UK food industry rivals share delivery costs

Posted by James Ferre on 20th June 2008

In a move believed to be a world first, 37 of the UK’s leading food and consumer goods companies yesterday announced a major transport collaboration that will significantly reduce the environmental impact of transporting food and groceries in the UK.

Initiatives such as sharing vehicles and more efficient warehousing will result in the industry saving 48 million miles of travel by the end of 2008 alone – equivalent to removing 800 lorries from Britain’s roads – and conserving 23 million litres of diesel fuel per year. Led by the IGD’s Efficient Consumer Response (ECR) programme, the Sustainable Distribution initiative involves many of the UK’s leading household brands partnering to achieve greater transport efficiencies.

IGD President and Nestlé UK Chief Executive Alastair Sykes believes the strategy will be well received by consumers who are looking for companies to decrease their carbon footprint. “Consumers are increasingly interested in the food supply chain and sustainable distribution is a priority both for the food industry and Government,” he claimed. “At a time when we also have some of the highest fuel costs in the world, IGD members have taken a radical industry-wide approach to the sustainability challenge. In a highly competitive industry getting 37 companies working together in this way is very innovative and the results so far are impressive with over 16 million miles saved in the pilot alone.”
Mr Sykes adds that the program will provide a reduction in expenses and is designed for all companies to participate – not just larger corporations. “The Sustainable Distribution initiative demonstrates the determination of the industry to minimise environmental impact, meet consumer and Government expectations and at the same time reduce costs,” he said. “And it’s not just about large companies working together as we want to encourage companies of all sizes to get involved. There will always be a need to transport food and grocery items from producers to shoppers, and the more efficiently we can do this, the better for everyone”.
IGD, a leading food and grocery market research and insight company, will monitor progress on distance travelled, fuel usage and weight of products moved. It will also capture the miles saved through partnership projects.

The savings are anticipated to be generated through a mix of internal projects, and external partnerships between retailers and suppliers. The outputs of the initiative will be shared widely within the industry to encourage improvements from companies of all sizes.

The strategy is surprising given the competitiveness of the food industry but, with costs rising and environmental sustainability now a major issue, competitors have realised that there are areas where they can work together to provide benefits for all involved.

The successful pilot for the Sustainable Distribution initiative began in 2007 and participating companies now include the UK’s largest food and grocery retailers, manufacturers and wholesalers such as Procter & Gamble, Nestlé, Tesco, Sainsbury’s, Kraft, Heinz, Mars, PepsiCo, Unilever and Coca-Cola.