Resource Use

Grocery sector waste worth £6.9 billion

A report from the Waste and Resources Action Programme (WRAP) detailing the waste flows of the UK grocery supply chain has estimated that the value of the 10.7 million tonnes of food and packaging waste lost within the grocery sector is worth £6.9 billion. This ‘robust’ estimate is based on the cost of producing food and packaging, disposal costs and lost profits.

According to the ‘Estimates of Waste in the Food and Drink Supply Chain’ survey, released yesterday (8 October), the £6.9 billion ‘being wasted and…  lost to the economy’, equates to seven per cent of consumer expenditure on food and drink and 8.6 per cent of the grocery sector’s Gross Value Added (GVA).

Written by an internal project team comprising of Dr Peter Whitehead, Dr Julian Parfitt, Katherine Bojczuk and Keith James, and supported by the research and consulting firm Oakdene Hollins, the report aims to identify how much food, drink and packaging waste arises in the grocery retail supply chain. It also looks at where in the sector it arises, what the waste is, and how it is managed.

Waste is worth almost double previous estimates

The key finding of the report is that the cost of packaging and food waste in the grocery sector is almost double that than previously thought.

WRAP had previously based its estimates on Envirowise figures, which set the cost of food and packaging waste in the grocery sector at around £500 per tonne. However, Oakdene Hollins has now found this figure to be ‘dated’ and puts the true cost closer to the amount of £950 per tonne. It said that this may be due to increased ingredient, energy and other costs associated with food manufacture.

This inflated figure includes the cost of the food, ingredients, energy and water costs, disposal costs and lost profit. Approximately 12 per cent of this total is profits and capital expenditure costs, whilst 10 per cent represents disposal costs and the rest ingredient and production costs.

The report implies that these percentages may be a higher proportion than many grocery retailer and manufacturer profit margins.

Volume of waste

According to the report, of the 10.7 million tonnes (Mt) of food, drink and packaging waste estimated in 2011, there are 6.5Mt of grocery waste (which comprises of 1.6Mt from grocery retail and wholesale), and 4.9Mt of packaging. Food waste from manufacturing (58 per cent) is the single largest component of grocery waste.

The remaining ‘waste’ is made up of ‘surplus food’ redistributed to food charities, food used as animal feed, and food and drink classed as by-products. These routes are included in the ‘waste’ figure as despite the fact they are being used, it is ‘probably involves an economic loss’.

Now enshrined within UK law, the main management approaches for dealing with grocery waste are ranked in line with the waste hierarchy, which cites prevention as the best method of dealing with waste, followed by reuse, recycling and recovery.

The report found that although WRAP advocates anaerobic digestion for food waste as being ‘environmentally-better than composting and other recovery options’, just 19,000 tonnes of food waste is being sent to AD (though it says it is ‘unclear’ how much mixed waste goes down this management route).

Further, the WRAP report found that recycling (including composting) and land spreading were the two main grocery waste management methods, with 3.8Mt (48 per cent) being managed in the ‘least environmentally-beneficial way’, through recovery (thermal with energy recovery and land spreading) and general disposal.

Food and drink waste is decreasing

Despite this, the report found that ultimately, the quantity of food and drink wasted in the grocery sector supply chain has ‘decreased in the long term’. According to data collated from the signatories of the voluntary agreement in increasing efficiencies in the grocery sector, the Courtauld Commitment, there has been an 8.8 per cent reduction in the sector’s supply chain waste in 2011, despite a ‘slow start’.

This marked an improvement on the standing target of five per cent in the first three years. The Courtauld Commitment is now in its third phase, which is due to conclude in December 2013.

Taking action

The report concludes; ‘Whilst waste cannot be reduced to zero, there are significant opportunities to reduce it and achieve the associated economic benefits of doing so’.

Richard Swannell, Director at WRAP added: “This new research from WRAP can help deliver significant benefits for businesses and the environment. Armed with this knowledge, businesses, and the supply chain as a whole, can more readily identify where problems are arising, enabling them to find the solutions to reduce their waste and make large financial and environmental savings.”

Helena O’Neill of the Food and Drink Federation (FDF) welcomed the latest report, saying it “offers a further contribution to our understanding of where waste is occurring, helping identify priorities for future action”.

She added: “FDF members recognise the importance of reducing the impact of waste wherever it occurs in the supply chain, in accordance with the waste hierarchy.

“FDF members are also committed to making a significant contribution to WRAP’s Courtauld Commitment Phase 3 target to reduce ingredient, product and packaging waste in the grocery supply chain by three per cent by 2015 from a 2012 baseline.”

Read WRAP’s ‘Estimates of Waste in the Food and Drink Supply Chain’ survey, or find out more about supply chain waste in Resource 69.