State of Green Business
IKEA’s 7 imperatives for scrapping food waste
Many consumers associate IKEA with minimalist design, affordable furniture and pantry items such as the lingonberry sauce it sells for Swedish meatballs.
Lesser-known is that beyond serving up couple’s squabbles and sofas, the iconic Swedish furniture manufacturer runs a major in-store restaurant business — and its newest sustainability project is aimed at helping resolve the wicked environmental and financial problem of food waste.
Last month, IKEA, which serves hot meals, take-home products and coffee to 650 million annual visitors at nearly 400 of its stores in 48 countries, publicized its goal of halving the food waste from those operations by August 2020. The "Food is Precious" initiative trains employees to use an electronic "smart scale" and data analysis tool to identify what is being wasted (and why) and to find creative solutions to reclaim the profit.
As IKEA Food expands — in 2016, its turnover grew by 7.7 percent compared to the previous year for a turnover of more than $2 billion, and accounts for about 5 percent of overall IKEA revenue — maintaining efficient food services translates to big savings.
Since Food is Precious was implemented in December until May, 84 stores have implemented the "smart scale solution," reducing nearly 175,000 pounds of waste and mitigating 341,000 kilograms of CO2, the equivalent of 437 flights between Stockholm and Sweden. Furthermore, salvaging 176,000 meals at an average price of $6 per meal is avoiding nearly $1 million in the bin.
Midway into the first year of the goal, Jacqui Macalister, health and sustainability manager for IKEA Food Services, reflected on the initiative’s menu of opportunities and challenges. Here are some of her main takeaways.
1. Set quick but careful goals
"In 2014, IKEA Food Services met with a number of stakeholders, all gathered to discuss the future direction of the business and the sustainability issues we would like to address," Macalister said. "We recognized that the most immediate thing we could do, as far as sustainability was concerned, was to tackle food waste."
The World Resources Institute (WRI), which works with IKEA as a member of Champions 12.3, a coalition dedicated to solving Sustainable Development Goal (SDG) 12.3 — reclaiming the third of the world’s food that is lost from "farm to fork" — found that businesses can earn up to $14 on every $1 spent on food waste reduction.
Seeing a sustainability benefit as well as "significant savings" involved with taking on the initiative, IKEA’s global 2020 goal seemed a fair target: "We wanted to roll it out quickly, but not so fast that we were setting ourselves up for failure," Macalister said.
"The most challenging part is overcoming inertia," she said. "You need to stimulate the right kind of change through operations, along the supply chain and at home. We attacked our own operations first."
2. Make friends in tech
IKEA partnered with two tech companies to make the transition to low-food-waste operations. A "smart scale" and touch screen designed by LeanPath is connected to waste bins, measuring the volume of food as it is thrown out. The technology records what food was binned and how; analyzes the day’s waste using cloud software and pulls daily reports showing the highest areas of food waste, helping employees to become resource-efficient.
Another technology partner, Winnow, shows employees the value of food headed to the compost bin, generating data about where handlers should adjust purchasing, production, menus or staff training to prevent waste from occurring in the future. It promises to save up to 8 percent on food costs.
"We have always had management operation in the kitchen, but aided by technology, we can easily automate and aggregate the reasons food is being wasted and raise awareness with employees about how we can improve operational practices," Macalister said.
The Internet of Things is championed as a large-scale solution to minimize food waste; according to Navigant Research, the global smart waste collection technology market is expected to grow from $57.6 million in 2016 to more than $223.6 million in 2025.
But the people tending the kitchens are as essential as the technology towards reaching IKEA’s goals.
3. Engage employees
IKEA relies on 18,000 employees to run its operations. Getting them on board with the food waste initiative helps overcome the inertia Macalister discussed in kick-starting the project.
A co-worker survey performed in stores after the Food is Precious Initiative rollout showed that over 70 percent of IKEA colleagues felt proud of participating and half were even adopting food-waste prevention behaviors at home.
"We have a lot of support [for training programs], from both our suppliers and from the country head office and in the stores," said Macalister, spreading ownership of the food waste initiative across the organization.
4. Give good energy
So what happens to the leftover food that inevitably is thrown out? IKEA's 2020 goal also states that 90 percent of all food waste will be recycled or turned into a resource such as compost and biogas.
This fits well within IKEA’s wider 2020 sustainability vision, most notably becoming entirely energy-independent on renewables, producing as much clean power as it consumes and selling 500 million LED light bulbs to customers.
"We prefer to divert the waste in the first instance and find a good home for it after that to use as a resource, for example through biodigestion and composting," Macalister said. "[Our aim is that] none of our waste goes to landfill; it will be repurposed in some description."
5. Democratic design
IKEA’s five principles of "democratic design" help ensure that inefficiencies are avoided at the start of the design process, whether creating furniture or food. These principles are function, form, quality, sustainability and low price.
"Avoidance of waste is second nature to the business" due to these principles, Macalister said.
For example, the 2016 year-end report that first described the food waste goal also described the rationale behind the creation of a new menu item. The new pulled-salmon sandwich sources the fish’s fatty belly meat, which is usually discarded when filets are cut.
Somewhat surprisingly, IKEA claims to be the food service company offering the most Marine Stewardship Council and Aquaculture Stewardship House certified sustainable seafood globally.
6. Tackle post-consumer waste
Controlling post-consumer waste, or what happens to food after it leaves the store, is an entirely different obstacle. According to Macalister, in Western countries and other developed nations, most food waste occurs at home, so the company is in the process of creating easy solutions for consumers to prevent food waste beyond the store.
"The second two years [of the initiative] to 2020 would enable us to also address post-consumer waste," she said. "That will be more tricky and complex to address because it deals with consumer behavior."
"We have done tests with post-consumer waste, but there are lots of challenges with it, like when people take too much food or order too much," Macalister continued. "We’re still finding that out and looking at post-consumer waste pilot and test phase."
7. Tackle global challenges head-on
As mentioned, IKEA is a member of WRI's Champions 12.3 coalition against food waste on a global scale. This is an effort to end global hunger and to stem rotting food that goes to landfill, where it releases greenhouse gasses such as carbon dioxide and methane.
The program's target is to halve global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses by 2030.
Aligning internal operational goals with a bigger commitment to cutting food waste allows companies such as IKEA to develop unique solutions to operational issues and share them across siloed organizations.
"Identify the effective measures we can take to address sustainability problems when there are finite resources for food production," Macalister advised. "Leap on this, be transparent and show there is a strong business case for this kind of work."