Previously known for its landmark targets helping industry to reduce food and packaging waste, Wrap has ventured into uncharted waters with the Product Sustainability Forum (PSF), an ambitious project that it claims could transform the impact on the environment of the top UK grocery products.
After nearly three years of negotiations with retailers and suppliers, it has identified “hotspots” in the supply chain for everyday staples that account for a third of the UK’s greenhouse gas emissions.
Food hotspots - Top 10
1 Liquid milk: Top of the rankings for environmental impact but 38 different initiatives underway
2 Bread & rolls: Bakery products are obvious hotspots due to huge sales volumes and high energy usage
3 Red meat, frozen: Hotspots for emissions include vast amount of energy used in abattoir processing and refrigeration after the farmgate
4 Beef chilled, fresh: As well as methane emissions, the other big hotspot is the 44,000 tonnes wasted in the home
5 Dog food: Concern is focusing on use of soya and fishmeal ingredients from sometimes unsustainable sources
6 Chocolate: Cocoa and palm oil plantations linked to land use change, driving GHG emissions and biodiversity loss
7 Cheese: 38,000 tonnes of cheese wasted in UK homes every year, representing £240m
8 Fish & Seafood (chilled): It’s not just unsustainable fishing but fuel used in the capture of species like tuna
9 Deli food: Cooked meats are most wasted product at retail locations, due to limited shelf life of specialist meat
10 Poultry (chilled): 300,000 tonnes of poultry wasted in UK homes every year, equating to £350m
Read the rest of the list here
But in doing so it has also sparked a debate about the potential impact of the project, with some suppliers refusing to take part amid fears their products could be demonised, while other experts are questioning if Wrap has overstepped its remit. So how were the hotspots identified? What’s the truth behind the PSF? And what could it achieve?
The latest output from the project came in July with the launch of an online resource enabling retailers and suppliers, free of charge, to access a mass of data on the footprint of the UK’s top 50 grocery product categories, and measures that could be taken to reduce their harm.
But getting to that point had already been far from smooth. Wrap made a significant contribution to the development of the Courtauld Commitments, but now it had to convince the industry to begin sharing information on its supply chain data, effectively coming clean to rivals.
“The inspiration came when we were looking at the results of Courtauld 2 and where we could possibly take it next,” says Mark Barthel, special advisor and head of design at Wrap. “Retailers are moving away from thinking about store energy and waste and they are putting their energies into their supply chains. At the same time we had a virtual who’s who of the UK’s biggest suppliers on board and we felt this was a huge opportunity.”
Yet some suppliers still shied away, including Premier Foods and 2 Sisters, reportedly, nervous that the information would be used against them. Or they were simply dubious of the work’s potential to do better than they were already doing at company level. “There were several big companies that didn’t turn up to the meetings,” says one supplier source involved from the outset. “Lots of the leading companies are all over this stuff but there is this huge tail who are not on top of it.”
Barthel admits there was a “nervousness” initially, but that was quickly overcome. “In the end we got about 40 to 80 companies at the meetings in the course of the first year, and it’s grown from there. We have the likes of Nestlé, P&G, Unilever and Tesco, which have done a huge amount of work in the space. Then there are others who are just starting the journey.”
Along the way significant breakthroughs were achieved that made those involved start to realise just what they could be on to, says Barthel. “We had some huge moments, like when Tesco shared 1,100 carbon footprint studies with us. That’s millions of pounds of intellectual data.”
The key milestone was in March this year, with the publication of a 131-page report, entitled An Initial Assessment of the Environmental Impact of Grocery Products. Its scope was truly mindboggling, covering 230 categories and using no fewer than five different environmental metrics. Products were ranked depending on their greenhouse gas emissions, energy use and water use. Wrap also collated figures from the companies and other sources on the products’ impact on waste and materials.
“Two and a half years ago this data just wasn’t there,” says Barthel. “Every product we looked at told us at least one story that we didn’t expect to hear.”
Sainsbury’s shows the way
Imagine a day when all supermarket products are designed with what their impact on the environment will be, not just how much money they will make.
It might not be as far off, or as utopian, as you imagine.
In fact, within the next few months supermarket giant Sainsbury’s claims it will roll off the production line the first in a series of product developments being trialled under exactly that model.
The move by Sainsbury’s, which plans to introduce the concept across its own-label food business, is perhaps the most eyecatching and ambitious of the PSF pathfinders launched in March.
“We’re really excited about this project and are looking forward to what it delivers,” says Stuart Lendrum, head of sustainability and ethical sourcing at Sainsbury’s. ” I think it has the potential to deliver a step change in the way sustainability is viewed in product development.”
While the identity of the first products remains under wraps for now, Sainsbury’s says it will be willing to share its findings with rival retailers and warns those that do not begin factoring sustainability into NPD soon are in danger of becoming dinosaurs.
“I don’t think companies can afford to wait two to three years without doing anything to tackle this issue, especially with the growing concern over resource shortages. Those that do could end up being left behind.”
“What Sainsbury’s are doing puts sustainability right at the heart of NPD and if we can get a number of retailers to do that, it could have a massive effect on the overall impact of the grocery business on the environment,” says Mark Barthel, special advisor and head of design at Wrap.
He fires off examples, such as the finding that banana crops sourced from Ecuador suffered far less disease and wastage than others grown elsewhere in the supply chain. Just 2.5% of the wheat used in the UK supply chain came from Spain, yet it was found to have a water footprint of 150% of that from Germany, which accounted for 30%, due to more efficient irrigation systems.
But the huge mass of detail was next to useless when it came to Wrap’s stated aim: to make the research a usable tool across the sector. Hence, the July launch of an online tool. On the surface the information looks like an educational tool for children. But click on any one of the product images and the user enters a world that Wrap hopes will bring to life three years of painstaking negotiation with companies and many more years’ worth of research.
Beneath the images lay the learnings from more than 200 studies, in excess of 3,000 data points, and pathfinder scheme case studies from retailers including M&S, Sainsbury’s and the Co-op who worked with Wrap on a series of so-called “slide decks”.
Wrap simultaneously launched an “at-a-glance” summary of the environmental hotspots associated with its top 50. Between them the 50 product categories contribute four-fifths of the greenhouse gas emissions associated with the production, transport and retailing of groceries consumed in the UK - and that is just one of the metrics. But Barthel argues that when it comes to providing information to suppliers, less could be more. “You can have 16MB spreadsheets about water footprinting, but if you can translate that into a simple picture around a chart with a large pool of data behind, it can be far more effective,” he says. “A lot of companies I speak to just say to me what are the top five things I should be doing. They don’t want a huge amount of detail and this is the idea behind the slide decks. It’s about displaying highly technical data for people who aren’t necessarily technical themselves.”
It’s a huge volume of work but who will ultimately benefit from it? “Each supply chain has its own dynamics, with the common element being the small number of large retailers who are the final business buyers,” says Simon Miller, founder of supply chain consultants 3Keel. “With these dynamics, the big questions are, who should be responsible for the impacts and who is exposed to the risks? One thing that does come through is the importance of the raw materials - the ingredients that make our products, which moves things on from the historical environmental focus on packaging, transport and waste. So, for example, if NPD processes are going to be resilient, they’re going to need to design for products that contain ingredients that are both lower impact and readily sourced in the future. Considering the length of some NPD cycles, this planning needs to start now.”
The next level
Despite the call for urgency, Barthel admits it could be two years before Wrap can judge if retailers and suppliers have vindicated his faith in the new tools. But Wrap is already working with retailers on taking the research to the next level. A series of pathfinders was launched in March, looking at how sometimes small changes to supply chain processes could impact on the data. While some sources tell The Grocer there were “few real surprises” in the research, Barthel claims there have been several Eureka moments.
The Co-operative Group has been one pathfinder, looking to improve the efficiency of its UK potato supply chain. It had been suffering “a quite significant loss rate” due to greening from too much exposure to light. “There were people working together in this organisation for 10 years who had never met and never discussed this issue before,” says Barthel. “It was just accepted there would be a certain amount of greening.” Rob Hull, farms fruit and veg operations manager at The Co-operative Farms, admits “there have been hotspots identified that we didn’t think were significant.” The Co-op is now working on a solution to reduce light exposure, which could result in “huge reductions in waste”, he adds, and promises to share the results with others involved in the PSF.
Yet Wrap admits there are still holes in the available data, not least when it comes to the impact of ready meals, which can use up to 35 ingredients, each with their own footprints across the various metrics.
Barthel says a contract to commission a modelling tool to allow thousands of ready meal products to be added to the top 50 table will be awarded in the next few weeks. It is this sort of commercial activity, however, which some leading figures in sustainability view with suspicion. “In some ways what is being done in trying to take the sustainability agenda to the next level is commendable,” says the MD of one company. “But I have to question what Wrap’s role is in this. When I see slides filled with data brought together from companies and bearing Wrap copyright it really bugs me and I start thinking, where are they heading?”
“I have to question what Wrap’s role is in this. When I see slides with data from companies and bearing Wrap copyright, it bugs me”
An industry MD
Wrap has had a torrid time of things financially, with its funding from the government set to be slashed by a third over the next year, a £10m blow that has led to question marks over its future. Wrap would not be the first NGO to seek to carve out a more commercial funding pipeline on the back of shrinking government support but would also not be the first to find itself increasingly alienated if the project becomes a threat to commercial consultants.
The source also claims Wrap has nailed its colours to the mast on certain sustainability issues in PSF.
“They are very keen on certain solutions, such as anaerobic digestion,” he says. “I fear they are so attached to this outcome that they will push something further than it would commercially go. You could argue that compiling this list of hotspots on the top 50 is brave, but I think there is also a danger it could be seen as a chance for companies to say, ‘look this is what we’re doing,’ rather than really coming up with solutions.”
Dan Crossley, executive director of the Food Ethics Council, strongly disagrees. He describes PSF as “invaluable” and urges smaller suppliers in particular to use it to “edit out” environmentally damaging and unhealthy ingredients.
“It’s one of the best examples out there of collaboration to tackle sustainability challenges and it’s helping food businesses identify where to focus their efforts,” he says. “To date it’s mostly been about the vital job of laying the foundations for future action. Now it’s time for the food industry to press the accelerator.”
A spokesman for the WWF, another NGO involved, admits it used to have a far more fiery relationship with the food industry prior to the PSF, and says the project has “some of the best data around” and is a “shift change for the industry”.
Inder Poonaji, head of safety, health and environment sustainability at Nestlé, concurs. It has made an important difference even for companies at the forefront of sustainability, he says. Poonaji heads another pathfinder with UK dairy giant First Milk. Nestlé hopes to slash the waste from its UK milk supply chain - which provides 70% of the milk for Kit Kats from 64 farmers - by 5% come 2014.
“The work of the PSF is critical,” he says. “It’s playing a pivotal role both in co-ordinating efforts and providing expertise. Yes, we would have been involved in this sort of work anyway, but what Wrap’s been able to do is to provide a focus for this work and expertise. If we reduce it by 1% that’s a big win as far as I’m concerned but if we get 5% that’s just fantastic.”
Barthel claims that initiatives such as Nestlé’s and Sainsbury’s (see box right) can be a “huge breakthrough”. But he admits the entire project will stand or fall on what happens next. “We’ve never had a situation where a group of companies like this have come together and it has got the potential to be really groundbreaking.”
As to whether or not the Top 50 could become a stick for the government (or retailers) to bash suppliers with, Barthel is quick to reject these fears. “There will be some products in this list that have a bigger footprint and some where there are hotspots because of the sheer volume of sales, but that doesn’t mean it will somehow be used against people making those products.”
He cites milk as a good example. Although it features high up the rankings on various metrics, when the PSF looked deeper it found 38 different initiatives already put in place by the dairy industry to identify and tackle hotspots. And that’s exactly what this initiative is all about, says Barthel. “For me the importance of this is that it allows the industry to do this work by stealth and I mean that in a positive way,” he says. “But within the industry I hope this will go on to be seen as a really important, almost seminal piece of work, which has opened up our eyes.”
11 Fish and seafood (frozen)
12 Biscuits (sweet)
13 Kitchen rolls
14 Light wines
18 Dishwashing products
19 Canned meats
20 Prepared salads
21 Morning goods
24 Cider and perry
25 Frozen desserts
26 Fish and seafood (canned)
27 Cakes & pastries
28 Chilled ready meals
30 Canned ready meals
31 Lamb (chilled)
33 Pre-packed sandwiches
34 Dog chews/treats
35 Pork (chilled)
36 Powder detergents
38 Chilled desserts
39 Sugar confectionery
42 Hot drinks
43 Baby toiletries
47 Ice cream (litres)
49 Chilled soup
49 Rodent food
Source: Wrap/The Grocer. Notes: Table based on combining PSF rankings for greenhouse gas emissions embedded energy and water usage. (PSF provided no rankings for its data on waste and use of materials.) Hotspot information from Wrap slide decks