CHEP has reaffirmed its commitment to developing better supply chains to food and logistics industries through an opening of an advanced pallet service in Malaysia.
With an opening ceremony officiated by the Chief Executive Officer of Brambles Limited, Tom Gorman, the event featured supply chain leaders from local and international companies.
“This service centre sets a new benchmark for modern pallet repair facilities in Asia and positions CHEP to better meet the growth demands of our customers in the region, many of whom are household names such as Nestlé, F&N, Coca-Cola, Mondelez and Unilever,” Gorman said.
CHEP supports more than 500,000 customer touch-points for global brands such as Kellogg’s and Nestlé as part of Reusable Plastic Containers (PRCs), which operates a fresh food supply chain globally to the automotive, aerospace, oil and gas sectors.
Consumer goods (such as dry food and groceries) are served in the fast-paced industry that services fresh produce, beverage and manufacturing groups.
A new site has been designed to support an additional 30 per cent increase in future pallet repair volumes and also incorporates CHEP Malaysia’s head office and support functions such as customer service.
Gorman said CHEP’s role in providing supply-chain solutions to help customers transport goods can assist in driving trade and business worldwide, with the quality and efficiency impacting on consumer experience.
CHEP has committed to making donations to Foodbank on behalf of its customers who agreed to participate in a market insights interview.
CHEP interviewed a range of food retailers, manufacturers and logistics companies and 8,000 additional meals will be going to people who might otherwise have gone hungry.
Foodbank works with over 700 Australian partners including farmers, wholesalers, manufacturers and retailers, who contribute food and groceries. In 2014, for the first time, Foodbank distributed more than 30 million kilograms of food across Australia – the equivalent of 40 million meals or 110,000 meals per day. In 2014, CHEP Australia providing Foodbank with more than $900,000 of in-kind support
CEO of Foodbank Australia, Jason Hincks, said “CHEP’s support underpins our operations – without it we wouldn’t be able to get food to where it’s needed most. This latest act of generosity by CHEP and its customers is just another example of how they are always looking to go that extra step to help us in our goal of fighting hunger in Australia.”
President of CHEP Asia-Pacific, Phillip Austin, said “Today’s donation is an extension of the support we, and our customers, give to Foodbank throughout the year. We appreciated our customers taking time to participate in the research to help us better meet their needs, and being able to make a donation on their behalf is our way of saying thank you.”
After a stronger-than-expected Christmas trading period, retail spending growth will slow heading into 2015, according to the sixteenth edition of the AFGC CHEP Retail Index.
The Index was 4.4 percent higher in the December quarter of 2014 compared to the December quarter of 2013; however, growth in the Index is expected to slow over the first few months of 2015, to 2.5 per cent over the 12 months to February 2015 and 2.4 per cent over the 12 months to the March quarter 2015.
Christmas trading saw an increase in retail sales of 4.5 per cent year-on-year in the month of December, with turnover of $23.75 billion; however, growth in February 2015 is less robust at 2.5 per cent year-on-year, with turnover retracting to $23.6 billion, between December and February.
ABS Retail Trade trend data showed evidence of a slowing in the rate of growth in the second half of 2014. The latest data shows that year-on-year growth in nominal retail trade was 4.5 per cent over the year to November 2014.
The sales result for retailers over the year to November 2014 was stronger than the forecast in the previous AFGC CHEP Retail Index. The growth of 4.5 per cent over the year to November 2014 compares to the prediction of 3.2 per cent growth.
Australian Food & Grocery Council (AFGC) Chief Executive, Gary Dawson, said: “The lower Australian dollar is positive news for Australian food and grocery exporters; however, the domestic market remains tough for manufacturers, given below average consumer sentiment and the highest unemployment rate in more than a decade. Manufacturers and retailers will be hoping the fall in oil prices and low interest rates are sustained, leading to improved consumer confidence in 2015.”
President of CHEP Asia-Pacific, Phillip Austin, said: “While growth in the AFGC CHEP Retail Index indicates challenges ahead for retail trade, we believe through taking an innovative approach to the supply chain, CHEP can support retailers’ and manufacturers’ growth strategies. This will be a focus for us in 2015, as we collaborate with industry to bring new innovations to market to improve the way products move through the supply chain to the end consumer.”
The AFGC CHEP Retail Index is a collaborative project between the AFGC and CHEP Australia, powered by Deloitte. The Index uses CHEP transactional data based on pallet movements and is a lead indicator of ABS Retail Trade data.
Growth in retail trade is expected to soften in the lead up to Christmas, according to the AFGC CHEP Retail Index, which predicts year-on-year growth of 4.8 per cent in the September quarter, slowing to 3.2 per cent growth for the December quarter.
While the Index predicts growth will slow, retail trade turnover is still expected to increase modestly from $23.26 billion in September to $23.35 billion in November.
The AFGC CHEP Retail Index has shown strong year-on-year growth in 2014 to date, peaking in January at 5.7 per cent and easing in more recent months.
ABS figures show the food and household goods sectors recorded year-on-year sales growth of 5.5 per cent to August 2014.
Australian Food & Grocery Council CEO Gary Dawson said, “Looking ahead to Christmas, the AFGC CHEP Retail Index indicates the trading year will finish weaker than it began, although traditionally the food and grocery sector is more buoyant at Christmas than other sectors.
“Interest rates remain low but consumer sentiment hasn’t recovered significantly since the May Federal Budget. Rising unemployment is also having a dampening effect on retail trade growth and a lift in the labour market is needed to underpin a stronger rate of income growth and therefore retail spending.”
CHEP Asia-Pacific President, Phillip Austin, said, “It is encouraging to see the Index anticipating continuing year-on-year growth for the important December quarter. With a range of factors driving variability in this seasonal quarter, CHEP is actively collaborating with manufacturers and retailers to deliver certainty to their supply chains as they look to maximise on-shelf availability.”
CHEP Pallets has officially launched CHEP Australia’s national Logistics Control Centre at Erskine Park.
The new system uses detailed real-time information from multiple sources, including video feeds from CHEP yards and live network data, to predict up to three hours in advance whether a delivery of CHEP equipment will be impacted by events in the network.
The new control centre not only provides a greater level of network visibility, it features mechanisms to help manage issues as they arise.
If a delivery is impacted by issues such as traffic congestion, the system triggers an alert which assists the team in proactively managing the situation. In the event of a delay, the team is significantly better enabled to quickly contact customers with a new expected delivery time.
Global group president of CHEP Pallets, Peter Mackie, said “using our data, network knowledge and logistics management expertise, the CHEP Australia team has designed a sophisticated logistics management system that will improve the level of service we provide our customers.”
President of CHEP Australia & New Zealand, Phillip Austin said “the unique thing about CHEP Logistics is that we only carry pooled equipment. We devote our resources and expertise in network planning, efficiency and safety to ensuring CHEP equipment is where it needs to be, when it needs to be there.
“The Logistics Control Centre enables us to offer the personal service of a smaller operator with the benefits of larger logistics provider such as scale and network capacity, with the potential for enhanced Chain of Responsibility compliance. We believe this will not only improve the service to our existing customers, but also encourage others to consider using CHEP Logistics for their pooled equipment movements.”
CHEP Australia has received the Australian Packaging Covenant’s High Performers Award in the Small to Medium Packaging Manufacturer category, in recognition of its commitment to environmental sustainability.
CHEP was also named the ‘Top Collector’ for collecting the most mobile phones and accessories through the MobileMuster1 program.
The Australian Packaging Covenant (APC) Awards recognise the accomplishments of companies in packaging product stewardship through their commitment and involvement in the APC.
CHEP’s Manager, Sustainability Programs Nicole Boyd said: “As an equipment pooling company, sustainability is at the heart of what we do at CHEP and we are committed reducing single use packaging from the supply chain.
“We are working towards improving the impacts that we can make on our environment through our own operational efficiencies, and also developing supply chain solutions aimed at reducing single use packaging.
“CHEP is a voluntary member of the APC and as a result, we have been able to work with like-minded organisations to improve supply chain sustainability together.”
APC CEO, Stan Moore said: “The APC is proud to acknowledge the work of our high performing signatories. The APC high performers are leading the way in packaging sustainability and innovation; they are a testament to the growing realisation that innovation and sustainability make good business sense, create opportunities for better employee and supply chain engagement, and can provide a competitive advantage”.
CHEP Australia received the award at the APC Awards Night held in Sydney on 23 July 2014.
Year-on-year growth in retail sales remains strong, despite easing moderately in the June quarter, according to the 14th AFGC CHEP Retail Index.
The Index shows year-on-year retail sales growth was 5.2 per cent in the June quarter down from 5.8 per cent in the March quarter, and year-on-year growth for the month of June was 4.9 per cent with a turnover of $23.11 billion, up from $23.01 billion in March.
Australian Food & Grocery Council CEO Gary Dawson said “It's pleasing to see growth is still quite strong at around 5 percent given that this period includes the impact on consumer sentiment of the May Federal Budget. Interest rates continue to remain low, and the labour market is picking up, so our expectation is 2014/15 will be a good year for retailers.”
Looking ahead nationally, growth in the Index is expected to remain at the current pace, with a rise of 5.1 per cent forecast for both the September quarter and month of August, with a turnover of $23.32 billion forecast in August.
However, retail performance across the states continues to be variable, with Western Australia seeing no retail sales growth over the past year while New South Wales enjoyed 8 per cent growth.
CHEP Australia & New Zealand President, Phillip Austin, said: “Although some states are doing it tougher than others, we’re delighted that CHEP’s data insights are showing retail sales growth will continue to be strong overall in the next quarter. We will continue to work with manufacturers and retailers across the country to find increased supply chain efficiencies to support growth in the food and grocery retail sector.”
The next AFGC CHEP Retail Index will be released in late October.
Packaging solutions company CHEP will be showcasing its new global innovations in fresh produce merchandising at the Produce Marketing Association, Fresh Connections conference in Auckland.
Brambles stable mate, IFCO Systems’ senior vice president, global business development, Fred Heptinstall, together with CHEP Australia & New Zealand president Phillip Austin, and CHEP New Zealand country manager, Mike Obrien will be showcasing a new in-store merchandising concept for reusable plastic crates (RPCs) pioneered by IFCO North America.
The trio will be providing insights on the new systems, as well as inviting feedback from growers and conference delegates.
Austin says that he is excited to showcase the RPCs which have been well received by the North American fresh produce industry since their launch in late 2013.
“The Australian and New Zealand fresh produce industry and the retail community are looking for innovative new ways to stimulate growth, and deliver a better customer experience in the retail environment,” says Austin.
“Fresh Connections is the ideal forum in which to showcase new innovations, particularly those designed to increase sales. These new solutions build on decades of proven capability, our multiple generations of new product releases – including, since the last Fresh Connections, the Lift Lock Crate in New Zealand and the Gen 3 Crate in Australia – and our proven ability to deliver better supply chains through lower logistics costs, lower produce damage and improved store replenishment.
“We’re excited to be able to invite direct feedback from Australian and New Zealand growers over the course of the conference and engage with those interested in market trials.”
Fred Heptinstall said that IFCO’s RPC merchandising solutions were developed through a collaborative effort between retailers and their fresh suppliers.
“The objective was to find the right transport packaging solution that would integrate in-store merchandising strategy, deliver superior quality and with the lowest supply chain cost,” he said.
The Fresh Connections conference takes place in Auckland today 25 June, 2014.
The 13th Australian Food and Grocery Council (AFGC) CHEP Retail Index shows year-on-year growth in retail sales continued to lift in the March quarter.
The index, released today, showed a 5.8 percent rise in March 2014 compared to March 2013, with a turnover of $23.01 billion.
Its expected growth in the index will increase by 6.6 percent for the 12 months leading up to May 2014, with a turnover of $23.62 billion.
Australian Food & Grocery Council CEO Gary Dawson said “It’s encouraging that retail performance has improved across all sectors since mid-2013. Retail sales growth is now at its strongest for more than four years.”
The latest retail data from the Australian Bureau of Statistics (ABS) has confirmed that retail sales picked up strongly late last year with retailers benefiting from an extended period of low interest rates.
ABS figures show a steady increase, with a 0.7 percent estimate for Australian turnover increase each month from December through to February.
CHEP Australia & New Zealand President, Phillip Austin, said “The continued strength in retailer sales over the past two quarterly results suggests a more stable and certain view of economic conditions. Expectations for the next quarter indicate resilience in Australian retail supply chains and sales results.”
See below: Year on Year Growth chart from the AFGC CHEP Retail index.
CHEP Australia has launched a new drying technology which will help deliver 80 percent drier plastic crates to the fresh produce industry.
Centrifugal dryer technology has been installed at CHEP’s Scoresby service centre in Victoria, helping make the crate the driest on the market. The service centre was the first to install the new dryer technology, which uses centrifugal force to remove 98 percent of the excess water from each crate.
Ashley Lockett, national equipment controller at fresh produce distributor, Moraitis, said "In our business moisture levels are critical to quality. We are very happy with the results from the new centrifugal crate dryer – it has already improved our ability to transport fresh produce to market in peak condition."
The centrifugal dryer complements CHEP’s HACCP crate wash system, allowing the company to supply crates with less than three grams of water.
"This will be ideal for fruit and vegetables that require very low moisture environments, such as onions, and will widen the opportunity for growers to benefit from CHEP’s reusable plastic crates solution," said CHEP’s senior director supply chain, David Hansen.
He said the centrifugal technology is an environmentally sustainable addition to CHEP's business model.
"We catch the clean water spun from the crates in a water collection tank before pumping it back into the washer for reuse and by doing this save around 180,000 litres of water a year. The dryer also uses up to 80 percent less energy compared to the existing blow dryer technology and it self-generates power which brings the total reduction in energy use to 90 percent," Hasen said.
Victoria is the first of three states to install the high tech dryer with New South Wales and Queensland to follow in early 2014.
The introduction of the dryers coincides with the launch of CHEP’s new industry standard crate, the Gen 3, which features the lowest fold down height in the world.
Supermarket chain, Aldi, has partnered with CHEP to release a new reusable plastic 'Gen 3' crate for use in the fresh produce industry.
Officially launched on 23 August at Aldi's Salisbury store in Brisbane, Aldi is the first retailer to use CHEP's new crate range, promoting supply chain efficiencies from farm gate to supermarkets.
ALDI Queensland managing director, Viktor Jakupec, said "The new crate allows products to be packed directly on farm before being delivered to our warehouses and subsequently to stores, which reduces the amount of repacking and speeds up the process. The crate design allows it to fit directly into our new fresh produce display on the shop floor, which means less product handling and therefore a higher level of product quality. Instead of store staff having to pack products on tables within the produce area, the majority of products will remain displayed within the crates which will assist with better product rotation and minimise damage to the products through less handling."
According to CHEP, the new Gen 3 crate uses globally best-in-class latching technology and is fully compatible with the previous generation crate and existing infrastructure.
"The Gen 3 crate family is a game changer. It’s not only an industry-wide solution, it offers world leading return logistics; with a folded height of 25mm, the Gen 3 outperforms all other crates on the market by up to 29 percent," CHEP Australia and New Zealand president, Phillip Austin said.
CHEP's range of reusable crates have a number of sustainability benefits. An independent lifecycle analysis conducted by RMIT in 2010 showed that compared with a single-use corrugated cardboard system, CHEP crates produced 70 percent less greenhouse gas emissions, used 85 percent less water and produced 95 percent less solid waste to landfill even if the cardboard was recycled.
With the global population set to soar and the growth of our agricultural industry threatened by climate change and competing land uses, Australia needs to toss out food waste – and packaging is the key.
Around 40 percent of all food intended for human consumption in developed countries ends up as waste.
In Australia, 4.2 million tonnes of food sees its way to landfill each year: 2.7 million tonnes from households and 1.5 million from the commercial and industrial sector.
And with the global demand for food expected to jump 77 percent by 2050 (compared to 2007), food and beverage manufacturers need to reassess not only how they go about making their products, but what they’re doing to ensure they survive the supply chain and, at the end of the day, are consumed, not wasted.
An Australian-first, the research draws on an international literature review as well as interviews with representatives from 15 organisations from within Australia’s food and packaging industries, focusing on food waste that occurs prior to consumption.
Australia’s food manufacturing industry is the second largest non-domestic contributor to food waste, sending 312,000 tonnes to landfill each year, beaten only by the food services sector, which generates 661,000 tonnes of food waste annually.
But this doesn’t mean our food and beverage manufacturers are wasteful or negligent – most of the food waste that occurs in the industry is unavoidable, and almost 90 percent is recovered and used as animal feed, compost, or energy.
Helen Lewis, adjunct professor and environmental consultant at RMIT University, told Food magazine, “The recovery rate in the food manufacturing sector is already very high, so the focus needs to be on reducing the amount of waste that is generated in the first place.
“Most manufacturers can do more to reduce the amount of waste they generate in distribution and at a retail level by looking more closely at where and why this occurs. For example, if manufacturers don’t specify their distribution packaging carefully, it may fail during transport or handling and result in products being damaged and thrown away. There is definitely an opportunity to improve the level of packaging expertise within companies to ensure packaging is specified correctly,” she says.
The study lists a number of reasons for food loss and waste at each stage of the supply chain, including damage from pests and disease as well as unpredictable weather conditions in agricultural production; products not meeting retailers’ quality and/or appearance specifications; and issues in distribution including damage in transit/storage due to packaging failures and inadequate remaining shelf lives.
The report then went on to identify a number of opportunities to reduce food waste through packaging improvements. These include:
Distribution packaging that provides better protection and shelf life for fresh produce as it moves from the farm to the processor, wholesaler or retailer
Distribution packaging that supports recovery of surplus and unsaleable fresh produce from farms and redirects it to food rescue organisations
Improved design of secondary packaging to ensure that it is fit for purpose, i.e. that it adequately protects food products as they move through the supply chain
A continuing shift to pre-packed and processed foods to extend the shelf life of food products and reduce waste in distribution and at the point of consumption
Adoption of new packaging materials and technologies to extend shelf life of foods (see table below)
Education of manufacturers, retailers and consumers about the meaning of use-by and best before date marks on primary packaging to ensure that these are used appropriately
Product and packaging developments to cater for changing consumption patterns and smaller households
Collaboration between manufacturers and retailers to improve the industry’s understanding of food waste in the supply chain, with greater attention given to where and why this occurs
More synchronised supply chains that use intelligent packaging and data sharing to reduce excess or out-of-date stock
Increase use of retail ready packaging to reduce double handling and damage and improve stock turnover, while ensuring that it’s designed for effective product protection and recoverability at end of life.
This list of recommendations indicates that improvements can be made to both primary packaging and secondary/tertiary packaging in order to protect a product up until it’s on a retailer’s shelf, while also boosting its longevity once it’s there.
CHEP Australia has a significant interest in the study’s findings, not just because it commissioned the report but also because it describes its pallet, container and crate pooling services as an inherently sustainable business model, preventing one-way packaging and mimimising resources.
Phillip Austin, president of CHEP Australia and New Zealand, said the company’s reusable plastic crates are a good example of both primary and secondary/tertiary packaging that can extend shelf life.
“CHEP’s reusable plastic crates eliminate the need to repack produce as it moves through the supply chain, which reduces the opportunity for damage during handling. The strength of the crate and better ventilation and cooling rates also help to protect the produce,” he told Food magazine.
“Reusable packaging is more robust than one-way cartons and less susceptible to piercing by sharp objects or crushing as it moves through the supply chain.”
Austin said an independent life cycle assessment of CHEP’s reusable plastic crates shows they save 8,000 tonnes of solid waste, 64,000 tonnes of carbon emissions and 460 million litres of water from the supply chain every year.
An Australian grower interviewed as part of the RMIT University study (all of whom remain anonymous), agrees that reusable plastic crates can improve efficiencies and extends produce’s saleability.
“Plastic crates allow for better ventilation and better protection. They also support better transport utilisation because the pallets can be stacked higher. They don’t require as much stretch wrap. There is less handling, although the crates aren’t used as much for retail display as they were originally. Plastic crates allow us to wet the product, which helps extend shelf life (unlike cardboard),” the grower said.
Primary packaging While of course secondary/tertiary packaging technologies such as reusable plastic crates can have a positive influence on reducing food waste, a large proportion of the industry’s focus, as the issue of sustainability becomes more and more prominent, will be on developments in primary packaging, as this is where shelf life is a key consideration in packaging design.
Confusion surrounding the meaning of ‘use by’ and ‘best before’ dates is a significant contributor to food waste in Australia. Consumers often dispose of products when they’re still of a good, edible quality, and poor stock rotation systems or materials handling processes could see perfectly good foods discarded by manufacturers, which not only wastes food but comes at a significant cost to the company as well.
“There does appear to be a lot of confusion about the difference between use by and best before dates, and when a food is still safe to eat. It’s a problem for consumers, who may get the two mixed up and throw away food that is still edible,” Lewis says.
The NSW’s government’s Love Food Hate Waste campaign is managed by the Environment Protection Authority and run in partnership with retailers, food manufacturers, local government authorities and community groups in an effort to reduce food waste in the state.
While 97 percent of respondents in its Food Waste Avoidance Benchmark study believed they store their food correctly and poor storage doesn’t contribute to food waste, those that did identify poor storage as a contributor to waste cited a lack of understanding of storage instructions/conditions and not using food before its used by or best before date as the main contributors.
Sixty-four percent of respondents knew the difference between use by and best before dates, but the Food Waste Avoidance Benchmark study concluded that more work can be done to clarify these definitions and reduce consumer confusion.
“Food manufacturers can help by ensuring that the dates are clearly marked on the packaging, not hidden under a seam or written in tiny font. They need to be readable. They can also provide more information to consumers about the meaning of date marks and how to store food correctly to extend its life,” Lewis says.
Where today’s use by and best before dates sometimes fall short, ‘intelligent’ or ‘interactive’ packaging technologies represent opportunities for both manufacturers and consumers to be given real time information on a product’s quality.
The RMIT University study says “Supply chain collaboration and data sharing could be facilitated by ‘intelligent’ or ‘interactive’ packaging technologies. Intelligent food packaging can provide real time use-by or expiration data, product tracing and temperature indicators, which are either time-based, activated by certain chemicals, driven by radio frequency identification data (RFID), or have thermal sensors, to provide better ‘on demand’ feedback to various supply chain stakeholders.”
Helen Lewis agrees that these ‘smart’ technologies could be a game-changer in the food manufacturing industry.
“Smart labels will become more important as technologies improve and costs come down. They can help companies to track and manage inventories to reduce waste in the supply chain. They can also be used by manufacturers, retailers and consumers to identify when a food has spent time outside of its required temperature range,” she told Food magazine.
Will more packaging help?
It might seem a little ironic that one of the strongest themes of the RMIT University study is the need to extend shelf life and reduce food waste by increasing the amount of packaging used on food products.
If food manufacturers and producers are to curb the amount of waste they send to landfill, shouldn’t they be reducing their reliance on packaging, not increasing it?
The RMIT University report says that the industry can reduce food waste by supporting a growing shift towards processed and pre-packed foods, while also considering product and packaging developments that cater for single or smaller serve products, therefore reducing waste by meeting the needs of single and two person households.
But this theory of using packaging to enhance shelf life extends beyond processed foods. Despite what many may argue, keeping fresh produce in its natural state isn’t necessarily the best option when it comes to product longevity.
The challenge, according to the study, is to find a balance or establish “trade-offs” between convenience, packaging, shelf life and product waste.
However it’s a case by case, or rather product by product, situation. A fresh produce supplier interviewed for the research noted that plastic film around a bunch of fresh herbs can extend its shelf life from two to five days. Packing fresh herbs in punnets (another growing consumer trend) doubles this again.
However, some cut vegetables that are washed, peeled and cut before hitting retailers’ shelves suffer a reduced shelf life thanks to faster physiological deterioration and microbial degradation.
If Australia follows current trends in countries such as the US, we will soon be seeing a lot more pre-packed fresh produce, says Helen Lewis.
“This is already happening, partly in response to consumer interest in convenient and pre-prepared foods such as salad mixes, which use multi-layer and modified atmosphere packaging. More sophisticated packaging is being developed for specific product categories, such as seafood,” she says.
“The trend towards more packaging, particularly for fresh produce, involves a conscious trade-off. We will end up using more packaging to reduce food waste, and some of this packaging is not yet widely recyclable. However, in most cases the benefits appear to outweigh the costs from an environmental point of view. This is because we know that the environmental footprint of food is so much greater than the impact of the packaging, when you consider all of the energy, water, land and chemicals that go into growing, processing and transporting food over its life cycle.
“A small amount of packaging can extend the product’s shelf life and ensure that it gets consumed rather than thrown away. To manage this trade-off it’s important that all packaging is designed to minimise environmental impacts and to be recyclable at the end of its life.”
So less isn’t necessarily best when it comes to packaging and sustainability. No doubt consumers in Australia are becoming more environmentally-conscious, but they’re also seeking convenient, affordable meal solutions, so as The Role of Packaging in Minimising Food Waste in the Supply Chain of the Future suggests, food manufacturers need to establish “trade-offs” to ensure all parties – consumers, businesses and of course the environment – are not only happy and healthy, but are getting the most out of their food – for the long term.
Examples of primary packaging technologies to extend shelf life
The latest edition of the AFGC CHEP Retail Index shows that retail growth remains sluggish, but predicts the rate of year-on-year growth will increase by the September quarter.
The Index is a collaborative project between the Australian Food and Grocery Council (AFGC) and CHEP Australia, using CHEP's transactional data based on pallet movements to predict performance in the retail market.
The latest Index findings indicate an increase of 2.8 percent for the three months ending 30 September 2013, up from 2.6 percent year-on-year growth in the three months ending 30 June, which was the third consecutive quarter of decline in the rate of growth.
For the month of June, the Index indicates that the Australian Bureau of Statistics (ABS) will report year-on-year retail trade growth of 2.5 percent and turnover of $21.9 billion. The Index forecasts August year-on-year growth will be 2.7 percent, with turnover increasing to $22 billion.
AFGC CEO, Gary Dawson, said the situation is expected to improve towards to end of 2013.
"The retail environment remains challenging, reflecting subdued consumer confidence. Indications of growth improving later in the year once the federal election is out of the way are encouraging and would see improved consumer spending supporting retail sales growth," he said.
Overall, food is faring better than other retail sectors. Recent ABS statistics have shown improving year-on-year growth in food and grocery retail compared with overall retail sales growth. Results published by the ABS for May show food and grocery retail sales grew by 4.2 percent over the past year. In contrast, sales at clothing retailers were flat, sales at department stores contracted, and household goods retailers posted growth of about one percent.
The next AFGC CHEP Retail Index will be released in late October 2013.
Packaging has a vital role to play in minimising food waste in the supply chain, according to new research by RMIT University.
The University's Centre for Design conducted the Australian-first research, commissioned by CHEP Australia, showing where and why food waste occurs along both the fresh and manufactured food supply chain.
The research also proposes opportunities for the food manufacturing industry to address food waste through sustainable primary, secondary and tertiary packaging.
The study, released to industry members and media on 25 June at Sydney's Red Lantern on Riley restaurant, also considers how food waste can and should influence packaging design, and follows on from the AFGC's Future of Packaging whitepaper.
According to Dr Karli Verghese, who led the research study titled The role of packaging in minimising food waste in the supply chain of the future, there has been no other significant research into the role packaging plays in minimising food waste in Australia.
"Packaging actually plays a critical role in protecting fresh produce and processed food in transit, in storage, at point of sale and prior to consumption. In doing so it helps deliver a wide range of functions while reducing food waste."
The report shows that food manufacturing is the second largest contributor to the 1.5m tonnes of food waste generated by Australia's commerical and industrial sector each year, sending 312,000t to landfill. It was trumped only by food services, which contributes 661,000t of waste.
However, food manufacturing recovers the vast majority of its waste, with 90 percent repurposed.
Poor inventory management, overstocking shelves and product damage during transport and handling were all listed as avoidable contributors to food waste in the supply chain. Other contributors are present in agricultural production, including damage from pests and disease; unpredictable weather conditions and produce not meeting quality specifications as well as wastage at home including food preparation waste; food spoilage; preparing too much food; and used-by or best-before dates passing. (See table below for other contributors).
"There are certainly opportunities to minimise food waste through packaging innovation and design, such as improved ventilation and temperature control for fresh produce, and better understanding the dynamics between different levels of packaging, to ensure they are designed fit-for-purpose," said Verghese.
As part of the study, a number of opportunities to reduce food waste through packaging improvements were identified. These include:
Distribution packaging that provides better protection and shelf life for fresh produce as it moves from the farm to the processor, wholesaler or retailer. This may require the development of tailored solutions for individual products.
Distribution packaging that supports recovery of surplus and unsaleable fresh produce from farms and redirects it to food rescue organisations.
Improved design of secondary packaging to ensure that it is fit-for-purpose, i.e. that it adequately protects food products as they move through the supply chain. Packaging developers need to understand the distribution process and where and why waste occurs.
A continuing shift to pre-packed and processed foods to extend the shelf life of food products and reduce waste in distribution and at the point of consumption (the home or food services provider). The packaging itself also needs to be recoverable to minimise overall environmental impacts.
Adoption of new packaging materials and technologies, such as modified atmosphere packaging and oxygen scavengers, to extend the shelf life of foods.
Education of manufacturers, retailers and consumers about the meaning of use-by and best-before date marks on primary packaging to ensure that these are used appropriately. Confusion about date marking results in food being thrown away when it is still safe to eat.
Product and packaging development to cater for changing consumption patterns and smaller households. Single and smaller serve products will reduce waste by meeting the needs of single and two person households.
Collaboration between manufacturers and retailers to improve the industry’s understanding of food waste in the supply chain. Greater attention to be given to where and why this occurs, tracking over time, will reduce the costs and environmental impacts of waste.
More synchronised supply chains that use intelligent packaging and data sharing to reduce excess or out-of-date stock.
Increased use of retail ready packaging to reduce double handling and damage and improve stock turnover, while ensuring that it is designed for effective product protection and recoverability (reuse or recycling) at end of life.
At the study's release, president of CHEP Australia and NZ, Phillip Austin, said he's pleased to be part of the ongoing conversation on managing Australia's food waste and believes CHEP is a suitable partner for such research.
"Our business model is an inherently sustainable one," Austin said, adding that CHEP's pallet, container and crate pooling services enable common-use, prevent one-way packaging and minimise resources.
Last year, CHEP reduced its absolute carbon dioxide emissions by three percent on the previous year, despite 2012 being a year of growth for the business, and moving forward, Austin says food packaging will be a big focus for all members of the food manufacturing supply chain.
"We understand that we form part of our customers' supply chain," he said. "We want to try to explore what we can do in regards to packaging to help make a difference."
While the latest AFGC CHEP Retail Index indicates that consumer confidence remains shaky and retail growth is lacklustre, ABS statistics show that food is in a better position than other retail sectors.
The Index is a collaborative project between the Australian Food and Grocery Council and CHEP Australia, using CHEP's transactional data based on pallet movements to predict performance in the retail market.
The Index reports that the rate of growth in retail trade decreased marginally in the first three months of 2013, and is expected to ease further as the year continues. It also showed three percent growth in the March quarter year-on-year, but forecasts growth will ease to 2.6 percent in the June quarter.
In March, the Index indicates that the Australian Bureau of Statistics (ABS) will report year-on-year growth of 2.6 percent, with turnover of $21.7 billion. May retail trade growth is predicted to be 2.8 percent year-on-year, with turnover increasing to $21.9 billion.
Australian Food & Grocery Council (AFGC) CEO, Gary Dawson, said "Retail conditions have been soft through the beginning of 2013, and the Index confirms that consumer confidence remains fragile, with low interest rates yet to bring a sustained lift in the retail sector."
The findings are slightly more promising for food, with recent ABS statistics showing food and grocery retail has a more solid rate of year-on-year growth than overall retail sales growth.
Food retail growth was 4.6 percent in February 2013, with spending on cafés, restaurants and takeaway food seeing a similarly solid growth rate. By contrast, department stores experienced year-on-year sales growth below one percent in February, as growth in online sales and ongoing price deflation make their mark in non-food retailing.