Food for thought for those servicing the Food and Drink sector - PKF Francis Clark
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Food for thought for those servicing the Food and Drink sector

This week I attended the Westminster Food & Nutrition Forum Keynote Seminar “Food waste reduction and new initiatives for reducing plastic packaging waste”.

I attended in my capacity as part of the PKF Francis Clark Food and Drink sector team, as we are aware that waste reduction, food and plastic packaging, are ‘hot topics’ for the sector.

In addition to the material covered in the presentations and panel discussions, I also found some comments from fellow delegates of interest, specifically the references to sustainability (including waste) moving from a ‘moral consideration’ to an ‘economic matter’; which was further borne out by the representation of several larger catering suppliers at the event – at least one of which is in active discussions with its supply chain.

So, why is waste reduction an issue for food and drink sector businesses and what are the potential implications and opportunities?

  1. The facts – well some of them?

I will list some of the facts (as I wrote them down – apologies for any inaccuracies) concerning waste from the current food production; sale and consumption:

  • 60% of food packaging is waste, 99% is made from carbon and is predicted it will account for Green House Gas (GHG) emissions by 2050
  • The UK contribution to plastic waste is a staggering 10.2 million tonnes per annum
  • A third of food produced is wasted; contributing eight percent of GHG emissions
  • Food waste has been valued in economic terms at £16bn per annum and would be enough to feed a further two billion people (it was noted that there are currently 820 / 870 million people who are hungry, including 70,000 children in London!)
  • Only 20 out of 100 potatoes farmed are eaten
  • 21 million pieces of bread are chucked away every day
  • Food waste contribution to world GHG is greater than any single country with the exception of USA and China
  1. The drivers for change?

I suspect that some of the facts above have been known for some time, so why the recent increase in importance for food and drink producers, distributors and retailers in the UK?  To my mind, there is carrot and stick:

  • Carrot – Consumer, employee and shareholder pressure and cost savings
  • Stick – Government legislation (or at least the threat of it)

In addition, it may be the increased ability of businesses being able to collect and analyse data that has meant the measurement of a (waste) problem is easier and therefore the first step to change is implemented.

In terms of legislation, the following were mentioned: Plastic Packaging Tax and Deposit Return Scheme (see separate blog).

As I will blog separately, peer pressure/ case studies will also undoubtedly be a stimulus for change and this is being tapped into by WRAP and Defra, through initiatives such as ‘Plastic Packaging Pact’, ‘Guardians of Grub’ and ‘Step up the Plate’, as well as sharing comparative data (including one on Food Waste in Primary Production which I will search out and share with Brian Harvey, the Head of PKF Francis Clark’s agricultural sector when it is issued next week).

  1. The service sector’s role

I have four takeaways that I will discuss with colleagues as the role that us, and other service providers specialising in the food and drink sector. Two of these follow on from quotes from presenters.

  • Information dissemination – we can share developments and references to further reading through blogs and newsletters etc. I will looking to accompany this with relevant presentations at our next Food and Drink sector focused breakfast briefing in Truro
  • “An opportunity for innovation” – and for those of our clients that do engage in innovation, we will assist them in obtaining R&D Tax Credits and / or grant funding. I do know that some of our food and drink sector clients are already looking at innovative ways of reducing waste and I am sure that our firm’s innovation & technology tax group are working with these on R&D Tax Credits
  • “Can only manage what you can measure” – I am sure that there is an expanding role for my colleagues and other accountants to play in data capture (financial and non-financial)
  • What if scenario modelling – I anticipate us working with clients in the sector to look at the financial implications of developments in waste reduction including where applicable the impact of any ‘tax’ (direct or indirect e.g., passed on through the supply chain)

I will be liaising with my colleague, to see if we can structure his annual Food and Drink sector focused breakfast briefing here in Truro around the subject of ‘waste’ – details will be posted up on our Events page in due course.

Please do not hesitate to contact your usual PKF Francis Clark contact, or one of our Food and Drink experts to discuss how we may assist with services listed above.

FEATURING: Richard Wadman
Richard qualified as a Chartered Accountant with KPMG in 1993. Since 2006 he has worked in Corporate Finance, firstly with the predecessor firm in Truro… read more
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