Seven steps to a more sustainable food system

Posted by Daniel Palmer on 15th May 2009

Joanne Denney-Finch, the CEO of food and grocery expert IGD, yesterday informed attendees of AFGC’s Highlands 2009 Conference of seven steps to a more sustainable food system.

Step One
The first move is to ensure everyone within your company understands the need for sustainable growth.

“Every member of every food business has a role to play,” Ms Denney-Finch said. “For instance, everyone at Sainsbury’s, from the shop floor to the board, has personal objectives on sustainability. And Danone rewards its managers for performance equally across three areas: finance, sustainability and people development.”

Step Two
Stronger partnerships are the hallmark of making any supply chain more efficient and that is no exception in food and grocery.

“Farmers, processors, wholesalers and retailers will sink or swim together,” she noted. “Collaborative programmes like the ones offered by AFGC are a great place to start.”

“The key to collaboration is to focus on the common ground, separating this from commercial negotiations.”

Step Three
The third step is to share best practice amongst national and international peers.

There will always be a first mover advantage, IGD contends, and learning from each other is crucial to the meeting the critical issues of the future.

In the UK, for instance, IGD has worked with 37 companies to take 80 million kilometres of truck journeys off the roads through techniques like speed dating for trucks … and we’re aiming to double that figure by the end of next year. And Australia, given the land mass, might be able to achieve much more.

Step Four
The staggering amount of food which goes to waste each year is enough to make anyone gasp. Ms Denney-Finch advised that A$20b worth of food was wasted in the UK alone.

“IGD has studied 33 of the best supply chains from end to end in the UK and we found that on average, 20% of costs in the chain add no value … waste in other words,” she said. “And that waste is often greater than the total profit through the supply chain.”

Companies must address every section of their business to define the waste they create and, ultimately, rid themselves of waste.

“For instance Heinz has saved 1400 tonnes of steel by developing a new “easy open end can,” IGD’s CEO noted. “United Biscuits reduced its packaging waste by 7000 tonnes over three years by recycling, lightweighting and using new materials.”

“Innocent, which manufactures fruit drinks, has cut the carbon emissions to produce a bottle of smoothie by 57%. It helped its growers to use inputs more sparingly and precisely, developed a 100% recycled plastic bottle, saved 10% of its energy bill in six months and found practical uses for all of its waste products.”

Other highlights in the industry were supermarket chain Sainsbury’s investment to convert all its food waste into power through anaerobic digestion, Nestlé uses coffee grounds as a fuel and PepsiCo does similar with left over oat husks.

Step Five
“Shockproofing” the system is vital, but has yet to be achieved.

“Worldwide, wheat yields have tripled since the 1960’s. Yields for rice and maize are up two and a half times over the same period. And soybean yields have doubled,” Ms Denney-Finch noted. “But this progress has come at a price: the intensive use of water, energy and agri-chemicals.”

Many countries have reduced or discounted the need for strategic food reserves, while most companies – working on Just-In-Time supply chain principles – have minimised stock as much as possible.

“When we look ahead and consider how fragile food supply can be, this might need a rethink,” she suggested. “You are best-placed to decide how to make your food chain more shockproof. You might want to build some stocks, hedge on futures markets or spread your risks by sourcing more widely.”

Step Six
The penultimate step is to use the rapidly improving technology available to raise productivity. We need to reap more but use less energy, water and chemicals.

“In the US it takes about ten calories of fossil fuel energy to deliver one calorie of food to the shopper,” Ms Denney-Finch told the audience. “We have to begin weaning ourselves off dependence on oil and, for food supply, the challenge is urgent.”

Tesco is investing A$170m this year in energy savings, while UK competitor Asda  is using natural lighting and natural ventilation instead of air conditioning and has even tapped into a geothermal source for heating at one store.

Denney-Finch also touched on the GM debate, with the issue needing to be resolved one way or another so the industry can be move forward.

“We need to decide what’s acceptable and what isn’t … once and for all so that our scientists can get on with the job of developing the crops we need,” she said.

Step Seven
The final step toward sustainability involves consumers, who must be involved in the movement.

“For many, change will be traumatic and we must take care to inform, to persuade and to enthuse,” the Highland 2009 attendees were informed. “To make them our allies in the process rather than dragging them along. For this, trust will be our most important asset and transparency should be our watchword.”

“The challenges ahead of us are daunting. But we can and must tackle them,” Ms Denney-Finch concluded.