Reducing food waste

Increasing competition from the multiples is one of the biggest threats to the independent convenience sector. Not only are the stores springing up at a rate of knots, but standards are rising and so are shoppers’ expectations of high-quality fresh and chilled food on their doorstep. A four-pack of apples and a few bunches of bananas are simply not going to hit the mark when you are going head to head with shops that stock a rainbow of assorted fresh fruit and veg.

“The category that shoppers want to see improved in order to drive top-up shopping is fresh,” explains HIM marketing manager Natalie Goodridge. “Stores that see ratings hit 10/10 for their fruit and veg will see shoppers spend 12% more. Investing in fresh ranges and equipment is risky, but we hear it is worth it in attracting bigger baskets, more frequent trips and new customers.”

Convenience Retailer of the Year 2012 David Knight, of Knight’s Budgens of Hassocks, West Sussex, has seen huge success with fresh and chilled, and the category now dominates turnover at his store. “Fresh produce is incredibly important to us,” says David. “It currently makes up 48% of our overall sales mix.”

Having such a large array of produce is one of the key reasons why customers choose to shop at Knight’s Budgens, with fruit and veg alone delivering a healthy 11% of sales. But despite the clear benefits of providing a strong fresh and chilled offering, many retailers are wary of investing in this area, for fear of ending up with waste.

However, anyone who successfully sells fresh and chilled will tell you that wastage is an inescapable part of the process. Nevertheless, it doesn’t mean to say that it ends up in the bin. Instead, some innovative retailers have found a number of uses for unsold produce, which result in financial, environmental and social benefits.

David claims that the starting point for effective waste management is a thorough analysis of which products are going to waste so you can review your ordering. “Wastage is a big focus for us as it comes directly off the bottom line. We aim for 1.5% of net sales. Our management team have a budget to work to and get a bigger bonus at the end of the year if they achieve this.”

About five to six hours a week is spent on wastage analysis, claims David. Head of chilled, and Independent Symbol Sector winner in the 2012 Sales Assistant Awards, Angus Pidgley, pulls off the wastage figures every week. “He spends an hour looking at them, as does my ambient manager and my fresh manager,” reveals David.

Simon Biddle, of Biddles Convenience Store in Redditch, Worcestershire, is also careful to keep food waste low. “Our fresh wastage is under 2%,” he says. Simon’s store prides itself on its freshly prepared food and he often uses products that are about to expire as ingredients in his ready meals. “We usually use it in our ready meals to make beef stews, shepherd’s pies, and Lancashire hot pots,” he reveals.

Put to good use

Andrew Thornton of Budgens Belsize Park in London is also an advocate of finding alternative uses for food waste. “None of our food waste goes to landfill,” he says. “We try to use it in sandwiches, salads and soups made in the store. This is the most productive use, so if we know we’ve got products expiring on a particular day we’ll use them in our store-made goods and still make money from them.”

If this isn’t feasible, then Andrew opts for staggered price reductions in the lead-up to the product’s expiry date. “On the day the produce expires we’ll do one reduction early in the day and then one later in the evening.”

David also opts for this method to sell fresh produce that is nearing its expiry date. “We offer a 25% discount on the day it expires, 50% by mid-afternoon, and a discretionary amount in the evening.”

But he adds: “Ultimately, if we’re reducing the price of stock to sell it quickly then we have to question whether we should be stocking it in the first place.”

Even if you can’t sell the products before their expiry, there are still further options for food waste that can result in your store doing its bit for the local community. “We have about 3% wastage on fresh,” says Roli Ranger, who owns Londis Ascot in Berkshire. “If the product is still edible, but doesn’t look perfect, then we have a woman from the local homeless shelter in Slough who collects it.”

Andrew has also made arrangements with local charities. “If the food is fit for human consumption then we donate it to local charity One Support,” he says.

“One Support aims to reintroduce homeless adults to living independently. What we contribute allows Martin, the manager, and his team to run cooking classes and breakfast clubs.”

He even goes to the trouble of freezing meat before it passes its use-by date so that the charity can still collect it and thaw it to cook at a later date.

If food is no longer fit for human consumption, then Andrew’s waste contractor collects it and turns it into electricity via anaerobic digestion. This is a natural process where organic waste is broken down in a sealed tank and which produces biogas.

Spar retailer John Perrett of the Hunnyhill Group and Gary Bilbrough of Nisa Toddington in Bedfordshire have found another smart way to dispose of the waste not fit for human consumption at their stores. “Our fruit and veg wastage is generally less than 2%,” says John. “We have a local waste collection service where fruit, veg and bread goes to pig feed. It’s nice to see it put to use.”

Gary takes a similar approach. “Inevitably there is always some wastage in store and we want to make sure that it is put to good use,” he says. “So, we’ve teamed up with a local farm to donate our waste, which includes everything from fresh produce and bakery to yogurts. The farmer’s delighted - and so are his pigs! He’s now promised us a pig for a hog roast - all we have to do is decide where and when to hold the event.”

David’s food waste is also used as animal feed. “We currently supply local people - we have a lady who likes to feed foxes - and wildlife charities take some of the food waste, too.”

Andrew is keen for other retailers to follow his lead and put their food waste to better use. “We have people starving in this world, in their own boroughs! Any convenience retailer should get in touch with their local homeless shelter and arrange for the food to be picked up. You have to find these groups and work with them to build a relationship, but once you have set up the initial arrangement it doesn’t take much time,” he says. “It is criminal to throw good food out.”

So rather than steering clear of fresh and chilled for fear of your bananas going brown, or your watercress wilting, accept that a small amount of food waste is par for the course. Providing a solid fresh and chilled offering is what customers have come to expect, and taking control of the associated food waste can result in substantial business benefits.