Tesco and the Wasting of Food

Case #9. Tesco is Challenged to Reduce Food Waste

By Zuzana Deptová

(this is a student-written case)

„The minute you walk into the supermarket you may be able to get a few bargains but, more likely than not, you'll be nudged into buying stuff you didn't really want or need and it will go in the bin”(Joanna Blythman, Investigative food journalist).

Tesco PLC is a British multinational grocery and general merchandise retailer headquartered in Cheshunt. It is the second-largest retailer in the world measured by profits and third-largest retailer in the world measured by revenues. It is the grocery market leader in the UK, where it has a market share of around 30%.

The latest figures published by the Waste and Resources Action Programme (WRAP) showed that 15 million tonnes of food go to waste in the UK each year, with households responsible for nearly half the waste. Tesco is the largest food retailer in the UK. It is responsible for far too much of the UK waste food mountain, which means wasted water, energy and land.

The British government, together with its advising body, WRAP, monitors, evaluates and controls the situation in the UK. They consider a food waste as a global issue, which requires collaborative actions and support on a voluntary level.

Regarding its vision,WRAP has actively cooperated with businesses, individuals and communities to help them use resources in an efficient way. For example, there has been a supportive project, „Love Food Hate Waste“ (since 2007), a consumer campaign which provides advice and tips on how to reduce food waste and make the most of the food which has already been bought.

The „green“ campaigners urged all UK supermarkets to stop multi-buy deals. The supermarkets should stop employing marketing techniques which lead to the customer wasting fresh food, and go much further, such as stopping ordering excessive amounts and demanding „cosmetic perfection“.

Then we have the consumer – an important actor that is responsible for almost half of the waste. Consumers should adopt a different perspective on the issue – to shop in a sensible way in order to protect not only the environment, but also their pockets, rather than throwing money in the bin.

Suppliers play an important role in the supply chain. Tesco has already begun to try to cut waste at all stages on the journey to the consumer´s dining table. Farmers and producers are other prior actors involved in the supply chain. The majority of waste is produced in the fields during production. The supermarket chain surely has the power to also reduce waste in these areas, starting with agreements with farmers. The GCA (Groceries Code Adjudicator) is a new watchdog that oversees the relationship between supermarkets and their suppliers. It helps to cut down the refusal of food by retailers because of cosmetic reasons.

Food has a central role in a human´s life, and the production of and retail of food plays a key role in our economy. However, ground-breaking research published by WRAP revealed that in 2007 a staggering amount of the food and drink brought into the home was being thrown away - 8.3 million tonnes, which is equivalent to 22% of purchases. Wasting food and drink hits our pockets – spending money on food that ends up being thrown away – and is a financial drain on local authorities who have to pay for food waste collection and treatment. It has a detrimental impact on the environment, wasting the materials, water and energy used in its production.

In 2010, 15 million tonnes of food went to waste in the UK, with roughly half of this waste occurring in British homes. The magnitude of these figures is best understood by considering the "average" household in the UK: the quantity of food that could have been eaten but ends up in the bin each year is around 210kg and costs 573 Euros. Why is it happening? A consumer is attracted by multi-buy deals, special promotions and bigger packs for better prices, without thinking about whether it is possible to keep it fresh. A low price works like a demotivation factor for responsible behaviour here. We have to consider, however, the whole process of selling food. A considerable part of food waste is produced in pre-consumption stage - in the field during production (for instance, some farmers can´t afford the latest harvesting technology and a percentage of crops remains unharvested. Food waste can also occur when delivering orders to retailers – when a there is a delay in delivery, retailers refuse the goods according to the delivery times and conditions.

In 2012, 7m tonnes of food and drink were thrown away by British households; 4.2m tonnes of which was classed as 'avoidable', 1.2m tonnes of which was considered 'possibly avoidable', and 1.6m tonnes which were declared as 'unavoidable' (banana skins, tea waste, poultry bones etc)

In the first 6 months of 2013, supermarket giant Tesco has revealed that it generated almost 30,000 tonnes of food waste. Of that total, 21% was made up of fruit and vegetables and 41% was bakery items.

In October 2013, Tesco published new statistics, stating that 68% of bagged salads were thrown out – 35% of it by households. It also found that 40% of apples were wasted, and just under half of all bakery items. Based on these figures, Tesco tracked 25 bestselling products and combined information with data from the Wrap, to give an overall food waste "footprint" for each item.

Despite this significant drive to reduce food waste, UK households are still throwing away 4.2 million tonnes of household food and drink annually; the equivalent of six meals every week for the average UK household. 1. Prepare 3 forecasts for how the food waste issue might evolve:

a. best case

b. worst case

c. most probable case

2. Then note what events and actions you as Tesco will track most closely in order to make adjustments to your strategy regarding the food waste issue.