Voluntary material efficiency commitment in the food industry
In the food industry, raw materials account for about 45 % of net sales. The cost of purchasing goods sold in the grocery trade is more than 70 % of turnover. Therefore, measures to improve material efficiency are a major competitive factor enabling a company to achieve significant savings. In small and medium-sized food companies, the typical savings potential found in material audits is on average € 600 000 per company and year.
Voluntary material efficiency agreements are a way for companies to implement measures to improve material efficiency based on their own needs and at their own pace, show their commitment and cooperate with other companies. Voluntary agreements offer an alternative to new legislation, and they usually include government support for companies, such as subsidies, expert services, and joint development projects.
In Finland, the food industry initiated the country's first material efficiency commitment in 2019. A commitment made by the food industry, trade, and the packaging sector as well as three ministries seeks to reduce the environmental impacts of food production, distribution, and consumption in the period 2019–2021.
Voluntary agreements to improve material efficiency have also been introduced in the UK (Courtauld Commitment) and the Netherlands (Green Deal). For example, the first agreement term of the Courtauld Commitment led to 1.2 Mtonnes less food and packaging waste, and € 1.8 billion in cost savings thanks to the actions taken by 40-50 signatory companies.
By signing up to such commitments, food companies commit themselves to concrete material efficiency measures and to reporting their results every year. It is up to the company to determine its own measures to achieve the industry's common goals. The aims of the commitment are to reduce food waste, increase recycling and material efficiency and raise awareness of the potential for material efficiency in the food sector and among consumers.
Examples of company actions in a commitment:
- Improving the material efficiency of processes by exploring, for example, the causes and potential for reducing food waste
- Developing and adopting more environmentally friendly products and packaging
- Creating new business, value-added or new products from production side streams
- Streamlining logistics to reduce climate emissions
- Increasing the capacity of staff and partners towards better material efficiency
- Communicating to customers about reducing food wastage in households