With landfill tax now costing £32 a tonne and set to rise by £8/tonne every year until 2012, business is facing an inflation-busting bill for its waste.
And disposal is, in fact, just the tip of the iceberg; the cost of waste also includes raw materials, management time, processing and transport costs, labour costs, energy costs, and the reduction in productivity caused by producing waste. Trade association the British Retail Consortium reckons that reducing waste can save you costs equal to 1% of turnover.
But in the face of these numbers, the food industry still dumps 12.6 million tonnes (mt) of waste every year, out of the UK’s 72mt total (according to the Environment Agency).
So why, with the financial argument seemingly so persuasive, isn’t everyone in the industry protecting their bottom line? And how are the most forward-thinking operators in the café sector, from the big branded cafés to traditional high-street operators benefiting from tackling rubbish?
Pret A Manger, Oliver Adams and Greggs are among those businesses that have made waste control a priority. Sandwich chain Pret A Manger’s flagship policy is sending its leftovers to homeless charities. Sustainability manager Nicky Fisher says the 180-shop chain donates 1.7 million items of leftover food to charities every year, vastly reducing its landfill bill to £400,000, and also making its contribution to local good causes.
Meanwhile, 28-shop Northampton craft chain Oliver Adams has saved itself £23,000 a year by introducing a tranche of measures to reduce the amount of waste it sends to landfill by 70%. One of its many initiatives is sending food waste to be processed into electricity at a biogas plant. Stores manager Phil Race says the chain’s reputation for environmental best-practice now attracts fact-finders to its bakery: "We are always looking to save in every single way possible, there is always something more you can do."
Greggs, the UK’s largest bakery retail chain with more than 1,350 outlets, says its target is to reduce landfill by 50% of the 2006 base, by 2010, "depending on commercial factors". Measures in place to reduce food wastage include a handful of second-day shops, typically in the suburbs or on an industrial estate. These sell goods that are one day old at cut prices, such as ’dry’ cakes, bread and rolls, but no chilled products, for safety reasons.
They might also sell some fresh products that would otherwise be left over from the local Greggs’ bakery.
Many smaller retail bakers have also cracked it when it comes to leftovers. Two-shop Stott’s Bakers & Confectioners, based in Blackburn, for example, reuses leftovers wherever possible - cake crumbs in trifles, for example. And good old-fashioned neighbourliness also comes into play in controlling waste: "We recycle; we have an arrangement with the Co-op next door. It uses our yard and we use its recycling cages for cardboard and paper. We scratch their backs, they scratch ours!" says owner Geoffrey Stott.
So, with so many smart and money-saving ideas on tackling waste in use by bakery retailers across the UK, why is it that the industry produces more than 12mt of food waste?
British Sandwich Association director Jim Winship says that waste control can be difficult and counter-productive: "The biggest losses tend to be in chasing reductions in waste. Unfortunately, what tends to happen is that retailers seek to reduce wastage by savagely cutting back on the amount of product they have on display - with the result that while wastage may drop, so do sales. Before you know it, you have lost more through lost sales than the wastage was costing!"
The key to success on waste control, he says, is to ruthlessly monitor how individual products perform: keep close track of which products sell, when they sell (time of day and year) and what influences sales (from day of the week to weather pattern), then stock accordingly, maximising sales, minimising waste. However, in the fresh food retail business, 5% wastage is to be expected, he says.
An independent report commissioned by environmentally friendly refrigeration supplier Gram, published in April, gives some further clues on why food businesses are still getting to grips with waste. The ’Green Paper’ looks at 688 foodservice operators - pubs, caterers and restaurants - and their position on green issues. Nearly three-quarters of those surveyed said making their business greener was a high priority. But barriers cited included issues with council waste collections, getting people involved and even laziness.
Need for cohesive action
Many operators do blame patchy and piecemeal nationwide provision of recycling services by local councils. Pret A Manger admits it spent three years working out an in-store recycling policy due to lack of uniform recycling provision across the UK. A Starbucks spokeswoman says waste control is a high priority, but the company has not been able to find a waste contractor that can service its 500-plus outlets nationwide in a commercially viable fashion.
Many businesses admit the commercial goalposts have moved, as cutting waste travels up national and EU agendas. Landfill tax had been rising £3/tonne a year, but started rising by £8/tonne each year from April this year, "to encourage recycling", according to the announcement in the 2007 Budget. That came as the government suggested that EU landfill targets to 2020 were "challenging".
As the financial thumbscrews turn, the growing cost of waste looks set to stir even those who confess to being lazy about tackling this issue. Whether it is by turning leftover sponges into trifle or donating leftover sandwiches to homeless shelters, the economics of waste reduction are set to get ever more persuasive. Waste management is no longer just for the Wombles.
Next issue: waste case studies
=== Landfill tax ===
The diversion of waste from landfill is a key objective under the EU Landfill Directive. By 2010, biodegradable waste going to landfill must be 75% of the amount disposed in 1995; by 2013 this must be reduced to 50%; and by 2020 to 35%.
The standard rate of landfill tax in the UK is increasing by £8/tonne a year. This rate applies to active wastes (those that give off emissions such as rotting food). It went up from £24 to £32 in April and will continue to rise up to £48/tonne in 2010/11. A lower rate of £2.50/tonne currently applies to inactive wastes.
=== How to tackle waste ===
l Understand where waste is arising in the process, where it is coming from, and how much it is really costing
l Calculate the true cost of waste, including raw material waste, energy, transport and labour costs. Finding that waste costs 10-20 times as much as waste disposal can move waste up the agenda, so it becomes a management issue, not just environmental
l Segregate waste materials for recycling such as paper, plastics and cooking oil
l Work with suppliers to ensure the packaging received on raw materials is recyclable, returnable or reusable
l Buying in bulk can reduce packaging and costs
=== Where to get help ===
l Envirowise: [http://www.envirowise.gov.uk]
l The Environment Agency: [http://www.environment-agency.gov.uk]
l Scottish Energy Efficiency Office: [http://www.sepa.org.uk]
l Northern Ireland Environment and Heritage Service: [http://www.ehsni.gov.uk]
l SWAP: [http://www.swap-web.co.uk]
l Waste and Resources Action Programme (WRAP): [http://www.wrap.org.uk]
l The Composting Association: [http://www.compost.org.uk]
l Business Link: [http://www.businesslink.org.uk]
=== Baking industry summit ===
In no other industry is food baked daily, packed daily, distributed daily and sold or thrown away - daily! While consumer wastage far outweighs manufacturers’ waste, bakers are under pressure to examine their operations and become as sustainable as possible. On 27 November, British Baker will host a summit on how to incorporate socially responsible practices into your business. The conference will examine what government, consumers and the supermarkets are asking for. Speakers already confimed include TNS director Ed Garner and a keynote speaker is Huw Edwards, the commercial director for bakery and cafés at Asda.
Who should attend?: plant, craft and wholesale bakeries, ingredients suppliers, supermarkets. equipment providers. [http://www.bakingsummit.co.uk]
=== How to set up a waste reduction programme ===
l Have commitment from senior management
l Have personnel who are dedicated to the introduction and development of the programme
l Involve staff at all levels in the programme
l Allocate resources to the programme to enable actions to be carried out
l Accurately measure information to enable management of the programme
l Identify priorities
l Provide reliable, credible and timely reporting for feedback, monitoring and targeting purposes
l Regularly review progress and set future priorities
l Communicate the programme’s successes to interested parties, eg, staff, directors and customers