The APPMA and RMIT have launched the results of an in-depth study examining the opportunities and barriers for the Australian packaging and processing machinery sector to tackle food waste, outlining food waste reduction ambitions and projects.
The new report, entitled Opportunities and Barriers for the Australian Packaging and Processing Machinery Sector to Tackle Food Waste is part of a larger study on the opportunities for food packaging and processing machinery companies to tackle food waste and loss.
It is estimated that food waste costs the Australian economy approximately $20 billion each year and over 5.3 million tonnes of food intended for human consumption is wasted each year from households and the commercial and industrial sectors.
The study, funded by the Fight Food Waste Cooperative Research Centre in partnership with the Australian Packaging and Processing Machinery Association (APPMA) and RMIT University, is the first of its kind to focus on an often-forgotten part of the food supply chain: the suppliers of technologies and machinery to process and package food.
These suppliers are often identified as the ‘manufacturing stage’, but this study also includes farm, transportation, retail, and consumption stakeholders.
The global market for food waste management has been growing annually. According to a 2019 BCC Research report, it reached $31.3 billion in 2019 and should reach $43.1 billion by 2024, at a compound annual growth rate (CAGR) of 6.6% for the period of 2019-2024.
Given Australia’s strong food production role in the region and beyond, the Australian packaging and processing machinery (PPM) industry is likely to play a key part in the global transformation of food supply chains, but the report makes it clear that the technology and machinery industry is not ‘in control’ of any aspect of the chain itself.
“It is an industry dependent on relationships, collaboration, joint goals, and the ability to innovate in a rapidly developing technology arena with increased awareness about the need to be sustainable in general, and to reduce food waste in particular,” the report states.
The report presents the results from a cross sectional survey of 27 industry participants and interviews with companies (including HMPS, Inox, Matthews Australasia and Result Group) to provide rich case information about specific experiences, challenges, and outcomes in the context of food waste reduction ambitions and projects.
EIGHT KEY FINDINGS:
1. Organisations in the PPM sector have a positive attitude towards the need to reduce food waste and are involved in a range of efforts already. More than two thirds (69.6%) of the responding firms indicated that their organisation has been successful in reducing food waste, either through participation in projects with other organisations or through internal initiatives. More than half (52.1%) of the organisations state that their efforts have a significant impact on food waste and loss reduction.
2. The COVID-19 pandemic is a human health tragedy that has resulted in major economic and social disruptions across the globe. However, the pandemic and its impact on supply chain disruptions is also perceived as an opportunity for the PPM sector.
3. The broad push for sustainability in general and the need to remain competitive appears a strong motivating factor behind current sustainability and food waste reduction efforts and investments in the sector. This shared motivation shows that the PPM sector generally does not perceive a trade-off between food waste reduction and economic return on investment. More than half (56%) of the organisations believe that sustainability and profitability go hand in hand.
4. Packaging and processing machinery and related technologies cover an extremely broad array of approaches, technologies, and capabilities that can potentially impact food waste and loss positively. The ability and need to collaborate and build an innovative ecosystem with the food manufacturing stage and beyond was highlighted by participants as a strategic priority. Given the speed of innovation and the indirect relationship between the technology providers and the supply chain, broader awareness of the nature and potential impact of emerging technologies, based on blockchain and artificial intelligence (AI), for example, needs to be increased.
5. To accelerate food waste and loss reduction, the survey results show that there is a need to increase collaboration, while continuing to lower running costs and build supportive policy and regulatory systems. Government policy is seen more as a wasted opportunity for supportive measures and coordinated incentives and less a top priority challenge or impediment. Client education and willingness to pay, labour costs, and lack of impact measurement capability in the chain are seen as the top challenges.
6. The challenges related to food waste reduction and loss are multifaceted and therefore complex. The PPM sector was seen by participants as a partner in the food supply chain without control over waste, but also as a collaborator that already has a significant impact on food waste and loss reduction. Going forward, the knowledge in the sector regarding packaging machinery and technologies, shelf-life extension, sustainable manufacturing, distribution and handling, and cleaning capabilities are important areas for future gains. At the sector level, relationship brokering may lead to identifying leadership that can build collaborative investment cases, manage the innovation process, and create more circular outcomes and food waste reduction.
7. There is a continued need to educate stakeholders on the role of packaging and processing machinery in reducing food waste and loss. Different approaches to packaging, for example, create opportunities for the machinery sector. The industry’s knowledge on shelf-life extension, damage prevention, hygiene, software and hardware integration, and batching offers clear opportunities. Both consumers and governments need to understand the broader context and the complex interrelationships between technology and machinery, the larger food supply chains, and waste and loss as a critical outcome.
8. Future leadership development around innovation ecosystems, circular strategies, and food waste reduction may stimulate the understanding of joint goals and joint value creation opportunities. The key sector development areas are (in no particular order): networking relationship building; understanding and integrating emerging technologies; understanding and influencing policy, circular leadership, impact measurement and business case development; funding models; and stakeholder education.
The report concludes that while the capabilities and ecosystem of the PPM sector are broad and deep, they are also only indirectly connected to the food supply chain.
Two strategies emerge from the findings of this study. First, there is an opportunity to develop more in-depth food waste reduction capabilities in the packaging and processing area where the industry has core strengths. By building a full understanding of the needs of clients in that part of the food supply chain, the innovation development and adoption could be accelerated.
Second, by further integrating PPM capabilities that are adjacent to packaging and processing, the industry could broaden its offerings and become more aligned with integrated whole-of-chain solutions. Again, this needs close interaction with food supply chain clients, as there are more technological and market risks in this approach.
Ultimately, an innovation pipeline with short- and long-term outcome windows will need a whole-of-chain approach. This would require participation not only from the PPM sector and the food supply chain clients but also from academia and government, and an active involvement in larger policy debates.