Oral evidence: Food security: demand, consumption and waste, HC 703Wednesday 22 October 2014

Oral evidence, 22 October 2014.

Witnesses

Steven Butts, Head of Corporate Responsibility, Andrew Loftus, Agriculture Manager, and Guy Mason, Head of Corporate Affairs, Wm Morrison Supermarkets plc, gave evidence.

Chair

Gentlemen, good afternoon and welcome. Thank you very much for joining us. Would you like to, just for the record, give your names and descriptions?

Guy Mason

A buy two, get one free offer today. My name is Guy Mason and I am Head of Corporate Affairs for Morrisons.

Steven Butts

Good afternoon. My name is Steven Butts. I am Head of Corporate Responsibility, and I am also the Co-Compliance Officer under the GSCOP regulations for Morrisons.

Andrew Loftus

Good afternoon. I am Andrew Loftus. I am Agriculture Manager for Morrisons.

Chair

Just speaking as a local MP, you have a very good reputation locally for sourcing produce, and Sir Ken Morrison is a constituent, albeit no longer part of the business. What do you think makes consumers choose what to buy?

Steven Butts

I think it is at various touch-points, really. If you work backwards to the point where a customer goes into store, clearly they are looking at information in and around the store, in particular on pack, although we know that customers tend to look at the information on pack pretty quickly—about three seconds before they make a decision about it. Secondly, there are wider corporate communications: the way that our business communicates to the market more generally in terms of advertising and information. If you look at what Ant and Dec currently say about buying something from Morrisons, you are buying directly from a farmer—that kind of information. It builds a picture of what our business does and how it operates. Particularly around critical issues such as food security, there is detailed information that we publish in our formal corporate documents. I write a very detailed corporate responsibility report every year, which is published online. What we then do is disseminate those messages, particularly in the online media, through our website, into our magazine that we publish in store; for example, case studies on particular suppliers or supply chain issues. There is a whole raft of different places. Also, from the programme that I manage—the corporate responsibility programme—we filter messages through to consumers through our wider stakeholder engagement; for example, this kind of forum but, in particular, in my field, through the NGOs. That might be, for example, a discussion with a major NGO like WWF about a particular issue, which could be as complex as soy supply chain, or with Greenpeace talking about tuna.

Chair

If we are seeking to have a sustainable and secure supply of food, do you think that consumers have enough information to be making an informed choice?

Steven Butts

My response to that is that I think they do. The question is whether they choose to find that information. There is a whole raft of information that consumers can find. The public debate around food is never-ending. Interest in the media is never-ending, and rightly so. The question is perhaps not so much whether they are interested in the issue, because clearly they are, but how that then affects their purchasing behaviour. For example, surveys will show that, if you ask customers about the issues that they are most concerned about, the largest response rate is always around price. If you can deal with the issue of price—and, as a responsible retailer, you can deal with supply-chain mechanisms behind that price—then you can drive the right kinds of behaviours in terms of sustainability.

Chair

Do you believe it should be left to retailers, or should Government have a role in deciding what consumers buy, where they should buy it from and where the food is sourced?

Steven Butts

It is a joint responsibility. Clearly, it is a responsibility for all of us, and we are very keen to play our part. Clearly, if we do not have sustainable supply chains, we do not have a business—it is as simple and as stark as it could possibly be. One of the things that we have done very successfully in recent years is work through agencies like WRAP, for example, which was mentioned earlier, and build up some really in-depth knowledge about the supply chain, working in collaboration. The reality is that none of these issues can be dealt with by a single entity. We are a large food retailer but, frankly, in global-market terms, our place is relatively small. Clearly, from a Government point of view, we can look at what is happening in the UK, and that is absolutely critical and a key focus for consumers in the UK. From a Europe‑wide position, however, we need to understand what is happening in global markets, looking at the best mechanism that we have to lever those global supply chains to make sure that we are effecting positive change where we can. I think the challenge for us is, where we find there are issues in the supply chain, to look at what levers we have to influence positive behaviours in the supply chain, because the easy answer for all of us is probably to walk away from difficult sources—for example, where fish is sourced in the global market. The alternative is to work in those supply chains and drive improvement.

Chair

Mr Loftus, do you think we are in danger of losing our rural roots and our connection to agriculture? Are we going to have sustainable agriculture going forward?

Andrew Loftus

As Jay said, we are a very urban population. It is inevitable that people are going to be less connected than they were, but we still see a massive attraction to buying British produce from our customers. All of our beef, unusually, is British, as is all of our pork, lamb and eggs, and most of our dairy too, so we have a great track record. Through our vertical integration, we work directly with a lot of farmers, so it certainly has a resonance, connecting with our farming-supply base. We talk about it a lot in our marketing messages, because we are particularly proud of what we do in terms of British sourcing. It depends on what you mean by connectedness, but certainly our customers, in our experience, value buying British, if that is a form of connectedness with agriculture.

Jim Fitzpatrick

That is a perfect lead-in to what I wanted to ask you. You heard the discussion earlier on with Mr Rayner and his colleague around whether it is patriotic or nationalistic, etc. How much is your policy of procuring British driven by consumers because people want to support British farming, and how much is it driven by you because you want to support British farming or it is easier for you to procure here and then present it to the consumer as a British option, which you know they want to choose? Is it the consumer driving it or is it Morrisons driving it?

Guy Mason

It is a virtuous circle. It has been a virtuous circle for us. We made that commitment to source British meat, and it was a very important commitment to us. It was a big stretch for us. It involved a financial contribution as well. We almost said to customers, “We are going to commit to sourcing this British food from British farmers, and we hope you will come with us on that journey.” What customers have clearly said back to us is that they want to do that. We could source meat from further afield and deliver that at even lower prices, but consumers have clearly shown us that they want to stick with it. Of course, that means that we buy greater volumes. In fact, our market share in the UK is around 11%, but our market share in pork is around 22% by volume at the moment, which shows that customers are coming in to us. Where some of our customers might come in to us for certain products and then go elsewhere for their meat, they are prepared to stick with us and buy their meat from us as well, because they know that they can be sure where it is coming from and that we can be sure where it is coming from.

Jim Fitzpatrick

Do you take a conscious decision about trying to dissuade the consumer from buying out-of-season produce, or is that just driven by price and, therefore, they make a decision based on how much they can afford? There is a great attraction to labelled British produce with the Union Jack, the red tractor and the leaf, and the rest of it. Do you consciously not put national flags on imported produce, or do you put it on because it gives the consumer greater information to make a choice about whether to buy that product?

Guy Mason

What we do is highlight when it is British, because we know that customers want to know. We highlight it and make a big thing about it. When you are talking about seasonality, strawberries are a fantastic example of that. When strawberries are in season, they taste better, they are cheaper and they are more abundant, so we put them all across the front of our stores, because we know that customers are waiting for the strawberry season. They expect it and, when it comes along, they love them and buy them in their droves. They also want to buy strawberries all year round, however, and we have to make sure that we can meet that demand. When they are in season, however, we encourage customers to buy them.

Iain McKenzie

I do not know if I should perhaps declare an interest at this point, Chair, in saying that I am often in Morrisons myself, so I know your shelves quite well, so be on guard about that. It has fallen to me again to ask the question on diet and the question on meat or veg. How do you feel about retailers or Government persuading people to eat less meat? Would you say that that assists with health and environmental benefits?

Guy Mason

Rather than persuading customers to eat less meat, we persuade them to eat more fruit and veg in particular. That is why we have the produce departments first in flow in every one of our stores. On Jay’s point earlier about the Sky team and the tiniest changes leading to big consumer changes, we did a pilot project called Healthier Choices in one of our stores in Salford last year. It was a very low-key experiment. We had a health expert called Damian Edwards, who ran it for five weeks. We did not tell customers that we were doing it; in fact, we did not even tell colleagues in store what we were trying to do. We just worked with Damian and said, “What would you like to put into store to help customers buy more fruit and veg?” He said, “What I would really like to experiment with is putting in life-size cardboard cut-outs of health professionals whom customers in your store might know.” We said, “Okay, let us have a go with that,” and we put these life-size cardboard cut-outs of doctors and nurses around the produce department saying, “Think about buying more fruit and veg.” At the same time, they had a little handle that gave out reusable carrier bags that were designed to hold fruit and veg. We complemented that with different pieces of point-of-sale around the produce sale—markers on the floor, and hanging signs as well—that were completely different to the normal brand look of Morrisons, all designed, really, to subliminally persuade customers to buy more fruit and veg and to see if that made a difference. We were absolutely startled by the difference that that made; in fact, over that five‑week period, sales of fresh fruit and veg in that store went up by 20%, and sales of frozen fruit went up by 26%, even more surprisingly. If you carried that on for much longer, whether that increase would continue or whether customers would get very used to that—

Iain McKenzie

Did you see a reduction in your pre-packaged fruit and veg?

Guy Mason

I was really interested to hear the last discussion about pre-packaged against loose. We have no particular desire to put product in pre-packaged. Let us take bananas, for example: we sell them loose and we sell them pre-packed. We sell apples loose and pre-packed. Some customers like the convenience of pre-packed. They like to know exactly what price they are going to pay, so you price-mark that pack and they can pick them up very quickly—that goes to Steve’s point about customers taking only two to three seconds to make their decisions on each product. Some customers want only one or two apples, so they like to pick those separately, weigh them on the weighing scales and know exactly what they are going to pay that way.

Iain McKenzie

On average, how long would you say that your fruit and veg will last when you take it home? If you go and do your shopping at Morrisons and you look at the sell-by dates on your fruit and veg, you will very rarely find, especially on a Friday or Saturday, that they will last beyond the weekend.

Guy Mason

We tend to use “display until” or “best before” rather than “sell by” or “use by” because, really, they are indications for us rather than indications for the customer. It is a quality indication. We give customers advice as well about where to keep that fruit and veg. If they are apples or grapes, for example, they are best kept in the fridge. We give customers extra information about where it is best to keep that produce so that it will last longer. If produce is loose, they can make their own decisions, but we replenish that fruit and veg every day, so you should be able to go into one of our stores on a Friday and it should last you through the weekend. The indications on the packaging are really for colleagues in store to be able to rotate the product properly.

Iain McKenzie

Do you think that your customers are driving the packaging in their desire for a more hygienic product—for example, “I do not want to take these apples that I know someone may have had their hands on, or in their basket or whatever”? Would you say that your customers are equally saying that they want that?

Steven Butts

The answer, for some customers, is yes. In terms of packaging on produce in particular, however, it is about smart packaging—the right packaging at the right time. The classic example is a cucumber: why do you put film over a cucumber? The answer is because it lasts 14 days longer, so you are helping the customer, when that product is taken home, to make sure that it is maintained properly and it lasts longer. For a lot of our products, they may be available in pack and out of pack. Some customers like to choose a particular apple and maybe buy one or two; some want the convenience of a pack. The packs are increasingly designed to be as lightweight and to use the minimum amount of material possible. That material should be designed in a way that it is smart, so that it can be recycled. That is really important. We can give additional information about a use-by date, which we have taken away as a sell-by date, because it confuses customers. That was part of the research that came out of working with WRAP.

Chair

Thank you very much. I think we have got to move on.

Iain McKenzie

A quick question.

Chair

Very quickly—we have to move on.

Iain McKenzie

What do you hope to do as a range of ways to offer people an alternative to meat as the central part of a dish?

Steven Butts

Look at the long-established work for the Food Standards Agency, for example—the eatwell plate. If you go into any school, any community centre, or anywhere where anyone talks about nutrition, they will come back to a fairly old-fashioned view, really, which is “Everything in moderation”. I think that is the point. What is interesting from a sustainability point of view is the development of the sustainability of that plate. It is about trying to get the right mix of the right products in the right balance—an eatwell plate—but also factoring in sustainability and looking at it in a more holistic manner.

Sheryll Murray

Could I turn to affordability? Clearly, there is a little bit of confusion about the role of food banks in food affordability. I can only speak for my constituency, but food banks will fill an emergency void where perhaps somebody’s circumstances have changed, but I do not think, particularly in my constituency, that they are a real indicator of long-term poverty. What does Morrisons do to enable low-income households to secure affordable and nutritious food? I shop there—I have to declare an interest—and I know you have different ranges that people can purchase, but could you expand on that a little?

Guy Mason

We know how central the affordability of food is to customers right now. They tell us every day. There is no more competitive grocery market than the one that we have in the UK. There are 10 big players and we are all fighting for every consumer. For example, from our point of view, we have committed to investing £1 billion in lowering prices over the next three years. We are finding efficiencies in our own business to be able to invest in that pricing, because customers tell us how important it is. Some stats for you: 48% of customers are buying cheaper food brands; 40% are buying fewer treats; and 30% are buying in bulk. One last fact is how many customers are looking online before they go out and do their shopping: around 75% of customers look online for their non-food items, but even 30% of customers are looking online before they go out and do their food shopping. It has become so important. That is why we have just released our new Match & More loyalty card. We are going to match prices against our competitors, because we know customers are coming to us and they are buying certain products from us and certain products from our competitors. They are what we call savvy shoppers: they know what they are doing, they know where to go and buy products, and they are becoming better and better at it all the time, so we have to become better and better at delivering the lowest prices that we can across the store.

Sheryll Murray

What engagement do you have with food banks and redistribution charities? Again, I know that you have allowed my local food banks to collect, for instance, outside of your stores, because I have joined them and done that, but what engagement do you have with them to provide this emergency food for people who, perhaps, have lost a week’s benefits because it has been delayed or something like that?

Guy Mason

There are two sides to the answer and, if you do not mind, we will split it. One is that we have a community champion in every one of our stores, and the community champions will work with local food banks. We do not have exclusive arrangements with a particular food bank; we do have Trussell Trust food banks in many stores, but there are other local food banks in different towns as well. We try to give different opportunities to different food banks, depending on where the store is. We encourage food banks to contact the local community champions in the stores directly, and we encourage them to do that through collection days, mainly because we know that, if somebody is there with the trolley explaining what the food bank does, why it is there, why it is necessary and how people benefit from it, they will buy the right kinds of products. They will not buy anything that is not suitable—that is perishable, for example. The more that you stand there with the trolley and explain what you are doing, the more food you are going to collect, rather than just leaving a trolley in the corner of the building, which we just do not think is as effective.

Steven Butts

I think food banks are very much a local issue and very often driven by local people, and the store reacts to that. However, a lot of the work that we have done around food redistribution has been with national partners in the supply chain, because the real issue tends to be supply chain-related. We look at the amount of potential waste food in store—and we have to be slightly careful about how we define the word “waste”. This is product that could not be used for human consumption. In our stores, the figure can be as low as 0.3% of sales value, which is incredibly low when you think that most stores would have at least 20,000 products and, in some cases, up to 30,000. The focus for us has been on national partnerships and looking at distribution or redistribution with the supply chain, which can be relatively straightforward in some ways. It is about making sure that our own-brand suppliers have the freedom, where they have excess stock, to utilise that stock and make sure that it is donated in another way. That may be with FareShare; it may be with Company Shop, which is a commercial operation that does the same. We work with His Church, which is another quite niche organisation that does amazing work, particularly in the Midlands. Coming back to my point about working in collaboration, we wanted to understand how we could be more effective in terms of redistribution, particularly looking at stores where we know there is a real challenge, especially around regulation and food safety—that kind of issue. We undertook a pilot programme. I sat on a specific collaborative panel that was co‑ordinated by WRAP and originally came out of DEFRA, looking at food redistribution. We worked with an independent consultant, and with other retailers, to be fair, looking at the operation in a particular part of the country, Bristol, to see whether we could draw up a set of guidelines that you could apply not just to one retailer in one particular location but more generically. From working with food redistribution organisations, we know that if you are working at a local level and you have a good relationship with your local store and you turn up and there is nothing to take, it is not a great use of your time and resource. Frankly, in the third sector that time and those resources are even more precious. So it is about taking the learning from that and sharing it. We have applied that learning. We are currently working on another programme in Clacton with FoodCycle, which is another redistribution charity, to look at whether we can effect that model nationally in other places, so we are looking at Manchester—

Sheryll Murray

Thank you very much. I know that you use an awful lot of local produce in your stores in my constituency, gentlemen. You even sell Cornish Blue and the Committee has visited the Cornish Blue factory, so thank you very much.

Mrs Lewell-Buck

How do you balance driving down prices for shoppers whilst making it still worthwhile for farmers to continue supplying?

Andrew Loftus

We are a value retailer, so we have to be competitive; there is a lot of competitive pressure on us. However, a lot of agricultural markets are extremely volatile and we are seeing more and more volatility, and I hope this is a question we will perhaps probe at this meeting. One of our roles is to take the volatility out of that, because as agricultural commodities move up and down in price, we could not pass those on to our consumers, because their budgeting would be extremely difficult. We do have to offer extremely good value for money, but we have to make sure that we have a viable supplier base in this country. With the vast majority of all our indigenous product coming from this country—dairy, beef, pork; I have already named some of them—we have to make sure that the industry here is vibrant and that we do a lot of work through our producer groups to make sure that our farming supply base is as efficient as possible, so that, frankly, we are not put in a position where we have to source from abroad and so that we can source from the UK sustainably for the long term.

Steven Butts

To be honest, often farming and the agriculture sector is where a lot of attention needs to be. As Andrew has already said, the issue really is volatility. We take a lot of challenge from the volatility and managing that on behalf of customers. That is about getting our relationships right, but it is also about driving effective mechanisms into the supply chain and working collaboratively with farmers, in particular, to look at mechanisms that are both transparent and that work, because it is in both of our interests to do so. There are lots of examples in the farming programme that we specifically manage and in our farming sustainability programme about how we have looked at those mechanisms. In part, that is about listening to the supply chain; it is about understanding the pressures that the supply chain is under and reacting to it. We do not sit in an ivory tower, immune to the pressures in the supplier base. As we are vertically integrated, we are buying directly from farmers, so we do not buy cuts of meat; we buy whole animals. We have the ability to buy whole crops. As a result, that direct relationship, which has stood us in very good stead, particularly recently when you look at the issue over shorter supply chains, means that we are and have to be very specifically engaged.

Chair

We are going to have to shorten the answers a little bit; otherwise we simply are not going to get through.

Mrs Lewell-Buck

Can I just ask how you manage those relationships when other supermarkets are perhaps giving cheaper products?

Andrew Loftus

It varies depending on the sector. All different sectors of agriculture have different models, and we either work directly with the farmer or work through a processor. So if you wanted to name a particular sector that you are interested in, I could go into some detail on how we structure the relationships in that sector. Otherwise it is a very long answer.

Mrs Lewell-Buck

I do not think the Chair would give me the time.

Andrew Loftus

There are some big variations.

Mr Spencer

Can I ask what not only you but your competitors are doing to reduce the amount of food waste that your customers are ending up with? Can you give us some specific examples of the efforts you are making to reduce that waste?

Steven Butts

A lot of the consumer‑focused work we have done has been with WRAP. As I said, we have worked with WRAP and the industry and been signatories to the Courtauld commitment in all three areas. As you will know, the major campaign focus has been around education, originally from our own campaign, Great Taste, Less Waste, which has now morphed into us supporting WRAP’s campaign, Love Food, Hate Waste. That is about consumer messaging, it is about sharing information, it is about putting information on packets, and it is about storage advice. In particular, recently, we have focused quite heavily on social media. The ability to be able to add something to our Facebook page or tweet simple messages to consumers with links to more detailed information is really helpful. Particularly in our customer magazine, that kind of information is really helpful to customers, because essentially what we do is link it into an overall message about, “This is how you can save money”. We know that price is such an issue for customers and it is about saying, “We want you to use all the food that you buy, and utilise it as well”, because as part of that process we are adding value into the relationship we have with our customers.

Mr Spencer

Is there not a contradiction, though, in that obviously the retailer’s job is, frankly, to get as much product into my shopping basket as possible, so you are doing these buy-one-get-one-free offers and these multi‑buy offers, but at the same time you are trying to sell this narrative of reducing the amount of waste? Do they not just contradict each other?

Guy Mason

What is really important is that customers think that they are getting value or understand that they are getting value from their shop. Therefore, if every time they come into a store they feel like we are making them buy things they do not want, they take them home and then waste them at home. They will be disappointed with us and they will say, “You are giving me the wrong offers. You are not meeting my needs.” People often talk about the buy‑one‑get‑one‑frees or three‑for‑twos on products that are not considered healthy, so they are not on fruit and veg. That is often because they are at the ends of aisles; they are things that we know customers can stock up on, can keep in their cupboards, and can keep in their larders. When you go back to the fruit and veg section, we will have 50 promotions on fruit and veg week in, week out, but of course they are different kinds of promotions. They are not buy-one-get-one-frees, they are not three-for-twos, they are reductions on price, because we know consumers only want one particular item and they do not want to be wasting food. They are not things that they can freeze; they want to be able to eat it that week, so they keep that low. If I can just very quickly go back to how we educate customers, something we have not mentioned is our Let’s Grow programme, which is starting early, with children. This is talking to primary school children, in particular, about how to grow fruit and veg, how to prepare it and how to cook and eat it. What we really want is to be able to develop a nation of customers who really understand food, really care about food and then, when they come into our shops and they go around Market Street, they will speak to the fishmonger, they will speak to the butcher, they will speak to the baker and really understand it. When customers really understand food and know how to prepare it, that is when they will lower their waste.

Mr Spencer

Mr Butts, you mentioned WRAP. Do you think the Government should be supporting WRAP more, or what should the Government be doing to assist?

Steven Butts

I work with WRAP personally. I sit on their Product Sustainability Forum Steering Group now and, absolutely, yes. What they provide is a really important, central, safe space for collaboration, based on what I might say is some really in‑depth research and information that, frankly, as an individual retailer you could not get. For example, at the moment, there is some really in‑depth work about looking at the top 50 products where waste can appear in the supply chain, and looking at the particular hotspots. We are currently working with WRAP on a programme looking at one of our manufacturing plants and looking at ways in which we might improve efficiency within the plant—taking, if you like, an independent perspective on our business. We are at a stage in our relationship where we can do that and not feel like it is an intrusion into our business; it is about saying what a smart way to use resource is. One of the things that might surprise you is the amount of collaboration and shared information back to the industry, whether it is our farming programme—talking about what we are doing with farmers and sharing that—or elsewhere. This information is not necessarily proprietorial, because there is a lot to be said for gearing up and making sure that in working together you drive efficiencies in the sector rather than in our particular supply chain, because the likelihood is that our supply chain is linked with somebody else’s supply chain and somebody else’s supply chain, such is the market.

Mr Spencer

Are you ahead of the curve or is one of your competitors better than you at reducing the amount of waste?

Steven Butts

Our businesses are very different. We have mentioned it a couple of times, but we are a large food manufacturer as well as a retailer.

Chair

We will move on to that specifically, with Richard Drax.

Richard Drax

You said that there are low levels of food waste from the field to the store. What is that level of waste? Do you know?

Steven Butts

It depends at what level in the chain. What we know is that there are specific points in the supply chain where waste is most likely to occur, and where greater volumes occur. That may well be on farmer production within the supply chain and post‑consumer. Within the retail space, where we have the best metrics, to be honest, because it is based on sales volume, is where the least amount of waste is. Indeed, there are comparative studies across Europe—there was one recently in Germany—which come to the same conclusion. What I can tell you is that what we are doing as a process—and this again refers back to the work that we are doing with WRAP—is looking at mapping across all of our manufacturing base to get a more holistic picture that is based on a uniform process.

Richard Drax

Presumably, that ties in with the contract with farmers and other food producers, does it? What deals do you have with them to ensure that waste is kept to a minimum?

Steven Butts

It will depend on the supplier and which part of the supply chain. What you want to be careful of with waste in the supply chain is making sure that you do not just move it from one part of the supply chain to another. For example, if you have a glut of produce and you move it into the stores and you try to sell it to customers, but the volume is too great and customers do not want to buy it, you simply move that waste into a different place: consumers’ bins. What we are careful to do is make sure that we look after the waste within our operational boundaries; that is where we have the most influence. However, on my earlier point, our boundaries differ from our competitors’, because we are dealing directly with primary suppliers in the UK into our own manufacturing plants, so we have our own abattoirs, our own bakeries and so on.

Richard Drax

You are saying you maybe have more control than other supermarkets.

Steven Butts

Yes, because it allows us to innovate within our direct supply chain.

Richard Drax

Do you do enough to ensure that edible, perhaps aesthetically low‑grade products are not wasted?

Steven Butts

Again, coming back to our own particular business model, I will give you an example of this. We take on board something like 38,000 tonnes of carrots into one of our manufacturing sites. As part of that process, we can look at the grading structure, and what we are able to do is look at how those are best utilised. Therefore, if they are in an appropriate grading structure, clearly they are going to go into stores. There is an assumption that if something does not hit the grade, it goes nowhere else and is wasted, but in fact it is not, because it is valuable. It might mean that we sell it in a different way, so it might mean that we sell it as part of our Savers range, for example. We do this on potatoes, and it is very popular with customers, because you get a similar product that looks a bit different, packaged in a different way, at a cheaper price.

Jim Fitzpatrick

Notwithstanding your comments about having more control because of your shorter supply chains, etc., going back to Mr Mason’s point earlier on about sell-by dates and display dates, are there any regulatory changes that might help, particularly the regulations concerning dates? Should they be changed to help you redistribute food? FareShare, for example, have an idea about giving tax breaks to companies that are able to redistribute more. Is there anything regulatory‑wise or legislatively that would help minimise even further and support your efforts to avoid waste?

Steven Butts

On the specific point about tax breaks, I am loth to say that as a company we would not want tax breaks, but the challenge is how you define waste in that structure, and it is quite problematic. The other issue is that there is a danger of unintended consequences here, because in the most effective supply chain you would not have any waste food that would be redistributed anyway. Ideally that is where we would like to be, notwithstanding the fact that we work with FareShare and other redistribution charities and agencies.

Jim Fitzpatrick

So there is nothing preventing you from maximising the effort that you are undertaking at the moment.

Steven Butts

No. I think most of the issues are around the use of a particular type of food in a particular type of way, but it is largely based around food safety and, in my view, food safety should be paramount.

Chair

Gentlemen, thank you very much for being with us and for being so patient in responding to our questions. You are most welcome. Examination of Witnesses

Witnesses

Lindsay Boswell, Chief Executive Officer, FareShare, Adrian Curtis, Food Bank Network Director, and David McAuley, Chief Executive, The Trussell Trust, gave evidence.

Chair

Gentlemen, good afternoon and welcome. Thank you very much indeed for participating in our inquiry. For the record, could I just ask each of you to introduce yourselves?

David McAuley

I am David McAuley, Chief Executive of the Trussell Trust.

Adrian Curtis

I am Adrian Curtis, food bank Network Director for the Trussell Trust.

Lindsay Boswell

I am Lindsay Boswell, Chief Executive of FareShare.

Chair

Thank you for what you do. Food banks have been around for some time, and I am sure we have each had cause to visit them in our own constituencies. Could I just ask what you say the current estimate would be of the number of UK households experiencing food poverty at this time?

Adrian Curtis

We can speak from how many people we supported last year. Last year, we fed 913,000 people who found themselves in a sudden short‑term crisis. Just to pick up on Sheryll’s point earlier, we would like to draw a distinction between those in poverty and those who need to use our food banks. Our food banks partner with referral agencies that refer people in a short‑term crisis, and that could be due to a sudden change in their circumstances that leads them to the inability to buy food for a short period of time. That affects people from all kinds of demographics, not just people who we would see typically living in poverty. It can be people who are used to a relatively modest standard of living who suddenly find themselves in an unexpected short‑term crisis as well, but last year we fed around 913,000 people who were referred to us, which was 163% more than the previous year.

Chair

Would you say there is a divide between those living in rural areas and those living in urban areas?

Adrian Curtis

We see a need in every community, from Harrogate down to Tower Hamlets, but in poor communities and rural communities we are finding that around a quarter of our food banks offer a rural distribution service where we need to go to the client’s house to be able to drop the food parcel off, because they are unable to access our food banks. Poverty within rural communities is very different from urban areas, but it exists nevertheless.

Chair

Do you have a breakdown of those who are in work who are coming into food banks—perhaps they are on a limited number of hours—and those who are out of work? Do you have that breakdown as well?

Adrian Curtis

It is difficult to give an exact, accurate number based on the statistics that we receive at the moment. Our statistics are what the organisations referring the clients to us tell us, and whether somebody is in work or out of work is not something that we capture at the moment. However, we can indicate that around 25% to 30% of our clients have experienced low income as a reason they have come to us, which includes people who are in work and whose low income, coupled with rising costs of living, has led them into a position where they are struggling to buy food and are in a crisis.

David McAuley

What we can say is that because of the information we collected last year and because of the questions that came back, especially from constituency MPs, we are starting to look at defining people in work. So our virtues have changed, our system has been upgraded and the next set of stats that come out from us should give better figures to say that people are in work.

Chair

Of course, the rules are quite strict over the amount of food that you can claim, are they not, in any one week or any one month? Is that an issue?

David McAuley

Can I just say that it is really important to pick up a point here? The Trussell Trust is not a food charity; that is a misunderstanding. We are a poverty charity. We use food banks as a connection to get to meet the client to deal with the issues that are going on in their lives, and we see that as being as important as the food, if not more important. That is important to say. You could maybe answer the further question, Adrian.

Chair

I was just going to ask Mr Boswell from FareShare if he would like to chip in as well, please.

Lindsay Boswell

The FareShare model is slightly different. We are not a food bank organisation, although we work in that space. What we do is to support over 1,700 charities across the UK, the vast majority of which were probably there before the economic downturn and will be there afterwards, because they are dealing with societal issues like domestic violence, isolation in the elderly, drug and alcohol rehabilitation, HIV or mental health. Those organisations are providing a frontline service. Quite often, hunger will be a contributory factor in the symptom of why an individual may be turning to that organisation, but there are deeper societal reasons or medical or other issues that support them. What we really try to do is to support those charities, and they then address the front-line causes and issues. In terms of your direct question around the numbers of people suffering from food poverty, as a result of the way we work I cannot really answer that. We normally quote and cite what we find is very compelling and comprehensive research carried out by the Joseph Rowntree Foundation, which, from memory, is somewhere in the order of about 5 million people.

Chair

What we heard in the evidence earlier was that food prices are probably extremely low. If food prices went up, what impact would that have on your clientele?

Lindsay Boswell

For the charities that we support, many of them are organisations that are not the big-brand charities—they are not the sexy causes that tug at the wallets of the general public—and so they have become extremely reliant over the years on local authority funding and local council support. Many of them find that whilst the numbers of people turning to them for their services have gone up, their funding is deeply pressured and the savings that we are able to give them by diverting surplus food from the food industry, which last year was £16 million, is an absolute lifeline. A large number of them say to us that if it was not for the availability of that food they would probably not exist.

David McAuley

This food price thing is really relevant. Food inflation has been rising higher than wages for the last five years, and that is a fact of life. I think it is really important that what we see and one of the reasons for the rise in food banks is that people are struggling because of low income, stagnant wages and inflation, not just food inflation but inflation in general—the cost of electricity has gone up; the cost of housing is going up. The only good measure is that across the country rates have probably stayed pretty much flat, because of the Government’s policy on rates. However, that has pushed more and more people into the position where they rely on food charities and food banks. That is the last five years, and that is probably one of the underlying reasons for the growth in food banks.

Adrian Curtis

I would agree.

Chair

Could I just ask what more you would like to see Government and retailers do, and what more you think they could do, to enable low-income households to buy affordable and nutritious food?

Adrian Curtis

I believe that, as David was saying, anything that pushes food prices higher is clearly going to impact on the disposable income that people have and make it more likely that they are going to enter into a crisis. If I start with what I do not believe is going to resolve the issue of the clients coming to food banks, over‑production and food waste and waste within the food system itself is not driving people to food banks. Therefore, simply relying on that food to be given to charities, to give to people who are struggling, is not the answer. The answer is obviously tackling the waste in the first place to address that. The way we operate is that we ask the general public to donate items of food to our food banks rather than just rely on industry to supply that food, and that is for two reasons. First, we believe that is a more sustainable way of operating. We work a lot through churches in the UK, and faith communities have been donating food to people in crisis as a community response to a need for many hundreds of years. It is an incredibly sustainable way of society looking after those in need around them, and it also educates people that a need exists in their community. However, when food waste does occur, we are quite passionate about seeing that used to help those in crisis and to help the charities we work with rather than just going to anaerobic digestion.

Lindsay Boswell

Chair, I do not think I am qualified, or my organisation is qualified, to really deal with the pricing issue.

Mrs Lewell-Buck

Am I right in saying, though, that unless things like low pay and the problems that we have with the welfare system are tackled, the model that all of you operate under is not going to be enough in the long term to keep feeding people? You rely so heavily on charity, but it is volatile; you cannot guarantee that that charity is always going to be there. You cannot always guarantee that the waste is going to be there. So without other measures to address the reason why people are coming to food banks, the models that you are operating on are not going to last, are they, because the numbers are rising and rising all the time?

David McAuley

We have just put in a five‑year to 10‑year plan, which is to deal with the underlying issues that bring people there in the first place. Obviously low pay, benefit delays, benefit system issues and domestic violence are all things that need to be dealt with. We are looking at a long‑term plan to bring them into the food banks where we can give one‑touch point-of-contact advice to the people to get them out. We have trialled this; we have trialled it in Tower Hamlets in London and the success rate has been phenomenal. However, the cost of that is also extremely high, because you cannot run that sort of system without having the infrastructure behind it, so we are looking now at how we can make that sustainable. What I would say is that our model is sustainable. We have grown at a rate no other organisation in the UK has grown at over the last five years, including Costa Coffee, which is one of the biggest organisations for growth. It has been sustainable because we asked the local community to support the local community. That is what makes it sustainable. The local community is under pressure, but in the UK we have an amazing, charitable, giving community, and that is what makes our model so different.

Mrs Lewell-Buck

As more and more people slip into poverty, they will be less likely to have anything to give, so I just do not see how that can work long‑term.

David McAuley

We are just going to have to go to the high end and start getting the high end giving.

Mrs Lewell-Buck

Without addressing the problems that are leading them there in the first place—

David McAuley

We are, and that is why we lobby Government. That is why we tell the story time after time, because it is really important that we get the message out there that low pay, zero‑hour contracts and part‑time work under 15 hours are all things that need to be addressed by Government, and that is why we lobby.

Chair

You will be pleased that we are ending exclusive zero‑hour contracts.

Mr Spencer

Obviously, you must have looked at where food waste is occurring and how much of that food that is wasted is recovered, if you like, for distribution through your systems. What percentage of the food that is being wasted are you recovering and where is that occurring in the supply chain? Is it production, is it distribution, is it in retail or is it in consumers’ homes?

Lindsay Boswell

Within the FareShare network, last year we redistributed enough food for 13.2 million meals. That is an amazing figure, but the amazing figure is that that is less than 2% of our estimate of the surplus food that is in the supply chain that is fit for human consumption and could be diverted to feed people in need, so the total figures are there. If we got to 25%, which is a massive growth from the 2% we currently are at—so still 75% of that food would be thrown away—that would generate enough savings for the voluntary sector to save £280 million a year. The numbers are absolutely enormous. In terms of specifically where that food is, a lot of the food that we are accessing at the moment is coming from the supply chain in partnership with the retailers. So, it is food that is owned by a manufacturer or a supplier, a producer or a grower, but is, for one reason or another, surplus in a retailer’s distribution centre. In particular, we got enormous support from Sainsbury’s to help set us up in the first place and, coming alongside the work of Sainsbury’s over the years, Asda and Tesco. Those are the three main retailers that we principally work with, and we work in exactly the same model of accessing food before it has got anywhere near a shop; it has not got anywhere near retail. The big‑ticket items are in the manufacturing and the supply chain itself, and so some of our biggest and longest‑term partners are companies like Nestlé, who have embedded systems and processes right through their business to be able to actively work on so that, if and when a surplus occurs, they have the systems and processes in place rather than reacting if they suddenly have an issue or a problem. That could be a weather problem or a myriad of other problems. Nestlé are a very good example. Kellogg’s would be another very good example. To illustrate the size of the prize, we work with a magic company in Kent called Thanet Earth. Last year, Thanet Earth diverted 123 tonnes of fresh grown fruit and vegetables to us, grown in the United Kingdom, a lot of it cucumbers and tomatoes. That was enough to feed in excess of 300,000 meals in total, but was 0.003% of their production. The big issue is that most of the food industry are not as enlightened as the organisations that I have name‑checked, because they turn round and say to us, “We have no waste”. A business saying, “Our waste is 0.003%” would be legitimate in making that claim, but when that is, as with Gerber, enough fruit juice to serve 1 million portions of fruit juice, then there is a real moral responsibility for those organisations, I think, to put the steps and processes in place to divert that.

Mr Spencer

Where should you be concentrating your efforts on recovering much of that food—at manufacturing level or at retail level?

Lindsay Boswell

We are unashamedly using partnerships and relationships with the retailers to influence the supply chain, because we have rightly recognised that they have a much greater influence than dear old FareShare does, but it is the supply chain where the majority of that is. The Thanet Earth partnership, for example, came as a result of Sainsbury’s introducing us as one of their suppliers and saying, “You ought to talk to these guys”.

David McAuley

I was going to say, if FareShare worked, as they do, really well at the high end, to move the big volume stuff, we have around 1,600 food bank centres and we will work with any food bank, even if it is not a Trussell Trust one. We can work with supermarkets on the low‑level waste, and we work with organisations daily that help them get rid of the low‑level waste. Together, we can attack it from both ends, and that is what we are trying to do and why we have this partnership.

Mr Spencer

How important is it that consumers understand this and are tuned in to the food waste that is happening? Is that important or not?

David McAuley

It is really important. I am not an expert in this area, but when we do talk at the supermarkets, the consumers seem to think the supermarkets cause the problem, so all the waste is at the supermarket. However, as Lindsay has said, quite rightly, the volume of the waste is down the chain; it is not at the supermarket level, so there is an educational issue there. Lindsay, maybe you could add to that.

Lindsay Boswell

I think the more that the consumer understands and insists, the more the food industry will react.

Mr Spencer

Give us an example of what you have done to make consumers in general aware of this issue. What have you guys done to highlight that?

Lindsay Boswell

I would answer that in a slightly different way. Our two organisations both partner with Tesco twice a year on a national food drive. The next one is coming up in late November—that is a little plug for that—and that asks the public to donate some product. The messaging that FareShare gives is that we talk about the volume of food that Tesco’s supply chain and distribution centres and dotcom stores divert to us, and by getting the long-life items that, by dint of having a long life, do not come to us and go off, we can combine those to be able to provide a meal. That gives us a public platform to be able to talk about food waste, but the real benefit out of that is that the rest of the food industry sees that brand alignment. If I am a Tesco supplier, and I see Tesco aligning its brand with FareShare, and FareShare then ring up and say, “Can you please answer our call and can we please have 10 minutes of your time?”, they are more likely to open their door and begin a dialogue.

David McAuley

I think it is working. It is a slow, long-life process, but it is working, because some of those manufacturers are now coming to us and coming to FareShare direct because of the hard work we have done behind the scenes. It is hard work, because we are a small charity, and we spend a lot of time with Tesco and a lot of time with Waitrose and a lot of time just trying to get the message to the supermarkets at that level. That is really important. We also run an Eat Well, Spend Less course, which is about educating the public, so every day somewhere in the country we are teaching people how to shop better, shop smarter and how to use near‑date food, because that is really important.

Jim Fitzpatrick

Mr McAuley, you have mentioned Tower Hamlets a couple of times already. Can I say thank you for being there and for helping the community? It is very well supported and would not be there without your help. Can I ask both organisations what the main barriers are to increasing the redistribution of food? You have covered some of them, but are there any other barriers that you think ought to be removed?

Adrian Curtis

There are two issues where food banks would find a problem in relying more heavily on redistributed food as opposed to our normal route, which is asking the public to donate food. One is that there is kind of an ethical, moral issue around the dignity of a client who comes into the food bank and is offered waste food or food that is not fit to go into a supermarket for people to buy. There is a perception that you could end up with a situation where you have people who can afford seemingly good-quality food and others who get the leftovers, so many of our food banks are very keen to avoid that. We would be very keen to avoid an over‑reliance on that. The second issue is the variety of products that we need. All of our Trussell Trust food banks give out nutritionally balanced food parcels to make three meals a day for three days, so that is breakfast, lunch and dinner. To be able to get the variety of products to put into that parcel requires us to ask members of the public to donate the items that we need most, rather than just relying on what industry has created as surplus that month or that week. Therefore, it is really important to our food banks to be able to get the variety and also to address the issue of dignity, and those things would be barriers to us relying more heavily on redistributed food.

Jim Fitzpatrick

Before you answer, Mr Boswell, FareShare has called for a £3 million injection of funds to bridge the gap. Can you cover that as well? Is that part of this?

Lindsay Boswell

Yes, absolutely. There is a variety of barriers. There is a cultural barrier within the UK food industry about being able to see and recognise those surpluses as and when they happen. The example I have illustrated with the very, very small percentage shows that the UK food industry is unbelievably efficient and effective, but there is a huge prize with those minute margins. Every single food business that we work with ends up saving money, but it is unbelievably hard work to get that culture shift and change. France has the same size population as the United Kingdom, although a bigger piece of real estate, admittedly. The food industry has some differences, but it is a modern, first-world food system a bit like ours.

Jim Fitzpatrick

There are tax breaks available in France, though.

Lindsay Boswell

France redistributes 20 times the volume of food that we do. There are two principal reasons behind that, and we do not think it is because the French love their food more than we do. One is that a French food business, if it diverts its surpluses while there is still life in that food, is able to reclaim up to 0.5% of its profit level. We are still trying to talk to the French Ministry of Agriculture, which is not an easy exercise to do, but our understanding is that the cost of that is in the order of £150 million a year. That is the theoretical; we are not sure how many food industries claim that rebate and that is the bit that we are trying to look at currently. That undoubtedly has had an impact and the French tell us that that has had an impact.

Chair

I am sorry to interrupt, but do we know how much that costs the French Administration?

Lindsay Boswell

The theoretical cost could be £150 million if every food business reclaimed it, based on the volumes of food in France that are redistributed to charity. What the actual cost is, because obviously very few people all take up 100% of tax breaks that are offered to them, is a different question. FareShare is very clear that we have invested heavily over the last few years in putting a really sustainable business model in place, and all 20 of the current FareShares—and we are due to open the 21st later this year in Cornwall, which is part of addressing rural poverty—are run as profit‑and‑loss social enterprises based on a very modest charge to the charities that receive the food, so we have sustainability woven through us. However, to get to the size and scale from the pathetic 2% of the UK food that is currently being diverted to our target of 25%, we do need some partnership working and investment in expansion and infrastructure. We believe that that is an absolute fraction of the cost of the investment that has been made in France. France draws down from a central European Union pot, which the United Kingdom chooses not to access.

Jim Fitzpatrick

Why do we not access that?

Lindsay Boswell

I cannot get a straight answer from any politician on that one. If, through the work of this Select Committee, there was an ability to be able to try to get a categorical answer, that would be most welcome, because in theory there is a pot in the order of about £30 million allocated to the United Kingdom for food redistribution for the vulnerable each year.

Chair

I do not speak for the Government on these matters, but I would imagine they would say it was matched funding. It is the issue of if you apply for that, you have to take money as well from the matched funding.

Jim Fitzpatrick

That sounds like a very good answer on behalf of the Government, Chair.

Chair

I am just leaping to conclusions.

Lindsay Boswell

What has happened this year, for the first year—I think this is a European Union fudge—is that the pot of money has been moved from what would have been an agriculture and a DEFRA responsibility across to DWP, and the United Kingdom has been made to draw down 10% of that. Therefore, in theory, sitting in DWP is £3 million, which, from the European Union perspective, is meant and designed for—

Jim Fitzpatrick

That is the £3 million that is referred to in—

Lindsay Boswell

Correct. Clearly, it is up to the UK Government what it does with that and my understanding is that that is being focused on employability opportunities.

Chair

If that was to be used to create jobs, so people were in employment and earning money, then they would not have to come to your organisations for food.

Lindsay Boswell

They would not need to turn to the Trussell Trust food banks. We are about diverting surplus food while there are people who, for a whole range of other reasons—the domestic violence and the mental health‑type issues that are never going to go away, sadly, as I illustrated before.

Adrian Curtis

The only observation I would make is that while employment opportunities would help minimise the chances of somebody entering into a crisis, they certainly do not eliminate the need for food banks. As we have already said, people in work also need to use food banks, particularly when employment opportunities are created on a very low-pay basis.

David McAuley

Lindsay has talked about what FareShare is. It is a social enterprise. We run a social enterprise ourselves and we employ 35 people in real jobs, paying a living wage. With £3 million investment to the two organisations sitting here to rack up the food redistribution services we could create jobs and reduce food waste, so I think the Government needs to think about that long‑term.

Jim Fitzpatrick

I understand Tower Hamlets, because that is where I live and obviously the networks are easy to put together. Mr Boswell mentioned the West Country, Devon, I think, and setting up. Given that there is poverty in rural communities, it must be much more difficult for both organisations to function. How do you square that circle, because I would imagine critical mass is the primary driver to say, “Can we deliver our service?” Are rural communities getting a fair crack or are they in a very much more difficult position in terms of accessing services?

David McAuley

We do our best; we honestly do our best. When we set a food bank up that has a rural community attached to it, we say to that food bank at the start, “You have to provide a service to the rural community”. We do that not just by taking a van out on the road. We do it by looking at the doctors’ surgeries in the rural community, the social workers’ surgeries and we give them the food parcels to take out. We do our absolute best, but we still get stories where people have walked 10 miles to pick up a bag of food and they break our hearts; they absolutely break our hearts. Some food banks have got grant funding to pay for taxi services to get to people and then we get criticised in the press for putting a taxi on for somebody, but we do our absolute best. That is what the Trussell Trust does. We have 1,600 centres almost across the UK to try to meet the need there.

Lindsay Boswell

It costs more to roll out a FareShare‑type operation into rural areas, and that is part of the reason why we are looking, as I say. As we develop and expand, our concentration has been on the 83% of the UK population who live in an urban setting, because that tends to be where you get critical mass in terms of the front-line charities that are going to be offering those services.

Chair

Thank you very much indeed. On behalf of all the Committee, thank you very much for being here and for all the work you do. It is very encouraging to know how involved manufacturers and retailers, and especially local communities, are, but thank you for being there and all you do. Thank you very much indeed. Oral evidence: Food security: demand, consumption and waste, HC 703 21