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Industry report identifies huge profits missed by food manufacturers

16 June 2014

The food industry could increase its profits by over 10%, simply by effectively utilising unwanted waste, finds the UK’s leading food waste manufacturer, ReFood.

Latest figures released by the House of Lords suggest that an estimated 90 million tonnes of food is wasted across the EU every year*. Staggeringly, nearly 20% of this figure is generated during the manufacturing process, at a total disposal cost of over £6bn. In addition to the colossal financial cost, the resulting carbon footprint is equal to twice the entire greenhouse gas emissions created by US road transport in 2010 – an astonishing figure that must be lowered.

However, Philip Simpson, commercial director of specialist national food recycling organisation ReFood, believes that this figure could be easily reduced; while at the same time subsequently increasing profits and lowering running costs. In fact, simply by improving the planning, portioning, management and production in the food supply-chain, as well as utilising necessary waste in alternative applications, Philip believes manufacturers can make a huge difference and calls for the sector to lead the way.

“The food industry is the largest manufacturing sector in the UK, with a turnover of £76.7bn and employment figures of nearly 395,000,” comments Philip. “This said, the waste it generates amounts to a vast volume and reducing this figure is a key industry goal. Food waste is a valuable resource and one we shouldn’t simply squander. There are so many different uses for it, therefore greater planning and consideration of alternative disposal strategies, makes commercial sense. Indeed, landfill tax alone stands at £80 per tonne, and food waste is a heavy commodity so diverting food waste from landfill can save manufacturers up to 45% on their waste costs.”
To guide the industry in making these changes and reducing food waste across the board, ReFood recently launched its Vision 2020; a comprehensive UK roadmap to deliver zero food waste to landfill. Written in collaboration with leading industry bodies, key environmental stakeholders, government and charity organisations, the report aims to recommend a variety of strategies to embrace sustainable alternatives, encourage behavioural change and showcase best practice examples from across the food manufacturing sector.

“As well as highlighting how we can tackle the issue on an industry-wide level, insight from the report identifies a number of specific factors behind the sector’s rising waste figure,” continues Philip. “Overweight products; trimmings, such as crusts or tomato ends; technical errors; contamination of machinery; and inconsistency within processes used, such as cooking times and temperature all seem to be contributing to the high generation of food waste. 

“Large manufacturers are already making positive progress on preventing such waste arising, but smaller companies still face a number of challenges in order to reach the same level and significantly lower their landfill figures. Education regarding prevention and recycling solutions is key, as is disproving the misconceptions surrounding alternative disposal options, such as introducing separate collections or altering operations.

“Embracing a more strategic waste management approach and reducing waste across the sector is, however, relatively straightforward. By considering the food waste hierarchy in all contract specifications; developing action plans to review systems and processes; and encouraging collaboration between manufacturers, distributors and retailers, we can all play our part in lowering discard volume and increasing profitability.”

Ferndale Foods in Kent provides an excellent example of how this can be achieved in practice. Last year, the innovative ready meal producer significantly reduced its environmental impact and lowered disposal costs by over 16%, simply by diverting its waste through a biomass combustion process. As well as generating more than 400MWh of renewable energy throughout 2013, the process produced nutrient-rich fertiliser from the ash and accordingly displaced more than 250 tonnes of greenhouse gases.

“It is essential for more manufacturers to look towards similar strategies and lead the way in reducing waste. As well as reducing costs and preventing unnecessary landfill, this can significantly improve environmental credentials. But, most of all, making a small change can significantly impact on the bottom line,” concludes Philip. 

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