Optimising product life will save The Co-operative Food £5m

The Co-operative Food has undertaken a series of initiatives to give their stores and customers increased product life in order to combat waste.

The Co-operative Food have focused on the relationship between waste and its root causes including product life and case size.

They have shown across categories that, for a wide range of products, there is a significant reduction in waste from a marginal increase in product life which can be achieved without compromising product safety or integrity.

A wide-ranging programme of change has been initiated which is already reducing waste, increasing sales and improving availability.  All of these changes can be achieved through working more collaboratively with suppliers, without alterations to product recipes or packaging.

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Date codes

The Co-operative Food wanted to ensure that it was giving its stores and their customers the best available product life.  There are two key drivers for this. First, The Co-operative Food’s retail estate is largely comprised of convenience stores, which require more time to sell through compared with supermarkets. Short life coded product from these stores was more likely to end in The Co-operative Food’s waste stream. Secondly, the main reason why households waste food is because the date code has expired. 

The Co-operative Food has worked with suppliers to provide longer product life in the following ways:

  • Setting benchmarks with all suppliers on the expected maximum product life that will be delivered to depots;
  • Setting a 75% minimum life on receipt for all products supplied into depots;
  • Running these new arrangements in ‘training mode’ for six weeks after which products failing to meet the new benchmarks will be rejected. 

This initiative is expected to halve the amount of waste arising from short coded products, improve on shelf availability, increase sales and lead to better forecasting. It has also led to a review on the handling of rejected stock that is currently underway.

‘We have challenged all our suppliers to work with us and provide our stores with the maximum product life on all occasions. This has now been formalised into a standard working practice. For our part we are ensuring that all products are cleared from depots such that our convenience stores benefit from a longer selling time which in turn will benefit our shoppers’ 

Alan Jackson

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Own Label

The Co-operative Food are retesting the product life for all their protein products and finding that it is possible to add 1-3 days (depending on type of packaging) without compromising product safety or quality. This is expected to save The Co-operative Food over £1m in lost revenue through reducing waste and the proportion of protein that is ‘reduced to clear’. 

The protocols for testing the product lives of meat and fish are historic. A review of labelling on mince, necessitated because of changes in EU labelling regulations, led The Co-operative Food to review case sizes and product life protocols. This approach is now being extended to cover all protein.

Store procedures have also been improved. More proactive stock rotation is now practiced and reduced to clear policies are better followed.  

Meat and fish are expensive waste streams both for households and for the supply chain. For the supply chain they also require separate collection arrangements so there are additional benefits in terms of simpler processes and efficiency savings.   

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Crisps

The commercial benefits of The Co-operative Food’s approach to product life optimisation have been demonstrated by their work on crisps. Crisps were found to be a high waste product and so at the forefront of the project on product life.  This work involved:

  • Working with Walkers and other suppliers to ensure The Co-operative Food was getting the maximum possible life on the product into depot;
  • Collaborative working with the supply chain team in The Co-operative Food to reduce the amount of short-dated stock sat in depots – in effect, depot to store protocols were established to mirror the supplier to depot arrangements;
  • Improving stock management throughout promotions through better forecasting and use of their stock exit management system.     

Over 12 weeks in 2014 The Co-operative Food has 63,000 fewer wastage units amounting to a reduction in 39 tonnes of waste over the year.

‘Crisps are an example of how we are working with suppliers to give more product life to our stores in order to prevent waste in line with our targets under the Courtauld Commitment. Crisps demonstrate the benefits that can be achieved in waste prevention with a few simple changes to the ways we work with our suppliers which now has a more collaborative focus.’

Iain Ferguson

The next phase of this work will examine the optimum case sizes and better product selection for The Co-operative Food’s stores in order to more closely reflect the sales volumes across their estate.

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