When the focus is on output, there is a tendency to overlook waste because the priority is to just “get the product out the door”. But, what if we could have increased output, if we hadn’t wasted the ingredients or finished product in the first place?
COVID-19 appears to be splitting the food industry into two broad groups.
Depending on where they are in the supply chain and who their key customers are, firms are either under huge pressure to increase production while keeping their staff safe, or they are losing big slices of their traditional market access and needing to pivot to create new opportunities.
In last week’s email I focused on the importance of the pivot and talked about how companies that thrive in a downturn attempt to achieve the necessary cost reductions through operational efficiencies, in order to minimize staff cuts and knowledge loss.
This week, I want to look at the firms that are going flat out to meet the increased demand for food products from Canadians in lockdown.
According to FCPC, 80% of food manufacturers have seen increased demand in the last month. Across the country, both staple and processed foods are flying off grocery store shelves, and in many cases faster than they can be replenished. The other shelves that are in need of replenishment are those in food banks, as more people than ever are needing to access them because of layoffs and lost jobs. If you are a food business and in a position to support food banks, Second Harvest has expanded FoodRescue.ca to a national platform to ensure food and drinks can make there way to those who need it most.
Companies are responding in a variety of ways. Increasing shifts, moving to 7-day operations, hiring more staff, and streamlining operations to a select number of popular SKUs to reduce changeover. Ital Pasta was one of the firms cited in the Globe and Mail this week. They normally produce more than 60 SKUs of pasta and are now only making six in an effort to increase productivity.
However, I’m not hearing many firms talk about operational efficiencies, specifically preventing food waste, as a way to boost output.
This is important because when the focus is on output, there is a tendency to overlook waste because the priority is to just “get the product out the door”. But, what if we could have increased output, if we hadn’t wasted the ingredients or finished product in the first place?
Yet, more than ever, waste is a resiliency issue, not just for food and beverage manufacturers, but for our entire food system. We need more food on the shelves. Anything that falls off the line or goes down the drain during the manufacturing process makes meeting that need more difficult. Doug Dittburner, Chief Engineer at Molson Coors, says “We are always making sure that as much of our product as possible gets in the bottle or the can. With beverages, it’s easy to miss and think it’s okay, but it‘s not okay.” In these times especially, every gram and every ounce matters.
If we flip how we think about food waste, we can see that there is a tremendous supply opportunity, at a time when food access is critical.
The most common response when I bring up the subject of food waste with manufacturers is, they don’t have any; it’s all diverted to animal feed, bio digesters or composters. Or if they do, they tell me it’s not significant, so not really an issue.
I get that. It’s not the glamourous side of our business, but we know this to be false. If you are diverting edible ingredients or products, you likely have some form of avoidable waste.
And so, last year, we partnered with the Walmart Foundation and our friends at the Canadian Centre for Food Integrity and Enviro-Stewards to gather data on food loss + waste from food and beverage manufacturers across Canada.
We carried out a series of prevention assessments at 50 facilities, met with leadership and frontline teams and did a lot of listening and poking around. The findings were noteworthy to say the least.
Across the 50 facilities studied, we found 9.3 million kilograms of food and beverage that was falling off the line or going down the drain and being wasted. Annually.
Put into societal terms, that’s more than 15 million meals per year never reaching people’s plates. And while we recognize that not all the products that we investigated can be converted to a meal, this was over 11.2 million calories that people never got an opportunity to consume. Think of the potential to stock shelves in grocery stores or food banks.
And if that isn’t enough to convince you, that’s an annual average cost saving of $228,000 per facility, if the waste can be prevented.
In the words of Dean Gurney, from Eden Valley Farms, one of the 50 participants who significantly reduced their waste as a result of the project, “The changes [we implemented] have absolutely helped us. If we hadn’t made them, we would be challenged to meet our customers’ orders in this time of crisis”.
Clearly, there is potential here…
But when your teams are giving their all, when every ounce of your focus is on keeping your people safe AND the plant running, how can you find the bandwidth to make this a priority?
This is a question that we have been spending a lot of time on in the last few days. Here is what we have come up with.
First, we have leveraged the technology that has become ubiquitous over the last few weeks in our homes and businesses to develop remote food waste prevention assessments. Using video captured on a simple smartphone we can start identifying opportunities to help you capture some easy wins. So as long as you can spare 15 minutes and you can bring a phone onto the production floor, we can support you here.
And because 80% of the savings and productivity increases typically come from 20% of the opportunities, we can focus on finding the low-hanging fruit that will make the biggest immediate difference to your output and your bottom line.
Second, your people are your smartest technology. Are you leveraging the power of your teams to source their ideas on how to prevent waste? Again, if they are already struggling under the pressure of the pandemic, asking them to do one more thing at work may be a challenge, but technology can again help here. Employee “suggestion boxes” may seem like a concept of the past, but there are many ways to digitize this simple tactic using a smart phone, that will support the collection of knowledge and make it easier for your employees. We were discussing this today and imagined a platform where employees could record a short audio message on their phones with their ideas while driving to or from work. Communicating the “why”, the importance of food access, and that connection to your production capacity, will only connect your team on a deeper emotional level. Incentives for great ideas couldn’t hurt either. This, or other simple concepts can allow you to quickly benefit from the “rally effect” of staff engagement that many firms are reporting.
Finally, while this may sound obvious, it is amazing what you can uncover by simply walking the floor during and at the end of a production run, with a lens of waste prevention. It is a way to see what's being wasted, where the problem is coming from, and can inspire ideas on how to prevent it.
The reality is that in a state of crisis, roughly 80% of our time is spent dealing with the crisis, but the remaining 20% should be focused on planning for the future. We believe these ideas will support that resiliency planning. We also get that in a state of overwhelm, you simply don’t have the time or the cash to start big new projects – however important they may be. But I hope that these ideas can help you seize the supply opportunity that food waste prevention may represent to your company in these challenging times.
The resiliency of our food system is on the line.
Let’s make sure that we don’t let it fall off the line or go down the drain.
By Cher Mereweather, CEO and President, Provision Coalition Inc.