chain occur as early as the ‘first mile’. Though Wrap limited its research to post-farmgate loss, the UN estimates up to 40% of global crop yields are lost during the harvesting, drying, storage and transport stages. And fmcg companies have a direct interest in solving these issues, says Chris Brett, head of CSR and sustainability at global agri-business Olam International. “We’re doing a lot of training with our smallholder farmers, getting them to realise how to reduce the immediate post-harvest loss, and this will have a huge impact on our business,” he says.

The importance of timing

Once on the factory floor, the root causes of waste are more varied, says Wrap. It could be a failure to quickly repair a broken machine, dodgy temperature controls or the loss of recoverable materials.

For example, in dairy - the sector with the highest levels of food waste across all categories - they found edible milk solids in whey made during cheese production are often lost as waste water during cleaning, a loss that specialist drying processes could prevent. Over-baked loaves leading to off-spec products was also flagged up as a problem in the bakery sub-sector.

“Under or overweight products, trimmings, such as crusts or tomato ends, technical errors, contamination of machinery, and inconsistency within processes used” - all these factors add up to piles of waste, says Philip Simpson, commercial director at ReFood.

Great strides are being made to cut this factory level waste and to quit “throwing money out the window”, says Ignacio Gavilan, director of sustainability at the Consumer Goods Forum (CGF).

Nestlé, which wants to achieve zero waste for disposal by 2020, says it has more than halved, per tonne of product, the amount of waste for disposal generated in its factories in the past decade. Transforming leftover materials, such as coffee beans and cocoa, into “safe, value-added” food has played a major role, as has innovation to capture by-products in milk production, for example. But there is more that could be done.

Chucked away

Wrap estimates 155,000 tonnes of waste could be curbed in the manufacturing sector and logistics by “a wide range of awareness-raising, behavioural, operational, process and product innovations.”

Staff must be clued up to oversee more efficient operations, it adds. And particularly if manufacturers are to improve on the mere 1.8% of waste that currently heads to redistribution.

What does fmcg do with its waste?

Of the 2.4 million tonnes of food surplus and waste Wrap uncovered at manufacturers (the equivalent of 4.2% of production)…

  • just 42,000 tonnes, or 1.8%, finds its way to redistribution charities or commercial firms
  • 635,000 tonnes, or 26%, is used in animal feed
  • and the remaining 1.7 million tonnes, or 72%, goes to landfill, AD or is sent for land spreading

However Wrap estimates that 867,000 tonnes, or 51%, of that waste is avoidable. It also estimates that:

  • 118,000 tonnes of food (the equivalent of 230 million meals) could go to people
  • 805,000 tonnes could be used for animal feed

Although researchers did uncover examples of staff already helping to redistribute surplus stock - for example teams at a yoghurt manufacturer storing surplus in a warehouse for charitable collection - a “poor understanding across the sector about the sorts of surplus that were within scope for redistribution” led to a lot of edible food being chucked away. 

Staff at factories churning out ambient SKUs in particular had a “lack of understanding” about the potential to redistribute an additional 5,400 tonnes from the sub-sector with better training.

To tackle that, Wrap says it plans to work with both the FSA and local enforcement bodies to create clearer guidance and training to staff on the ground. It has also developed a ‘Your Workplace Without Waste’ resource that sets a framework for staff training as well as posters, suggested activities and guidance for managers.

“Awareness is fundamental,” agrees Gavilan. As is a better sync between operational and sustainability bosses on food waste.

Once packaged and ready for retailers, the next cause of waste occurs when pallets piled with products fail to make it to supermarket shelves at all thanks to inaccurate forecasts. And it’s here the lines of accountability grow blurred.

Getting orders right is no easy business, particularly in fresh produce. “The shorter the shelf life of the products, the more accurate the anticipation of demand when producing it has to be,” says Mikko Kärkkäinen, group CEO at supply chain consultants Relex. Factoring in higher demand at the start of a week, that fails to materialise spoils fresh produce in particular, he points out.

“This is particularly significant when promotions occur, or with stock that is seasonal or weather-sensitive, or when a store layout changes,” adds Jason Shorrock, VP of retail strategy EMEA at JDA Software.

Wrap highlighted poor forecasting as a major factor behind waste in fresh fruit & veg, soft drinks and meat, fish and poultry, with inaccurate orders of turkey during Christmas and BBQ cuts in summer. It’s a problem manufacturers can’t solve alone. While they’ll plan for the long-term to buy in enough “cows and chickens” for the years ahead, day-to-day forecasting is at the behest of the retailer, says Kärkkäinen.

“I see manufacturers stuck with stock that goes to landfill as they daren’t sell it because there’s the wrong name on it,” says Approved Food boss Dan Cluderay. “That happens every single day.” And it leaves suppliers in “a real snookered position.”

“Ordering a million and then saying you only want a quarter of a million might be a great negotiating tool, but when it comes to food waste the manufacturer left with that product hasn’t got a lot of options,” he adds. “The supermarkets have a real ownership issue there to look at where a line is cancelled or a product hasn’t sold as well as they’d hoped. It’s their social responsibility to make sure it doesn’t go to landfill or get wasted.”

Paper order books

The best-case scenario must be to avoid surplus in the first place by getting retail orders right. “The difference between being ‘OK’ and being ‘best in class’ is very significant” in forecasting, says managing consultant Oliver Wyman. Some retailers still rely on basic paper order books in stores, it adds, leaving “considerable room for improvement” and a potential waste reduction of up to 35%. For this “technology is vital,” says Kärkkäinen. For example Booths supermarkets had struggled with wasteage across its 29 stores but by installing better forecasting technology, it slashed waste by 10% across all 13,000 SKUs, and by 20% across fresh produce, he points out.

And too often suppliers and supermarkets operate at “arm’s length” in predicting demand. “I would advise manufacturers to talk and analyse the forecast accuracy of each of their retail customers,” says Kärkkäinen. He suggests manufacturers look at the robustness of a retailer’s past forecasts to understand where improvements could be made, and how they could help.

And if that fails, retailers must step up and help find new options for surplus, adds Cluderay, rather than leave pallets of produce rotting at the factory.

The art of food forecasts: Booths

A closer look at forecasts led supermarket Booths to cut food waste by 10% across its stores, say Relex, and by 20% across fresh food. Lacking the negotiating power of bigger rivals, the retailer had struggled with wastage as it was unable to demand suppliers made daily fresh deliveries leading to spoilage.

But by installing forecasting technology, Booths studied the impact of small changes to fixtures and price promotions on demand, leaving it better equipped to predict the day’s sales. And after rolling out the IT to all 29 stores it has significantly cut wastage across its 13,000 SKUs.

Redistribution to charity is central to the approach adopted at Clipper Teas owner Wessanen UK. Surplus occurs when problems with packaging, texture, or flavour occur, but these are all now made available to FareShare, says commercial director Alan Bird. “This relationship has also sharpened our focus as a business in how we approach stock management, forecasting and production.”

But charity can’t be the whole answer, urges Cluderay. “Although manufacturers would love to give everything to food banks, they might have £100,000 tied up in a product - if that’s the solution it doesn’t feel very fair to the manufacturer.”

The authors of Wrap’s report agree. The high value of some surplus left it unsuitable for redistribution, it said, with the more viable option coming from alternative buyers such as restaurants, or businesses following Cluderay’s Approved Food model.

Currently that model is limited, however, with “considerable concern” among manufacturers about “the risk that redistribution poses to the integrity of branded products” or those stamped with a supermarket own label. For this reason Approved Food offer a de-identifying service that strips brand labels from canned goods before selling on at a discount to protect brand reputations.

But it’s a problem a frank discussion between retailers and their suppliers could solve - so long as supermarkets don’t skirt their responsibility but accept they have “a bit of blood” on their hands, adds Cluderay.

Ultimately “supply chains are intricate, highly interconnected and multidimensional,” says Nick Hay, MD at Fowler Welch, and “addressing the overall challenge of waste remains a difficult prospect, one few have managed successfully.”

Manufacturers are more than up for this challenge, insists Bird. “We all have to be, from both a commercial and moral perspective.”

But it isn’t an issue they can tackle alone. And if retailers won’t accept that their responsibility doesn’t stop at the supermarket shelf they might find themselves cast as the villains of the piece once again.