As the largest manufacturing sector in the EU, the food and drink industry is taking a leading role in assuring the sustainability of the food supply chain. NGF takes a look at how some companies are tackling the challenges of sustainability whilst assuring their competitive edge.
“A Western Europe without packaging would lead to a 15-fold rise in food waste”
With a turnover of €913 billion in 2007 and employing over 4.3 million people, the food and drink industry is the largest manufacturing industry in the EU, ahead of the automobile and chemical industries. This significant economic sector has flourished over the years, but its competitive position has been brought into question recently as the industry faces new risks and challenges.
Food security and sustainability are two topics that are quickly moving higher up the agenda of European governments, international organisations and associations and which is now racing towards the top of the consumer agenda.
The world is facing an unprecedented challenge brought about by a growing world population that is set to spiral towards 9.2 billion by 2050 and the global food crisis that has led to countries the world over being destabilised by food price inflation.
We are now in a situation where we need to produce more food, but in a way that does not degrade the natural resources on which the food and drinks industry depends, and which decreases the food chain's dependency on fossil fuels and reduces harmful emissions. Meeting this challenge will require a fundamental shift in thinking about food on the part of governments and consumers.
The food and drinks industry is already proving itself to be proactive, forward-thinking and practical when it comes to addressing sustainability, which is a major concern at every stage of the food supply chain. From primary production to manufacturing, packaging, distribution, retail and consumption, there are worrying issues regarding the environmental performance of the sector.
Primary production encompasses all agricultural food production and is one of the key threats to sustainability. Agriculture actually accounts for almost 50 percent of green house gas emissions created by the food supply chain.
Nitrogen fertilizers cause water pollution and are the single largest cause of nitrous oxide emissions. Methane gas is 20 times more powerful than CO2 and every day Britain's 10 million cows emit approximately 100-200 litres of methane each. It has been estimated that methane emitted from cattle in the UK could account for as much as 3 percent of the country's total greenhouse gas emissions. However, food manufacturers are playing an increasingly active role in defining and disseminating best practices, a good example being the Sustainable Agriculture Initiative (SAI) Platform, which was founded by three leading food manufacturers - Nestlé, Unilever, Danone - in 2002 and today counts 24 members.
Water is used in huge amounts by the food and drinks industry. Christoph Tamandl, Director of Environmental Affairs at the Confederation of the Food and Drinks Industries of the EU (CIAA) says: "Water is a key issue for the food sector, it is used by our suppliers to grow our raw materials, to process our products, to ensure hygiene and for our consumers to prepare their meals. Above all, we have to look at agriculture, which consumes 70 percent of fresh water globally and 40 percent in Europe." However, the food and drinks industry is taking positive action to reduce its water consumption by engaging in best practices and by investing in more water-efficient technologies.
On the 28 January 2008 the UK Food and Drink Federation (FDF) launched the Federation House Commitment (FHC) in conjunction with Envirowise. The initiative, which is part of a five-fold action plan, is designed to achieve a systematic improvement in water efficiency. 21 FDF members with a combined turnover of £15 billion joined up when the initiative, which sets a target of a 20% reduction in water use by 2020 compared to 2007, was launched and a further 15 have joined since. Companies who have signed up to the FHC include international brands such as Unilever, Mars, Kelloggs, Kraft, and Nestlé.
The FHC 2009 progress report states that the initiative has the potential to save around 140 thousand cubic metres of water per day - the equivalent to 56 Olympic-size swimming pools - and a combined financial saving of around £60 million per year on water bills. In 2008, the total amount of water used (excluding that embedded in products), by signatories reduced by more than 476 thousand cubic metres compared with 2007, a reduction of 1.7% which, for the first year of the FHC, is an impressive first step towards the overall industry target of a 20% reduction by 2020.
The production and disposal of all forms of waste including machinery, farm inputs, dead animals, crops, packaging and food waste hinder progress towards sustainability. One way that the sector is looking to reduce its environmental impact regarding waste is by diverting as much of it as possible away from landfill. David Bellamy, Sustainability Manager for FDF says: "We have a target to send zero food and packaging waste to landfill from 2015. Part of what we have done is to set up a process to measure our member's waste. Last year we published the results jointly with DEFRA and that showed something in the order of 17 percent of our member's waste was going to landfill as of 2006. So a lot was already being diverted away from landfill at that time to other treatment options, but clearly we have some work to do to get from 17 percent to zero, which is what our ambition is."
However food waste isn't the only problem that the sector is facing. Pressure on packaging has dramatically increased in the past few years. Consumer perceptions, fuelled by media calls for more 'sustainable' packaging, are making life difficult for the industry. Packaging must meet a multitude of functional objectives whilst minimizing its impact on the environment. However, the European Organisation for Packaging and the Environment (Europen) believes that sustainable packaging is not as clear-cut as it sounds as it plays such an important role in all stages of the food supply chain.
In its 2009 report Packaging in the Sustainability Agenda Europen states that a Western Europe without packaging would lead to a 15-fold rise in food waste. What is needed is an industry-wide re-evaluation of the role of packaging and its environmental impact. However, Tamandl believes the EU is already making good progress: "Recovery, including recycling, of used packaging is very successful in the EU. All recovery and recycling targets under EU waste legislation have been met. Continuous improvement lies ahead. This is a real success story."
Recent advances in technology have permitted the industry to explore ever more effective means of ensuring packaging is safer and more sustainable. The use of nanotechnology in food packaging is already a reality and some interesting advances are currently under development, for example, nanosensors in plastic packaging that can detect gases given off by food when it spoils and packaging that changes colour to alert consumers to food that has gone bad. These developments could help the industry prevent hundreds of thousands of tonnes of food waste every year, but the technology does give rise to new and unique safety issues.
Greener food transport
Distribution and transportation are also under scrutiny for threatening efforts towards a more sustainable food chain. Carbon emissions and air pollution obviously pose the most significant risks during the distribution stage, but this does depend on the mode of freight chosen and the type of fuel used.
Reducing food miles is something that is high on the agenda for the UK's Food and Drink Federation (FDF) and which forms part of its Five-fold Environmental Ambition. In July 2008 FDF launched its Checklist and Clause for Greener Food Transport. By achieving 'fewer and friendlier' food transport miles, FDF members will contribute to the challenge thrown down in the Food Industry Sustainability Strategy for the food chain to reduce its environmental and social impacts by 20 percent by 2012 compared to 2002.
FDF have also been working in close collaboration with the Institute of Grocery Distribution (IGD) and Efficient Consumer Response (ECR) in order to reduce the environmental impact of transportation. This involved sharing years of experience to encourage retailers and manufacturers to collaborate beyond the boundaries of traditional commercial relationships. The initiative aimed to identify opportunities for collaborative working across communities of retailers and suppliers and to encourage them to be more efficient by pooling space on sections of journeys where vehicles would otherwise be running empty. Collaboration across the participating organisations identified a potential reduction of between 10,000 and 15,000 loads or approximately two million miles per year.
Such initiatives are proving extremely successful but the majority of food vehicle-kilometres in the UK are actually accounted for at the consumption stage of the chain by consumers. It has been estimated that 1 in 10 car journeys in the UK is for food shopping, which results in social costs of around £3.5 billion per year due to traffic emissions, noise, accidents and congestion. However this does not mean that consumers are producing the most CO2 emission on these journeys. Heavy goods vehicles are still responsible for the highest emissions so the sustainable distribution initiative should go a long way to helping the food and drink industry meet the 20 percent reduction by 2012.
Reducing energy consumption
The food supply chain is obviously highly dependent on energy at all stages and currently this energy is mostly derived from fossil fuels. In fact the energy consumption of the food and drinks industry is already quite low compared to other sectors, but there are many ways in which the consumption can be lowered still. Again the FDF is encouraging its members to do what they can, which ranges from investing in new technologies, such as biomass boilers, wind turbines and combined heat and power units (CHP), using renewable energy sources where possible, and raising staff awareness.
The current economic climate has served as a catalyst for lowering energy consumption, which is now a major priority for the industry as the price of energy continues to rise. The food and drinks industry is adopting measures that should help it not only in its mission to reduce its environmental footprint, but also to help it to cut costs and enhance its competitiveness.
According to Toby Prickard, a Business Analyst in Market Intelligence at IGD, businesses that recognise the opportunities that being sustainable represent will be best placed to succeed in the current economic climate, and in the future. He points out that they clearly see the move to sustainability as a benefit to the environment, their consumers and their balance sheets - so fully incorporating the triple bottom line of sustainability.
According to DEFRA's Food Industry Sustainability Strategy (FISS) 6.7 million tonnes of food are sent to landfill from UK homes each year, that is enough to fill Wembley Stadium eight times over.
Waste and Resources Action Programme (WRAP) confirms that the cost of food waste to UK consumers is about £10 billion per year, which equates to roughly £400 per household.
McCain has invested £15 million in three new wind turbines that will provide approximately 60 percent of the electricity required to operate the plant over the year. The turbines generate 26,000 MWh of electricity between them per year. McCain Foods investment plan also includes a new combined heat and power facility that will run on biogas (methane) generated by a new on-site waste water treatment.
Between 2001 and 2007, Walkers reduced the water used to manufacture Walkers Crisps by 42 percent. For the Leicester site alone, this amounted to a saving of 700 million litres.
The canned foods and pet foods industry in the UK is worth £3.7 billion and sells nearly five billion cans every year. WRAP teamed up with Heinz to reduce the amount of material used in its cans. New lightweight ends were trialled, which were 10 percent thinner than previous ends at just 0.18mm thick.
Heinz has saved £404,000 and 1,400 tonnes of steel each year by using lightweight ends and can now fit 18 percent more cans on each pallet. Each lorry load of filled cans with the new end weighs 83kg less, meaning improved fuel efficiency.
Sainsbury's has opened its new flagship green store in Dartmouth, Devon. The store has been specifically designed to reduce CO2 emissions. 40 percent of its overall CO2 emissions will be cut by using a 'biomass boiler' to heat the building and water.
'Quiet revolution wind turbines' power the checkouts, and contribute to cutting electricity usage (kWh) by a third. Rainwater is collected, and used to flush toilets and irrigate plants. The store will save over one million litres of mains water every year, and uses 60 percent less water overall.
Cadbury launched its environmental initiative Purple goes Green back in July 2007. In February this year, following a review by the UK's Carbon Trust, which stated that 60 percent of Cadbury's carbon emissions came from milk, the makers of Dairy Milk, which claims to have a glass-and-a-half of milk in every bar, decided to take action to reduce its environmental impact. The confectionary giant sent the Cadbury Guide to Low Carbon Dairy Farming to its dairy farmers in Selkley Vale in Wiltshire and Gloucestershire to provide them with practical advice for reducing emissions.