- Supply chain food waste - Definition
- Reason for supply chain food waste
- Unavoidable supply chain food waste
- The cost of the problem
- Reduction of food waste through legislative measures and cost increases
- Benefits of food waste minimisation
- The Food Industry Sustainable Strategy (FISS)

Supply chain food waste - Definition

Supply chain food waste is that produced during the production, processing and distribution of food to the end consumer. This waste is disposed of in the commercial (or industrial) waste stream, as opposed to food waste generated by households that is dealt with in the household waste stream (see ‘Household Food Waste’ factsheet).
 

Reason for supply chain food waste

Through the sheer size of the supply chain there are many areas where food waste can be produced. The May 2007 Food Industry Sustainability Strategy (FISS) Champions Group on Waste identified a number of avoidable areas of food waste production, as follows:

• Under/over weight products and trimming .i.e. crusts and tomato ends
• Technical errors with machinery
• Inconsistency of processes, such as cooking times and temperatures
• Market imposed waste, like ‘take-back’ systems and last minute order cancellations

Biffa Waste Services estimate that at least 500,000 tonnes per annum of food waste is generated and disposed of by food retailers. Some of this waste is unavoidable but some could be reduced through more efficient systems.
 

Unavoidable supply chain food waste

The FISS Champions Group did recognise that some food waste is unavoidable, for instance inedible parts of raw food that cannot be processed as by-products or co-products. There are numerous areas within the food chain where waste is an inevitable side effect, for instance:

• The UK poultry industry produces 150,000 tonnes of feathers every year, which costs the industry around £3million in landfill charges each year. (Source: United Kingdom Food and Drink Processing Mass Balance)

The whole of the supply chain is affected by waste in one way or another. However, in some areas of the supply chain such as the meat and livestock sector waste can become a resource: animal skins and hides can be used in the leather industry, helping to reducing overall waste and landfill costs.
 

The cost of the problem

Food waste is a cost to industry. The current total financial cost of managing most food waste is likely to fall within a range of £50 to £100 per tonne; the variation being due to the amount of treatment required. In some extreme cases treatment of waste can cost as much as £500 per tonne. (Source: Economic benefits of waste minimisation in the food sector)

With the high monetary costs associated with food waste in the supply chain and the social and environmental implications of allowing food to just go to landfill there could be huge potential savings for the sector.

Presently the amount of surplus food captured and redistributed is unlikely to exceed 15,000 tonnes per annum within the UK, according to Fareshare. This amount of recovered and redistributed waste is minimal relative to the scale of the production of food waste. Reasons for a lack of recovery and redistribution of food can partly be put down to worries over food safety and part due to potential brand damage from food finding its way back onto the market.
 

Reduction of food waste through legislative measures and cost increases

With strict targets to be met for the reduction of Biodegradable Municipal Waste (BMW) being sent to landfill (EU Landfill Directive), there are clear drivers for the supply chain to cut the amount of waste produced, or redistribute it to avoid landfill.

The Directive’s targets are:

• By 2010 to reduce BMW landfilled to 75% (by weight) of that produced in 1995
• By 2013 to reduce BMW landfilled to 50% (by weight) of that produced in 1995
• By 2020 to reduce BMW landfilled to 35% (by weight) of that produced in 1995

There are economic demands that will be put on the food and grocery industry from the EU Landfill Directive, primarily landfill tax. With the increase of £8 per tonne per year for active waste from 2008-09 to at least 2010-11 food waste disposal will become more expensive.

Other regulations such as the Animal By-Products Regulation, climate change levy and increasing energy costs along with stakeholder and social demands from the public and media could mean that the supply chain sector may need to readdress its waste strategies.
 

Benefits of food waste minimisation

The economic benefits of waste minimisation are clearly very large for the food and grocery industry. The financial benefit has been estimated to be more than £800 million in the next 10 years (see 'Fareshare' below), although this is open to debate.

The Fareshare study also estimated that diverting and redistributing surplus or rejected food towards charities or front line agencies for the disadvantaged is profitable, with a net present value of around £635 million over ten years. The main benefits are from reductions in disposal costs and increased spending of the charitable organisations.

The Food Industry Sustainable Strategy (FISS)

The FISS sets out how all those involved in the food and drink industry beyond the farm gate (manufacturers, wholesalers, retailers and food service providers) in the UK can help achieve sustainable development. It challenges the food manufacturing industry to reduce its own waste, including food waste by 15-20% by 2010. (Source: Defra)