78 ESM Issue 1 - 2018

Supply Chain❘ECR

A New Approach To

Tackling WasteLATE LAST YEAR, ECR COMMUNITY HOSTED A WORKSHOP IN PRAGUE,

WHICH FOCUSED ON NEW INNOVATIONS THAT ARE HELPING TO REDUCEWASTE THROUGH COLLABORATION. ESM REPORTS.

Clean Streets Prague’sfamous Charles Bridge

ECR❘Supply Chain

ESM Issue 1 - 2018 79

The year 2018 is likely to seenew advancements in tack-ling food waste along thesupply chain, with greatercollaboration between all

participants leading to significant achieve-ments in this area. That’s according to theECR Community Shrinkage and On-ShelfAvailability Group, which hosted the ‘SellMore, Waste Less’ workshop at Prague’sUniversity of Economics (VŠE) at the endof last year.

The event welcomed more than 60 dele-gates, including retailers’ buying, supply-chain and waste-prevention experts, as wellas producers and academics. ESM was amedia partner for the event.

One of the main discussion points was anew collaboration model, the Food WasteCollaboration Maturity Model, developedthrough a partnership between the ECRCommunity Shrinkage and On-ShelfAvailability Group, Oliver Wyman man-agement consultants, and Kühne LogisticsUniversity (KLU), in Hamburg.

The model encourages the advancementof collaboration capabilities, as well as theintroduction of greater cross-company sup-ply-chain visibility, including the sharing oftransactional data and sales forecasts. Theaim is for the model to become a de-factouser manual on industry guidance for jointfood-waste collaboration.

“Where retail industry partners struggledover the years to build effective collabora-tion with the aim [of reducing] losses and,more [specifically], food waste, the toolwill be a pragmatic game-changer to betterconnect retailers and manufacturers andalign their competencies and objectives,”said John Fonteijn, global asset-protectionleader of Ahold Delhaize and the ECR

Community Shrinkage and On-ShelfAvailability Group’s chair.

Understanding Collaborative MaturityFollowing the opening presentation fromOliver Wyman’s Jens Torchalla, on freshproduce as “the most effective lever to dif-ferentiate” within retail, Dustin Wisotzky(also Oliver Wyman) and KLU’s SuyashShrivastava formally introduced the collabo-rative maturity model.

The presenters highlighted how previouscollaborative ventures have helped to “drivequantum leaps” in food-waste reduction,including a 25% reduction in fresh-conve-nience waste and a 20% reduction incheese/dairy-product waste, and exploredways in which improvements on these fig-ures are achievable.

As the speakers revealed, the new collabo-rative maturity model enables actors withinthe food-retail sphere to assess their sweetspots when it comes to food-waste collabo-ration, as well as their Achilles heels.

As well as serving as a pragmatic tool forassessing the current state of food-waste col-laboration, the model supports the identifi-

THIRSTY WORK

Attendees had the opportunity to sample an exclusive ‘bread beer’, developed in themicrobrewery of the University of South Bohemia in České Budějovice, which encapsu-lated the event’s food-waste theme and kept those present well refreshed.

To produce the beer, the university collected waste bread from Czech retailers includ-ing Makro, Tesco and Albert, dried and milled it into a mash suitable for brewing, anddeveloped a beer that is more economical (costing €0.40 per half-litre to produce, com-pared to €0.50 for a typical beer) and uses less malt. In terms of tackling food waste, wecan’t think of a more delicious prospect.

Discussion Topics Snapshotsfrom the workshop in Prague

"We hope that this newframework will support andease future collaborativeefforts and lead to reducedshrink and better relationshipsbetween suppliers andretailers."Dustin WisotzkyOliver Wyman

80 ESM Issue 1 - 2018

Supply Chain❘ECR

cation of areas in which improvement canbe achieved. It is useful in terms of self-assessment, as well as alignment with cur-rent or prospective collaborative partners. Itis, in other words, a valuable starting pointfrom which collaborative agreements canprosper.

“Reducing food waste is an importantresponsibility retailers face – not only toincrease their profitability, but also to

improve their sustainability footprint,”Wisotzky explained.

“One of the most effective ways to reducefood waste is closer collaboration betweensuppliers and retailers in terms of joint plan-ning and forecasting, alignment of produc-tion cycles, and innovations – just to men-tion a few examples. Due to commercialand legal restrictions, such collaborationsare not easy to set up, and a lot of trust and

goodwill is required. “We hope that this new framework will

support and ease future collaborative effortsand lead to reduced shrink and better rela-tionships between suppliers and retailers,”added Wisotzky.

For each aspect of the collaboration, thelevel of maturity is assessed on a scalefrom rudimentary (0) to world class (4),enabling participants to assess the areas in

WASTE WARRIORS

ECR members across Europe have been proac-tive in developing novel, country-specific solu-tions to deal with food waste, including the fol-lowing.

Greece: Love Food Programme (AB Vassilopoulos)AB Vassilopoulos is the first company in theGreek retail sector to implement an integratedfood-donation programme: ‘Trofima Agapis’(‘Love Food’). The retailer donates food that isabsolutely safe and healthy but non-mar-ketable because it is close to expiration or indamaged packaging. The company com-menced its work with the Greek Food Bank,which has supported 198 NGOs and over23,000 beneficiaries since 1995.

Poland: Stop Food Waste Programme(Carrefour)Via the ‘Stop Food Waste’ programme,

Carrefour encourages its customers to shopresponsibly and adopt eco-friendly behavioursin key locations in the stores, self-described asa ‘customer path’ initiative. The company’s goalis to reduce food waste by 50% by 2025. Inaddition, the retailer operates the ‘Challenge forSuppliers’ campaign, which encourages suppli-ers to present solutions aimed at reducing foodwaste. The winner of the competition will beawarded a monthly promotional campaign forits products in the Carrefour network.

Central Europe: Food Waste Data (Tesco)Tesco, which operates stores in Poland, theCzech Republic, Hungary and Slovakia, hasbecome the first CEE retailer to publish food-waste data across its operations, as part ofthe wider Tesco Group’s responsibility strate-gy. A spokesperson for the retailer said,“Without measurement, it is impossible to settargets and take action to reduce the amount

of food going to waste. Publishing our dataalso allows us to measure progress againstour goals, and to identify areas for futureimprovement.” In addition, the retailer hasdonated over 12,000 tonnes of food – theequivalent of 29+ million meals – to people inneed across Central Europe.

France: Phenix Phenix, a start-up launched in 2014 by JeanMoreau and Baptiste Corval, uses the conceptof the circular economy by channelling surplusfood into resources for other actors in thewider food chain. In other words, waste surplusfrom retailers and suppliers is turned into valuethrough the use of an innovative app and B2Bservices. Every day, Phenix facilitates therecovery of 50 tonnes of non-food and foodproducts and redirects 80,000 distributedmeals and 3,000 kilos of material through itsnetwork of 500+ partner charities.

which progression on collaboration canbest be achieved.

During the pilot phase, which com-menced in September of last year, impor-tant areas in which companies could assesstheir readiness for collaboration includedsupply-chain transparency, availability ofstock/inventory data, and the systemisa-tion of forecasts, while, in terms of settingup collaboration platforms, areas such asresources, sharing benefits and purposefuldata-sharing were among the factors con-sidered.

Following this test phase, the model hasnow gone live and is expected to be a valu-able tool going forward in the battle totackle food waste along the supply chain inthe years to come.

Be Fresher, Sell More, Waste LessThe workshop also played host to aninsightful presentation from RobBroekmeulen and Nevin Mutlu ofEindhoven’s University of Technology onthe findings of the Sell More, Waste Lessreport, which seeks to improve the perfor-mance of fresh supply chains and deter-mine what is currently lacking when itcomes to waste reduction.

A key dynamic through which the wastepotential of a particular category can bemonitored is the Fresh Case Cover, definedas the case pack size divided by the averagedemand during the store’s shelf life. As arecent study revealed, this single variablecan explain 42% of the variation in waste.

Broekmeulen and Mutlu examined thelevel to which shelf life has an impact onproduct availability, waste and freshness,determining that increasing the shelf life byjust one day can be a major contributingfactor to these areas. Improved supply-chain collaboration is a key means forachieving this.

In addition, reducing case pack size canalso have an impact on shelf, with shoppersmore likely to ‘grab and go’ a product that

is of a very manageable size. Again, thisrequires greater supply-chain collaboration.

Another factor identified by the universi-ty was the fact that the large differencebetween the size and shape of stores caninfluence the level of waste therein – yetanother factor that requires greater collab-oration along the supply chain.

Utilising DataEmanuela Casalini, a bar-code specialistwith GS1 Italy, was also on hand to exam-ine the level to which the GS1 DataBar – abar-code solution that extends the possibil-ities for product identification in the fresh-produce sector – has reduced waste athypermarket chain Iper.

As part of its project with Iper, whichsaw the chain introduce the DataBar tovariable-weight items in store, GS1 soughtto allocate a Global Trade Item Number(GTIN) to each product, capturing theexact weight of each variable-weight tradeitem sold at POS and automatically recog-nising expired products, preventing theirsubsequent sale.

“The fight against waste should be seenmore and more as a process that needs tobe addressed in a supply-chain perspec-tive,” Casalini explained. “The search forsynergies among production, retail andconsumers is fundamental, not only forfinding new solutions, but, above all, formaking a cultural change that will allow anew and better balance of ethics and envi-ronmental issues.”

The positives emerging from the studyinclude the fact that a cross-functionalimplementation plan could be developedright across the organisation, while, on theground, benefits include reduced hours inchecking expiry dates, avoidance of regula-tion fines for out-of-date violations, andconsistent product identification for vari-able-weight products.

The negatives are few, other than theneed to coordinate different solutionproviders and install updated hardwaresolutions that are capable of managingmore information.

Overall, the lasting impression was clear:in terms of tackling food waste, the retailsector is entering a brave new world. ■

For more information, visit www.ecr-shrink-group.com

"The fight against wasteshould be seen more andmore as a process that needsto be addressed in a supplychain perspective."Emanuela CasaliniGS1 Italy

Consumer Focus Shoppers need to bemore engaged in waste control measures

ECR❘Supply Chain

ESM Issue 1 - 2018 81