Four years ago Dr. Martin Gooch helped sound the alarm about food waste in Canada. A report he co-authored found that every year Canada throws out $27 billion worth of perfectly edible food, equal to 2% of gross domestic product.
Consumers at home are largely responsible for the waste (51%), but the industry across the food chain is also to blame, from farmers leaving safe-to-eat apples to rot in orchards to supermarkets tossing unsold baked goods.
Today, Gooch, who hails from Rugby, England and has worked in agri-food in his home country as well as Australia and New Zealand, is CEO of food industry consultancy Value Chain Management International, in Oakville, Ont.; and an adjunct professor at the University of Guelph.
He says cutting food waste across the food industry is good for the planet. But attacking it can also save companies millions of dollars and make them more profitable. Canadian Grocer recently spoke with Gooch about the problems with food waste, and the opportunities.
Here’s a condensed version of our conversation.
You’ve got a new report coming out this month, on food waste in Canada, that looks at the costs and opportunities for industry to save money. What are you finding?
Our findings have surprised us. As we’ve delved more into it, we’ve realized just how far Canada has to go in quantifying the value and impact of food waste. We now estimate food waste in Canada exceeds $30 billion a year. That waste never occurs in isolation means that it presents an enormous opportunity to reduce costs and increase profitability.
For example, the resources retailers invest in storing and distributing food that is wasted often exceeds the face value of the food itself. Remove food waste at source, rather than try to manage waste by redirecting it from landfill, and you’ve immediately reduced your costs.
How do we, as an industry, get started?
It’s one step at a time because this is a massive problem. But we also need to look at food waste from a different angle. Don’t look at it as a cucumber you are throwing out. Look at it as money. You’re throwing money away.
How much money are we talking, exactly?
A major problem is how we measure the cost of food waste. We look at it as the cost of disposal. So, in Ontario, it’s typically $70 per tonne. But that’s not the true cost. The true cost factors not just the disposal, but also processing, labour, transport, energy, inventory, audits and more.
In the U.K., where they are far ahead of us quantifying the extent, causes and real cost of food waste, I’ve seen published figures from WRAP that puts the cost at a minimum of 1,200 pounds per tonne at retail, versus the disposal fee, which in Britain is about 90 pounds per tonne.
Last year, the Industry Council for Research on Packaging and Environment analyzed data provided by three retailers who together account for 65% of the U.K. grocery industry. It identified that the highest levels of waste occur in fruit, dairy, meat and poultry, vegetables and bakery. The face value of this waste was over 2,290 pounds per tonne. And then, of course, there is the environmental impact.
What is the effect on the planet?
As figures in the U.K. show, if food waste were eliminated, it would equate to taking a half-million cars off the road each year. That’s from carbon emissions associated with food made, but thrown out.
Is there enough collaboration on food waste in Canada’s food chain?
No. The two factors that have the greatest impact on profitability are predictability and consistency. Much of the food industry does neither as well as it could. This results in unnecessarily high levels of waste and cost. An example is red meat, where the primary focus is on managing variation in carcass consistency versus managing the factors that lead to variation in carcass consistency.
Other inconsistencies impacting the food industry include variations in inventory and product flow along the value chain. But there are businesses profiting from developing the ability to predict what they will produce and receive by managing consistency into their operations.
You mentioned WRAP, which says it has reduced food waste in homes in the U.K. by 21%. British grocers have gotten behind WRAP. How are they getting their customers to toss less?
Sainsbury’s has created an online tool with Google that gives people ideas for how they can use the food that’s already in their cupboard. Morrisons has Great Taste, Less Waste, which provides online recipes for leftovers and teaches people proper storage of fruit and vegetables. Grocers are doing a lot more resealable packaging as well.
In May, you spoke about food waste at the House of Commons Standing Committee on Agriculture. Is this issue getting attention from the government?
It’s not on the radar in supporting a program, like WRAP, to encourage change in industry and consumer behaviour. But I do see interest growing in Ottawa.
How did you get involved in food waste?
When we started the report we did in 2010, which found $27 billion in food waste in Canada a year, it had nothing to do with food waste. It was going to be on innovation in the food business. And when we looked through performance information and metrics and through value-chain analysis we did in Canada and overseas, one thing smacked us in the eyes: the really innovative, successful, more profitable businesses had considerably less waste. The fact that so few people get the business case continues to astound me.
Any advice for grocers and CPGs looking to create a culture of dealing with food waste?
Sustainability relies on a viable business model. Businesses that have generally achieved long-lasting success are those that view sustainability as an outcome of having improved operations. This includes building effective teams and destroying the silo mentality that typically exists in modern companies.
It’s the same with food waste. Don’t focus on the food waste, per se. Focus on identifying, then managing, the cause; and address it through creating the right team of people, and rewarding them.