The link between productivity improvement and food waste
I recently attended a meeting on the topic of food waste in Canada, looking at the entire food value chain. I have spent a lot of time looking at the issue of how we can use a national food strategy to better meet the needs, wants and demands of the consumer market. But this meeting, sponsored by Provision Coalition of Guelph, Ont., a group focused on processing food sustainably, led my thoughts more into both the area of sustainability, but also, perhaps more so, into the area of productivity improvement and associated costs.
The facts presented were based largely on a report written by Dr. Martin Gooch of VCM International, an Ontario company focused on value chain management and productivity improvement. The report shows that in Canada, the equivalent of 30 to 40 per cent of the food produced is lost along the value chain, much of it ending up in landfill or composting. That amount of food waste was shown to be worth an estimated $27 billion+ per year, and it occurs at all levels of the value chain – crop/livestock production, processing/packaging, distribution, retail/foodservice, and households. But…more than 50 per cent occurs at the household level. So one conclusion is that we really need to increase consumer awareness of the issue and what they can do about reducing it. But it also highlighted the need for a focus on waste reduction along the entire production value chain in all sectors of “Canada Food Inc.”
I hoped that this had been addressed by the Value Chain Roundtables to some extent, but upon doing a bit of research, while several of them do have Environmental Working Groups in place, none of them appear to have productivity improvement, and with it cost improvement, as a stated objective. And yet, improving the productivity of the value chain reduces food waste and thereby makes better use of scarce resources. It would also decrease production costs and therefore could have a key impact on profit improvement.
The tools to do this are well known. In addition to the process improvement tools connecting back to the Lean and Six Sigma ideas, we now have Value Chain Management techniques, leading to a much better understanding and justification for working together with suppliers and customers to improve the efficiency of the entire value chain and thereby increasing the profitability of “Canada Food Inc.” in all of its “divisions” as I have referred to before.
It also leads companies to design their product right to enable more process efficiency. And yes, that can happen, even with agricultural commodities. Scientists in universities, focused on plant agriculture and animal agriculture, do create this kind of innovation occasionally. Let’s speed up the progress. But the whole processing and distribution systems also hold huge opportunities to save money and improve profits.
There are other spinoff benefits. Usually this process improvement approach will reduce energy and labour required in the process, as well as increasing the production efficiency in terms of units produced per a specified time period. And this leads to another spinoff benefit, namely improved environmental/energy performance. By taking this approach, we would be using less energy as well as producing less waste to be dealt with.
The other aspect is whether we are using the waste that is inevitable in a productive manner. Sending it to landfill is not the right end destination for the waste that will still be produced. Could we use more of it for livestock feed, anaerobic digestion, biodiesel production, and so on? I don’t even know all of the potential uses, but there are quite a few out there that are better than sending to landfill.
So by putting more focus on productivity improvement, we can reduce the amount of resources used, improve our costs, reduce our waste, and use more of that waste for socially responsible actions.
Provision Coalition is intent on making this a major focus of their operation, working with organizations to achieve these principles. In addition, there are other related actions happening by other groups/associations, such as the National Zero Waste Council and the Municipal Waste Association, just to name a couple. And, in fact, since food packaging accounts for a large amount of waste attributable to “Canada Food Inc.,” PAC: Packaging Consortium has started a sub-group called PAC FOOD WASTE to find ways to investigate causes of food waste and identify innovation opportunities to extend product shelf life and reduce food waste resulting. Another sub-group called PAC NEXT is focused on maximizing recycling rates while finding value-adding uses for the waste that is produce, such as energy from waste, and avoiding landfill.
There is a huge opportunity in productivity improvement in the entire food sector that would reduce material used and waste generated, and find value-added uses for the inevitable waste that is still generated. At the same time, we can make Canada Food Inc. sustainably profitable and globally competitive. Come on! Let’s do it!
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent more than 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at [email protected]