Recycling has been a priority for consumers and processors for years, and the ongoing COVID-19 pandemic is not affecting their views.
A Consumer Brands Association survey of 1,000 American adults offers some clues into the future of recycling. When asked about the best way to deal with plastic waste, 62% of the respondents agree that improving the recycling system so it can efficiently process plastic is best. Another 20% are unsure, and 17% say the U.S. should ban single-use plastic.
Because nine in 10 Americans believe that a pandemic like COVID-19 could happen again, it is important to have a recycling system capable of handling another spike in plastic and packaging waste. Of course, the U.S. required a functioning recycling system before the pandemic, so supporting the increased volume of waste resulting from the pandemic intensifies an already urgent need.
So what role do consumers, plastics and packaging manufacturers, and CPG manufacturers play in solving the waste problem, running recycling systems and financing said systems? According to the CBA survey, consumers say they are 72% responsible for solving the waste problem, with plastics and packaging manufacturers in the No. 3 spot at 67% and CPG manufacturers in the No. 4 spot with 66% responsibility. Who should be running recycling systems? It is no surprise that waste management is No. 1 with 70%, followed by state or local government at 46%. However, the 3, 4 and 5 spots are plastics and packaging manufacturers (38%), consumers (27%) and CPG manufacturers (27%), respectively. Who should finance these systems? According to the survey, respondents rank plastics and packaging manufacturers No. 1 at 49%, CPG manufacturers No. 4 at 39% and themselves at No. 7 with 25% of the financial responsibility.
With such high stakes for CPG and plastics/packaging manufacturers, Food Engineering turned to three experts in the field, who offer their take on the roles that waste disposal and recycling play in sustainability in the food space as well as how they affect food processors’ bottom line.
Kimberly Carey Coffin,
Global Technical Director for Supply Chain Assurance,
Lloyd’s Register
Kimberly Carey Coffin is the global technical director for supply chain assurance at Lloyd’s Register, one of the world’s leading service providers of food safety certification and customized assurance solutions.
FE: What are the driving factors for waste management in the food industry?
Kimberly Carey Coffin: Growing consumer demands for a reduction in food waste, in relation to concerns around global sustainability, have understandably caused a shift in the way waste management is handled in the food industry. Businesses have seen that cost management and yield optimization has a direct impact of the cost of sale and revenue. Progressing waste management strategies are therefore essential if we are to move forward as an industry.
FE: How can waste management and recycling benefit a food processor’s bottom line?
Carey Coffin: An effective waste management and recycling program is essential to control the risk of foreign object contamination and maintain a hygienic environment for the production of food. The benefits to a food processor are clear, as potential product contamination and infestation could be devastating, in terms of finance and reputation.
Pest infestations, for example, in a food processing or storage facility are against the law because of the risk presented to food safety and integrity. Not only that, food damaged by pests or other foreign object contamination is not fit for consumption, unable to be used as rework and must be disposed of as waste, often using controlled measures that come at an additional cost to the manufacturer for disposal.
With appropriate management strategies in place, the time required to facilitate cleaning, sanitation and waste removal can be significantly reduced, which will undoubtedly provide massive benefits when it comes to operational efficiencies and downtime related production costs. This can also have a direct impact on reduction in stock on hold or out of specification.
Additionally, the promotion of waste optimization strategies can provide positive consumer perception of a brand and enhance organizational commitment to environmental management.
FE: What trends are you seeing in waste disposal, recycling and waste management in general in the food processing marketspace?
Carey Coffin: One of the initiatives we have seen many food manufacturers increasingly adopt is redirecting safe food via charitable contributions. Production of out-of-specification products may occur, most commonly on startup and line changeover. In most instances, this is relatable to product quality attributes, but as it is still considered substandard to brand, it leads to unnecessary food waste.
However, some of these goods, while they are not suitable for distribution through normal channels, are often still safe to consume. The sale of almost-perfect products is a growing trend that has seen food redirected to feed people, via food banks, markets or as lower cost “value” brands. The benefit being, this prevents unnecessary food wastage, provides some level of return to the processor and has a significant impact on the environment.
With concerns over food waste growing among consumers and businesses, there is collaborative effort to educate and raise awareness. This includes the most appropriate sizing of consumer products, to assist with the prevention of food waste in the home.
We have also seen an increasing focus and adoption by food processors for sourcing raw material inputs in a variety of reusable containers/totes such as oils, liquid dairy, sugar syrups, grains and flours.
FE: What are the biggest challenges for food manufacturing plants when it comes to waste management? How are they overcome?
Carey Coffin: Raw material packaging disposal presents unique challenges for food processors. Commonly, operations handle large volumes of soft and hard plastic as well as cardboard which have limited opportunity for reuse. Unlike other industries, the reason for limited opportunity for reuse is the introduction of cross contamination risks, which must be controlled, and overall higher standards of sanitation required to maintain production environment and product integrity.
Food manufacturers also face challenges with scrap, off cuts, production changeover/systems flush, and out of specification food. As such, there are a number of considerations companies must make in respect to “waste” generated when making decisions about product design, product and packaging format, stringency of customer specifications, and adherence to regulatory requirements.
Finally, not having the right product available to sell can lead to expired stock that becomes unsaleable; not only does this result in waste, but it also offers potential for additional risk and cost related to infestation, extended storage and controlled disposal. This can come about as a result of poor materials management and production planning; therefore, it is pertinent to establish a materials management plan and put the necessary procedures in place.
FE: What tips can you offer processors regarding waste management for the greatest impact on their bottom line?
Carey Coffin: Our advice to food manufacturers is to carefully consider product range optimization, production planning, and the agility of production lines when tackling product and processing design for new or existing products. As well as reducing the volume of stock on hold, agile production lines can eliminate the potential of losses incurred via changeover and plant sanitation required for product safety and integrity. The benefits include reduced labor costs by eliminating wasted time and improving process flow, and optimized equipment usage.
Further, a significant reduction in overall waste generation at a facility can be achieved through sourcing as much of its raw materials inputs in bulk form and/or reusable packaging materials.
When it comes to waste management planning, there is an obligation for waste to be managed sustainably. We have seen numerous global food, beverage and packaging companies, including Nestlé and Danone, join initiatives such as the 3R (Reduce, Recover and Recycle) Initiative, to tackle waste issues in the food industry.
The recently launched Responsible Plastic Management Standard provides another opportunity for companies to take significant verifiable steps to manage plastic waste and its environmental impact. As part of the process, companies can take proactive steps to better measure, reduce and reuse the plastic coming into—and going out from—the business.
Ray Hatch,
CEO,
Quest Resource Management Group
Ray Hatch is the CEO of Quest Resource Management Group, a North American leader in environmental reuse, recycling and waste disposal services for various forms of waste, including packaging and food waste.
FE: What are the driving factors for waste management in the food industry?
Ray Hatch: There are three “buckets” of things driving sustainability in the food space. One is regulation. For example, in certain parts of the country, it’s now illegal to put food waste in the landfill or the standard trash. So regulation is growing, which is good, because landfills are filling up. It’s going to continue putting pressure on sustainability in every aspect of the food business.
Second is the investment community. Close to 70% of the S&P 500s report on sustainability today. There’s a lot of pressure on the food industry from investors and investor groups to increase and improve their sustainability, and, further, publish their progress.
The third one is more basic: consumer purchasing power. Environmental consciousness is at the forefront of consumer’s concerns. The awareness doesn’t extend only to the products they use, but to HOW those products are produced. Everything from soft drinks to tires comes under the scrutiny of an ever-increasingly eco-conscious consumer base. Because of this trend in consumer awareness, manufacturers in all markets are pushing toward achieving a zero-waste production cycle. Not only does achieving this goal make your products more valuable to customers, in the end, but it can also save your business a lot of money.
FE: How can waste management and recycling benefit a food processor’s bottom line?
Hatch: Understanding exactly how much waste you are producing and how you’re getting rid of it is not only environmentally conscious but it could also save your company a lot of money. Each year, food manufacturers send tons of recyclables to the landfill that could easily be recycled—literally throwing their money away. Beyond just not being sustainable, food and packaging waste is an enormous inefficiency with lost sales and costs of resources.
Food waste reduction could increase your bottom line. Manufacturers, retailers and restaurants received a median return on investment of 1,300% when implementing food waste reduction programs, according to a report from Champions 12.3. The report, “The Business Case for Reducing Food Loss and Waste,” reviews historical data from nearly 1,200 business sites, from more than 700 companies, across 17 countries to determine the financial impact of food waste reduction efforts on businesses. The results of the study are overwhelmingly positive with more than 99% of sites reporting a net positive financial return on food waste reduction efforts.
FE: What trends are you seeing in waste disposal, recycling and waste management in general in the food processing marketspace?
Hatch: Prior to the pandemic, investors were prioritizing companies that integrated ESG factors into their decision-making processes. Since the outbreak of COVID-19, this trend has accelerated further.
The need to better manage cost has also accelerated due to the pandemic, with an emphasis on leveraging volume, consolidating suppliers and centralizing the vendor management process.
FE: What are the biggest challenges for food manufacturing plants when it comes to waste management? How are they overcome?
Hatch: The decentralized nature of national food manufacturing plants and distribution centers is often one of the biggest challenges when it comes to sustainability.
Also, food is perishable by nature, so the food industry faces unique challenges like code dates and packaging. Additionally, there are a lot of fleet miles incurred to get product back and forth.
From manufacturing all the way through distribution and retail, there are tremendous challenges—and opportunities—pertaining to sustainability. For instance, the industry can look for ways to make their packaging more sustainable, reduce the number of miles driven by fleets or recycle motor oil.
FE: What tips can you offer processors regarding waste management for the greatest impact on their bottom line?
Hatch: Decentralization also means companies are working with an extensive vendor network. One of the first steps for greatest impact on your bottom line is to reevaluate your vendor network. With more vendors comes the potential for overspending, and with so many moving parts, it’s difficult to gain a granular view of the overall operation.
Once you’ve evaluated your vendor network, the next step is bringing them together. Combining multiple services under one vendor, or bringing all of your services under one “umbrella” provider, not only gives you the ability to streamline your waste management, it increases your buying power, ensuring the best pricing.
Regularly evaluate your waste streams and track KPI’s that matter to your business. There will always be room for improvement, so set short and long-term goals that will keep your waste reduction programs on track.
FE: Final thoughts?
Hatch: The biggest challenge we see with food businesses is moving away from the standard mindset, which is something like, “We put everything in the compactor or the dumpster now. Why would we do anything different?”
Another common misconception we hear is that recycling costs a lot of money. Business owners and CEOs are typically held accountable to a board and shareholders, so anything that adds cost is challenging.
Doug Lawson,
CEO,
ThinkIQ
Doug Lawson is the CEO of ThinkIQ, a pioneer of digital manufacturing transformation software.
FE: What are the driving factors for waste management in the food industry?
Doug Lawson: As with many other industries, manufacturing is beset by major challenges that are made worse by hyper shifts in supply and demand. Three main areas that are persistently an issue for manufacturers are quality and safety issues, waste and underperforming assets, and high environmental impact.
The root cause of these problems is that manufacturing is an inherently complex domain, especially when viewed across a supply chain in which events and practices early in the supply chain can have serious and unexpected consequences later in the chain. Being nimble and staying ahead of the curve allows you to not only reduce waste but decrease recalls and keep your workers safe, as well as minimize your environmental footprint.
FE: How can waste management and recycling benefit a food processor’s bottom line?
Lawson: Unmanaged waste directly and significantly affects margins and profitability for food processors. Profitability in food processing is particularly sensitive to cost of goods sold (COGS), and the naturally high variance in agricultural raw materials leads to many forms of waste that are, to a large extent, hidden from financial systems and “baked in” to fixed assumptions that are frequently inaccurate. Effective waste management can:
- Improve yield by reducing the quantity of raw materials needed to make a given quantity of finished goods.
- Create new revenue opportunities.
- Reduce energy costs.
- Reduce disposal costs.
- Eliminate noncompliance events and the associated costs.
FE: What trends are you seeing in waste disposal, recycling and waste management in general in the food processing marketspace?
Lawson: We see major trends that are having a deep impact on the industry:
- A shift to eliminating waste in the first place.
- A change in perspective from local optimization to system-level optimization. As an example, there are many practices in agriculture and raw material storage/handling that negatively affect the manufacturing/processing portion of the supply chain. Being able to identify these causes and effects in-line during operations enables businesses to avoid and mitigate the problems.
- Building the system-level thinking enables the more creative repurposing of byproducts. Practical examples that we have seen include: 1. Oats that cannot be made gluten-free were previously disposed as a byproduct. It turns out the physical attributes that make them hard to clean result in oats that can be sold at a premium price for certain multigrain cereal bars; 2. The byproduct from making yogurt is a valuable ingredient for baby formula; and 3. Onions rejected for appetizer use are ideal for essence oils.
- Energy waste is a growing concern.
FE: What are the biggest challenges for food manufacturing plants when it comes to waste management? How are they overcome?
Lawson: Embracing these trends requires deep cultural shifts from a business collaboration and a technical perspective. System-level thinking becomes possible when data exchange between supply chain actors becomes much more detailed, granular, trustable and mutual than it is today. This necessitates different attitudes toward information sharing than historical business relationships expected.
It also requires significant shifts in the technical systems supporting the manufacturing process. Current systems are vertically fragmented within business silos (brittle boundaries between automation, execution, planning and financial systems) and horizontally fragmented between silos (minimal technical synergy between agriculture, logistics, storage, processing, distribution and retail). Systems exist today to overcome such fragmentation, but legacy assumptions held by people present barriers to adoption.
FE: What tips can you offer processors regarding waste management for the greatest impact on their bottom line?
Lawson: The greatest impact will happen when you can view waste as a systemic problem that has its roots in places that only the executive suite can set in motion to solve. System-level thinking at the granularity needed to affect deep change is best driven from the highest level. This will involve new levels of interenterprise collaboration in supply chains and expectations about new levels of performance and capability of supporting systems. It does not call for massive cost and complexity, but it does require a shift in thinking.
FE: Final thoughts?
Lawson: Historically, food manufacturers have focused on analyzing equipment efficiency, but today material flow is becoming just as important for two main reasons.
The first is it provides actionable insights. With material flow, you can gather information about the raw materials, quality attributes, movement and equipment involved in the process of creating your final product. Then, you can correlate that information to the quality and yield of the process. For example, analytics afford you the opportunity to correlate a certain method of potato storage with the quality of the french fry. You might identify storage unit CO2 levels are impacting your end product, with the fries being crispier, for example. These correlations also can help to identify areas of machine inefficiency, production and energy waste.
The second has to do with provenance, or the chronology of the ownership, custody or location of a product. Material flow analytics can easily prove the provenance of your foods and the amount of waste.
There are some cases in which the provenance of food is critical for other reasons. For example, the origin of the product might be relevant if there is an outbreak of foodborne illnesses, or if the product is originating from a country that is known to inflict human rights abuses on workers.
For more information:
Consumer Brands Association, www.consumerbrandsassociation.org
Lloyd’s Register, www.lr.org
Quest Resource Management Group, www.questrmg.com
ThinkIQ, www.thinkiq.com
Editor’s note: Responses have been edited for magazine style and space constraints.
