Case study

In 2001, without spending money on new technology, Heinz Australia realised savings of AUS$60 000 per year by reducing waste in the production and retailing of tomato ketchup. This was accomplished by forming a supply-chain partnership programme to develop environmental management systems (EMS) for supply chains in the tomato ketchup industry. Infotech Research headed up the project, with funding and support from The Commonweath Department of Environment and Heritage. Infotech worked with the following organisations involved with the production and retailing of ketchup: Heinz-Watties Australasia, Australian Processing Tomato Research Council, ACI Plastics, Safeway grocery stores, and Visy Industries (a glass bottle manufacturer). The team examined the environmental performance of a bottle of ketchup throughout the entire supply chain and focused on discovering opportunities to reduce the amount of raw material wasted and packaging waste created, in addition to decreasing water and energy use. They discovered that an astounding 56.6% of the tomatoes grown for processing into ketchup are wasted. Most of the waste takes place with growers and at the early stages of processing. Packaging wastes throughout the supply chain are also high, at 0.57 kilograms per litre of ketchup.

This supply chain consists of the following steps and participants. Tomato growers supply their products to the nearby Heinz-Watties tomato paste manufacturing plant in Girgarre, Victoria. At the plant, tomatoes are cleaned, cooked, and converted to paste; the paste is then packed into 1000

litre bladders stored in wooden boxes. Ketchup is then packaged in PET and glass bottles provided by ACI Plastics and Visy Industries, respectively, and stored at Girgarre; it is then shipped to the Heinz-Watties Dandenong warehouse before being distributed to retailers, including Safeway supermarkets.

Of the 56.6% loss of tomato product, 49% is lost by local growers with unharvested fruit or tomatoes in inferior condition or with inadequate colour that fail to meet the quality standards for the paste. There are no other markets for the tomatoes, as they are grown specifically for paste production. Another 10% of the tomato paste is discarded because it does not meet quality criteria at the paste production stage. This is an ongoing loss that costs money in addition to requiring biological treatment before being disposed of in landfills. Subsequent to paste manufacture, tomato-based losses of 2% continue at each stage of the supply chain.

The majority of ketchup packaging waste is generated at the supply chain's formulation, retail, and consumption stages. Half of the ketchup is bottled in PET plastic and the other half is put into glass containers in a range of sizes. In the processing plant, the bottles are placed in cardboard cartons on pallets then wrapped in shrink-wrap before shipping to the warehouse. Half of all of the packaging wastes are recycled. Most of the recycling takes place at the supply chain's warehouse and retail stages, particularly with cardboard waste. Significant amounts of bottling wastes are generated at the formulation stage when newly bottled ketchup does not meet Heinz-Watties quality standards. However, recycling of the bottled ketchup is low because the packaging prevents it from being composted and the bottles must be cleaned before being recycled. So the poor-quality bottled waste is usually sent to landfill. Some of the bottled waste is caused by breakage during storage and transfer, with twice as many glass bottles damaged than PET plastic bottles. Finally, waste generated at the growing stage is comparatively minor and mainly consists of polypropylene drip tape and agricultural chemical containers. The containers are challenging to dispose of as they cannot be directly tipped to landfill.

Based on their findings, the supply-chain members devised goals and plans for reducing waste. Beginning with the growing stages, the growers and Heinz-Watties set a goal of reducing harvest losses by 20% per year, saving AUS$20 000 in the initial year. Their plan was to improve coordination of tomato harvesting and delivery to the facility for processing to reduce tomato losses and poor-quality tomato paste. Growers set the goal of reducing polypropylene drip tape waste landfilled by recycling 80% and saving approximately AUS$500. Another AUS$500 would be saved by recycling chemical containers through the Australian DrumMuster Program. Three packaging waste reduction goals were set. Change bottling from half PET: half glass to 60:40 PET:glass to reduce breakages and transport fuel costs, for anticipated savings of AUS$38 000 per year. Another AUS$2000 per year is expected to be saved by identifying and quantifying causes of damaged packaging and reducing landfill disposal by 10% per annum. The second goal was to increase recycling of damaged PET bottles and those containing off-spec ketchup. The last goal was to investigate options for adding value to organic wastes by reusing them as refined extracts in tomato sauces or as food additives.

A total of AUS$60 000 per year in savings is anticipated by implementing these initiatives. No new equipment or technology is required; instead, the key to waste reduction is communication between supply-chain partners and organisation of the improvement schemes.

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