ANALYSIS: Retailers fall short in tackling supply chain waste
Retailers are still finding their supply chains a challenge when it comes to reducing waste, despite making good progress within their own internal operations.
A sustainability progress report released today (January 31) by the British Retail Consortium (BRC) shows that retailers are behind target on their Courtauld Commitment pledge to reduce product and packaging waste in the grocery supply chain.
The target was a reduction of 5% by 2012 – but so far, retailers have only made a slight dent in this figure, achieving just 0.4%; the equivalent of 10,000 tonnes.
This disappointing blip in an otherwise impressive stack of results didn’t go unnoticed by Environment Secretary Caroline Spelman, who used it as an opportunity to remind stakeholders about the Government’s intention to increase packaging recycling targets (the consultation closes at the end of this month).
“There is much more we can do in packaging and recycling,” she told delegates during her speech at the report’s launch in the House of Commons. “Retailers have a powerful voice across production sectors and a responsibility to bring about better waste reduction.”
When it comes to internal waste operations, there is no doubt that major retailers are ahead of the game. A collective commitment to reduce waste sent to landfill to below 15% by 2013 has been beaten two years early – last year, signatories sent just 14% of waste to landfill.
However, tackling waste further down the supply chain is proving much harder, not least because the more complicated and lengthier the chain is, the less control a retailer has over it. And for those companies that have several different tiers of suppliers, it can be something of a headache.
The BRC’s head of environment Bob Gordon acknowledges it’s a tough task, but says members are committed to the challenge. “Despite current economic difficulties, retailers are continuing to work with their suppliers to meet tougher sustainability goals,” he said.
According to the BRC’s chairman Rob Templeman, who spoke at the launch, collaboration will be “an extremely important approach” in achieving this, through initiatives like WRAP’s Courtauld Commitment, on-pack recycling labels and product sustainability forums.
Frontline examples of this can seen with Sainbury’s supplier groups, where the retailer has forged strong relationships with its farmers and growers to build more resilient supply chains. Flour development and crop sustainability groups have been set up to look at issues such as waste and carbon emissions.
Meanwhile Tesco has established an online knowledge hub which has over 400 collaborators – here, suppliers can share best practice on resource efficiency. One of its potato suppliers, Branston, has invested in an anaerobic digestion (AD) plant for its food waste and is sharing its experience with others.
But even when retailers eventually succeed in exerting more influence over their suppliers, there is still the tricky issue of communicating sustainability efforts to their customers – the consumer – in an easily digestible way.
Consumers are already scratching their heads somewhat over sustainable purchasing decisions. Just last week ASDA published the findings of a six-month survey which highlighted the dilemmas shoppers have over buying greener products.
At the BRC launch today, I spoke to a sustainability manager in charge of product quality for a leading household name. He told me that it was a complex issue – not just for consumers, but retailers too.
“Consumers are confused about sustainability, they are given a lot of conflicting messages so find it hard to make the right decision. What we need to start doing is educate them about the whole life cycle of a product – it’s not enough to say we’ve reduced packaging by this amount, or waste by this amount, anymore.”
Whether that message comes through advertising, packaging, product labelling or point-of-sale material is still up for grabs in many a marketing department. What is clear is that retailers have many balls to juggle in the sustainability arena – and while waste is seemingly a more visible indicator to work towards, there is still plenty to do in engaging suppliers to step up to the plate.