Delivering food industry excess to where it’s most needed

The industry term is surplus food, but that’s merely a euphemism for food waste – a problem said to cost the Irish economy up to €4 billion a year.

Waste spills out of the food chain at all levels and in huge volumes, from farmers dumping cosmetically ugly vegetables to companies binning mislabelled stock and households buying too much. The Environmental Protection Agency estimates about a million tonnes of it is generated each year in the Republic.

At the same time, up to 600,000 people are said to be suffering some form of food poverty as a result of the downturn, while one in five Irish children are going to bed or school hungry on a daily basis.

A significant amount of this excess – about 250,000 tonnes – comes directly from manufacturers and grocery retailers. Typically it is food that has been discarded as a result of minor production glitches or product lines that have been discontinued or ordered in error.

Most of it is already processed and packaged for the consumer – in other words perfectly edible. But it will end up being reconstituted as animal feed, incinerated or dumped in landfill.

Problem of scale

With the proper infrastructure, much of it could be put back into the food chain via the charity sector. The problem is one of scale. Because most food banks in

Ireland

are small, charity-run operations, they can’t deal with the size of the shipments involved.

Food companies are also extremely wary of donating unless they can be sure their product will be stored and used correctly, for obvious legal reasons.

To address the gap in the infrastructure, Bia Food Initiative, a non-profit organisation, has just opened what it describes as the State's first food surplus redistribution hub in Cork.

Its 10,000sq fit centre in Little Island, operational since July, takes in excess food from Tesco, Aldi, Musgraves and Kelloggs, as well as several local producers. It then redistributes the food to a network of charities in Cork, Limerick and Kerry.

Container of food

“The industry in the past would have said, unless you can take a full container load, which is typically the volume they have from a production glitch, we’re not interested in breaking that down into smaller units for you,” says Bia chairman

Jack Dunphy

.

“There has been a proliferation of small food banks opening across the country in response to the Government’s austerity programme, but they can’t meet the standard of food storage which is required.

“So what we’re saying is that we will be the intermediary between the industry, its surpluses, and the recipient charities, and we will store and give it to the charities as they need it.”

Dunphy is an industry veteran, having sat on the board of the Federation of European Food Banks for several years before co-founding the Bia project.

“We’re trying to move away from the term food bank,” he says. “We’re calling it a surplus food redistribution system. We want to be the go-to organisation for large volume management of food industry surplus.”

In practice, he says, this means having a facility big enough for a 40ft container truck to back into and unloaded its contents in the space of 30 minutes.

He says the plan is to establish a similar operation in Leinster early next year, with several possible sites along Dublin's M50 already earmarked, and a depot in Galway by the end of 2015.

Tesco biggest benefactor

Significantly, the Bia scheme has the financial backing of some big industry players. Tesco, its biggest benefactor, donated €60,000 to the initial start-up costs and a further €40,000 worth of infrastructural components, such as the centre’s racking system.

The scheme is also funded by the charity sector, with the JP McManus Benevolent Fund donating €50,000, Community Foundation of Ireland committing €30,000, and a further €10,000 coming from the Ireland Fund.

Bia’s warehouse is fitted with a modern IT cataloguing and tracking system, which shows where their food is at any given time and allows charities to order online.

“The motivating factor to get the 10,000sq ft warehouse was to be able to say to the industry that we have the capacity and the IT supply chain technology to trace your product and to tell you where it is on any given day,” Dunphy says.

“We’ve invested a lot of money in trying to replicate what the industry would have for themselves.”

The plan is to have a network of depots talking to each other via one IT system, he says.

The companies don’t pay Bia for taking the surplus, as in other countries, but Dunphy says the group wants to move towards accepting contributions from the companies, equivalent to what it would cost them to dispose of the food. “At the moment, we’re not moving large enough volumes to give them a bill.”

The key to getting industry buy-in, he says, is having a facility that adheres to strict standards in terms of storage, end-use and health and safety regulations.

Legal indemnity

Bia is targeting the large volume, longer- life end of the market, in contrast to fast growing FoodCloud.ie, a separate social enterprise that connects retailers with short- life food surplus to community groups and charities.

The charities currently indemnify Bia, which in turn indemnifies the donating food companies. Dunphy acknowledges that this arrangement hasn’t been tested in the courts.

Peace of mind

In the US and

Italy

, producers who donate food in good faith are protected by a Good Samaritans’ Act, which indemnifies them from any liability resulting from the donation. This gives the food industry peace of mind that they won’t face claims over the inadvertent misuse of their product. There is no comparable legislation in Ireland.

Another issue relates to how food waste is treated from a taxation point of view. At the moment, surplus food is treated as having zero value, so it does not attract VAT liability.

However, French food banks want the their government to incentivise food companies to use the system via tax credits. Bia has been calling on the Government to support a single entity that meets the standards of the industry.

“While they [the Government] haven’t given their formal backing to the initiative, we understood through back channels that that is what they’re going to do,” Dunphy says.

EU aid

The EU’s new Food Aid programme has earmarked €24 million for Ireland over seven years to support people suffering from food poverty. The funding will be distributed by the

Department of Social Protection

. Dunphy hopes some of it might be diverted into rolling out the Bia initiative nationwide.

The EU stipulates that donor countries must be able to account for where the money goes. “What we’re saying to the Government is that we can guarantee this if you partner us.”