Optimising resources in food grocery value chains WRAP Conference - PowerPoint PPT Presentation

Optimising resources in food grocery value chains WRAP Conference – Creating the Future: Rising to the Resource Challenge Judith Batchelar Director Sainsbury’s Brand 5 th November 2015

Agenda Our context Underpinning our work Product – Designing in Sustainability Understanding & helping our customers Within our own operations What does the future hold

Our context

The global challenge

A complex set of evolving challenges Decreasing … Global Fish Stocks: Agriecosystems: >85% over or fully exploited, 60% degraded or in decline Agricultural land use Resource change: availability 11% of global GHG emissions Land availability: 50% of available land mass used to grow food Severe flooding: will double in Europe by 2050 Extreme Global Stable & drought events Food predictable per 100 years Reserves climate will double 50 year low (IPCC) Global GHG emissions: 24% from agriculture

A complex set of evolving challenges Increasing … UK Food Population: Poverty: Energy 10M more 4.7 million Demand: 50% people in people by 2030 (IEA) 20 years in UK Food waste: Ill Heath: Demand for 1.3 billion circa 1bn resources and tonnes a year ‘stuffed’ or food ‘starved’ Middle Global class population: consumption 2-2.5 billion 3-4 billion by 2050 by 2050 Food Prices Competition (104%) & Price for Water: Volatility 30% by 2030 (>3-fold) IFPRI UK: Products Food: 50% by £50 billion cost & services = 2030 of poor diets to 75% of UN FAO NHS by 2050 personal CFP

A UK Retailer but a global business £10Billion of Sainsbury’s Brand products from 72 countries Over 1,300 Stores SWEDEN Over 160,000 Colleagues NORWAY USA Over 2,000 supplier sites FINLAND CANADA 10,000’s farmers U EIR K E EUROPE PORTUGAL USA TURKEY SPAIN CHIN MOROCCO A PAKISTA SOUTH DOMINICAN N KOREA EGYPT REPUBLIC INDI A MEXICO VIETNA ST LUCIA SENEGA THAILAND M L MALAYSIA PANAMA COLUMBIA GHANA MALDIVES KENYA BRAZIL PERU BOLIVIA MADAGASCAR MAURITUS NAMIBIA AUSTRALIA NEW ZEALAN CHILE SOUTH D AFRICA

Underpinning our work

An End to End Approach Because we don’t work in isolation, we need to understand this for the entire value chain Food and Drink Agriculture and Supply Chain Retail Soil Landfill Manufacturing Consumers Land Use and Logistics Operations and Processing Progress going forward will rely on our ability to join up the end to end value chain to create truly sustainable business models

Fit For the Future Best people with the best information make the best decisions working with the Best Suppliers to create shared value Best Suppliers Best Best People Data

Data…benchmarking & best practice • Sustainability standards • Key raw materials • Hotspot issues, (triple bottom line) • Building on from and using existing standards • Standard assessment & simultaneous data capture • Supports benchmarking & continuous improvement. • Improves transparency & traceability within our supply chains. • Produces real time value chain data for all stakeholders… more than just certification • Technology opportunities form remote sensing to big data generating foresight

Product

Designing in Sustainability

Understanding & helping our customers

Structural change in the UK grocery sector Grocery Market Channel Share, 2013-2022: % Take Home Market Online Convenience Discount Supermarket 2013 2022 Forecast

There is real structural change in channels – fragmenting the customer shop Market Value by Channel: £bn Supermarkets Discount 0% +12% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Convenience Online +4% +10% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

The kids are sharing with I want a job running product Grandma in Australia that they tests at Sainsbury’s love Sainsbury’s new lasagne I am 13 and I hate supermarkets unless I’m taking I like Sainsbury’s pictures of myself there In Godalming I’m currently drinking store we are Taste The Difference Prosecco talking about British Strawberries Here is a vintage picture of me eating strawberries 4,000 customers are on a Watch me as permanent forum with chat I review my rooms and a weekly shopping feedback survey I am a google employee who Here is a collection likes electronic shelf edge of pictures and recipes labels

Closer to customers

Helping customers reduce their household waste and start saving money along the way • Planning e.g. shopping planning not meal planning PLANNING SHOPPING • Shopping e.g. navigating multi-buys & till shock • Cooking e.g. portion size • Storing e.g. confusion over what to put, where STORAGE COOKING • Not using e.g. unopened products as well as leftovers • Throwing out e.g. battling the bins & recycling NOT USING THROWING FOOD OUT FOOD

Waste Less, Save More: Search for a town

Within our own operations

Everything you would expect and a lot more

Our Waste and Recycling Creating Renewable Energy : AD Plant First store ever to be powered Sainsbury’s off grid by food Cannock waste

What does the future hold?

Sainsbury’s Brand - Research Portfolio 64 projects 30 research institutions 40 suppliers £3.5m per year Format: Farmer-Grower – Supplier-Academic-Sainsbury’s Duration: 6m – 4years

Fresher better quality products with better availability - Container Tracking Real time location data Temperature and MAP monitoring Proof of concept funded by the Catapult

Complex agendas require an interdisciplinary approach Data translated into Foresight, Technology information and Real time modelling replaces enabled insight hindsight Managing Trade offs interdependencies

Partnership and collaborations

Evolving our relationship with WRAP • Working together for over 10 years • Valued independent source of knowledge, data, benchmarking and insight • Facilitating value chain and pre-competitive stakeholder activity • Moving from a packaging focus, to food waste & packaging to resource efficiency & resilience