Leading the Fight Against Global Food Waste

How do you define the food waste challenge?
Let’s establish some of the facts to start with. An astonishing one-third of all food that’s grown globally gets wasted. According to the World Resource Institute, that’s 1.3 billion tons of food each year. But the issue is bigger than the food wasted; it’s about inequality, with paucity in one place and excess in another: one in nine people go to bed hungry while that food is wasted, and there are also 2 billion people with excess calories in their diet. 

Look at it economically. $940 billion of value is destroyed. That’s not a very smart thing to have happen. And it’s going to get more challenging when we can’t produce enough food for the people on the planet but we’re wasting one-third of what we produce.

And people are now waking up to the fact that greenhouse gasses coming from food waste and loss are 8% of the total. Just to put that in context, the climate impact of that is a great deal more than aviation.

So, whether you come at it economically, socially or ethically, I see lots and lots of reasons that tackling food waste matters.

How have you driven performance inside Tesco?
Consider that Tesco sells about 10 million tons of food a year and we have thousands of fresh and perishable food items. Getting supply to match demand every day for every product in every store is nigh on impossible. So, you’re always going to either have a shortage or surplus of something, as a function of the business. Our waste in store is 0.42 percent and, compared to international performance, we’re absolutely the best. But that’s still a huge amount of food: 41,000 tons of food wasted annually, right?

How did you go about tackling it?
We started by mapping the food chain end-to-end, post-harvest to consumption. Then getting to that best-in-class food waste performance in the business is all about the supply chain: demand planning, distribution, storage.

We now have our own weather forecasting capability, for example, in 26 different regions in the UK and use that to manage demand so we don’t push produce where it’s not relevant. When the sun will shine in Cornwall and not in Scotland, we have the ability to increase the amount of berries going into Cornwall. In the past, we would have just distributed to all stores equally. Now, with our main suppliers, we decide on a daily basis which field to harvest. We can be much more specific and reduce the waste. There’s a lot now that happens like that, and examples I could give you.

That work represents significant operational change. Why would you do this?
Honestly, I think the answer to your question is why wouldn’t you, right? In my induction at Tesco, I worked in stores to understand the business and I got to see that, after trying to manage prices that are about to hit their use-by date, at the end of the day you get to a point where they’re not going to be sold. Legally, you’re not allowed to sell them. They go in the tip at the back of the store and they’re wasted. Before I came into retail, I’d worked and lived half my life in places where food is scarce. If you’ve got that as a background, watching that waste happen just feels completely wrong. So, I think the question is why as a retailer would you allow that to happen?

Commercially and economically, you’d want to minimize that waste. Then when you accept that in your business model you’re always going to have this issue of managing surplus or shortage, you start to think from a broader social value point of view, what can you do about that?

Where is the waste in the system?
Very little of it is in retail. The majority is either before it gets to the store or once it leaves the store. But the nature of food loss and waste varies around the world. In economically developing countries, you see more food loss “closer to the farm,” during production, handling, and storage. Yet in economically developed countries, you see more food waste “closer to the plate,” at the consumption stage—that’s where 58% of the waste happens in North America, for example, and 42% happens in Europe. That’s in people’s homes. So that’s about addressing consumer behavior, right?

Changing consumer behavior is notoriously hard. Do you believe your consumers care about food waste?
Whenever you talk to consumers about their domestic consumption, nobody’s happy about the fact that they waste food. But in the way that people actually live their life, it’s not uppermost in their mind for most people, no.

But if you think about your question, it pre-supposes that consumers completely understand everything about it. And they don’t. These are not things consumers should know or would want to know. We don’t need consumers to know everything about food waste. But if we were able to talk to them about it, what would they want us to do? And we think that if consumers knew what we know about it, they would want us to do what we’re doing.

It’s too easy to say consumers don’t care. Actually, I think consumers look more and more to businesses and brands like ours to be responsible on their behalf.

But is there anything you can you do to influence consumer behavior in any meaningful way?
The critical thing is: what actions can we take to help them change their behavior to avoid waste? And there are some practical things we can do: change the promotional plan, change the packaging, and drive education. 

We used to have a program to drive volume in fresh produce, for example, where consumers could buy two lettuces, say, and save 25%, or “Buy one, get one free.” That means consumers take two home when they really only ever needed one and they find themselves throwing the other out. Our promotional program was driving food waste. So, we changed that promotional program and moved towards a policy of everyday low price. 

What about employees, do they care about food waste?
Absolutely, they do. Of course, when you start on something like this, you’re changing routines so, for people in the business, it starts as more work. Then you get it into the routine; everyone learns to manage it. So, our rates of food waste operationally have become really very low.

Beyond that, what’s most powerful for colleagues in-store is seeing that food that would be wasted is being donated to projects in their own communities. We have a partnership with FareShare to distribute to 7,000 local community projects at the end of each day. And you often hear of colleagues dropping it off the on their way home. As a result, colleagues drive this initiative. There’s definitely a cost to delivering it but, if I were to try and take this out of the business today, there’d be a mutiny. It’s taken on a life of its own.

So it works at different levels. Colleagues in-store get really involved with the food donation part. Meanwhile, we work across the whole value chain in partnerships with suppliers. These are all parts of a systematic approach.

Outside your role as CEO of Tesco, you’re Chair of the global network of Champions 12.3 for the UN’s Sustainable Development Goal goal on food waste. How does that work?
Because of our experience in Tesco, I was approached a few years ago to chair Champions 12.3. We set up a coalition of about 30 leaders from business and government. The idea was to represent the entire food chain, getting expertise right from primary agriculture all the way through to food science and consumption behavior.

I think the reason it’s worked well so far is that we’re aligned around the methodology: Target, Measure, Act. The first point, target, is clear: every country and company involved in the food supply chain should get behind and adopt SDG 12.3—to halve food waste globally—as their own. Then governments and companies should quantify these efforts, track them, and report them publicly.  Informed by those insights, they should take action.

From that Target, Measure, Act model, what kind of action are you seeing?
Every year at our Summit in September, we showcase the actions that have taken place from any of the players in any part of the food chain to share best practice. At the last Summit, we announced 10x20x30. That’s the 10 leading retailers around the world committing to work in this way with their 20 largest suppliers in order to deliver the 2030 goal.

Because everyone’s measuring in the same way, you get a huge amount of cross-learning. And sharing the real challenges they’re facing as well, and we’re working with the World Resources Institute on what can be done to move forward on those.

Champions 12.3 focuses action on “hotspots.” Can you give me an example?
Rice is a good example. More than half of the world’s population consumes it several times a day. 144 million small farmers’ livelihoods depend on it—and it generates 16% of the GHGs originating from agriculture. But post-harvest losses are high. So, last year the Sustainable Rice Platform, which is made up of the largest rice producers in the world, committed to the Champions 12.3 strategy,  and also to halve post-harvest rice loss and waste by 2030. Achieving that could make a real difference to food security, farmers’ incomes—and climate change.

Globally, is there enough action to meet the food waste goal?
No, not yet. While much of the good practice that’s needed to achieve this exists out there, the commitment to action isn’t. We urgently need more companies and more governments to set targets and measure and to take bold action—that will enable us to move much faster at scale.

You’ve made publishing data on food waste a call to action for Champions 12.3. Why is that your rallying cry?
For a systems approach, you have to have an element of transparency and consistency. The whole idea about publishing data is that you have the basis to share best practice. 

People don’t like to publish because it attracts scrutiny. It’s painful initially, but we must. At Tesco, we were the first in the industry to publish our food waste data some years. Now all the grocers in the UK have signed up in principle. Publishing is still voluntary, but it’s so important that we want government to make it mandatory. 

Isn’t it counter-intuitive for you as a business leader to be calling for regulation?
We need it or we can’t get at the problem. I’d like every company and every government to publish their data on food waste—and publish on the same metrics. Regulation can make that happen.

Do your investors see this differently, particularly with the rise of ESG?
We did a full capital markets day last year focused on ESG. We had a massive turnout. And people began to understand the business differently. We’ve all spent years measuring the reduction of negative impact. I’m not at all against that. But it only gets you to a certain place. So we’re trying to move on from only measuring impact to thinking about it through a measure of dependence. When I think about the dependence of the business on soy, for example, I have to get intimately involved in how to maintain long-term value and create resilience. Then you start coming to different answers.

Originally, businesses were created as an economic vehicle to manage risk. It’s in the language: limited liability. Now part of that risk is managing a broader set of stakeholders and issues. If I don’t get involved and I keep my head down, that’s not managing risk, that’s avoiding it. The way that I position it to the City is your investment in Tesco is dependent—key word: dependent—on a responsible sourcing strategy. If I don’t source responsibly, I destroy that supply chain and weaken your investment in the long-term.

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Lucy Parker is a Senior Partner and leads Brunswick’s global Business and Society practice.

Second photo: Jack Taylor/Getty Images. 
All other images provided courtesy of Tesco. 
Charts and graphics by Peter Hoey.