Trimming, cutting, reducing, recycling–they add up to cost savings and a healthier bottom line.
Waste reduction. It sounds like an unglamorous task, a hard slog to save a handful of pennies by recycling a few more containers, turning off the water a couple of seconds earlier and generally maintaining a miserly grip on resources.
But the green movement has suddenly made conservation hip in consumers’ eyes, and companies displaying an ecofriendly attitude are admired for being socially responsible. And now companies are discovering that cutting waste and trimming excess doesn’t save just a few pennies–it saves billions of them.
Kai Robertson, director of food, beverage and agriculture practice advisory services for Business for Social Responsibility, helps food processors develop waste reduction strategies. His company has seen a recent increase in the number of clients looking to cut waste.
“I think this is due to a combination of factors, including a realization that there are efficiency gains and the corresponding cost savings or revenue creation opportunities,” she says. “In addition, many companies are including waste reduction metrics in their requirements from suppliers–this drives efforts across the supply chain. Moreover, local communities are increasingly including zero waste as a guiding principle, with San Francisco and Seattle as notable examples.”
Kraft Foods, Northfield, Ill., has made significant strides in waste reduction of late, announcing in July that it had reduced net waste from its plants by 30 percent, using 2005 levels as a base. Its original goal had been to cut waste by 15 percent by 2011.
“Sustainability isn’t new to Kraft Foods, but we’ve made a significant increase in focus over the past few years,” says Richard Buino, spokesman for Kraft. “Driving major reductions in natural-resource use by increasing efficiency across our supply chain makes good business sense and is good for the environment and society. And it’s smart to reduce our consumption of energy, water and packaging, while producing less greenhouse gases and waste.”
Kraft’s Fairlawn, N.J., bakery became a zero-waste-to-landfill plant in February of this year. Its employee recycling team found ways to use existing equipment to collect and compact recyclables, and it works with a vendor to make sure all the recyclables are sent to the appropriate facilities. Unrecyclable materials go to a local waste-to-energy generator. Kraft’s bakery in Suzou, China, prevented more than 150 million tons of broken cookies from going to waste by crumbling them and using them as an ingredient.
“For Kraft Foods, manufacturing accounts for the vast majority of its solid waste output, so its plants are a natural place to take action,” Buino says. “Simply put, too much waste ends up in landfills that can affect nearby communities and cost lots of money to manage. People need to find ways to create less waste and find better uses for the waste they produce.”
Main Street Gourmet, Cuyahoga Falls, Ohio, developed a waste reduction plan in 2002, which it runs periodically. In the three times the bakery has implemented its War on Waste program, it has saved more than $500,000–not exactly chump change. Steven Marks, C.E.O., says numbers were the original catalyst for the effort.
“It stemmed from looking at the recorded amount of waste on our financial statement,” he explains. “When you see a waste number every month on your monthly financial statement, it gets you motivated to try and reduce it.”
Additional motivation comes from having waste reduction methods that have a discernible positive effect on the bakery’s surrounding community.
“Our No Muffin Left Behind sale is the No. 1 source for selling product that isn’t quite perfect but perfectly edible,” Marks explains. “We hold sales two to three times a year to sell off-spec product to the public at $1.25 per pound, with proceeds benefiting the Akron-Canton Regional Foodbank. It’s a circus-type atmosphere, with people standing in line three to four hours before we open the doors. Hundreds of people show up to purchase our product and benefit the Foodbank.”
The question of what to do with off-spec product is one that plagues bakeries. McKee Foods, Collegedale, Tenn., sends its waste product to a food processor that converts it into animal feed. McKee diverts more than 1,500 tons of waste product from the landfill annually–no small amount. Robertson applauds companies for such efforts but reminds bakeries not to forget to address the root of the issue.
“[Converting product to animal feed] is a good option, but most important is to prioritize reducing waste as much as possible first, then finding outlets for selling or donating it for alternative uses.”
When developing a waste reduction plan, a bakery should make the most of its resources, regardless of whether it will be working with a consultant or going it alone.
“Waste reduction is something companies can tackle successfully internally, if they have the staff available and expertise,” Robertson says. “But as a company broadens its approach, outside resources can be useful to provide advice in areas like measuring lifecycle impacts, engaging with external experts, as well as providing technical advice on emerging solutions. In addition, since waste policy and existing technology can be a barrier to a company successfully implementing its goals, it may not be able to achieve its goals alone.”
Main Street Gourmet developed its waste reduction program internally, and it made the most of its most valuable assets–its employees.
“The No. 1 thing is to get employee buy-in, and to reward the employees who provide the ideas and implement the savings,” Marks explains. “You need to be very good at communicating the concept to everyone and make sure they understand the ramifications. Once you get them started, it opens a lot of doors.”
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And once those doors are open, everyone will want to come in.
“Customers want to do business with partners who support sustainability. Consumers want to buy products from companies that ‘get it.’ And employees want to work for companies that respect and preserve the world around them,” Buino says. “Everyone is realizing we can minimize the impact on the environment, help society and increase revenue and profit all at the same time.”
Kai Robertson is the director of food, beverage and agriculture practice advisory services for Business for Social Responsibility (BSR), a consulting firm that helps companies develop socially responsible programs. These are his recommendations to companies looking to start a waste reduction program.
• Start by conducting a waste inventory in order to identify the various waste types, sources, current costs and disposal methods. One of the key questions to begin with is defining what ‘waste’ is for a company. Many leading companies are taking a lifecycle perspective and looking all the way back to raw materials through to end-of-life use. This cradle-to-cradle thinking is necessary but most companies begin by looking first at their facilities and processes over which they have direct control.
• Engage with other organizations. Food processors are not in control of their own waste disposal streams, so working with government agencies, suppliers and non-governmental organizations is critical to ensure the infrastructure and incentives support an increase in recovery and recycling rates.
• Benchmark peer companies, and leading companies in other sectors to not only learn from others but also identify areas where collaboration may be needed to overcome common obstacles.
• Understand key customer and supplier issues and needs. When BSR starts working with a company that wants to reduce waste, it asks three questions. Companies developing a waste reduction program internally also should ask these questions of themselves:
• What are your waste streams?
• What are your objectives?
• What are your customers asking for and doing themselves?
BSR recommends companies begin by taking an inventory of their current waste. “Laying out a ‘waste map’ of sorts enables a company to prioritize where to focus, based on what has the greatest potential for impact (i.e., reducing costs and supporting other goals) and is of greatest concern to its different stakeholders,” Robertson explains.