Dave Lewis at Tesco
‘I want to run a responsible firm and that’s what I am doing’
Dave Lewis, the clean-cut, suited-and-booted Tesco boss, is recounting the afternoon he recently spent with a heavily tattooed Hells Angel. It’s a surprising image. The meeting of the two men from opposite ends of the social scene came in Brixton, south London, when the supermarket chief was finding out more about the grocer’s food waste initiative and who was benefiting from its surplus stock.
“There is a much wider pool of charities than homeless shelters and food banks, and some of the charities we donate to don’t have professional chefs,” Lewis explains as he’s dashing around the supermarket in Taplow, Buckinghamshire. It’s the start of an exhausting tour around the country that’s meant to rally the Tesco troops in the run-up to Christmas.
As well as sealing a £3.7bn takeover of Booker, trying to grow sales amid increasing competition from the discounters, and attempting to draw a line under past accounting troubles, Lewis has been ramping up Tesco’s food waste targets.
As part of Tesco’s tie-up with food charity organisation Fareshare, it recently recruited chefs to show volunteers how to make the most nutritious and innovative menus with leftover food. One of these volunteers was the “larger than life” former drug addict and reformed Hells Angel who now runs a community centre and was studiously taking recipe notes. It made an impression on the boss of the UK’S biggest retailer.
Since 2013, Tesco has been a driving force behind tackling the country’s food waste crisis and was the first supermarket to audit its own wastage. The scale of the problem remains enormous: around 10m tons of food is wasted in the UK every year while food poverty and the use of food banks have increased fourfold in the past five years. By February, Tesco will become the only UK retailer to ensure that no food fit for human consumption will be passed as waste – an ambitious initiative that has involved all of its 2,654 shops.
“Last year we sold 10m tons of food to the British public,” says Lewis. “But even if our waste is just 0.7pc of the food, that’s still 70,000 tons of food. And so long as that food is fit for human consumption I’d much prefer it to go to people than landfill, or animal feed or fuel.”
The bulk of food waste actually comes from British households. The agricultural industry contributes around 1.7m tons of wasted food. In the retail sector less than 0.2m tons is wasted, but households throw away a staggering 7.3m tons each year.
Over the festive season alone it is estimated that 4.2m Christmas dinners are wasted, equivalent to 263,000 turkeys, 7.5m mince pies, 740,000 slices of pudding, 17.2m Brussels sprouts, 11.9m carrots and 11.3m roast potatoes. In total around £64m of food is squandered each Christmas.
Tesco, along with other supermarkets, has weaned itself off “buy-one-get-one-free” offers that were partly blamed for increasing the amount of food thrown away by consumers who were putting extra items in their baskets to get a bargain, rather than out of need. The supermarket is now focused on directing any unsold food to those who need it.
“In retail there will always be some surplus food, because no matter how sophisticated the ordering systems are it will be impossible to perfectly match the supply and demand for every one of our shops, 365 days a year, when there’s so much volatility,” says Lewis.
After initially discounting any surplus stock in store with “reduced to clear” yellow stickers, Tesco now ensures any unsold items at the end of the day are collected by local charities – including pre-schools, women’s refuge centres, rehab clinics and youth centres.
Fareshare has been instrumental in partnering up stores with a list of local charities and devising collection rotas. Tesco estimates that it has saved charities around £5.2m by donating its surplus food. “That goes a long way in reducing charities’ bill burdens, so they can spend the money on other things, like the cost of housing two more addicts, or providing much needed services,” says Lewis. The move was only made possible after the firm developed an app with two graduates from Trinity College, Dublin.
The app, called Foodcloud, allows each Tesco store – ranging from its vast Extra shops to local Express convenience stores – to scan and upload whatever surplus food they have at the end of the day to registered charities who then collect the food.
More than 6,700 charity partners now receive daily alerts from Tesco about surplus food with it donating 600,000 meals a week.
The Tesco boss agrees that the tide is turning when it comes to society’s attitudes towards food waste and recycling, and there is a growing awareness about the environmental and societal risks of our throwaway culture. Lewis spent much of his professional career at Unilever, which is run by outspoken environmental campaigner Paul Polman. It’s rubbed off on him: “I’ve worked some of my life in food-starving countries, so seeing the amount of food being wasted is really noticeable, it’s really stark.” The Tesco boss argues that the supermarket’s food waste efforts aren’t just another case of trying to restore the grocer’s reputation. He claims there is clear economic logic behind it. A UK business makes a return of £8 for every £1 saved, based on the UN’S thorough analysis. Those numbers aren’t just for hippies.
Lewis also chairs a wider initiative – Champions 12.3 – which focuses on the United Nations’ goal of halving global food waste.
Currently around 1.3bn tons of food is wasted – around a third of the world’s food production and enough to cover the land mass of China.
“Food waste has been talked about for years but if Tesco can make this work, with all of our different stores across the country, then why can’t everybody?” says Lewis.
Tesco is about to get even bigger as part of its £3.7bn takeover of wholesaler Booker. But Lewis has argued that the deal will enable the supermarket to tackle food waste even further, and across the whole food supply chain. For example, potatoes that don’t make the grade to be sold whole on the shelf to consumers can be turned into mash, not just for the supermarket’s ready meals but also for the restaurants, hotels and pubs that Booker supplies.
The Booker tie-up has taken almost a year to complete and has been viewed as the catalyst for a wave of deal-making in the convenience sector and the collapse of wholesaler Palmer & Harvey. However, Lewis insists that “consolidation of independent retailers wasn’t the reason” for doing this deal. “It is an opportunity to become the UK’S leading food business,” he says, sticking to the briefing notes released when the deal was announced back in January.
He looks baffled about predictions on future deal-making in the supermarket sector and what 2018 might bring. “I don’t see many material changes, I expect the pressures to be roughly the same. The difficult thing to predict is the timing of the EU negotiations. We face three impacts from Brexit: the freedom of goods, freedom of movement of people, and Ireland. People used to be surprised when I flagged Ireland as being an important issue, but now we are seeing how important it will be to find a resolution that can satisfy lots of different parties.”
Since he took the helm in 2014, Lewis has steered Tesco out of the biggest crisis in its history due to an accounting scandal. This further eroded public perceptions of the supermarket, which was seen as the bully boy of retail.
He says: “When I joined there was no trust in the business. But I believe that you don’t talk your way out of it, you have to behave your way out of it.
“I don’t think business should be considered bad and the size of the business should make you bad. I want to run a responsible business, and that’s what we’re doing.”
‘Food waste has been talked about for years but if Tesco can make this work, why can’t everybody?’