Understanding, Assessing

and Managing Water

in Grocery Supply Chains

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FOREWORD 3

EXECUTIVESUMMARY 4

GETTINGSTARTED 6

INTRODUCTION 7

UNDERSTANDINGWATERINYOURSUPPLYCHAIN 9

Variation by:

> Use 9

> Season 10

> Location 11

> Product 12

> Source and quality 13

ASSESSINGWATERINYOURSUPPLYCHAIN 14

> Stage A: On site direct water use and water balance 15

> Stage B: Supply chain mapping 17

> Stage C: Comprehensive water footprinting 20

MANAGINGWATERINYOURSUPPLYCHAIN 22

> Practical tips to managing water 22

> Information on regulations 26

> Information on voluntary agreements 29

> Building enhanced water stewardship 30

THEFUTURE 33

SUMMARY 35

Glossary 36

References 37

Annex 38

Contents

© Institute of Grocery Distribution 2010. All intellectual property rights reserved. IGD is the trade mark of the Institute of Grocery Distribution. IGD authorises you to: View and print out the material for personal use only. Extract small amounts of text, tables and charts for inclusion within internal company documents for limited distribution. IGD must be referred to as the source of information when this occurs. You are not authorised to: Sell, license or dispose of material for commercial or any other gain. Alter the material in any way. Whilst every effort has been made to ensure that the information contained in this publication is correct, neither IGD nor any of its staff shall be liable for errors or omissions howsoever caused. This publication is a guide only and does not provide specific advice.

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Water is our most precious resource – we simply cannot live without it. As an industry we use a lot of it. And as the triple challenge of climate change, global development and a rising world population really start to impact the supply of water, it could become a bigger challenge for food and grocery companies than anything we have seen for decades.

We cannot look at water in isolation, either from the point of view of the food supply chain, or with wider sustainability objectives in mind. While food manufacturing has been improving use of water for many years, it is too simplistic to think that it is just a challenge that our farmers will have to tackle and nothing to do with anyone else in the chain.

Water is inextricably linked to other aspects of sustainability. Many workers in some water-stressed areas of the world rely on the food industry. If we simply withdraw from those areas to save water, the social impact could be significant.

This is why our Industry Sustainability Group has put together this guide to water in the supply chain. In these pages you won’t find all of the answers – we’re still on a journey to finding those and need to work together even more to meet the challenge. But you will find a deep and broad source of information, tips for looking at your own supply chain’s water consumption, and some positive steps that companies large and small can make.

I hope you find it useful.

Foreword

Joanne Denney-Finch OBE, Chief Executive, IGD

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UnderstandingtheimpactWater affects supply chains, from raw material to consumer. The extent of any impact and risk is determined by a number of factors:

~ Use – whether water is used for human or animal consumption, for processing, or cleaning

~ Season – summer brings high irrigation demand, winter brings flooding and freezing

~ Location – what local supply and demand conditions are

~ Product – impacts can vary tremendously depending on the type of product

~ Sourceandquality - both freshwater supply and effluent disposal

The degree of water-related risks to companies depends on a combination of all these factors.

AssessingtheimpactA business must be aware of both its direct water use, and the water ‘embedded’ in food and grocery products. There are a number of activities a company can undertake; some simple, some more complicated. We suggest three stages to assessing impact:

1.Startwithyoursite(s)– first meter water and then undertake a water balance (input, leaks, evaporation and effluent)

2. Assessyoursupplychains

~ Analyse the sustainability of water supplies. For example, identify raw materials supplied from areas of local water scarcity

~ Determine if water quality is an issue, either as supply or as effluent

~ Understand the local impact of water - analyse water use and your relationship to other water users in the same locality

3. Undertakeafullanalysisofembeddedwater inaspecificproduct

~ Include reference to the different sources of embedded water - focus on the more vulnerable sources of water

~ Consider how to quantify impact as well as volume

Companies may not need, or wish, to cover all three stages. However, to assess the full impact of water on your business you will have to move beyond direct use to address water in your supply chains.

Water is a vital resource for the food and grocery industry. The combination of limited availability and high demand, including the expected impacts of climate change, mean food companies are subject to increasing water-related risks. The guide aims to help food and grocery companies of all sizes improve their understanding, assess impact and better manage these risks along supply chains.

Executive Summary

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ManagingwaterMore companies are seeking advice on how to manage water in their own operations and in the extended supply chain. We encourage companies to explore new technologies and drive best practice. To help this process the guide:

~ Outlines practical tips, relevant to all parts of the supply chain

~ Sign-posts further sources of information

~ Summarises the role of regulations and voluntary agreements

ThefutureThe impact of a rapidly expanding world population, coupled with climate change, will increase the water- related risks faced by food and grocery companies. The following points are important in developing a resilient and sustainable water strategy:

~ Recognise the importance of local collaboration

~ Factor in new management of abstraction licences and increases in the price of water

~ Identify best practice in watershed governance and management

~ Review new technologies for better, cost effective water management

~ Respond to the potential impact of supply interruption and flooding

~ Incorporate the impact of climate change into sourcing plans

Companies who understand and manage water risks effectively will be most resilient and better able to survive and prosper in a future resource-constrained world.

Want to take action? Click here for practical tips and checklists for water management across the whole supply chain.

Executive Summary

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Getting startedMonitorthewateryouareusing:~ Establish where you use water (sub meter if appropriate)

~ Take regular meter readings

~ Look for trends over time – high water use outside working hours may indicate leaks

~ Reduce leaks

~ Optimise water use (e.g. match your periods of high demand with periods of high supply)

~ Harvest rainwater to supplement supply

~ Provide clear information and labelling of appliances that use water on how best to operate them

~ Lag hot water pipes to save run through of water

~ Lag cold water pipes to reduce bursts due to freezing

~ Improve and expand recirculation/re-use systems in plant and equipment

Developaplantomanagewater:Step1: Involve people and gain top-level commitment – appoint a champion and identify roles, responsibilities and resources

Step2: Focus effort and prioritise actions – don’t overlook effluent as well as water supply

Step3: Understand cause and effect and identify the ‘quick wins’ – look at four key areas: people; methods; materials; and machinery

Step4: Draw up your action plan – identify the task, highlight what is achievable, who is responsible and a timescale for completion

Step5: Implement your action plan - publicise your success, review the plan, identify volume and cost savings, plan for future scenarios

This advice is based on guidance from WRAP. Throughout the guide, we reference sources of further information.

If you have a water management plan in place the guide offers many other suggestions on reducing the impact of water on your supply chains.

This guide is available on line as an interactive pdf, with full embedded links, please visit www.igd.com/waterguide

If all of this is new to you and you want to know where to start, the following tips offer some quick and easy wins.

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IntroductionImportanceoftheglobalsupplychainGood water management starts with companies ensuring legal compliance for water use and effluent management. Many food and grocery products also have significant volumes of water ‘embedded’ in them. Companies must, therefore, be aware of their vulnerability to reduced water availability and degraded water quality, both in direct use and in their supply chains.

As food supply chains are often global, companies’ water supply or quality issues elsewhere in the world may impact the companies’ resilience and cost base in the UK. In addition, companies sourcing products from water scarce regions may face challenges to their reputation for using finite water resources needed by local populations.

The water-related risks that companies face have been summarised by WWF-UK1 as follows:

~ Physicalrisks – deterioration in product quality/ safety; raw material or product shortages

~ Financialrisks – escalating cost of direct water use, fluctuating and/or escalating cost of raw materials/products/services, requiring significant water input

~ Regulatoryrisks – tightening regulation leading to cost increases; outright bans on specific practices and reputational risks associated with litigation

~ Reputationalrisks – from actual or perceived irresponsible use of water, either directly by companies or in their supply chains

Whocares?Investors are aware of the importance of water in the food and grocery sector. They are taking a greater interest in the water strategies of larger food and grocery companies and analysing their exposure to risk. The trend is set to continue as investors seek reassurance that businesses have water use, water management and improvement plans, and understand future water trends and challenges. These businesses will in turn be obliged to seek facts, figures and assurances from their suppliers.

Non-Governmental Organisations (NGOs) believe that businesses have a key role to play in supporting good governance of water. This may include building relationships with local communities using the same water sources. NGOs see greater challenges ahead for companies unable or unwilling to address their impact on extended supply chains.

Governments, particularly those in water scarce regions, remain very sensitive to the use of water.

PurposeoftheguideThe purpose of this guide is to help food and grocery companies of all sizes, increase understanding, assess impact and manage water in their supply chains. The guide does this by outlining the main concepts, issues and challenges and suggesting solutions.

Water is used directly by food and grocery companies and forms an important element of many of the ingredients purchased by companies. Water is used by consumers in preparing food products for consumption and is essential for some products to fulfil their function (e.g. washing powder). Water is, therefore, relevant to all food and grocery companies to a greater or lesser extent.

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Only 0.5% of global water is available as freshwater for human use: 97% is saltwater and 2.5% is locked in glaciers and ice2.

Of the available freshwater, over 97% is stored in underground aquifers. They account for approximately 50% of all drinking water globally, 40% of all industrial water and 20% of irrigation water3.

Nine countries (Brazil, Russia, China, Canada, Indonesia, USA, India, Columbia and the Democratic Republic of Congo)4 possess over 60% of the world’s available freshwater.

As a global average 70% of water withdrawals are used in irrigation in agriculture5. There are marked differences by country however:

~ In Europe, agriculture accounts for only 32% of use, with industrial use 53% and domestic use 15%

~ In Africa, agriculture accounts for 86% of use, with industrial use 4% and domestic use 10%6

It is estimated that up to 35% of global irrigation withdrawals are unsustainable7.

Today 2.8 billion people in 48 countries live with the threat of water scarcity8; by 2050, the number of people impacted is projected to increase to 7 billion9.

A supply of clean, safe, cost effective water is regarded as a human right. Given this, it is socially unacceptable that a significant population exists without access to clean water10.

In some regions of the world, corruption and territorial disputes affect access to water, sanitation and the treatment of effluent. At the same time the ownership, management and cost of water is often the subject of dispute.

Thebigpicture

Introduction

KEy pOInts:

> All food and grocery businesses face a number of water-related risks and these are increasing

> Exposure to these risks will vary by company, so understanding your particular situation is critical

> Stakeholders are paying more attention to how businesses are assessing and managing water-related risks

> This guide will help companies increase understanding, assess the impact and manage your water-related risks

More information:World Business Council for Sustainable Development (WBCSD) - Facts and Trends on Water, Version 2 (Large file size 4MB)

CDP Water Disclosure - The Case for Water Disclosure

Ceres - Murky Waters? Corporate Reporting on Water Risk

WWF - Understanding Water Risks

European Environment Agency - Water resources across Europe, confronting water scarcity and drought

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Understanding water in your supply chain

Figure 1 illustrates the different uses of water across the major stages of the food and grocery supply chain. Energy, and its associated water use, is linked to all activities. Different uses of water will have different economic, environmental and social values.

Variationbyuse

Figure 1: Examples of water use along the food and grocery supply chain

Source: IGD

Raw Materials

Consumption human and animal

Irrigation

Growing

Packaging raw material/production

Animal and food production

Wash down and hygiene

Use

Consumption human

Cleaning and clothes washing

Cooking

Sanitation systems

Personal consumption and hygiene

Disposal

Consumption human

Washing recyclables

Processing

Consumption human

Cleaning equipment and vehicles

Cleaning ingredients

Cooking

As an ingredient

Sanitation systems

Personal consumption and hygiene

Retailing

Consumption human

Cleaning equipment and vehicles

Cooking

Sanitation systems

Personal consumption and hygiene

E N E R G Y

Read this chapter to understand:

> How water is used in the grocery supply chain

> How availability of water varies by season, location and product type

> The different sources of water and water quality

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Companies must understand the importance of irrigation in their supply chains and ensure this is as sustainable as possible. Some irrigation facts:

~ In the UK over 1,000 agri-businesses rely on irrigation to produce 30% of the UK’s potatoes and 25% of all vegetables and fruit.11

~ 17% of global cropland is irrigated which supplies 30% to 40% of the world’s food production.12

~ Over 60% of the world’s irrigated area is in Asia13, where demand for food is already high and population growth is rapid.

FocusonirrigationRainfall varies by season, resulting in large differences in water available for use and storage. Figure 2 illustrates this variation in England and Wales through changes in available water from reservoirs. The dips in capacity in 2005, 2006 and 2010 indicate particularly dry summers.

The greatest demand for irrigation tends to coincide with the driest periods, when overall demand is at its highest and supply is at its lowest. In areas of the UK where irrigation is most heavily relied upon

(e.g. East Anglia), demand for water can increase by over ten-fold on dry days during the growing period. In some areas this has led water companies to introduce a seasonal tariff to preserve water supplies in summer months.

Seasonal flooding is also a serious challenge: flooding damages crops and impacts infrastructure. Contingency plans for flooding should also be part of business water management plans - both in terms of crop failure and infrastructure damage.

Variationbyseason

Figure 2: England and Wales, reservoir contents (% of useable capacity)

Jan

2005

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2005

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July

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Sep

t 2005

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t 2009

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Mar

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May

2010

July

2010

120

100

80

60

40

20

0

% o

f us

eabl

e ca

paci

ty

Source: National Hydrological Monitoring Programme at the Centre for Ecology & Hydrology

Understanding water in your supply chain

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VariationbylocationThe availability of water varies by geographical location. Europe is the source of many products and ingredients used in the UK. We use Europe to demonstrate how location affects water availability and to emphasise water scarcity issues.

In southern Europe, irrigation accounts for over 50% of the total abstractions, rising to 80% in Turkey.14

In the UK, Germany and Belgium the majority of water abstracted is for cooling at power stations. Without the initial abstraction, energy generation would fall15.

Countries with glacial melt (Austria and Switzerland) have a source of summer water unavailable in other countries. The Alpine region provides 40% of Europe’s freshwater16. Any decrease in glacial melt water would contribute significantly to water scarcity.

Nearly half of Europe’s population live in locations defined as water-stressed17. Figure 3 illustrates the extent of water stress in river basins or watersheds in 2000 and projects it to 2030. It should be noted that significant parts of the UK are defined as ‘water stressed’.

The forecast shows a reduction in water stress in eastern Europe due to a decline in inefficient manufacturing and conventional power generation. Southern Europe and Turkey show an increase in water stress due to increased demand for irrigation.

Understanding water in your supply chainFigure 3: Water stress in European river basins (2000 and projected 2030)

-10°-20°-30°

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Current water stress in European river basins Forecast water stress 2030

20–40 (medium water stress)

Outside data coverage

0–20 (low water stress)

> 40 (severe water stress)

DefiningwaterstressWater stress is defined by the Water Exploitation Index (WEI). WEI divides water abstraction by the water available to give a percentage figure. The warning threshold for the WEI for a stressed region is around 20%18. Severe water stress can occur where the WEI exceeds 40%19, indicating unsustainable water use.

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Source: European Environment Agency

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VariationbyproductWater is embedded in products throughout their life cycle, from raw material to use. The type of product determines the total quantity of water embedded in it, and where in the supply chain the greatest amount of water is used.

Explainingembeddedwater‘Embedded water’ refers to the amount of water used to produce a product. For example, it is estimated that it takes between 170 and 310 litres of water to produce 0.5 litres of a sugar-carbonated soft drink20.

Figure 4 illustrates product variation using two examples. In the sugar-carbonated beverage, just 3% of water is used in processing, retailing, use and disposal. The majority of water embedded in the product (97%) is used in the growing of the raw materials, particularly sugar beet or sugar cane. In the laundry product, nearly all of the water (99%) is used in the ‘use phase’ (washing); very small volumes are used in other parts of the supply chain.

Figure 4: Examples of the volume of water used in typical grocery products

Source: A sugar-carbonated soft drink, Ercin, Aldaya and Hoekstra Value of Water Research Report Series No.39 2009

Source: Laundry product, The LCA of Ariel “actif a froid” 2006

Raw Materials

97%

<1%

Processing

3%

<1%

Retailing

<1%

<1%

Use

<1%

99%

Disposal

<1%

<1%

A T y p i c a l l a u n d r y p r o d u c t

A S u g a r - c a r b o n a t e d B e v e r a g e

Understanding water in your supply chain

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Clearly, it can be very helpful for companies to understand where in a product supply chain water is most heavily used. To understand the impact of a product’s embedded water look at the geographical locations where the water is used through the supply chain. Availability and quality varies markedly in different locations.

TheUK’swaterfootprintWWF-UK estimates that the UK is only 38% self-sufficient in water: 62% is imported, mainly as embedded water footprint in agricultural products. The top five countries responsible for exporting these agricultural products to the UK are Brazil, France, Ireland, Ghana and India. Products include; red and white meat, soybeans, maize, wheat, barley, castor beans, cocoa, coffee, tea, cotton, rice, milk and various types of nut.

VariationbysourceandqualityCompanies wanting to assess impact and manage water-related risks will need to differentiate the sources of water embedded within their products. There are three commonly accepted sources:

~ Blue water – the water flowing in rivers, lakes and aquifers

~ Green water – water in soils and vegetation in the form of soil moisture and evaporation

~ Grey water - freshwater required to dilute pollutants to raise the quality of water to agreed standards21 (readers may also see grey water defined as captured waste water to be cleaned and re-used).

Each of the sources is referred to in this guide and it is essential for companies to understand the differences.

In addition to quantity, sufficiently good water quality is essential for use in food and grocery supply chains. There is a need for companies to be aware of the minimum standard required and to understand the implications of any degradation or contamination.

Understanding water in your supply chain

KEy pOInts:

> Water is used for a large number of purposes across the food and grocery supply chain

> Irrigation can have a significant effect on supplies already depleted due to seasonal variation

> Water availability varies by location - nearly 50% of Europe’s population live in areas of water stress

> The use of water in different parts of the supply chain varies markedly according to the product

> The impact of water in grocery supply chains needs to be fully considered with reference to the above

> Water varies by source and quality

More information:

Water Footprint Network

WWF - UK Water Footprint (Large file size 8MB)

EN 952 – A review of water use in industry and commerce – summary report 2009

European Environment Agency - water

Environment Agency for England & Wales (Environment Agency)

Scottish Environment Protection Agency (SEPA) and Northern Ireland Environment Agency (NIEA)

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Assessing water in your supply chainStagesforassessmentFigure 5 outlines three stages for assessing water in your supply chain. Each stage is considered in more detail in the following sections.

s ta G E a C t I O n s

a On Site: Direct water consumption

Onsite: Water balance

Measure the volume of water used:

~ Undertake an action plan to reduce water

Undertake a water balance

~ Input water

~ Leaks

~ Effluent

~ Evaporation

B Supply chain mapping Supply chain mapping: Assess the regional impact of water in the supply chain. Identify:

~ Drought and flooding resilience, longer term water security

~ Water quality issues

~ The impacts on and of local water users

C Comprehensive water footprinting A comprehensive assessment of the water consumed in the manufacture, use and disposal of a product. Consider:

~ The different types of water (green, blue and grey) embedded in the product

~ A strategy to reduce blue and grey water consumption

~ How to address the impact of water

Figure 5: Stages for assessing water in your supply chain

Source: IGD

Read this chapter to help you assess the impact of water on:

> Your own business functions

> Your extended supply chain

> Specific products

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Directwateruse–grossuseofwaterThe principles of avoid, reduce, re-use and recycle apply to direct water use. Undertake an assessment of available water supplies, their cost and environmental impact. Put in place real time monitoring of water; this will help identify leaks and ‘hot spots’ of water use.

stage a: On site direct water use and water balance

Assessing water in your supply chain

Waterbalance–netuseofwaterYou can produce a water mass balance for a site, process or company. Water balancing is a mathematical calculation, which shows where water comes in and goes out of a site or business.

A mass balance model will help in visualising water use and will assist in identifying areas critical to better water and effluent management. The scale of the model depends on the complexity of the site or process. For large and complex sites it may be preferable to split a mass balance into smaller units.

By conducting a water mass balance a business will:

~ Better understand and manage its water use

~ Identify opportunities for cost saving

~ Detect leaks

~ Identify the water withdrawn from one source and discharged to another

~ Better manage levels of effluent (effluent processing costs can be as high as clean water provision)

A typical high-level water mass balance model is shown in Figure 6. (overleaf)

More information:

In the UK, WRAP gives businesses free and independent advice on reducing water use. There are a number of tools to help monitor, calculate water use, cost and efficiency measures. The following advice is available through the WRAP website:

En934 Developing an action plan to reduce water usage: five simple steps – referred to in the ‘getting started’ part of this guide

En662 Understanding leaks, water pressure and meters

En665 Understanding water and waste water billsEn893 Product recovery – reducing water use and improving resource efficiency

En894 Reducing water use through clean-in-place (CIP)

GG349R Water minimisation in the Food and Drink industry

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Source: IGD

Typical steps in a water mass balance include:

1. Identify each area or process where water is used

2. Calculate or estimate the amount of water used by each area or process

3. State the level and source of effluent, level of leaks and water invested in products

Companies can share their experience and skills of direct water use and water balances by taking knowledge to other parts of the supply chain.

More information:

EN895 A guide to developing a water balance

KEy pOInts:

> Start on site and tackle direct water use

> Extend to a mass balance of water used on site, if necessary at more than one location

> Include effluent volume and quality

L e a k s

E f f l u e n t

P r o d u c t s

E v a p o r a t i o n

Figure 6: An example of a mass balance of water in a production plant

Water In

OuT

OuT

OuT

OuT

Assessing water in your supply chain

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Source: Smakhtin, Revenga and Doll, (2004) UNEP/GRID-Arendal Maps and Graphics Library.

Retrieved October 2010 from http://maps.grida.no/go/graphic/water-scarcity-index

stage B: Supply chain mapping

To assess the impact of water use within a supply chain, a company must analyse the water used beyond their own site or operations, both upstream and downstream.

Given the global nature of the food and grocery supply chain, an understanding of water scarce regions of the world is important. Figure 7 illustrates global water scarcity by watershed (the minimum level of detail needed to address impact). The map shows that in many parts of the world where food and grocery companies source materials and process products, water scarcity is already very high.

Figure 7: Global water scarcity

Water Stress Indicator (WSI) in major basins

SlightlyExploited

ModeratelyExploited

HeavilyExploited

Over-Exploited

Assessing water in your supply chain

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Supply chain mapping is intended to highlight which regions (and therefore raw materials/products) may be vulnerable to:

~ Interruptions in water supply

~ Increasing water prices

~ Reduced water quality

~ Reduced product quality

~ Impacting local communities

A supply chain map highlights risk and therefore helps companies address weaknesses in supply chain resilience.

Three key questions should be addressed when mapping the supply chain impact of water:

1. How sustainable is the water supply in both the short and long term?

~ Is it susceptible to drought and flooding?

~ Is the water supply easily renewable or unlikely to be replenished?

2. Is water quality an issue, either as an input or as effluent?

~ Water supply may be plentiful but water sources may become subject to degradation and/or contamination

3. Who are the other users of this water source?

~ What are the impacts of your water use on them and their use on your water, now and in the future?

Raw material production is often the supply chain stage requiring the most water. For horticultural products the source of water is related to the growing region. For livestock it is a function of both where the livestock are located, and where livestock feed is sourced (if different).

Engaging in water stewardship at a local level supports understanding and reduces risk. Businesses should develop plans on how and where to engage on water, to ensure access to local knowledge and develop longer term strategies.

N.B. Assessing the volume of water used in producing and using products does not form part of a supply chain map – a water footprint is required to assess volume use (see Stage C).

Assessing water in your supply chain

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Assessing water in your supply chain

KEy pOInts:

> Assess exposure to risks based on sourcing from water scarce geographic areas

> Focus attention on regions with the greatest risk, from quantity and quality perspectives

> Address the local community impact of water supply and effluent discharge

> Develop a plan to understand any likely reputational risk

> Plan to engage local communities at a watershed level

More information:

WWF - Understanding Water Risks and Investigating Shared Risk in Water

WBCSD – Water for Business

UNEP CEO Water Mandate – Corporate Water Accounting

Measuringwaterinthevaluechain–anexampletool

the Global Environmental Management Initiative (GEMI) has developed a water measurement tool. It allows companies to understand the impact they have on water at a local and regional level. Through a series of five modules, the tool helps the user build a picture of its water use, the impact, and the risks. It helps companies develop a strategy for water management and goals. GEMI - Collecting the Drops: A Water Sustainability Planner 22

Atoolkittounderstandtherisksofwaterscarcity

The tool commonly used to understand water scarcity risks is the World Business Council for sustainable Development (WBCsD) Water tool23. For point locations (typically factories) this tool produces interactive mapping of sites onto key scarcity indices (water availability per capita and water scarcity) at a watershed level, and thus helps to identify sites with key water scarcity risks. It also links to key country level indices from bodies such as the World Health Organisation (WHO).

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stage C: Comprehensive water footprinting

The water footprint of a product is the total amount of water, both direct and indirect, used in its production, along the whole supply chain. Water footprinting builds on the concept of embedded water in a product, but takes into account where in the supply chain the water is used. A water footprint includes components of green, blue and grey water.

To help develop the concept of water footprinting the Water Footprint Network (WFN) was established in 2008. WFN comprises global partners across companies, governments, NGOs and consultancies interested in the application of the water footprint methodology. The Water Footprint Manual24 introduces the subject and offers a comprehensive technical reference for those seeking more detail.

Table 1, shows the results from a water footprint calculation and illustrates the importance of where raw materials are sourced and types of water used. In the example it can be seen that sugar cane from Cuba has the highest total water footprint, high fructose maize syrup (HFMS) from India has the highest green and grey water footprint, and Iranian sugar beet has the highest blue water footprint.

HFMS: High Fructose Maize Syrup

Source: Ercin, Aldaya and Hoekstra. The Water Footprint of a Sugar-containing Carbonated Beverage 2009

Assessing water in your supply chain

Table 1: The water footprint of the sugar input for a 0.5 Litre PET-bottle sugar containing carbonated beverage (litres of water)

Green Blue Grey tOtaL

Iran – sugar beet 5.7 82.0 10.0 98.5

France – sugar beet 11.7 9.5 6.2 27.4

Netherlands – sugar beet 13.6 7.0 5.4 26.0

Cuba – sugar cane 95.2 65.7 6.2 167.0

Brazil – sugar cane 35.3 26.6 2.4 64.3

India – HFMS 55 117.9 38.2 10.2 166.2

France – HFMS 55 10.1 10.0 9.2 29.3

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To reduce impacts, WFN stress the need to differentiate between sources of water in establishing a strategy for reduction. Blue water and grey water are likely to have the greatest impact, green water the lowest impact. Grey water, it is argued, could be reduced to zero by avoiding pollution. Blue water in the agricultural stage can be brought down, in part by increasing the use of green water.

Alternative (life cycle analysis) approaches to water footprinting extend the concept to incorporate the impact of local scarcity of water25. This approach quantifies the volume of blue and grey water at each stage of the footprint (green water is not included).

A scarcity value is applied dependent on the source location of that water. This implies that two products with the same volumetric water footprint can have a different footprint value, based on the relative scarcity of the blue and grey water elements.

WaterfootprintingtechniquesTechniques for water footprinting are developing – for example in how to reflect local water impacts in the calculation. Water footprinting increases understanding at a product level, but does not necessarily capture the impacts of water use at a local (watershed) level. For this, supply chain mapping remains the best approach.

KEy pOInts

> Be aware that this technique is developing. Efforts are continuing to move beyond

simple volumetric measures to ones that include impact.

> Two products with the same water footprint may have very different scarcity impacts.

> Be clear on the different sources of water – focus on the impact of blue and grey water

More information:

Water Footprint Network

Waterwise - Hidden Waters

WWF-UK Water Footprint (Large file size 8MB)

Assessing water in your supply chain

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Managing water in your supply chainPracticaltipstomanagingwaterTips relevant to: All parts of the supply chain

Establish where you use water; sub-meter if appropriate

Reduce leaks

Manage water pressure

Optimise water use (e.g. match high demand to periods of high supply)

Harvest rainwater to supplement supply

Provide clear information and labelling of appliances that use water on how best to operate them

Lag hot water pipes to save run through of water

Lag cold water pipes to reduce bursts due to freezing

Plan to respond to flooding, by flood risk management and building resilience

Improve and expand recirculation/re-use systems in plant and equipment

Develop a water reduction strategy

Set water reduction targets to reduce water use

Motivate, manage and train employees to save water

Understand short/medium/long term risk to water availability and sustainability of local water sources/watershed

Reduce, reuse and recycle high intensive water products and by-products

More information:

EN663, EN664, EN666 and EN667 - Reducing water use in showers, taps and toilets

EN896 – Reducing mains water through rainwater harvesting

Read this chapter for:

> Tips for managing water across your supply chain

> Information on regulation, voluntary agreements and the potential for collective action

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Tips relevant to: Raw materials

Use self-close triggers on hoses used in washing down yards

Use scrape and brush for yard cleaning as opposed to hose

Pre-soak vegetables prior to cleaning, this reduces water needed for the final clean

Collect and store water – this can provide 20% of a dairy farm’s needs for example26

Optimise irrigation:

Use boom or trickle irrigation

Irrigate at night, ensuring the necessary safe working systems are in place

Manage droplet size on irrigation

Avoid irrigating in windy conditions to best manage spray patterns

Irrigate at the right time for the right crop – create an irrigation schedule

Land level to ensure the best impact of irrigation

Develop own reservoirs (this is subject to planning and regulatory approval)

Recognise the potential of flood damage to crops

Use varieties that require less water and are more tolerant to drought

Manage planting schedules to reduce evapotranspiration – e.g. plant earlier

Integrate existing sources of water and consider developing local abstraction groups

ManagingirrigationUsing drip irrigation instead of conventional methods can reduce the volume of water applied by 30-70%. As an added bonus crop yields under drip irrigation, tend to be 20-90% higher. While this method is used on 90% of Cyprus’ fields, it is only used in 17% of fields in Spain and South Africa, and only 4% in the USA. In China and India, it accounts for less than 1% of irrigation27.

More information:

Environment Agency - water and agriculture

NFU Water

Effective use of water in dairy farms, Milk Development Council August 2009

UK Irrigation Association - EEDA strategy section

Managing water in your supply chain

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Tips relevant to: Processing

Motivate and manage employees to reduce water use and report leaks

Manage cleaning and wash down techniques – maintain hygiene but look at new techniques

Invest in effluent treatment, manage effluent within discharge constraints

Check valves, spray and circulation efficiency

Install sub-metering

Investigate Enhanced Capital Allowances for water capital projects

More information:

FHC 2020 and WRAP

Business Link – Enhanced Capital Allowances for water efficient technologies

Environment Agency – Food and Drink manufacturing industry, environmental management toolkit

Tips relevant to: Retailing and food service

Provide plugs for sinks

Fit percussion taps, these constantly stop and start the flow of water when ‘on’, reducing the total water flow

Change to smaller (or dual flush) cisterns for toilets

Place ‘hippos’ in existing systems

Install infra-red managed urinals

Recycle water in car washes

More information:

Thames Water – Steps to Sustainable Water Use

Southern Water – Small Changes, Big savings

EN660 - reducing water use in catering establishments

Managing water in your supply chain

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Tips relevant to: In-home use

Reduce running taps

Use flow restricted shower-heads

Fill up the washing machine/dishwasher before use

Install a water meter

Save water and find an alternative use for waste water (e.g. watering plants)

Reduce water use in the garden, collect rain water

More information:

Direct Gov - Water, using less at home

Tips relevant to: Disposal

Reduce, reuse and recycle products and packaging where possible

Re-use water in washing recyclables

Use dry re-processing techniques

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Informationonregulations

European, national and devolved administrations have established a range of regulatory requirements that apply to companies’ management of water. Failure to comply with these regulations resulted in 83 convictions in the UK in 2007/8.

UK businesses should be particularly aware of the following areas:

~ Abstraction licences

~ Discharge permits

~ Nitrate Vulnerable Zones

~ Water Framework Directive

~ Integrated Pollution Prevention and Control Directive

More information:

OFWAT: Water Today, Water Tomorrow – Ofwat and sustainability

Abstraction licences

Current policy: you must apply for a licence if you want to impound water or take more than 20 cubic metres (4,000 gallons) of water per day from a river or stream, reservoir, lake or pond, canal, spring or underground source.

More information:

Netregs – Abstraction Licences

Environment Agency – Catchment Abstraction Management Strategies (CAMS)

Managing water in your supply chain

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Discharge permits

Current regulation: apply for an environmental permit or a registered exemption if you carry out any water discharge activity or groundwater activity. Water discharge activities include:

Discharge of poisonous or polluting matter or waste matter, trade effluent or sewage effluent into inland freshwaters, coastal waters and estuaries

Discharging trade effluent or sewage effluent from land by a pipe into the sea

Removal of material from the bottom, bed or channel of inland freshwaters that has built up at a dam, weir or sluice, by causing any of that material to be carried away in the water

Cutting or uprooting large amounts of vegetation in or near any inland freshwaters if you do not try to remove the vegetation from the water

Permits for groundwater activities are required when:

~ Discharging a pollutant directly into groundwater

~ Discharging a pollutant that might indirectly enter groundwater

~ Making any other discharge that might cause a pollutant to enter groundwater directly or indirectly

More information:

Netregs – Water Pollution

Managing water in your supply chain

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Nitrates Vulnerable Zones (NVZs)

NVZs are designated areas of land draining into waters polluted by nitrates from agriculture. The European Nitrates Directive requires NVZs to be designated and for farmers with land in NVZs to follow mandatory rules to tackle nitrate loss from agriculture.

More information:

Netregs - Nitrate Vulnerable Zone (NVZ) rules

Water Framework Directive

The Water Framework Directive (WFD) is a major piece of European legislation. It has been instrumental in establishing the management of trans-boundary watersheds. WFD aims to:

~ Enhance the status and prevent further deterioration of aquatic ecosystems and associated wetlands which depend on the aquatic ecosystems

~ Promote the sustainable use of water

~ Reduce pollution of water, especially by ‘priority’ and ‘priority hazardous’ substances

~ Ensure progressive reduction of groundwater pollution

More information:

Water Information System for Europe (WISE)

Environment Agency – Environmental permitting

Integrated Pollution Prevention and Control (IPPC) Directive

IPPC includes reference to water, site operations and the management of waste.

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InformationonvoluntaryagreementsVoluntary agreements go beyond existing regulatory requirements and often take place between groups of companies and a third party (typically a regulator). Two examples relevant to water in the food and grocery supply chain are:

Federation House Commitment

The Federation House Commitment (FHC) is an agreement by companies in the food and drink industry. FHC aims to reduce water usage in companies and work towards an overall industry-wide water reduction target of 20% by the year 2020. Any manufacturer in the food and drink industry may join. The programme is overseen by WRAP.

Water Abstraction Groups

Farmers in East Anglia have been working together and with regulators to agree the fair allocation of water in agriculture28. In response to high seasonal demand for water and the proactive engagement of the Environment Agency, abstraction groups such as the East Suffolk Water Abstraction Group (ESWAG) have been formed. ESWAG has played a key role in fostering co-operation between regulators and industry, and supporting the better use of irrigation and developments of new technology. Other similar schemes exist in Lincolnshire, North Norfolk and the Norfolk Broads.

More information:

Food and Drink Federation: Federation House Commitment FHC2020

Managing water in your supply chain

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BuildingenhancedwaterstewardshipCollective action is a response to the shared risks companies face operating in a shared watershed. As a concept, collective action requires application of a common, systemised approach to watershed management.

Nine common activities are suggested for consideration29:

1. Agricultural land practice changes

2. Storm-water management

3. Land use alterations

4. Hydraulic/hydrologic waterbody alterations

5. Recaptured leakage from water systems

6. Waste water treatment

7. Biologic management

8. Water reuse

9. Rainwater harvesting and aquifer recharge

Projects based on these principles aim to quantify the impact of an integrated approach to water management in a given watershed30.

KEy pOInts:

> Good water management is important at every stage of the supply chain

> Businesses should have a series of checklists to reduce the impact of water use and effluent production

> Be aware of the need to comply with regulation on abstraction and effluent production

> Consider the role of voluntary agreements in managing more sustainable water use

> Look at the opportunity for collective action at a watershed level to reduce shared water risks

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Increased demand and reduced supply

The Environment Agency predicts a 5% increase in UK water demand by 2020. The increase is driven by population growth, an increase in the number of single households and increased use of water for irrigation.

Climate change could result in declining water availability in some areas of the UK – the invasion of aquifers with salt water for example. Increasing demand for new housing will mean additional land required for new reservoirs. Regional development may result in greater competition for available water between households and agriculture.

More information:

Water UK - Sustainability Indicators

Environment Agency - Water for People and the Environment

Defra - Future Water, The Government’s Water Strategy for England

Flooding, erosion and climate change

Climate change may increase the risk of flooding from rivers and the sea, as well as increasing coastal erosion. The increased risk of flooding is likely to impact low-lying, high quality agricultural land. Businesses must therefore develop flood protection measures and contingency plans. These plans need to include an assessment of the impact on crops, livestock and infrastructure.

More information:

Defra – Flooding

National Flood Forum

UK Climate Impacts Programme (UKCIP)

The FutureFutureprospectsfortheUK

Read this chapter for information on:

> Future prospects for the UK

> Future prospects globally

> Possible roles for regulators and technology

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Competition for water abstraction licences

It is likely that the consistency and type of abstraction licences will change and competition for licenses will increase.

More information:

Defra - Water Resources Planning

Price of water

In order to maintain water quality standards, more intensive treatment will be required. This is likely to put upward pressure on the price of freshwater and effluent treatment.

Water trading

The trading of water abstraction licences is used as a water reduction strategy in some countries (e.g. Australia). Water trading currently takes place in the UK but only at very low levels; this is likely to increase.

More information:

Water UK – price review

Ofwat

Australian Government National Water Commission – water trading

Environment Agency – water rights trading

The FutureFutureprospectsgloballyAs the world’s population increases and the amount of freshwater available decreases, water will become an increasingly valuable resource. For nations sharing rivers or lakes, the risk of conflict is likely to increase, unless agreements on conservation and sharing can be reached. Water co-operation and peaceful resolutions have historically far outnumbered incidents of water conflict31, but this may change.

Increased flooding and droughts will result in more crop failures. Remaining agricultural areas will have to produce more food. For regions affected by climatic extremes, population movements will increase tension and conflict by placing more strain on declining water supplies.

Coastal areas may suffer increased saltwater contamination of groundwater as aquifers become prone to invasion by seawater (this is already happening in the UK32).

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Many countries have introduced renewable energy policies to address concerns over growing greenhouse gas emissions and fuel insecurity. The growth of biofuels means that levels of embedded water in the fuel sector is increasing33.

The current level of degradation and contamination of water is unsustainable and it is considered unacceptable that some people do not have access to clean water. The millions of tonnes of inadequately treated sewage and industrial and agricultural wastes that presently end up in drinking water must be addressed.34

FutureroleofregulatorsRegulators have a role to play in managing water use and reducing the impact of water scarcity. The following are examples of possible future developments:

~ Encouraging the use of voluntary agreements to manage water use

~ Developing a progressive water sector to invest and deliver long-term solutions

~ Using the price of water as a management tool to reduce demand

~ Extending restrictions on abstraction licences

~ Encouraging greater use of renewable energy

~ Increasing domestic water metering

~ Raising consumer awareness of the risk of reductions in water quantity and quality

~ Developing water trading

~ Developing an integrated strategy on waste water treatment

~ Using satellite imagery to impose better local water governance

~ Improving international water governance

FutureroleoftechnologyThere are a range of potential technological solutions to water scarcity:

~ Develop new sources of water – e.g. building new reservoirs and water grids to move water from one watershed to another

~ Cost effective desalination of water – e.g. using brackish water in the first stages, reducing energy requirements, using renewable (solar) energy for desalination and making use of saline by-products

~ Use of treated water directly for drinking water (not current practice in the UK)

~ Artificially recharge aquifers in winter at times of high rainfall

~ Enhanced, smart irrigation that uses very low levels of water

~ Crop and livestock breeding to reduce water input and increase drought resistance

~ Use of satellite imagery to identify new water resources and highlight sources of pollution

Companies need to develop a proactive response to these issues, individually and through collaboration.

The Future

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KEy pOInts: > The future is likely to see a reduction in supply of, and increasing demand for, clean water

> As more water needs to be resourced, cleaned and distributed prices are likely to rise

> There is likely to be increased vulnerability to supply interruption and increased risks to quality due to contamination

> These issues are likely to be magnified by climate change

More information:

2030 Water Resources Group – Charting Our Water Future

The CEO Water Mandate

Global Water Partnership

European Environment Agency – Water Resources Across Europe – Confronting Scarcity and Drought

Pacific Institute – At the Crest of a Wave: A Proactive Approach to Corporate Water Strategy

The Future

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SummaryThe purpose of this guide is to help food and grocery companies of all sizes better understand, assess and manage water risks in their supply chains.

It is inevitable that companies will be at different stages on this journey. The guide therefore offers a breadth of information and advice, from the very simple and practical, to the more complex. If you need more detail on particular themes, you are urged to follow the directions to sources of further information.

All companies should be identifying practical measures to optimise direct water use and manage effluent effectively. Companies should also assess how water affects their supply chains and identify where their major risks are in terms of water use, location, season, product, source and quality.

By working with supply chain partners (and even competitors), you will be better able to identify and tackle shared risks and so improve water stewardship.

Increasingly investors, governments, NGOs and the media will challenge companies on the use of water throughout their supply chains. We hope this guide encourages you to be proactive in identifying and managing these water risks.

There is a growing awareness of the many impacts of water on global food and grocery supply chains. Even companies operating in areas of high rainfall must recognise risks in sourcing products from water scarce parts of the world.

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Blue water The water flowing in rivers, lakes and aquifers

Brackish water Water containing salts at a concentration significantly less than that of sea water but in amounts that exceed normally acceptable standards for municipal, domestic and irrigation uses

Catchment Area having a common outlet for its surface runoff. Synonyms include: drainage area, river basin and watershed

Contamination Water made unsuitable for animal or human consumption

Degradation A concept related to the lowering in quality of a water body

Direct water use Refers to the water used directly by companies (e.g. in manufacturing)

Effluent Water that is of no further immediate value to the purpose for which it was used or in the pursuit of which it was produced because of its quality, quantity or time of occurrence. Waste water from one source may be a potential supply to a user elsewhere.

Embedded water The volume of water used to produce a product, measured at the location where the product was actually produced. Most of the water used to produce a product is not physically contained within the product. Also known as “virtual”, “embodied” or “hidden” water.

Green water Water in soils and vegetation in the form of soil moisture and evaporation

Grey water The volume of freshwater that is required to dilute pollutants to such an extent that the quality of the water remains above agreed water quality standards

Groundwater Subsurface water occupying the saturated zone

Indirect water use The volume of freshwater that is used to produce the goods and services consumed by the end user

River basin Area having a common outlet for its surface runoff (also catchment, drainage area and watershed)

upstream/Downstream

The concept of water used “upstream” – toward the raw material and “downstream” toward the consumer. The supply chain concept highlights the need to understand the relative impact and risk of managing water in one section (e.g. retailing) in relation to another (e.g. raw materials)

Water balance A calculation of water inputs and water outputs; giving a net balance figure. Water in a system may be re-used, evaporate, soak away or be lost through another route. This needs to be considered in a net balance calculation

Water quality The physical, chemical, biological and organoleptic (taste-related) properties of water

Water footprint Blue, green and grey water components embedded to produce a product

Watershed Area having a common outlet for its surface runoff. Synonyms include: catchment, drainage area, and river basin

Glossary

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References1 Orr,CartwrightandTickner(2009)Understanding WaterRisks-WWFWaterSecuritySeries4

2 WorldBusinessCouncilforSustainableDevelopment (2009)FactsandTrends,WaterVersion2

3 FosterandChilton(2003)Groundwater–theprocess andglobalsignificanceofaquiferdegradation

4 WorldBusinessCouncilforSustainableDevelopment (2009)FactsandTrends,WaterVersion2

5 UNESCO(2009)WorldWaterAssessmentProgramme. TheUnitedNationsWorldWaterDevelopmentReport3: WaterinaChangingWorld

6 UNESCO(2009)WorldWaterAssessmentProgramme. TheUnitedNationsWorldWaterDevelopmentReport3: WaterinaChangingWorld

7 WorldBusinessCouncilforSustainableDevelopment (2009)FactsandTrendsWaterVersion2

8 UNEP(1998)PopulationActionInternational,based upontheUNMediumPopulationProjectionsof1998, http://www.unep.org/dewa/assessments/ ecosystems/water/vitalwater/21.htm,accessed August2010

9 UNEP(1997)basedonGardner-OutlawandEngleman

10 UnitedNationsCommitteeonEconomic,Socialand CulturalRights,JohannesburgPlanofImplementation, Povertyeradication http://www.un.org/esa/sustdev/documents/WSSD_ POI_PD/English/POIChapter2.htm,accessedAugust 2010

11 EastofEnglandRuralForum(2007)http://www.eerf. org.uk/Documents/Position-papers/071128%20 Water%20Resources%20Position%20Paper%20Draft. pdfaccessedAugust2010

12 WoodSebastianandScherr(2000)PilotAnalysis GlobalEcosystems

13 BarkerandMolle(2002)PerspectivesonAsian Irrigation

14 EuropeanEnvironmentAgency(2009)WaterResources AcrossEurope—confrontingwaterscarcityand drought

15 EuropeanEnvironmentAgency(2009)WaterResources AcrossEurope—confrontingwaterscarcityand drought

16 EuropeanEnvironmentAgency(2009)WaterResources AcrossEurope—confrontingwaterscarcityand drought

17 EuropeanEnvironmentAgencywww.eea.europa.eu/ themes/water/featured-articles/water-scarcity- accessedAugust2010

18 Raskin,Gleick,Kirshen,PontiusandStrzepek(1997) ComprehensiveAssessmentoftheFreshwater ResourcesoftheWorld.StockholmEnvironmental Institute,Sweden

19 Alcamo,Henrich,Rösch,(2000)WorldWaterin 2025–GlobalModellingandScenarioAnalysisforthe WorldCommissiononWaterforthe21stCentury. UniversityofKassel,Germany

20 Ercin,AldayaandHoekstra,(2009)TheWaterFootprint ofaSugar-containingCarbonatedBeverage

21 Ercin,AldayaandHoekstra,(2009)TheWaterFootprint ofaSugar-containingCarbonatedBeverage

22 GEMI–CollectingtheDrops:AWaterSustainability Plannerwww.gemi.org/waterplanneraccessedAugust 2010

23 WorldBusinessCouncilforSustainableDevelopment (WBCSD)–GlobalWaterTool-www.wbcsd.org/web/ watertool.htm-accessedAugust2010

24 Hoekstra,Chapagain,Aldaya,Mekonnen,(2009)Water FootprintManual:StateoftheArt

25 RidouttandPfister(2009)Arevisedapproachtowater footprintingtomaketransparenttheimpactsof consumptionandproductiononglobalfreshwater scarcity

26 EnvironmentAgency(2009)RainwaterHarvesting:an on-farmguide

27 Waterwise(2007)HiddenWaters

28 RudgeandGowingwww.ukia.org/IrrigUK/Rudge.pdf accessedAugust2010

29 CommunityWaterPartnership(CWP),Global Environment&TechnologyFoundationwithAlbert Wright,September2009

30 DePinto,Larson,Redder,Freedman,Arbor,Richter andKnight(2010)QuantifyingBenefitsFrom WatershedRestorationProjects:Aninitialexploration

31 ForeignPolicyCentre(2010)TacklingtheWorldWater Crisis:ReshapingtheFutureofForeignPolicy

32 EnvironmentAgency(2006)Underground,UnderThreat: ThestateofgroundwaterinEnglandandWales

33 Gerbens-LeesandHoekstra(2010)BurningWater:the waterfootprintofbiofuel-basedtransport

34 UNEPandPacificInstitute(2010)ClearingtheWater-a focusonwaterqualitysolutions

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IndustrySustainabilityGroup(ISG)membercompanies

ASDA Stores Ltd

Bakkavor Group

Booker Group plc

Cadbury

Coca-Cola Enterprises Ltd

Compass Group plc

Dairy Crest Group plc

Greencore Group plc

H J Heinz Co Ltd

John Lewis plc

Kellogg Marketing & Sales Co

Kerry Foods Ltd

Kimberly-Clark Ltd

Kraft Foods

Marks & Spencer plc

McVities (UK)

Musgrave Group

National Farmers’ Union

Nestlé UK Ltd

Northern Foods plc

PepsiCo UK & Ireland

Robert Wiseman & Sons Ltd

Sainsbury’s

Tate & Lyle Sugars

Tesco Stores Ltd

The Co-operative Group

Unilever plc

Wm Morrison Supermarkets plc

WaterWorkingGroupmembercompanies

ASDA Stores Ltd

Marks & Spencer plc

National Farmers’ Union

Nestlé UK Ltd

PepsiCo UK & Ireland

Robert Wiseman & Sons Ltd

Sainsbury’s

Unilever plc

Annex: IGD and sustainabilityIGD’s Policy Issues Council (PIC) is a forum of industry leaders, broadly representative of IGD’s membership. It brings together Chairman and Chief Executives from the UK’s leading retailers, manufacturers, wholesalers, foodservice businesses and producers to address strategic challenges affecting the food and grocery supply chain. Sustainability is a key priority for the PIC and IGD.

IGD’s Industry Sustainability Group (ISG) was established to help the food and grocery sector tackle key sustainability issues. Water is one area of focus; this guide is an output from an ISG working group.

IGD provides regular articles and case studies on a wide range of sustainability issues, including water, across the grocery supply chain. Visit igd.com/sustainability for more information.

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