UK food & drink supply chain waste is costing £5bn a year

The following diagram gives some examples of waste and illustrates the mounting costs of adding value to product and packaging material along the supply chain:

Top-level estimates of the annual volume and value of food and drink waste arising along the UK grocery supply chain

Source: WRAP, March 2010

Seeing the full cost of waste and the case for rooting it out

Land-fill charges will reach £80 per tonne shortly but potential savings go way beyond this amount.

To disposal charges we need to add the costs of reduced yield from input materials. However the full costs of waste are much greater still.

We need to recognise the hidden costs of all the various processes that products will have undergone depending on where in the supply chain the waste arises. The costs of preparation, storage, sorting, washing, trimming, size reduction, heating and or cooling processes, packing, transport, further storage, handling, cleaning down and maintenance. These processes involve the use of water, energy, chemicals and labour. When product is wasted all the water, energy, chemicals and labour associated with these processes is wasted along with it. The costs of treating the wasted material, water, energy, chemicals and labour are by no means trivial and all add up.

Preventing waste from arising generates savings which – in effect – drop straight to the bottom line. Every £ of waste prevention saving is equivalent to profit that would require between £3 and £4 of additional sales to generate.

Companies that have reduced waste have also increased availability – so there are extra sales to factor in as well.

The ECR UK waste hierarchy

The following diagram depicts the hierarchy of preferred options for reducing waste. The diagram is used on each page of all the guidance, tools and case studies here to remind the reader where in the hierarchy the content fits and encourage the reader to work at the top – not from the bottom up.

Prevent or eliminate waste by using Reduce to clear and the Five-to-drive Redistribute to alternative markets: surplus for charities, via clearance houses or for animal feed Recycle or process into a fresh supply of the same or similar material and reduce consumption of virgin material. Recycling Recover via anaerobic digestion composting, used cooking oil, rendering, energy recovery and mechanical heat treatment Dispose of via landfill, thermal treatment without energy recovery or via sewer / controlled water course

What does success look like?

Waste prevention and redistribution count towards the supply chain waste reduction targets that many companies have signed up to. For example, over 50 companies committed to the Courtauld 2 agreement which contains a target requiring signatories to reduce retail supply chain product and packaging waste. WRAP has been very specific about what does and what doesn’t count towards achieving this target.

The message is don’t create the waste in the first place or, if it can’t be avoided, redistributing it to alternative markets or channels for human or animal consumption.

Contents

Click on the title links to view each section:

1. About this Output
This section outlines why this guide was produced, who was involved in its production and how you can help improve it.

2. Five-to-Drive to Prevent Waste
We've identified the five key areas businesses can work on to drive down waste - measure, engage, forecast, design and range. Here you'll get top tips, case studies from across the industry and links to sources of information.

NEW! 3. Internal Responsibility Matrices
Who is responsible for preventing product and packaging waste between factory in-gate & till from occurring in the first place? These Responsibility Matrices will help you ensure internal functions are aligned and focused. 

4. Collaborative Waste Prevention Toolkit
Manufacturers and sellers can step change their commercial performance by working together to prevent supply chain waste. Download this toolkit to help you launch collaborative initiatives with your trading partners.

5. Waste Management
Find the right disposal option for your business, see case studies, identify the best environmental option and find out which companies provide the different alternative disposal routes.

6. Charities and Waste Service Providers
A handy list of UK charities and waste service providers who can help you prevent and manage waste more effectively.

7. Case Studies
Over 50 case studies from companies including Booker, Brakes, Kellogg's, Kraft Foods, Lactalis, Sainsbury’s, and Tesco.

8. Glossary and Links
Make sense of the plethora of commonly used terms and acronyms with this handy glossary.

9. Tools
Download tools to help you audit your waste, plan how best to prevent and manage it, and track achievements.