“For me, it is really hard to talk about food waste because it is actually food to us,” explains Mark Game, managing director of Company Shop.
“It is an opinion and point of view to define it as ‘waste’. To the manufacturer it is a waste stream because it needs to remove it from its business and factory but, to us, it is still food.”
We are sitting in the firm’s headquarters in Tankersley, Barnsley, where even the office is an inherited 1970s building from the former site occupant. Next door is a vast distribution centre which receives stock from its 450-odd suppliers. This is sorted and processed, and then sent out to its network of 34 stores.
Three of the stores are independent shops that are open to employees of its food industry suppliers. The other 31 are run behind the individual suppliers’ factory gates.
The company redistributes around 30,000 tonnes of surplus food a year, and Game expects that figure to double in the next three years. Its feedstock comes from manufacturers and retailers. Such products include those with labelling irregularities, feature expired competitions or have been over-ordered. Company Shop inserts itself into the supply chain by redirecting this ‘waste’ food from disposal and into membership-controlled staff or factory shops for its food industry suppliers.
Walking around one of its independent shops in Tankersley is like visiting a regular supermarket – with the exception of the incredibly low prices.
Members must sign up to terms and conditions, which include assuring that food bought is only for personal consumption. They swipe a membership card for entry into the shops and, when they do so, their photo comes up on the entry system so that store staff can verify their identity. Members can buy up to six units only of each item. Disclaimer labels are put on all the stock as physical protection for the brand owners, to ensure that the heavily discounted goods cannot be returned for full price refunds at other retail outlets.
The business offers food suppliers an economic return for products that could end up going to alternative treatment, such as anaerobic digestion (AD), at a cost. In 2013, Company Shop generated an annual turnover of £28m, an increase of £9m, and a 30% rise in sales on 2012.
“Our growth is coming from our profile within the industry,” Game explains. “For the past couple of years, it is no secret that food waste and food poverty have been high on the agenda, both politically and from a consumer perspective. That has raised the profile of food waste within the industry. “From our perspective, we can see that the industry is trying to address the problem. And the more it does that, the more we embed into the supply chain and grow. It is not hard to sell cheap food so it is not difficult for us to grow the outlets – we have to balance that with supply.”
But its surplus food feedstock is random and unpredictable: “The best example I can give is the Queen’s Jubilee in 2012.
For weeks before hand, the food industry was gearing up for the largest celebration of the year. The barbecues and the street parties that were planned were going to be enormous – but then the heavens opened, and all the food stayed on the shelves in the supermarkets and the distribution centres because nobody wanted it.
“We had to be there to pick up the pieces. But that was an incredible volume of food for us to sell and we have only one way of dealing with it, and that is standard economics: people will buy more if it is cheaper. So we have to fluctuate our prices,” he says.
“The way I try to bring it to a personal level is that if you ever have to cater for a dinner party, you always over-cater, and it is no different for a retailer.
“The retailer is always trying to make sure the product is on offer when you walk through the door. But the problem is, they don’t know what you want to buy. And they can’t, because we ourselves don’t know. We enjoy that choice, and choice is one of the main factors in food waste,” he says.
The company has increasingly been working with manufacturers to identify material that it will pay for to sell on and the genuine waste streams which must be disposed of at a cost. Game says this provides a feedback loop for the supply chain and helps it to understand better where its waste cycles are.
“The trick is to have a process that sorts and identifies what is in date and wholesome, and to rescue that before it goes to AD,” he says. “That innovation within the manufacturing process is improving, and it is the piece of work that we are looking to expand on – that collaborative way of identifying areas where we can salvage more and more product. We definitely collaborate in that space – with the retailers, the distributors and the manufacturers.” But he adds that this involves “quite an investment in time and money”, which makes it challenging to gain the commitment required.
The actual amount paid for surplus food products will generally be costed on a case-bycase basis, depending on factors such as the nature of the product, how constant the supply is, the food category type and the nature of the manufacturer.
“Sometimes, when manufacturers engage, they expect to make a profit on food surplus, but they never will. We have to educate them to compare the revenue they will get from us to the waste services [costs] they may incur if they were to dispose of it in a different way. We offer an environmental, yet secure, disposal method for them,” he explains.
Game says that AD, rather than food redistribution charities, is its real competitor. It already works alongside charities for suppliers: “We try to complement an offer such as Fareshare [which collects food waste for charities to distribute] because we will offer the seven-day, 365 days a year service. We collaborate to deliver a solution which prioritises donating to charity.”
In 2013, the business launched a new social enterprise called Community Shop. Like Company Shop, it offers surplus food to a membership body, but its shops are on the high street and its members are those on means-tested benefits. A pilot scheme has been running in the Goldthorpe area of South Yorkshire with great success. Those wanting to sign up for Community Shop membership can do so for six months only in order to avoid dependence, and part of the deal is that people engage with a ‘success plan’. This is essentially a personal development plan, and revolves around confidence issues, employability and CV writing, as well as home economics and finance.
Community Shop is targeted at socially deprived areas, for people who are facing tough times but who have an appetite to improve their lives. As Game explains, by giving members access to cheap food, it gives them the space to address other issues and get their lives back on track.
At Goldthorpe, the shop is a conveniencesized store, with a café above it called the Community Hub. Members are encouraged to pop upstairs and have a cup of tea with the staff, and engage with the personal development plan once they are comfortable with the surroundings. It expects members to start engaging with the scheme – which means a regular weekly commitment to attend development sessions – within the first two months. By the end of the six months, it will review members to see how their circumstances have changed.
Kate Roberts, Community Hub mentor, is passionate about the scheme and the effects it has had on the local community, which has a history of long-term unemployment. She explains how a change in members can be seen as they start to engage when they get their confidence back: the women may start to wear a little make-up and take more care in their appearance, and the men will have had a shave.
When we meet, she is also brimming with pride about a group of members who have come up with a plan for their own business, complete with business plan. And she is pleased that the Hub has been engaging with retailer Aldi, due to open a distribution centre locally, which is interested in giving job interviews to members who have been through its programme. The hope is also for members from Community Shop to be able to do work placements at Company Shop, with the view to look to its members first when actual jobs come up.
Community Shop takes the profits from its retail aspect and invests them into the services that supports its members.
Game says: “What we have managed to create is something that is morally sound and has a great social impact story. At the same time, we have found the right compromise to be able to find support from the food industry and retailers to be able to say ‘yes, you can go on the high street’ because we wanted to find the right balance between the commercial world and the social world.”
An early success story comes from one of its first applicants, Debbie, who applied for membership but said she would much rather have a job. She was interviewed, and has now become of the Hub’s peer mentors, supporting new members.
When the Goldthorpe pilot was launched, the business said it would commit to opening 20 stores in 12 months. “That was hugely ambitious of us, but we are still committed to 20 stores by the end of 2015,” Game says. It has the support of the Greater London Authority for six shops in London, with the first one due to open before Christmas.
“We also have other national sites in mind: Manchester, Scunthorpe, Thetford, Loughborough,” says Game. “What we are going to do from those spreads is see if we can create clusters for some efficiencies around logistics.”
For Company Shop, plans are afoot to open two more stores of around 6,000sq ft a year for the next three years: “At the moment, we are going through a process of identifying national pockets of food industry.”
From where Game sits, retailers are putting effort into reducing and recycling their waste.
He says: “Consumer awareness is driving some of the thought within industry so, as consumers want to reduce their carbon footprint and become more environmental with all of their own personal issues, that translates into consumer demand, and the retailers listen and then influence the supply chain. That is how industry will change. Let industry fix itself – I don’t think it is appropriate to legislate around food waste.”
He is also against a landfill ban on food waste, which he believes would “suddenly create a problem for the industry”. Instead, he says, “a multi-disciplinary approach and collaboration throughout the supply chain is the answer. And we are part of that.”