Waste not: Ways to reduce the cost of food wastage...

Waste not: Ways to reduce the cost of food wastage to your business

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Pile of old loaves of bread against an outside wall (wastage)

As the world becomes more and more focused on issues concerning social justice, the environment, and better business practices in general, one of the things that has come heavily under the microscope is food wastage. This is something that the bakery sector in particular has trouble with, with 319,400 tonnes of good-quality food being wasted every year across the sector (from grain used in primary production through to unsold and uneaten bakery products), according to research done by Stop Food Waste Australia. Baking Business looks into some of the rules and guidelines around food waste and what it means for bakeries going forward.

Across Australia, various state-level schemes, strategies, and acts all currently exist with plans for the country as a whole to reduce the amount of food waste produced over the next few decades. All of these provisions form part of Australia’s commitment to the United Nations’s sustainable development goal set in 2018 to reduce food waste by 50 per cent by 2030. With only seven years remaining until the deadline on that goal, a suite of Waste Management and Resource Recovery provisions are slowly coming into effect, affecting individuals, corporations, and small businesses.

With the cost of running a business only increasing year to year, the importance of not wasting money (and therefore profit) by producing goods that will only end up in landfill is only increasing. As such, these provisions are focused on helping to save the environment and reduce the number of Australians going hungry every day, but also on reducing the wasted costs and lost profits that small businesses face as a result of food waste.

One of the leading bodies in this area is Stop Food Waste Australia (SFWA), which was established with funding from the Australian Government to lead the delivery of the National Food Waste Strategy. SFWA put together the Bread and Bakery Sector Action Plan (SAP), which covers the impacts the baking industry in particular will face as a result of food waste and ways to remedy this in the future over the period of 2022–2025.

The SAP identifies machine failure, human error, and overproduction as the hotspots and root causes of food wastage in the bakery sector.

A pile of discarded bread loaves on a tarpaulin

In terms of machine failure, it is important for businesses to ensure that scheduled maintenance is prioritised highly so that machine breakdown doesn’t result in food spoiling and becoming unusable.

A lack of systems in place in a business can contribute to human error, which can result in missing or incorrectly weighed ingredients, in turn leading to the wastage of entire batches of food. The SAP indicates that documenting processes, systems, and recipes is one of the best ways to combat this issue, as well as ensuring that recipes are adjusted for changing conditions and that new and inexperienced staff are provided with adequate training to ensure that mistakes occur less frequently.

Ensuring that production planning processes are followed closely can also help to reduce the problem of overproduction, which the SAP attributes part of the overproduction wastage stream to.

Because the produce that a bakery or cafe sells can be regarded as ‘trading stock’ for taxation purposes, businesses are able to claim back the loss of this trading stock through spoilage. However, a report by the Baking Association of Australia in conjunction with SFWA and the NSW Environment Protection Authority indicates that the Australian Taxation Office will be limiting the amount of money that businesses can claim back for food wastage to $2,000. Business will also still be required to keep a tight inventory of their stock going from one financial year to the next, so that it is clear what and how much stock has been wasted across each financial year.

However, this may not be the only recourse that small businesses have to reduce the impact that food wastage has on their bottom line. Although there are many different avenues available to reduce food waste within the bakery context, this is not always possible, and even with such measures in place food waste still occurs.

When this happens, small business must still absorb the financial cost.

Foodbank chief operations officer Sarah Pennell told ABC, “This is just something that the average business… cannot bear, so the food just goes begging…”

Foodbank is currently campaigning for the Federal Government to introduce a tax incentive for businesses that donate surplus food to charity, similar to incentives that are already in place in France, Canada, the Netherlands, and the United States.

“We are seeing tax incentives as the single most effective way to motivate businesses to redirect their waste, giving them both the incentive and the support to be able to do it,” Sarah said.

The proposed tax incentive aims for small businesses to receive 20 per cent cash back on all costs associated with donating food, which would greatly lessen the cost of surplus produce for bakeries and cafes while having the added benefit of contributing to the fight against hunger in Australia.

Baker's Hands Discarding Bread Waste In Garbage Bin

Ways to reduce your waste

There are many different ways that bakeries and other small businesses that play roles in the industry can work to reduce their food waste and contribute to the national target of a 50 per cent reduction in food waste by 2030. Aside from some of the solutions to food waste mentioned in the main body of this story, here are some larger steps your business can take to reduce the amount of profit lost to waste each year.

  • Source separation: This involves separating surplus produce into common categories for separate collection. This reduces the amount of unavoidable waste that ends up in landfill. It is a good idea to have strategies to identify what can be donated to charity, what can go towards animal feed production, what can be reused or repurposed, and what doesn’t fall into any of these categories. Before sending the surplus goods to landfill, also consider how much of it can be used for commercial compost.
    In July 2025, source separation will become mandatory for large food-waste-generating business in New South Wales, and, while other states have currently not set up source separation to be compulsory at any stage, it is recommended in a number of their Waste Management and Resource Recovery documents.
  • Collecting data and estimating regular sales: This can be done using your business’s point of sale system. Analysing the data from the systems at the end of each week or month can highlight the products that are selling well and identify those that aren’t selling well. Having this information can mean that businesses are able to order smarter and more accurately, resulting in less food waste as a result of product not selling.
    This also contributes to minimised costs in the form of reduced packaging spending. When businesses are able to more accurately determine how much food is needed to meet daily order requirements, they are better able to tailor their produce ordering to their actual needs, eliminating waste and eliminating costs.
  • Menu flexibility: Keeping a flexible menu goes hand in hand with maintaining an accurate and comprehensive data list of things that your customers are buying and when. This can give you a clear idea of when the highest numbers of people will be in your stores and when will be a good time to offer special deals, discounts, etc. It will also give you an idea of when your staff are able to start discounting produce to sell at a lower rate towards the end of the day. This will give your business the opportunity to prevent food wastage, reduce its lost revenue, and earn money for stock that would otherwise have gone to landfill.

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