17 July 2008
Buyers in the food industry should develop longer-term strategies to tackle the problems of waste and high prices in the supply chain.
Peter Jackson, director of risk services and head of the food group at consultants Aon, said purchasers in the sector are driven by highly demanding short-term supply chains. He urged them to take a more strategic three-year view, to be selective about suppliers and collaborate with them to eliminate waste and reduce costs.
It follows the publication of a government report, Food Matters. The review included information and actions aimed at targeting the waste of "millions of tonnes" of food and packaging in the supply chain.
The report said greater transparency of use, better communication between buyers and suppliers and application of good practice could help firms meet the aim of cutting waste by 20 per cent by 2010.
Jackson agreed: "Buying has moved away from being purely transactional. Procurement must help lead and integrate the supply chain." He added purchasers should consider working with external experts and compare practices with rivals.
This approach could also help to mitigate rising food prices partly brought about by the increasing amount of biofuel production.
"If 50 per cent of the wheat market goes to biofuels it will impact food supplies and contribute to price rises," said Jackson.
"Buyers must understand the impact of this on meat, dairy and bakery products. They should be making sure they've got a choice of suppliers and consider hedging techniques."