Food for Thought:

Rising prices & decreasing profits:

How giving away is the new way to save in the UK food industry.

The survey revealed little awareness amongst donors of the potential savings they can achieve through food donation, indicating the need to discuss the financial benefits of redistribution.

There is an urgent need for the UK food industry to redistribute more food — not only for the environmental and social benefits, but also as a core part of its overall strategy to generate cost savings in this challenging economic climate. By redistributing, food businesses eliminate costs spent on storage and warehouse spaces, as well as on waste management. When businesses partner with organisations like City Harvest, they save even further by not having to pay for the logistics of disposal, as City Harvest takes care of transport and any required sorting of the produce. City Harvest believes that redistribution can address cost pressures in the food industry, whilst also helping vulnerable populations gain access to food.

On average, only 60% of generated surplus food is redistributed.

Redistribution is a process whereby surplus food that might otherwise be wasted is rescued from food businesses and delivered to partner agencies and community programmes to help feed people experiencing food insecurity. *2

The Road to Redistribution

Redistribution plays a pivotal role in alleviating the mounting financial burdens faced by both the food industry and individuals in the United Kingdom.

Stop 1: Farming Sector

There has been a substantial increase in the financial pressure on farmers, in particular for their fresh produce production, which is affecting their business viability.

165%

increase in the cost of energy prices for farmers in the past year *5

Anaerobic Digestion’s (AD) Ramifications for Farmers & People Government-funded subsidies for AD have increased by a near four-fold (from £200 million seven years ago to £750 million today). However, AD may become less financially viable as taxes for the AD sector are estimated to increase by 30% in the upcoming year. *6

These increases only compound the financial pressures experienced by farmers as many of the AD plants are located on farms. *7

the loss of more than 150 million meals *8

Stop 2: Manufacturing Sector

Food manufacturers have faced significant cost pressures as they saw their output reduced due to factors such as staff recruitment issues and supply chain bottlenecks from COVID-19 and the war in Ukraine.

£3bn

value of goods that cannot be finished or sold *10

Many manufacturers struggle withthe availability of materials as the war in Ukraine continues. *11

Did you know?

£14 return for a business in the food industry *12

Redistribution is both a cost-saving mechanism and a way to get fresh produce to the most vulnerable families.

Anaerobic digestion and landfill disposal emerged as the top areas for cost-savings through food redistribution. As the table below demonstrates, the entire food industry bears the brunt of waste disposal, labour and transportation fees. Food redistribution presents an opportunity for the industry to offset these costs. Partnering with City Harvest, in particular, maximises cost-savings as it provides the service FREE of charge.

Although redistribution substantiates ESG/CSR reporting and fosters consumer trust, it is overlooked by an average 63% of food donors. These benefits cannot be understated, as over 60%of consumers are more likely to purchase and support products associated with a trusted brand that actively contributes to positive societal impact. *12 Highlighting further financial benefits for the industry, in the face of its current labour crisis, two out of five food donors have acknowledged the benefit of redistribution to their workforce’s job satisfaction and mental well-being. This is imperative as businesses have to prioritise the retention and well-being of their employees. Ultimately, businesses who engage in redistribution input minimal effort to yield greater financial returns.

Collection times within 24 hours;
Free transportation; and
Labour to sort surplus

Stop 3: Retail Sector

Retailers have seen a 41.5% decrease in operating profits in FY2022/23 through trying to limit passing on these additional costs of production to consumers. Some have introduced price locks in order to safeguard consumers and maintain their market share, at the sacrifice of their revenue. *16

11.1%

increase in the average price of fresh produce *18

Marketing Standards Perpetuate Food Surplus.
Cosmetic standards are the primary reason for food surplus generation for City Harvest’s donors. Standards imposed on the food industry such as size, shape and physical blemishes cause 4.5 million tonnes of fresh produce to be wasted in the UK every year. *19
As 400g is needed per person to fulfil the daily requirement for five portions of fresh produce for a healthy diet, rerouting even 1,880 tonnes of the surplus produced by cosmetic standards a year will help the 4.7 million food insecure people in the UK receive their five-a-day. *20 *21

Stop 4: People

The UK population continues to eat less fresh fruit and vegetables than is recommended by the World Health Organisation (WHO). Deprived communities are disproportionately affected.

1 in 5 people in the UK consume an average of 3 portions of fresh produce each day, two portions under the daily requirement. *22 Rising food prices contribute to the limited fresh produce consumption, as the most deprived quintile would now have to spend 50% of their disposable income on food to meet the cost of the WHO-recommended healthy diet. *23

Brexit added £250 to household food bills between December 2019 and March 2023. *24

City Harvest’s Social Return on Investment (SROI)

Social Return on Investment (SROI) is an approach to measure the outcomes of an activity to quantify the ‘societal value’ it creates in terms of economic, social, and environmental benefits. At City Harvest, we calculate our SROI analysis in alignment with our mission of ‘Rescuing food, people, and planet.’ The analysis provides a breakdown of the estimated benefit to society (both financial and non-financial) of City Harvest donations in a financial value.

For every £1 invested in City Harvest, £11.90 of value is created each year for society.

Since 2018, the estimate of City Harvest’s SROI has more than doubled, primarily due to our increased operational scale. We have also made some changes to our methodology of calculating SROI, but these had a net negative impact, as we have been more conservative. We have also included some new factors in the SROI calculation as the composition of our recipient charities has changed (e.g. improved educational outcomes for children receiving food). When calculating SROI we have considered that CityHarvest is part of, and enables, a broader ecosystem of charities. Those factors in the Food and Planet pillars are more directly attributable to City Harvest’s operations, and therefore, City Harvest is responsible for a higher proportion of the total social impact generated here. In the People pillar, City Harvest enables improved outcomes but is not exclusively responsible for them, so only a portion of the total social impact generated is attributed to City Harvest and included in City Harvest’s SROI.