Case Study
Author:
Martin Fryer
Position:
Environmental Manager
Organisation:
Geest Plc
Keywords:
Waste Packaging
Producer Responsibility and
Packaging Waste - an Industry
Perspective
Geest Plc is a main supplier of branded fresh and prepared food products to all the major supermarket
chains in the UK. This article is a case study of the impact on the company of the Producer Responsibility
Obligations (Packaging Waste) Regulations 1997. It assesses the use of the Packaging Recovery Note
(PRN), the economic instrument associated with the Regulations, and the impact of the UK Government's
decision to increase recovery and recycling targets in 2001 above those first legislated for.
Geest history
Geest has its origins in the horticultural and fresh produce sector. The Van Geest brothers began growing
bulbs in Spalding, Lincolnshire and developed from this into a fresh produce business. In 1953 Geest
began trading with the Windward Islands and imported bananas, an activity for which the company is most
commonly known.
In the early 1970's the company diversified into prepared foods, opening the first dressed-salads factory in
Spalding, Lincolnshire. Throughout the seventies and eighties the company grew through organic growth
and acquisitions providing branded products to the major retailers. In 1996 the banana side of the business
was sold to Fyffes.
The approach to information
During the formative stages of the packaging waste regulations in 1997 Geest submitted data to the
Environment Agency based on 1996 usage. This was to assist the UK Government in establishing
packaging use by UK Plc.
Gathering the information and presenting it in an auditable form proved to be a time consuming and
difficult task. To avoid duplication of effort and the creation of 24 different systems for calculating each
business unit's obligations, the decision was made to produce the data centrally making one application to
the compliance scheme.
The method employed concentrated on volumetric data taken from stock adjusted goods received (SAGR)
records. The SAGR records contain the quantities of all purchases made by business units from packaging,
raw materials and sundries. Details include the opening stock, closing stock and usage figures. Each
packaging item used has a part code or 'P' code and each raw material an 'M' code. This approach seemed
to provide an adequate level of accuracy.
Information on the weights and sources of packaging and materials was obtained from suppliers using
proforma datasheets. The source of packaging and raw materials was also crucial to an accurate
calculation.
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Case Study
Data collection
The majority of Geest's obligations come from its packer filler operations but the company also imports
packaging (with a rolled-up obligation) and raw materials (picking up 100% of the obligations on tertiary
packaging). Geest also exports products for which the weight of packaging has to be removed from the
obligation.
With 3,000 food recipes, over 6,000 packaging items and several hundred packaging and raw material
suppliers the task was not to be underestimated.
In the first year spreadsheets were created using Microsoft excel to calculate individual business unit
obligations. Each individual packaging item was listed and its weight taken from supplier data. Usage
figures for the packaging came from the SAGR records.
The only drawback with this approach was that the records were not a secure data source - they could be
altered by several people within the organisation and their accuracy could be questioned. This could lead
to an over or under estimation of the company's obligation. However, for the legislative requirement of “a
reasonable estimate” this method was deemed adequate.
To test the approach, we commissioned an independent audit by Environmental Resource Management
who spent several days following the audit trail and assessing the accuracy of the data collection system.
They found it difficult to reach meaningful conclusions because industry response to the legislation was in
its infancy and there were no benchmarks or standards for comparison. However the final report was
broadly favourable.
Some developments
The problems with the SAGR approach were that the number-crunching exercise was an enormous task and
it could only be done at the year-end. This made it difficult due to the end of February deadline set by
Valpak, the compliance scheme. In terms of personnel, Geest employed one full time Legislative
Compliance Controller and at least two, but sometimes up to four, part time staff to cross check data and
chase business units or suppliers for information.
Internal cross checking of data was done using the Bill of Materials (BOMS). The BOMS is a recipe for
every product manufactured across the company. It shows sales, use of raw materials, packaging and costs
for each product. The sales and usage data provided a useful cross check to determine the accuracy of the
calculations for the whole company.
In 1999 the system was partly automated by the creation of a database using Microsoft Access, this
gathered information from the variety of sources but could only be used for the prepared-foods side of the
business. The system worked well but the size of the database and the complex calculations were, at times,
too much for the software to handle.
In 1999, we were audited by Valpak in August and by the Environment Agency in August and December.
Both audits confirmed the data met the required levels of accuracy. They highlighted the company's
enormous range of packaging types, raw material sources, products and customers and the complexity of
the calculations that had to be undertaken. The Agency and Valpak had difficulty in covering all areas of
the business in a one-day audit. The huge volume of paperwork generated by the Access and Excel
spreadsheet systems hindered the process. The Agency made some recommendations for improved data
accuracy, particularly in relation to exports.
It became clear that a software solution was required to ease the obligation calculations, reduce the manhours spent on the task and improve the accuracy of the calculations.
Computer software
Towards the end of 1999 Geest purchased an off-the-shelf software solution to help improve data accuracy
and its ability to respond to customer requests for packaging data. The new software 'Packtrack' required
hardware in the form of an SQL7 server. The combined package cost in the region of £16,000.
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Case Study
This proved to be a sound investment. The number of personnel required to calculate the obligation was
reduced to two part-time, the environmental manager and an environmental assistant. Also, the financial
burden of the regulations had not been as great as expected, membership of Valpak was proving cost
effective and obligation costs had actually gone down year on year.
'Packtrak' is able to take part code and product recipe information from the BOMS off the company's
'impcon system. For those business units not on 'impcon', spreadsheets are still being used. However,
'Packtrak' can be updated with tables so the obligated tonnage from these business units can be added to the
company's total. Existing packaging weight data and any new packaging item weights can also be loaded
into the 'Packtrak' database.
By loading in sales files from business units their obligations are calculated automatically. The software
supplier, Foresite Systems updates the software to take account of any changes to the regulations and
percentages for recovery and recycling obligations.
This allows the user to concentrate on the accuracy of the data being put into the system rather than
worrying about the accuracy of the calculations. For Geest, the installation of 'Packtrak' has also meant
data can, for the first time, be loaded throughout the year as opposed to an end-of-year exercise.
With uncertainty over the future cost of the regulations, due to the PRN market and possible price
fluctuations, the ability to predict obligated tonnages and potential costs is invaluable. In addition
'Packtrak' has helped to improve our response to customer requests for packaging information.
Auditing
Over the past four years Geest has generated a large database of packaging item weights and new
packaging items are continually being added as new products are designed and launched. During 1998 and
1999 over 2,000 packaging item weights were added to our database.
With only two full-time staff in the environmental section an audit of all packaging suppliers was an
unrealistic aim. A decision was taken to select a sample for audit purposes.
Audits have been undertaken on a small number of the 3,000 recipes available, tracing the packaging chain
from product to supplier. The audits were designed to check the accuracy of weight data, examine heavy
metal contamination and investigate the use of laminates and their recyclability. One encouraging finding
was that Geest's suppliers were also putting in place systems to improve the accuracy of their data.
Waste management and PRNs
Geest also generates large quantities of packaging in back-door waste, particularly from those sites that
import raw materials or packaging items. It was hoped that the good quality card found on imported fresh
produce could be used to offset some of our obligation and in 1998/99 several waste management
companies were approached to provide equipment, collection facilities and hopefully PRNs.
The response was disappointing, the attitude from most if not all waste management companies was that
recovery and recycling services could be provided but at a cost and if Geest wanted PRNs then there would
be an additional cost.
We decided to set up an integrated waste management system at our main site at Spalding. Cardboard
Connection Ltd. provided the equipment and an income is produced from this waste - bulked-up steel also
provides an income. These initiatives have reduced considerably the amount of waste going to landfill.
The question remains as to whether PRNs are useful as an economic instrument, our efforts have produced
no benefits to date?
Geest is striving for continual improvement in its environmental performance. The recovery and recycling
of waste is one contribution to the aim. We had hoped to contribute more to the ethos of the packaging
waste regulations by diverting packaging waste away from landfill.
But the current PRN system has provided no incentive for us to do that. The future of the PRN market is
uncertain and the present reliance on export markets for generating PRNs at the cost of some UK
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Case Study
reprocessing capacity surely goes against the whole philosophy of the regulations and the use of economic
instruments?
In 2001, the recovery target is to be raised from 52% to 56%, this is happening because the UK is in danger
of failing to meet the European target. This will penalise companies like Geest who have taken the
regulations and their responsibilities as producers of packaging waste seriously. For Geest the potential
financial impact of the new recovery targets is in excess of £200,000.
An interesting parallel in the use of economic instruments can be drawn with the recovery and recycling of
household waste. In the UK, local government was set a target in 1990 of recycling 25% of household
waste by the year 2000 and an economic instrument “the recycling credit” was introduced to provide
money for investment in recovery and recycling systems. The target was not reached, in fact the UK failed
to reach double figures and the target has recently been reviewed.
Time should be taken to ascertain whether the use of economic instruments is effective in waste recovery
and recycling, particularly when so much rests on the need for an expanding end market for recycled
materials and products which does not currently exist in the UK.
Note
This article was published in 'the environmentalist' in January 2001
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