|1
2014 Danone Position on Food Loss and Waste
Summary •
According to the Food and Agriculture Organisation (FAO)1, approximately one third of global food production intended for human consumption is lost or wasted each year. In general, most losses in developing countries occur in the “upstream” phases (production, harvest and storage), and those in developed countries in the “downstream” phases (preparation, distribution and consumption).
•
Danone takes a comprehensive approach to addressing food waste reduction and considers that initiatives are necessary at each stage of the food chain: production, distribution and consumption.
•
Danone endorses the European collective initiative “Every Crumb Counts,”2 through which signatories commit to working toward an overall 50% reduction in food losses by 2020.
•
Danone has launched concrete initiatives to reduce food losses in areas it controls and influences—not only at its production plants, but also upstream in its supply chain and downstream with customers.
UPSTREAM • • •
•
Danone’s actions to reduce upstream losses is part of its global sustainable agriculture initiative3. Milk and fruit are Danone’s top two raw materials and are among the most perishable. Special precautions are required to avoid losses. For example, Danone has been engaging with and supporting dairy farmers across its global milk supply chain for many years, providing training and evaluation programs to improve milk quality and reduce production losses, and managing the processing of all milk provided. Danone minimizes waste in product sourcing by using fruit that is no longer suitable for retail sale due to minor defects in form, shape, color, or other superficial flaws, but that still meets all necessary criteria for taste and nutritional properties. The Group also uses surplus fruit
1
http://www.fao.org/docrep/018/i3347e/i3347e.pdf (Food wastage footprint: impacts on natural resources, FAO 2013) ‘We, the co-signers, commit to the objective of reducing food wastage throughout the food chain and to contributing to halving EU edible food waste by 2020. We call on all stakeholders involved in the food chain from farm to fork and beyond to take further action to prevent and reduce edible food wastage on a European and global scale.’ “Every Crumb Counts,” Joint Food Wastage Declaration, 25 June 2013 (www.everycrumbcounts.eu) 2
3
Danone Sustainable Development Report 2012 : Strategy and Performance http://www.danone.com/images/pdf/danone_developpement_durable_2012.pdf
|2 from seasonal overproduction. Finally, Danone works with fruit and vegetable producers, particularly in developing countries, to promote new and more resource-efficient agricultural practices that optimize production and improve the commercial quality of their products while eliminating or minimizing their impact on the environment. IN PRODUCTION PLANTS •
Danone ensures that staff are trained and involved at every level, and institutes action plans to reduce losses throughout the production process. For fresh dairy products in particular, the company continually optimizes packaging materials to maintain or improve product shelf life. Maintaining the cold chain throughout the entire production process, right through to retailers, is of the utmost importance in reducing logistics-related losses.
DOWNSTREAM •
Retailers
To reduce damage to fresh products that have a relatively short lifespan, Danone develops partnerships with retailers to optimize transit, in-store packaging systems and product restocking, as well as inventory management and pricing initiatives to accelerate purchases as products approach their expiry date. •
Consumers
Danone actively works to enable consumers to play a more proactive role in their purchasing decisions and to ensure optimum consumption of food products once purchased. -
The company contributes to waste reduction by providing a diverse range of products and packaging sizes to meet the needs of different households. Danone supports awareness and education programs by public authorities that improve consumer understanding of the optimal conditions for food conservation, storage, and product shelf life. Particular attention is paid to the conditions that guarantee the quality and safety of fresh products requiring refrigeration.
For economically disadvantaged consumers, Danone supports structured and secure food donations through food redistribution charities and food banks.
|3
Danone's main actions to reduce food loss and food waste
|4
Danone Position on Food Loss and Waste (for External Use) THE ISSUE Approximately one third of global food production intended for human consumption is lost or wasted each year. The United Nation Food & Agriculture Organisation (UN FAO, 2013 report4) estimates that 1,600 billion tons of food products are lost each year, equivalent to 250 km3 of embedded water and 1.4 billion hectares of agricultural land. This represents a direct cost of US$750 billion or €565 billion according to the FAO. In other words, one in four calories of food intended for human consumption are currently lost or wasted globally, according to the World Resources Institute (WRI).5 Overall, 54% of losses occur while growing, harvesting and storing raw materials. These are classified as “food losses,” The remaining losses are considered “food waste” (production, distribution and consumption). UN FAO defines the term “wastage” as encompassing both food loss and food waste (Appendix). In general, the proportion of food loss or food waste differs depending on a country’s level of development. In developing countries, 40% of total food production is lost, while in developed countries the same proportion is wasted6. UN FAO encourages developing countries to improve their agricultural practices as well as storage and transport infrastructure. However, the FAO also states that “rich countries have an utmost responsibility with regard to food waste given that their modes of production and consumption are not sustainable.” UN FAO research suggests that in developed countries, total reported losses from milk and dairy product waste—which is particularly significant for Danone—account for between 10% and 20% of production. Nearly half of this waste (40%-65% depending on the country) occurs in the consumption stage. In France, statistics reveal that fresh dairy product waste is much lower, with an overall loss across the chain estimated at only 3%.
THE CONTEXT
4
FAO report 2013: Food wastage footprint: impacts on natural resources http://www.fao.org/docrep/018/i3347e/i3347e.pdf 5 http://www.wri.org/our-work/project/world-resources-report/world-resources-report-2013-2014-creating-sustainablefood 6
Global Food Losses and Food Waste, FAO study conducted for the International Congress “Save Food”, at Interpack 2011, Dusseldorf, Germany http://www.fao.org/fileadmin/user_upload/suistainability/pdf/Global_Food_Losses_and_Food_Waste.pdf
|5 •
•
•
The battle against food loss and waste is one of the proposed solutions for meeting the needs of a global population that could reach 9.6 billion people by 2050, according to the latest United Nations Bureau of Statistics forecast, in a world facing increasingly scarce arable land and natural resources (water, fossil fuels, etc.). A number of national and international initiatives have been launched in this area in the past few years: o The UN Secretary General’s “Zero Hunger Challenge”7 o The “Think.Eat.Save” campaign of the Save Food Initiative (partnership between United Nations Environment Programme (UNEP), UN FAO, WRAP and Messe Düsseldorf)8 o At national level: programs including Love Food Hate Waste (WRAP UK)9, Stop Wasting Food in Denmark10, OzHarvest in Australia11 and U.S. Food Waste Challenge in the USA12 o In the European Union, the seventh Framework Program of Research and Development launched a four-year social innovation-based research project called “Fusions”, seeking to halve the level of food waste generated in the EU by 2020, and reduce food industry input losses by 20% through the following initiatives: standardizing quantification methodologies (a pre-requisite to measure losses and monitor progress), developing powerful stakeholder networks, demonstrating viable solutions through pilot projects, and finally, developing guidelines for an EU Policy on food waste. As part of this, in June 2013 numerous European professional federations co-signed “Every Crumb Counts,”13 a common declaration regarding food waste and food losses through which signatories commit to contributing to cutting food losses in half by 2020.
DANONE´S POSITION
7 8
•
Danone is a signatory of FoodDrinkEurope and Europen, and supports developing an effective methodology to enable rigorous and precise quantification of food loss reductions.
•
For this effort to be truly effective, initiatives are needed at each stage of the food value chain: production, distribution and consumption. Danone takes an integrated approach to reducing the loss or waste of both raw materials and final products.
http://www.un.org/en/zerohunger/challenge.shtml “Think, Eat, Save” campaign: FAO and UN Environment Programme (UNEP): http://www.thinkeatsave.org/
9
http://www.wrap.org.uk/category/materials-and-products/food http://www.stopspildafmad.dk/inenglish.html 11 http://www.ozharvest.org/index.asp 12 http://www.usda.gov/oce/foodwaste/ 10
13
‘We, the co-signers, commit to the objective of reducing food wastage throughout the food chain and to contributing to halving EU edible food waste by 2020. We call on all stakeholders involved in the food chain from farm to fork and beyond to take further action to prevent and reduce edible food wastage on a European and global scale” : “Every Crumb Counts” , Joint Food Wastage Declaration, 25 June 2013 ( www.everycrumbcounts.eu)
|6 •
Operating as it does at various points along the value chain, and specifically at the interface between agricultural activities and consumers, Danone has launched practical initiatives to reduce upstream food losses and downstream food waste. 1- LIMITING UPSTREAM LOSSES
•
•
•
•
The main agricultural raw materials used by Danone are, in order of importance, milk, fruit, and sugar. Danone also uses some vegetables, meat and fish for certain baby food products. It collects all milk produced by its dairy suppliers, except the output that these farmers need or want to retain for their own consumption, to feed young calves, or to sell directly. In addition, all milk collected from these dairy farmers is processed, thus ensuring that there are no quantifiable losses at this stage. Across all the countries where it sources milk, Danone is engaged with and supports dairy farmers by establishing training and evaluation programs to improve milk quality, which reduces production losses caused by discarding sub-standard product. This quality improvement program has been in place since 1996. To control the sourcing of fruit used in its products, Danone purchases a large proportion directly from primary food processors that are themselves in direct relationship with fruit growers. This often consists of fruit that is not fit for retail market distribution because of form, shape, color, or other superficial defects, or due to seasonal overproduction that the market cannot absorb. This initiative has economic benefits for both parties, and limits the disposal and waste of fruit that retains its key properties of taste and nutritional value. Meanwhile, Danone also works with fruit producers, particularly in developing countries, to promote new agricultural practices designed to reduce water consumption. Equally, Danone promotes the best available means of creating value from final waste (e.g., resulting from peeling, separation or deseeding) on the part of its primary processors. Danone’s sugar is supplied directly by industrial sugar producers or added through fruit preparations. There are practically no losses in the supply chain. These actions to reduce losses by farmers are an integral part of Danone’s initiative on sustainable agriculture14. 2 – LIMITING PROCESSING LOSSES
•
In Danone production plants, staff at every functional level—planning, procurement, manufacturing, logistics and beyond—are trained and involved in action plans to reduce losses throughout the processing stage. Numerous measures are in place, including detailed traceability of material inputs and outputs, adapting production batch sizes, controlling optimum storage conditions, tracking losses throughout the process and optimizing recycling of any unavoidable losses. Thanks to these measures, production losses represent significantly less than 1% of final product.
14
Danone Sustainable Development Report 2012: Strategy and Performance
http://www.danone.com/images/pdf/danone_developpement_durable_2012.pdf
|7 •
For logistics, Danone complies strictly with cold chain requirements throughout the entire process—all the way to the retailer—reducing logistics-related losses of fresh dairy products. 3 – LIMITING DOWNSTREAM LOSSES – food waste
•
Retailers Danone develops partnerships with retailers to optimize transit, in-store packaging systems and product restocking, including inventory management and pricing to accelerate purchases as products approach their expiry date. Optimizing volumes of Danone products sold is under the full control and responsibility of retailers. Yet while it is up to retailers to manage real-time demand so as to limit the rate of “damage” or loss and to achieve the best possible match with consumer demand, Danone effectively collaborates with the retailers it supplies to strike the right balance between making products available at all times at the point of sale and reducing losses. This relationship is particularly important for fresh products with a relatively limited shelf life. Today, a variety of restocking agreements are in place, depending on the culture of the retailers and the maturity of their trading relationship with Danone. With many retailers in developed markets, Danone enjoys partnerships built on mutual trust that use sophisticated management systems to anticipate changes and developments in demand more accurately. These include supplier-managed inventories, timely verification of retail order volumes, and collaborating to forecast demand and schedule restocking. Danone is planning to engage with a wider range of retailers to expand this collaborative approach, improving value chain efficiency and in-store availability, and reducing food losses.
•
Consumers Studies show that the most significant causes and volumes of food waste in developed countries occur in the home—which means consumers have an important role to play in their own households. Over the past few decades, consumer attitudes, behaviors and knowledge of food have gradually changed due to a range of factors: food preparation skills have declined in many countries, food has become more abundant and diverse, quality of life has improved for many, and people have become increasingly disconnected from the origins of the food they eat. In some cases, this has given rise to a loss of values and value in food consumption. It is important to reestablish this connection of consumers with food, inspiring them to play a more active role in how they plan, buy, store and use their purchases to waste less and reap greater economic benefits. A progress plan, including various levers, could be implemented to help them optimize management of their purchases and consumption of products.
•
Adapting package sizes Danone offers a wide range of product sizes and packaging. In dairy products, this includes family-size one-kg containers and packs of 8, 12 or 16 individual servings that generally contain a total of 125 g of product, as well as smaller four-packs and even individual servings in certain countries. We also sell a range of natural mineral waters in bottles ranging in size
|8 from 250 ml to two liters, sold individually or in multi-packs, and large 8-litre bottles. Such diversity allows consumers to manage their purchases in accordance with their needs, and helps them reduce waste. Danone regularly commissions studies to fine-tune its product sizes and packaging to the needs of consumers in different markets. For baby foods, portion sizes are based on standardized baby diets and include instructions for storage/consumption in case a child cannot finish a portion in one sitting. Different pack sizes, including singles and packs of 2, 4, 6 or more, depending on the product, are also available, giving parents greater choice and flexibility. •
Consumer awareness and educational programs Danone is involved in a range of initiatives developed by public authorities to raise awareness and educate consumers on food waste and food loss. Today public authorities in many countries are aware of food waste issues and—generally in association with the food and drink industry and other stakeholders—deploying campaigns, actions and tools to raise public awareness about the importance of expiry dates and optimal storage conditions for products (e.g., appropriate temperatures for storing fresh dairy products, natural mineral water, etc.). The way consumers manage purchasing of fresh dairy products such as yogurt and fromage frais—products that are both “fresh” and require refrigeration—is a case in point, and could often be improved. These products’ best-before date are generally determined by national authorities in accordance with regulations defined by food safety rules and standards15. Product shelf life is also designed to maintain key product quality attributes related to nutritional value—including living ferments, vitamins and minerals in the case of enriched products—as well as flavor, appearance, smell and texture. Consumers are advised on optimum storage temperature (4°C plus or minus 2°C) on each pack. Call centers provide additional information, e.g., how long products remain edible if kept outside the fridge. However, it is not always best if consumers purchase only products with the latest-possible expiry date, particularly when products are consumed quickly. This contributes to food waste by increasing the number of products that reach expiration and remain unsold at the point of sale.
•
15
Helping vulnerable consumers Danone supports structured and secure food donations to the most economically disadvantaged consumers, promoting agreements with dedicated charity organizations such as food banks. The group already works with a number of them, offering products that are no longer marketable but that are still suitable for human consumption. For example, in France, Danone Produits Frais signed a partnership agreement with the French federation of food banks that provides for products approaching the “use by” date, as well as those that have
Hazard Analysis Critical Control Point (HACCP)
|9 minor defects in labeling or presentation, to be transferred at no cost, within very short timeframes and in accordance with clearly defined rules, for distribution to consumers in need.
APPENDIX FAO 2013, Food Wastage Footprint: Tool Kit — Reducing the Food Wastage Footprint Food loss: refers to a decrease in mass (quantity of dry matter) or nutritional value (quality) of food that was originally intended for human consumption. These losses are mainly caused by inefficiencies in the food supply chain, such as poor infrastructure and logistics, lack of technology, insufficient skills, knowledge and management capacity of supply chain actors, and lack of access to markets. Natural disasters also play a role. Food waste: refers to food appropriate for human consumption being discarded because kept beyond its expiry date or left to spoil. While this is often because food has spoiled, it can also be for other reasons including a seasonal glut on the market or individual consumer shopping/eating habits. Food wastage: refers to any food lost by deterioration or discarding. The term “wastage” thus encompasses both food loss and food waste.
