Ready to go? Morning, everybody. We are all right to get started? Good. Well, listen, firstly, welcome. I know we briefly said it outside, but for those of you joining on the webcast, you are all very, very welcome. We're here in Jamestown. I'm Patrick Coveney. I'm the Group CEO of SSP. we have a lot of people from our leadership team with you today, which I think is symptomatic of the focus that we're putting on sustainability. If I could just call a few people out. Our Chairman, Mike Clasper, who was with us earlier and is with us at the back, and will happily take questions.
Also likes to keep a kind of close eye on what I say. Delighted to have Mike here. We've also got Jonathan, who's Deputy CEO and sits on the board with Mike and I. We've got pretty much every member of our group executive team as well. Many of that group actually will be contributing to the discussion over the course of the next hour. The first thing I want to say, I want to do, is to welcome all of you for coming. There's some people I wanted to in particular thank Angela and Jim for setting up and bringing on the food earlier.
In particular, Sarah, Verity, and our sustainability and communications team for putting on this event. This is actually the first sustainability-focused investor event that we've done. Hopefully it will be useful in terms of bringing to life everything that we're doing, and it'll be useful for us actually also in learning how to do this well and bring this topic to life going forward. Finally, I just wanted to welcome all of our non-SSP guests. We have about 10 equities and investors with us in the room and many more joining on the webcast. A few very brief comments from me to set up the discussion before I transition to Sarah. The first thing to say is that we reframed our overall strategy last summer.
I just would draw out three features of it that hopefully are relevant to what we're doing today. The first is to say that all elements of our strategy are driven from our purpose, and our purpose is to be the best part of the journey. Right? The two key concepts there are the concept of journey and the concept of being the best part. The reason that they're important is that we sit as part of an overall system that delivers experiences, ideally very good experiences for travelers. The notion of journey and the notion of best part of the journey is very important for us.
For each of our individual stakeholders, be that the end customer, be that our client, be it our brand partners, or the nearly 40,000 people who now work for us, this notion of actually being the very best part of that individual journey, whether it's a journey of travel, a journey of consumption, or a career or life journey, and the role that we play in that is very important.
It drives then each of the four elements of our strategy, which is about the customer proposition, the food, the service, the client experience and travel environment, whether it be the colleague experience, whether it be how we deliver long-term returns and growth to shareholders, and importantly, how we do that, all of that in a sustainable way and all of that by being very cognizant and informed and aspirational for what we're trying to do in terms of the wider community or stakeholders in which our business sits. That sets the framework for the sustainability component of strategy. Here, I guess I just wanted to leave you with three thoughts before I hand over to Sarah.
Firstly, in mindset terms, we come at this topic from a perspective of purpose and not compliance. In other words, we're doing this positively because we believe in it, and because we're learning all the time that it's actually becoming very, very good for all aspects of our business. I think many of us, if I could speak personally, but I know I would speak for my longstanding SSP colleagues here, I think a lot of us learned the power of purpose through COVID firsthand. Actually some of that, those lessons and mindset really underpin how we're pushing forward in terms of what we're doing on sustainability in the broader sense.
Now, as Sarah and Verity, and our executive team will lay out some, both the overall framework, the data in terms of where we sit, the strategy and key elements of that, of how we're implementing that strategy over the course of the rest of the morning. The mindset of why we're trying to do this, I think is very important. Second aspect of mindset is we don't think about this in trade-off terms, right. We don't think there is a choice to be made between good performance and good sustainability. We have a very different framework in mind, which is what we're doing in this space is mutually reinforcing with what we're doing, in terms of our performance agenda, our client agenda, our brand agenda, our customer proposition agenda. It's actually the interaction of all of those things, that's driving performance. Increasingly, that's not just a aspiration.
It's being evidenced by what our clients want us to do, the reason that we're winning new business across the world, the types of brands that we're actually developing and that are resonating with consumers. Being leading on sustainability is helping us lead as a food travel expert across the world. The last thing that I should say, and I'm just going to, if you'll allow me, pivot from a broader topic of ESG, comprising each of the elements of E, S, and G, to just talking about environment for one second, and within that, where we sit in terms of the climate impact of our business. Actually, the very core of where we're now putting a lot of our focus is in that space.
What I would say about that is that as we've dug in and built data on this, our business starts in a pretty good place in terms of its climate footprint, and Verity will run through it a little bit later on. Without giving too many examples here, any reference set of peers or somewhat analogous companies would, I think, show that we start with a relatively low level of carbon emissions as a business. It's about 0.4 of a kg for every GBP of sales.
If I give you just a way of thinking about it in that, when we have mapped the 1.1 million tonnes that Verity will run through later, about 1/3 of that carbon impact is actually delivered through one set of units that we have, which is our big retail partnership in the U.K. That only represents about 8% of our sales, but it represents over 30% of our carbon emissions. It gives you a sense of the relative contribution of a business model like ours relative to other consumer-facing businesses, in particular retail. Not to say that we don't have a lot to do, but we start in a reasonable place with a relatively low level of carbon emissions as a business.
That's given us a conviction that by really getting after over a sustained period of time, in particular, the ingredient composition in our food, that we can make huge differences in terms of bringing that 1.1 million tonnes all the way down to 100,000 tonnes of carbon, and then offsetting the last 10% in a way that we can be a net zero business by 2040. That's the path that we've got. The last thing I would say before handing over to Sarah is we're already making very, very good progress. Just for example, about 10% of our carbon emissions are in Scope 1 and 2.
Since 2019, in other words in only 4 years, we have already reduced our Scope 1 and 2 carbon emissions by 36%. All right? That only feeds through to about 4% in total because Scope 3 is where it's all about. The level of progress in the areas that are directly within our control is very, very encouraging. Indeed, we would, without yet being able to quantify the progress in Scope 3, we would have reasonable level of confidence that we've made some good progress there too.
Therefore, this isn't just about what happens in 2030 or 2035 or 2040, we're already making pretty rapid progress in reducing our carbon footprint as a business. As I say, thank you for being with us today. Hopefully you'll get a real sense for both the specificity of what we're trying to do and the momentum that we've got against that. With that, I'll hand over to Sarah.
Thanks, Patrick. It's important, right? Sustainability is important not just to us, it's important to us as a business, but it's also really important to us as individuals. I mean, how many of you now think a lot more about it than you did two, three, four, five years ago? Of course you do, because you're seeing the impacts all around you. It's a really important time for us. It's a time that we can make a difference, not just to our business and to us, but really importantly to the next generation. I think that's the motivation that many people, certainly in this room, will have to try and how can we make a difference for the next generation. I think you'll see that theme coming through as we go, as we go through.
Certainly, this is an important element for all of our stakeholders. Let's take the first one, clients, and let's take it head on. I mean, look, we operate in the global aviation industry. That's an industry that accounts for 2%-3% of emissions, and it's an industry that's acutely aware of the impact it has on the environment and is taking great strides in terms of developing their own strategies, looking at sustainable fuels as to how they can get to net zero by 2050. Many of them have already made that commitment. Look, travel from our perspective is really important. I mean, how many people in this room have traveled in the last 12 months? Hands up. Have you traveled? Yeah. You want to do it. It's really important that you do it for social connections and for business.
Our role in this is to make sure that the airport experience is as sustainable as it can be. This is a really interesting development for us. As Patrick said earlier, we've done a lot of work on mapping our own carbon footprint. We've done a lot of work on developing our strategy. We are having some very interesting conversations with our airport clients who are engaging with us on a whole new level. They can see that we want to take a leadership position in this space. They're interested in how we've done it. They're interested in our culture. They're interested in the products and services that we can provide the traveling customer. We are having a whole new conversation, which is exciting on so many different levels. I don't need to set them all out and explain them to you.
We're doing this in partnership. Working with our airport clients, we will come together to drive real change. I'll just take a couple more. Customers. I mean, listen, healthy eating and wellness has been a trend for a long time. We know that 2/3 of our customers are seeking out healthy and wellness foods, and we're providing those increasingly. The newer trend, and particularly prevalent among the younger generation, is those that care about the impact food has on the environment. Again, how many of you in this room have a child, a family member, a friend who's trying to either reduce the amount of meat they're eating or they don't eat it at all. Hands up who's got a vegetarian or a vegan or whatever else in their family? This is a trend.
We need to be ahead of it so that we can provide the right choices for our customers. We also have a role to play in education. We can't just sit back and say, "Hey, you know, pick it if you like." We've got a role to play in educating people on what we're serving, signposting it, and really, you know, helping people to make good choices or at least make choices that work for them. We've got a really important role to play in that. We'll talk a little bit more about that later. Colleagues. 67% of all 18-24-year-olds care about where they work and how sustainable that organization is.
I've probably done around 10 interviews in the last year, just in my small area, probably all of the people I've spoken to have said, "Talk to about me about the culture at SSP. Is it just full of white middle-aged men?" Apologies. Apologies. They do say that. Is it a more diverse and inclusive culture? We've done so much work in the last couple of years to really pull out, but to really drive this culture with everything from diversity training, through to measuring the proportion of gender diversity, different ethnicities, all those things. There are so many things to raise awareness. We've got so many networks going on throughout the organization that we've got a really good story to tell.
This is going to be so important for this next generation that we are a great organization to join if you care about sustainability. Then the final area, something that will be very close to your hearts, is investors and lenders. Of course, they care about sustainability. They can't invest in companies that are not doing the right thing. They need to be able to see, they need to be able to measure what their investment companies are doing and how they're making a difference. Now, it's not just about what we do, but it's about the transparency that we give that. Again, we've taken a step change. We've done our first sustainability report, many of you got copies on your knee.
Within that, we set out what we're actually doing. We make it more transparent. We make it easier for the likes of MSCI and Sustainalytics to mark us correctly rather than coming back to us to tell us what we're not doing, when in fact we are doing it, but oh, we forgot to tell them about it. It's a really important drive for us to make sure that we're transparent and we communicate what we're doing in this area. Really important for all stakeholders. What's our journey been? Well, listen, as Patrick said, you know, during COVID, this whole area, particularly the S part of the ESG, became a much bigger focus. People started to actually care about where people were at, looking out for people, helping people, and it really moved higher up the agenda.
We started our work on our strategy. We already had a strategy, but we wanted to take it to the next level, and we started working on it. We did that with the board. That was a step change. We had a climate literate board that cared about it. They helped us to develop the strategy. Our CEO helped us, our leadership teams helped us all around the business to develop the right strategy and the things where we could actually make a real difference. People, planet, products. We put in a whole range of detailed targets, predominantly out through 2025, which when you were standing in 2021, looked like a long way away, but is actually quite soon. I'll show you in a minute the progress we're making.
We put clear and measurable targets out there and published them, illustrating our commitment to doing this. We also set our net zero target at 2040, which again, is at the earlier end of the range of 40-50. That was about defining the strategy and embedding it. Since then, the countries have been working on how do we start to deliver against those targets? What sort of plans do we need to put in place? How do we action that? We then measure that. We measure the progress that we're making against all our targets every half year. We have constant dialogue with countries to say, "Right, where are we on this long list of things?" We have huge buy in. Huge. In fact, many cases, they're going faster than we've even suggested.
They want to do it, they know it's right for their stakeholders, and, you know, it's going well. We're just at the end process of getting our targets validated by the SBTi. By the summer, we should have that in place. Again, that will be a real evidence of the commitment that we're making to net zero. What have I missed? Okay. In terms of the three areas, I mentioned three pillars: product, planet, and people. Product and planet, the actions we're taking there is all about what we serve. It's about sourcing, sustainable sourcing of the food we serve. It's about developing recipes that are more sustainable, making sure that our menus are balanced and that they've got that range of wellness and climate friendly products.
It's making sure that we reduce our plastics, making sure that we focus on waste. We've always been a business that is very focused on waste. That's put us in a very good spot. We've now broadened that to take the products that we're not using, and giving them to people that need them. Steph will talk about a little bit more about that later. The people element, again, I've mentioned that we've made great progress. You know, three elements here really. It's all about engagement, about creating a diverse and inclusive culture, and about supporting our communities. As well as the governance elements that you can see on the bottom.
Again, lots of work done looking in our policies around human rights, modern slavery, training everyone from the board down, so we've taken a real made a real focus on making sure that we've got very high standards of governance. I mentioned these targets and Jonathan really helpfully said to me at sort of about 5:00 last night, "Sarah, no one will be able to read them." This is true. No one can read them. Jamie's taking a picture on his phone, which he will then zoom out that he can use it later. Importantly, all these targets are set out in the report and they're also on our website. The reason, the real reason I put it up was just to show that the fact that there are a lot.
In each of our three pillars, people, planet, product, we have a lot of targets out through 2025 and our net zero to 2040. What this does, along the right-hand side, is it measures where we are against those targets or where we were at the end of 2022 against those targets that we set earlier in the year. What you can see is I'm just gonna pick out three of the targets. The first one is meals that are plant-based or vegetarian. We had a target of 30%. We're already at 33%. We are at the start of our journey. Let's not be complacent. That is a very impressive figure.
However, we have a huge amount of carbon that we need to eliminate, so this will be a key element of how we do that, and Verity's gonna talk you through that in a bit more detail at the moment. We're in a good spot, as Patrick mentioned. The second I'm gonna talk about is our own brand packaging. 80% of our own brand packaging is free of unnecessary single-use plastic. Again, that's a really good start. We've got more to go, and we'll be helped by the development of new products. The industry's out there looking to develop more new sustainable recyclable products, and so that will help us. We're doing what we can, again, with our clients to make sure that we're using recyclable cups and such like.
The third area I mentioned is around people. A couple of things to pull out. Firstly, in terms of gender diversity, we've already achieved 50% of gender diversity. We're a very diverse board. 36% of leadership roles are filled by females. Again, we want to go further. We've got a lot of actions in place, not least the culture that we'll see that rising. I think, you know, a really good start. We know we're at the start of the journey, but I think a really good start. With that, I'm gonna hand over to Verity. We've really just covered the social and w e've covered the social and governance part of ESG, and Verity's gonna come and talk about the environmental side and our journey to net zero. Thanks, Rosie.
Hi. Hello, everyone. For those of you who I haven't met, my name's Verity. I'm Group Head of Sustainability at SSP. I joined in February last year. Really exciting time to be in the company and see the development of the strategy. I'm gonna talk you through where we're at in terms of net zero and our target for getting there by 2040. Before I go into details of the plan, I just thought wanted to take a moment to put this into context in the global food sector. The Intergovernmental Panel on Climate Change has estimated that food production globally emits around 19.1 billion tons of greenhouse gas emissions a year. That's over 1/3 of global emissions. That's a really, really big figure. There are positive signals to change that we are starting to see across the food sector.
There's lots of innovations and developments happening in areas such as alternative proteins, developing cultured meats, even additives for cattle feed that can reduce methane in emissions. You're seeing a lot more awareness, understanding, and adoption of regenerative agricultural practices across the food sector, and also those dietary trends, those consumer trends that Sarah talked about, much more moving towards plant-forward diets, if not all plant-based, definitely plant-forward, particularly amongst younger generations. We know a lot of these areas are quite nascent at the moment, but we expect a lot of these innovations and developments to really build and scale up over the next decade, and that's something that we really hope will actually start to drive meaningful reductions in emissions across the food sector that we will be able to leverage as well as an organization.
In that context, what does net zero mean for us at SSP? Like most organizations, we've been measuring and reducing our Scope 1 and 2 emissions for many years, and that essentially relates to energy use, things like energy use in our operations, which we have a lot more control over. Net zero takes a much wider view in taking account of the entire Scope 3 value chain. That's everything from your downstream supply chain, your upstream supply chain, right through to downstream consumer end use. In simple terms, and under the net zero standards set by Science Based Targets initiative, we need to reduce our absolute emissions across all three scopes by at least 90% by 2040, with only residual emissions for carbon offsetting. The first step in any net zero journey is working out where you're starting from.
We calculated our entire footprint across all 3 scopes last year. Essentially, that comes to quite a big figure of just under 1.1 million tons of carbon dioxide equivalent. As Patrick said, in intensity terms, that equates to 0.4 kg of CO2 per GBP of revenue. In our peer group that we looked at, there are some organizations that are pretty much on a par as us, but actually I've seen some that are as high as 6 kg of CO2 per GBP of revenue. It at least does put us in the lower end of that peer group range. As I said before, we've got a pretty good handle on Scope 1 and 2 emissions, and as Patrick said, we've already achieved a 36% reduction from our 2019 baseline by the end of last year.
In total, that's about 43,000 tons of carbon we reduced by. For the whole footprint, it knocks off about 4%. While we're very encouraged by that progress, we know that the big piece of work is gonna be in Scope 3, which represents nearly 90% of our total footprint, and the vast majority of that is in our purchased goods category. Let's break down purchased goods. What does that entail? That basically involves all the food, the beverage, the products that we serve in both our own brand units and our franchise units. That you can see that that's dominated with nearly 1/3 associated with meat and seafood, as you would expect. You know, a lot of that really sits in those high impact meat products like red meat, beef.
You've got pre-packed food, which is about 16%, down to dairy and 10%. What this actually tells us is that where we need to focus our efforts, where the hotspots are, and where we need to start looking at rebalancing our menus, starting to use lower impact ingredients, more plant-based, more plant-forward offerings, but then also thinking about those innovations and those developments that are happening in the wider food sector that I talked about earlier. It's not necessarily about eliminating meat entirely. Having mapped our baseline, we've done a lot of work to set our roadmap to 2040. What you can see here is this first bar, that's the baseline. That's the 1.1 million tons of carbon. Then we've accounted for emissions that we would expect to increase by due to business growth.
What we've done through is try to model the amount of reductions we expect to achieve through different strategies and approaches. This first big bucket here, that's the big emissions area, and that's essentially to do with our franchise brands. That, you know, as Patrick said, you know, there's a lot of partners we work with, particularly those kind of retail ones that can really push up the emissions in that space. There's a lot of work that we need to do with franchise partners. We're also very fortunate that a lot of the big brands that we work with, that we partner with already have their own net zero targets. You've got Marks & Spencer, Starbucks, Burger King, Jamie Oliver Group, they're all on the same net zero journey as us.
We're gonna be able to leverage a lot of what they're achieving through their emissions reductions. That's not just us being passive, we're also proactively supporting them in those emissions reductions. Really trying to take what they're doing, say in the High Street with their brands, and translating that into the travel environment. For example, we've done a lot of work over the last year with the Jamie Oliver Group in looking at how we can develop lower carbon dishes together. We've done a lot of work in that space and making sure that they're dishes that work for the travel environment that is obviously different to High Street. We're also supporting, for instance, Starbucks on areas such as their reusable cup trials in a number of areas.
There's a lot of work that we can do that I'm in close contact with the heads of sustainability at those other brands, and we're proactively exploring opportunities for further collaboration in that space. You've got some of our franchise partners that are not there yet. You know, they're much further behind, and that's where we can use our experience and expertise to support those brand partners further out behind to bring them on the net zero journey. We've already got examples, for instance, in the Nordics, this amazing range that we have for our own brands focused on more plant-based products called the Better Choice Range. That's been introduced to some of our franchise partners as well. Eatery in Sweden, that's gone to too. That's an example of how we're doing that work with the franchise partners.
This next big bucket of emissions reductions, that's our own brands. That's where we really need to start looking at how we rebalance those menus, as Sarah said earlier, and I'm gonna talk to that in a little bit more detail in a moment. All these other areas, these are the emissions reductions we've essentially modeled of things that we can achieve in terms of energy efficiency and the overall decarbonization of the grid, moving to renewables, the work that we're doing around sustainable packaging, reducing food waste, even just the behavior change in the business that can actually drive a lot of emissions reductions. If all goes to plan, that will get us to a 93% reduction by 2040 from our baseline with 7% of emissions for carbon offsetting.
Let's dig in a little bit further to what we're doing in that food and beverage space. Essentially, we know that that's 78% of our footprint, and that's where we need to focus the majority of our efforts. We're doing that across four key areas of sourcing, recipes, menus, and brands. Let's start with the sourcing. You know, a lot of this is kind of just stuff that will make sense in terms of how do we introduce sustainability criteria when we're selecting new suppliers, how we can work with suppliers to identify and choose lower impact products. Sukh's gonna talk to that a little bit more later. Also, how we can increase our use of certified ingredients, and also sourcing seasonally and locally.
Angela mentioned earlier when we were having our breakfast in the kitchen, our Juniper concept at Gatwick Airport, for example, has lots of partnerships with local suppliers and publishes food miles on the menu for key ingredients. There's also a lot we can leverage from the work our suppliers are doing in terms of their own net zero strategies and targets. A lot of them, you know, all their customers are kind of focused on this, so they're doing a lot of work in that space. We had a global conference last year in Paris in October, and we actually had a supplier exhibition there with all our major suppliers really showcasing the fantastic new products they're developing that will help us reduce emissions. There's a lot we'll be able to leverage there.
Our brand partners are doing the same with their suppliers and, you know, obviously Burger King suppliers also become our suppliers for the franchises. It's great to see the kind of work that Burger King and Starbucks are doing, particularly with that beef and dairy supply chain, which is one of the most challenging areas. There's a lot we're going to need to leverage, and we'll be able to get to there, but there's also looking further of how we can push further and how we can dig deeper into the supply chain. Next is the areas of recipes. This is where it's about using smart recipe design to not necessarily eliminate. It's not about eliminating entire food groups.
It's about rebalancing menus, thinking about what are lower impact ingredients that we can just reduce the proportion of, have more fruit, vegetables, whole grains on the plate, how we can look at if you've got beef, can that be swapped out for chicken? Chicken we know is much lower. If you look at this chart here, it's even there's your certified sustainable fish down in the green zone. It doesn't mean that all animal products are necessarily the highest emissions. There's lots of differences in that, we're doing a lot of work in terms of smart recipe design that you're gonna hear more from Sukh about later.
Importantly, we're really being guided by the science in this space, particularly the EAT-Lancet Planetary Health Diet, which recognizes that this kind of approach not only helps to reduce emissions, but also creates healthier and more nutritionally balanced meals for our customers too. Let's look at our menus. As you heard earlier from Sarah, we're already got over 1/3 of our own brand menus are plant-based or vegetarian, we've more to do there. Obviously we know that just putting things on the menu alone is not enough. We have a role to play in helping customers to make those healthier and more sustainable choices. That we're doing that through product promotions, information and labeling. I mentioned earlier our Better Choice Range in the Nordics.
It's a really simple way of just signposting for customers across all our own brands in the region, the products that might be healthier or more sustainable for them to choose. Got an example here from the U.S. where we're just using simple symbols on menus to make sure that customers can easily find those lower calorie or those plant-based options. In the future, you'd think with all the digital technology that we're doing with more digital menus, digital ordering screens, you'll be able to customize menus a lot more for customers to be able to say, okay, they want to see the healthier and the lower carbon options on the menus. It's also really important how you describe the dishes.
You know, the whole kind of thing is like we want everybody, not just those ones, people who are thinking climate consciously or health consciously to choose these dishes. They just want to see a great tasting dish on a menu that they want to eat. If that happens to be better for the environment, that's great. I think, you know, we definitely get a lot more people choosing the truffle infused wild mushroom and spinach lasagna than just the plain old labeled vegetarian one. Finally, let's look at our brands. We are really focused on integrating sustainability into the core of how we build and develop brands. We already have a growing portfolio of wellness brands, both for our own brands and our franchise partners. As Angela mentioned this morning whilst we were having breakfast, what we're doing is taking the learnings from these brands.
You know, these are very much the kind of brands people will go to if they're looking for what those healthier or more sustainable options. How do we take the learnings from those and put them into other brands that aren't necessarily with that core wellness, sustainability identity, but actually these are really successful products that people wanna choose, and we can take that through. Also, doing a lot of work, I'm working with a cross-functional team at the moment of looking at how we integrate sustainability into those processes for new brand and new product development. We are thinking about sustainability right from the outset of how we develop brands and our products going forward. That's pretty much everything from me. Bit of a snapshot.
I'm now gonna hand over to Sukh, who's gonna talk about some of the initiatives that we're doing that not only helps deliver our sustainability strategy, but also brings value in terms of that profit area and value creation for the business. Thank you.
Thanks, Verity. Good morning. I'm Sukh Tiwana, I'm the Chief Procurement Officer for SSP Group. Clearly our suppliers have got a big part to play in our supply chain, so we are benefiting from a lot of work that they're doing. We are also looking at sustainability with a commercial lens, and I'm gonna go through a few examples of the sort of things we're doing from a people, planet, and profit perspective. In regarding energy, we did a lot of work pre-COVID, looking at ways to reduce energy consumption. We looked at building management systems. We all put the LED lighting, all the sort of basic stuff.
Post-COVID, we've now started to look at cloud-based management systems where the cost is much smaller and therefore you can put them in sort of small medium-sized stores, whereas the full-blown building management systems really worked in the larger Burger Kings and Marks & Spencer type stores. That's one of the initiatives that we're looking at this year. The one I'm really excited about is the AMR meters. How many of you have got a smart meter at home? Quite a few of you. These are basically the commercial versions of those smart meters. We are gonna implement them across our business. It's a huge investment, and we will get basically half-hourly data on consumption, and that would allow us to look at every store and see which stores are overusing energy, et cetera.
In trials that we've done in the U.K., we've seen a 10% reduction in energy. The AMR meters are the enablers. We then have to look at the data, we will get exception reports each morning showing the outliers, then we can go into those stores and see what's happening. One of the examples that we had recently was Marks & Spencer's Euston station, where the manager forgot to close the night curtains and the chillers. The chillers, as we know, are large you know, consumers of energy. By just taking that one corrective action, we were able to reduce our energy bill. That's one great example. Moving on to smart recipes. As Verity alluded to, we now understand the carbon emission of every ingredient that we use in our organization.
We're using a third party to provide that data. There are three examples here I want to share of the sort of work we're doing. One is the wonky vegetables. Can you say that quickly? I find it quite tricky. As Jim said earlier, you know, we are starting to look at seasonal fruit and vegetables as well. If you imagine buying strawberries out of season, it will cost you 3x the cost. Whenever you see strawberries in winter in a fruit salad, ask the question of the store why they're doing that, because they shouldn't be doing that. There's a lot of products like that that we can use and take the cost down and provide fresh in-season products for our customers.
The other example you saw this morning from Jim was the repurposed croissants. By, again, taking the croissants at the end of the day, using them either at the end of the day part for the afternoon or end of the day for the next day, you can repurpose products like that as well. We've got many other examples. One of my favorites is the open prawn sandwiches. If you ever go into the Nordic countries, you see a piece of bread with a pile of shrimps on it normally. One of our very clever executive chefs called Jerry Davies did some work with the Nordics team. Basically we reduced the number, amount of, replaced the amount of shrimps by about 50%, added smoked salmon, boiled egg, and spinach.
Not only did we improve the taste profile, but we also reduced the carbon emissions by about 18%. Again, another great example, and Jerry's now looking at all our top recipes across the business to see how we can look at each product, but also the recipe build to try and reduce the carbon emissions. A lot of work going on there. Another great example is one of our few truly global suppliers is Diversey, who provide our cleaning chemicals. We started working with them about a year ago to see whether we can replace some of the chemicals with sort of plant-based cleaning products. We are now using a set of floor cleaning and table cleaning products that have helped us reduce our carbon emissions by 28% and delivered a 9% cost saving.
That's where I really get excited when I see both being ticked off. That's another great example. We're now gonna roll that out across Europe in the coming 12 months, and then further afield once Diversey get that range in supply chain. The final example is Too Good To Go. Has anybody got a Too Good To Go app on their phone? Hands up. Yeah. You've obviously got a lot of money, you guys. The Too Good To Go app basically is, it allows us to sell surplus food at the end of the day, which would otherwise be thrown away.
Effectively you get a bag of products which has a value typically of about GBP 12, and we sell that for GBP 3.99. That product would otherwise go into waste. It makes a small contribution to the bottom line, but it makes a big contribution to CO2 emissions. We now have rolled this out into 11 markets, and we that 440,000 bags was a September last year figure. We are gonna hit 1 million bags by this summer. That's gonna be a really exciting time for SSP. There are the four examples of how we look at sort of profit planet and product at the same time. We've got many other examples in the organization. We're looking at something we call free issues.
You know, whenever you go into a store, you get a bunch of napkins. How many of you get five or six sometimes? Again, we're trying to find ways to reduce that. There's ways we can do on extending cooking oil, et cetera. We've got many other examples in the organization. There was some snapshot of what we do. I'm now gonna pass over to Sarah Roff, Head of Investor Relations, for a panel discussion.
Thank you very much, Sukh. Good morning, everybody. I'd now like to invite up Michael Svagdis, CEO, North America, Jeremy Fennell, CEO, Continental Europe, and Mark Angela, our Chief Business Development and Strategy Officer, and also CEO for India and EEME. Michael, I'll start with you, if I may. We all know that North America is a huge opportunity for the group in terms of growth. How do you see sustainability playing into that? Do you think it can help us win and retain business?
It's kind of interesting going back. You could probably hear me, but okay. What Sarah said. You know if you look at our stakeholders, all of them are focused on it. At the beginning, we talked about the focus from Mike Clasper and the board. Re-energized focus, which has been fantastic, along with Patrick. I love the purpose, which has really helped us as an organization moving forward. You know, first is our employees. It's amazing. We just did our recent engagement survey through Gallup third-party, and it was a big focus for our employees, very important to them and what they want. Employee retention is critical to our business because keeping our talent, and they wanna work for organizations that are focused on, you know, sustainability, the environment, of course, governance as well, super important.
It reminds me, kind of funny, as you mentioned earlier, right? I have a 30-year-old, a 24-year-old, and how they're in the workforce. I know what I hear at home and what I hear from them, and it's very important to them. As I walk around the office, I realize half the people that work there, they could be my kids. I know that I'm getting older then, right? It isn't. It's super important to them, and I think that's really then makes it even more important to us, and it goes back to that purpose and it gives you that, which is great. There's our clients. It's interesting. As we come out of COVID, it's a bigger and bigger opportunity as well as something they want solutions to in RFPs that are coming out, or request for proposals.
You know, they're looking for zero waste for food. They're looking for elimination of single-use plastic. What are the strategies for that? The recent report that we've handed out today is a big part of our proposal because right now that's what our clients wanna hear. It's key to our growth strategy and also retaining business, is we're extending contracts that clients wanna hear about what is your sustainability platform, what are you doing for your employees? The governance piece is super critical. It's the consumers. You heard Angela mention it earlier about the recent survey we did of our consumers. We use 1/3 party called Culinary Tides in North America to look at the culinary trends. Every year we meet with them.
You know, again, sustainability, vegan, healthy options continue to get more and more important in our business, which is, you know, again, important to us because it's all about the consumer and driving sales. Key focus from that. It's the, our communities. you know, I'm excited. In the United States, Meals on Wheels is our partner in the United States, in Canada, Food Banks Canada. We are also involved in 30 other local charities because if you look in the U.S., a big part, most of our clients, they're governments, right? They're the local mayor, the local city. Getting tied into those local communities and charities is very important to them, therefore it's important to us as well. What I think is great is going back.
I like Patrick saying the purpose, but if anybody knows SSP America, when you give us a goal, we get it done, right? That's who we are as an organization. I ended up taking the lead, so I'm the champion of the sustainability efforts in the Americas. It's 'cause it's important to me. We have a monthly meeting. You know, you think about it, I have my VP of commercial on there, my vice president of procurement, VP of culinary, vice president of business development, and the head of communications are all part of that, and they have subgroups. We track every initiative. We have a call on it monthly. Again, it's not just about, you know, just getting it done. It is about the purpose, and it's a good blend.
What I like about it, 'cause with that good commercial mindset that Sukh talked about on those calls. At the same time, people with great ideas that drive out great initiatives. You get a great balance of taking care of the world, meeting our expectation of our stakeholders, but doing it commercially sound as well, which I think is fantastic. I did, I wrote these down 'cause I know if I, if I misspeak on any of these, Verity and Sarah will get really mad at me 'cause they measure it all. Think about this now. In a very short period of time, 20% of our own brands right now plant-based. Our meals are plant-based or vegan. 90% of our own brands, our tea and coffee are Fairtrade and Rainforest Alliance.
94% of our own brands fish is sustainable for the fishing standards. 80% of our own brands package free of unnecessary single-use plastic. 70% of our own brands packaging is reusable or compostable. 100% of our commissaries, our central kitchens, we compost all of our food waste. That's 100%, which is fantastic. 56% of our food that we do not use is donated. We use a company called Food Donation Connection. It's great 'cause it goes to homeless shelters, it goes to food banks. It's reducing the CO2 footprint, we're giving back to the community. 80% of our unused, our frying oil, it doesn't get wasted. It doesn't go in the waste stream. We recycle it right now.
We should be at 100% by the end of the year. More to come. We're doing a lot. It really is. Again, reason I took the lead of it is 'cause it's all about retaining our business and growing in a sustainable way, and it's been very successful so far.
Perfect. Thank you, Michael. Question for Jeremy, please, if you don't mind passing the mic. Jeremy, we all know that the Nordic countries are leaders in sustainability terms. Can you share any examples of what you've done there to integrate sustainability into the proposition?
Yeah, sure. Well, you've seen a few of them here, this morning, but clearly some markets are further ahead on this topic, generally than others. The Nordics for us is one where we had a huge tailwind really, 'cause a lot of this stuff is happening with partners and with clients and with customers as well. When you've set out on this journey, we're able to nail all of Michael's results there by the tailwind that the market was already on this. We've been able to use that momentum, and drive out a lot of initiative that we'll then be able to share across the rest of the region and indeed across the rest of the world. You've seen, the. The targets around, the, r eusable plastics and single-use plastics and being able to put away all of that.
Food ingredients, sustainable sourcing, local sourcing, all of that came very easy to us when we set our initial targets out. Actually healthy eating was the one that stood out where customers have got a strong desire to eat healthily in the Nordics and increasingly in the rest of Europe. Also clients as a result were asking us to put more healthy options in front of customers. Hence you saw Better Choice, which was our way of flagging locally sourced, meat-free products, sustainably sourced products on menus so that customers could make those decisions for themselves. We actually rolled that out across all of our own brands in the Nordic region.
Actually have now started to put exactly the same font and technique into some of our franchise partners who are saying, "Yeah, do that for us as well," then putting it into other markets. Beyond just the menu, actually looking at Haven, which is the entire concept from the build through to the offer, and the proposition that we put in front of customers. It was a Norwegian brand developed initially for Oslo Airport, but then rolled out into other airports in Norway as well. Really well received by clients and customers. Now rolling it out into other markets as well, doing some further development work on it.
We've got one in Cyprus, you've got one in Brazil, and we've got plans to put it further into the market as well, as well as some of the other brands that are on here as well. Yeah, that's where we see the market giving us advantage, but us being able to take that learning and put it into the rest of Europe and the rest of the world. Clients are into this, and as well as customers. What I would flag is a lot of the work that you've seen here today and a lot of the work that's been done by Verity and the team gives us a whole different perspective around moving from a sort of aspiration or a target to achieve by 2040, to being able to break it down.
The whole breakdown of the footprint is a step change in the way that we are now operating because you're able to see exactly where the footprint is generated from, which means you don't just have a target for 2040, you're able to break it down and look at what can we do this year, what can we do next year, what can we do the year after in order to get there in the end. When you talk to clients in that respect, and when you talk to teams in that respect, it brings it to life. You know, already just from putting the work that you've got in the, in the book in front of you there, putting that in front of clients and having a client conversation.
Unfortunately for Verity, it means she's now off to Sweden to go and meet SAS, to go and meet Swedavia, to go and meet other brand partners who are not just interested in what we're doing, but it's a thought process. They're doing a lot of this thinking as well. How can we get like-minded experts together to look at what we're all doing to try and serve this purpose? So that's happening as well, not just in the Nordics, but in the rest of Europe. The last thing that I would say to echo the presentation and also Michael's point, don't underestimate the huge impact that this has on our colleagues as well. The people that work in our business really want this.
Now that we've got a breakdown, now that we can see, the detail of the targets that we're trying to deliver, people are really engaged in this topic, people that work for us and people that have an aspiration to work for us in the future as well. It's great news.
Thank you, Jeremy. Now a question for Mark. India is another amazing growth market for us. Indeed, the board were there just a few weeks ago. Do you see any tension between that growth ambition and what we want to do on sustainability?
This is really interesting because you look at the growth of infrastructure in travel and transport that India is undergoing at the moment, and you'd think that that would be being done at the expense of the environment. In fact, I'd say looking across the business, there are probably some of the most innovative client initiatives under sustainability. I'll give you an example. For those of you who haven't had a chance to look at Bangalore T2 on their website, that is probably one of the most sustainable terminals that they built, entirely made out of bamboo. Some of the other initiatives I think are sort of quite groundbreaking. For example, they've introduced or are piloting a concessionaire scheme which incentivizes effectively sustainable behavior.
For example, use of recycled materials, to the point where actually it will result in a reduction of the concession fees, the more points you score on the sustainability agenda. The other thing they're doing is they're, I think, one of the first airports to be water positive. A bit like Gatwick, they have a policy, and we obviously are leading with that, making sure that all suppliers, all ingredients for all of the menus are coming within a 25-km supply radius. There's a huge amount of sustainability initiatives going on in India and despite the significant growth in infrastructure. It's also being supported by consumers.
Across the East Europe, Middle East and India region, I think 80% of our consumers in the client survey fed back that they are looking for healthy options. It's coming not just from clients, but also from customers. Also, as both Michael and Jeremy said, very motivating for the teams. I mean, across India now, they are very proud to say that 100% of our own brands have removed single-use plastic. I think 100% of our own brands are also recycling cooking oil into biofuels. When you look at the growth in India, you think that they're actually making some of the most progressive improvements in terms of sustainability. Also in the Middle East, we had COP in Sharm El-Sheikh.
We've got the next COP coming up in Abu Dhabi. Huge progress being made across the EMEA region. Just on the, on the people side, another aspect, because a lot of our teams in across the Middle East are on two-year contracts coming from places like Nepal, Bangladesh, et cetera. It's very important that we make sure, from a modern slavery compliance that we are doing all the checks and validating that the process whereby they are recruited by agents is followed with compliance.
I think it's as both Michael and Jeremy were saying, there's real momentum, not just amongst clients, India giving you the example, but amongst our teams to see the progress they're making year-on-year against the targets that we're setting. Actually, they don't see this as something that is a compliance measure. They see this as something that they really are engaged in and really want to make a contribution to.
Brilliant. Thank you very much, all. I think we're now handing over to Patrick for the Q&A.
Great. Listen, I'm actually, I'm gonna be the emcee for this, which I'm looking forward to because if nobody has any questions, I can put questions directly to Jonathan, which I really want to do. It's Jonathan, Sarah, and Verity are gonna join. Just by way of introduction as my two colleagues are sitting down here. I mean, one of the things that we wanted to give you a flavor for here, whether you're listening on the webcast or here in the room, is that the ownership of this agenda is very broad in SSP. You've got, you know, you've seen many members of the Group Executive Team today.
There are others who are in the room like, Carrie and Mark Smith, and Jonathan Robinson, who cover other regions in the business or other functional areas, including technology, which Verity said earlier. Hopefully you're getting a sense for that. Right. What we wanted to do now is to give you, having given you a lot of material, was to give all of you an opportunity to put questions to our panel here. Jamie, can I just say by the way that it is just such a part of SSP convention that you ask the first question? I'm glad that you're doing so again here today.
Can I ask three as well, just to be consistent? The first one is, you see yourselves as a sort of, you know, as the leader, if you like, in this space on ESG. Are there any sort of practical examples you can give us of tenders you've won or renewed, you've come out ahead of the competition? Just sort of judging where you are versus competition on CO2, you think you're in line, but are you sort of moving ahead of the pack? Anything on that would be quite helpful.
Let's take that question first, and then we can take the other two. I mean, I think we see ourselves as a leader. I'm not sure we've yet hit the hurdle of being the leader, although we would aspire to get better and better at that. Verity, you might wanna take that up because you're pulled into a lot of the tendering activity that we're now doing in the last year.
Yeah. I get kind of requests for information for tenders, I'd say, all the time. A lot of the kind of tender requests can vary from, like, the sort of basics you would expect to see. The kind of due diligence the clients are doing, wanting to see what policies we have in place, what targets we have in place, where we are on performing against those targets, what proof points we have. Some of them are really opening up to a lot more detailed conversations and actually looking for those kind of partnerships and collaboration.
I think, Jeremy, you certainly have said that a couple of the tenders that you've gone through in Europe recently, it's really opened up the conversation of being able to sort of say, moving from that sort of corporate kind of narrative or rhetoric around sustainability, but not being very tangible in terms of what we're actually doing to now having that kind of tangible, clear sort of delivery that we're doing and the progress against the targets, I think has really moved the dial. I'm not sure that it's possible to quantify the exact number of tenders we won on a sustainability proposition because it's one factor of many, but I think it's a very crucial factor in a lot of the tenders.
Jonathan? Jonathan?
Just to add something.
Yeah.
I mean, as you say, difficult to put numbers to this, and you wouldn't expect me to put numbers to this. A long history here. I think we are definitely moving from an era where it was about essentially meeting some qualifying criteria for the client, for the airport, the railway station, to it being genuinely part of the competitive process of the RFP. I think I can probably say this, one of the ones that you're alluding to in Jeremy's region, I mean, Oslo, for example, massive tender process recently. We know that sites were won and lost on pure, you know, environmental credentials. As Jeremy said earlier, they're probably at the leading edge. Equally, you know, we've seen some in India, of all places recently, where that has also been the case. Mark pointed some of those out.
That's a territory where frankly, a few years ago, we'd have said this wasn't really important for them, you know, in that particular market. It was more of a, frankly, a continental European pressure. It was less relevant in a competitive sense in North America and certainly the Asia Pacific region. That is not the case now.
Got it. Jamie, you had two more questions. You might take both of them.
Yeah. Yeah. Just on rail, obviously given much lower environmental costs there. Any change in the strategy to expand there at a faster pace than air? I mean, is that just not relevant given it's an industry level issue, not a.
Okay
company issue?
Let's take the third question as well, and then we'll do both.
Just, in terms of the changing menu mix and sourcing over the next few years, any impact on the financials, GP margins, et cetera?
Okay. John, do you want to pick both of those up and then draw Sarah and Verity in?
Sure. I mean, you know, I think that if we look out over the longer term, we may see some of these factors start to help the rail business grow and develop in a way that's a little bit of a natural hedge in terms of where demand comes from. Certainly, rail benefits from being the most environmentally friendly form of travel in terms of carbon emissions. You know, we, and again, stress, we've never said we have any intention to withdraw or scale back our rail business. It just happens that for competitive reasons and reasons of infrastructure investment, we think that air will grow faster and we're gonna grow in certain regions of the world more rapidly. I think we'll see how that develops.
In terms of the impact on the P&L, I genuinely don't think this is gonna have an impact on the P&L. At a micro level, some of the things that we're talking about, will carry a cost. Equally, many of them carry benefits. By the way, it's not just the sort of energy efficiency initiatives and so forth that Sukh has talked about. Some of the menu initiatives and the menu engineering actually are beneficial. Some of these, you know, heavy proteins in terms of their CO2 impact are also more expensive. I think if you thought. You know the way we work, we will always be evaluating opportunities, new business, renewals through the lens of making sure we've got the right formula to win competitively. That includes the right rent.
That would all be priced, that'll all be priced in. I don't see it as a direct pressure, quite honestly. If there were a cost that was being carried, you know, ultimately we'd see the benefit coming through in rent because we're in a competitive market.
I mean, the only thing I'd add to that on rail, is that I had the benefit of sitting down with Angela on this yesterday. You know, typically, our own brands play a bigger role in rail than they do in air. We have a very, very important agenda of renovating some of those brands, including, dialing up in both substance and communication, the sustainability credentials of the food within those brands. You know, what you're seeing with Upper Crust, what you're seeing with Camden, what you're seeing in Soul + Grain . Then equivalence, without going through all of them, in terms of what you're seeing in Germany and France, which are our two other very big rail markets, I think you will be.
Will have us matching, as we said earlier, our sustainability strategy with our channel strategy in rail. I think that'll be an important part of the next five years and those in that channel. Yep. Tim.
Morning, all. I just had one question really around timing. You mentioned a couple of times that you set targets in 2021, which is pretty much peak uncertainty, and bold from you because a few competitors really were.
Yeah
in the sand. I suppose what I'm asking is, are your 2025 targets volume and activity indifferent? How within the organization do you make sure that there isn't a kind of two-way pull between the ESG and volumes? Are things thought about on a per passenger basis? Thank you.
Yeah. Let me just frame it up, and then I'm gonna hand over to Sarah to talk a little bit about timing. I said this right at the beginning, but as an executive team and board, we are working very hard to avoid this becoming a trade-off conversation. Now, that doesn't mean, of course, conceptually that there aren't some trade-offs in terms of timing and efforts that you've got to balance, and particularly in terms of organizational capacity, given the sheer breadth of things that we're taking on. What I would say here is that we believe that doing sustainability well is very reinforcing of our growth and returns agenda and building stronger delivery for each of our individual stakeholders as we set out earlier.
Now, in terms of, you know, we are growing, as you know, Tim, very, very quickly. The pace of the passenger recovery has probably been a bit stronger in the market than we might have expected in 2021. And undoubtedly, as you've heard us talk in other, you know, in other forums, the level of net gains that our business is having is stronger than it might have been pre-COVID as well. The combination of those two things does mean that the very first bar that Verity showed earlier around what's happening to volumes is somewhat dynamic in terms of, you know, the, the growth trajectory of our business. What that means is that we have to find ways of offsetting that impact through the other bars.
That's really how we're working on it. Sarah, do you want to jump in on the 2021 timing versus today?
I mean, we. You know, you're right. It was, it was quite scary, but really important because we all know that, you know, targets are helpful in bringing focus and driving action. We, you know, we deliberated for many, many weeks and months and, you know, Mike will remember some of those painful conversations as will Jonathan and many of other people on the team. We thought it was really important. I guess the slightly surprising and great thing is that we've gone a lot faster than, you know. I mean, each of our regional CEOs mentioned it. This is something that they want to do, that their teams want to do, that our customers want us to do. Actually, there is this huge momentum, and we have gone faster.
We will hit many of those targets ahead of 2025. It's a rolling target, so we'll then look again, you know, and plan for the next five years. Similarly, with net zero out through 2040, you have interim targets along the way. It's helpful when you're planning for your business to work out, well, okay, where do I need to be by when? What do I need to do? Really, they're just helpful milestones and guides that we're not just focusing on them because they're there and we have to hit them. They're just helpful in bringing, you know, prioritizing the things that make a difference, the things that matter. You'll see that just being a rolling process. If that's the right answer.
Yeah
if that was the question you were asking.
Yeah. Thank you.
Great. Guys, do you mind just 'cause of the other people listening if you just give your kind of name and firm as well so everyone. Yeah.
Hey, morning. It's Jaafar Mestari from BNP Paribas.
Great.
Two questions. First one, just an open and open question on benchmarking. If we don't mention competitors by name-
Yeah
but maybe by type of competitor-
Yeah
what types of competitors are doing this really well, benefiting from this? We often hear the big ones can do it really well, but maybe they're distracted right now. We also often hear the small ones can do it really well because sometimes mechanically they're just very local, et cetera. You know, who's benefiting from these trends?
Yeah.
Second question on this slide with the targets, obviously a lot of them are very, very advanced. If I look at the ones that are least advanced, there's eggs, fish and perhaps more importantly, employee engagement. You know, they're probably on track still for 2025, but the ones where the progress hasn't been as amazing early on, are you already finding remedies or, you know, doubling down on the resources there?
Yeah. Verity, let me just pick up a couple of points and then hand to you for details. Firstly, I'm gonna react emotionally to one, if you don't mind, which is I think we're making great progress on employee engagement. I'm not quite sure how you could discern from the measurements that we weren't.
Percent.
Yeah.
A lot of these businesses are 90% already.
Yeah. I struggle to find a single business in the world that has engagement scores at 90%. I'd be very interested in learning the ones that have. Right. To be up in the mid to high 70s% heading towards 80% is really, really good versus the any of the internal or more particularly external benchmarks on colleague engagement. If there are things that we can be doing that can make that better, we're all ears to try to learn about that 'cause it is so central to our business. In terms of the, if I just pivot from broader ESG to climate and benchmarks.
As Verity said earlier, if you take a reasonably broad definition of food service, restaurants, bars, and you look at the metric of kgs of carbon per revenue, it ranges from about half a kg to about 7. Right? Benchmark just of about, I think we've got about 7 or 8 firms in there. We're right at the bottom of that. We hesitate to say that we are the lowest because I'm sure some it might be that someone can find something that's lower. You know, in or around half a ton of carbon is very low relative to relative to the restaurant food service sector generally. There will, of course, be examples of very, very good practice that are brand specific.
There are things that we can learn from that and are learning from some of the individual brands that do very well. Our business is an aggregator of many types of brands. I need to be a little careful in terms of how I describe this. For example, narrowly on the issue of carbon emissions, we will be held back very, very significantly by the scale of the business we have with Marks & Spencer, because they have a much higher level of carbon emissions because retailers do than a coffee shop might or a restaurant in an airport might. There will be some kind of weighted average of the different brands and formats.
Yet if you compare that retail proposition versus other retail propositions, they actually look pretty good relative to other retailers. What we're trying to do is to learn from other aggregators of brands, a little bit like our curators of brands like we are. Then also see if we can get discrete pockets of individual practice from brand specific formats where, you know, people may well be lower than us. That's a. Have I missed anything on that, Verity?
No. No. I mean, I think peer benchmarking is quite challenging for us anyway because our business model is quite unique compared to a lot of others. We obviously look at, you know, other food service and hospitality, but then also the big restaurant groups too. I think, you know, there's benchmarking of course, where you sit in terms of your data, but then is your question also a little bit around who's the best practice as well? I mean, I think you see a lot of the different organizations, depending where they sit, whether that's in food retail or hospitality or food service, have a very strong on particular areas. The food retailers are very good on food waste. You know, that's something that they really focus on.
You've got other brands like Jamie's are really focused on that nutrition and that health piece. They're very strong on that. You've got Starbucks who are really good in terms of what they're doing around packaging and all the work on reusable cups and plastics. There's lots of kind of different elements that we will benchmark from, but also learn from as well. I think we have that opportunity because we work with so many brands to learn from them and they learn from us. Like you say, sometimes things that they're doing don't quite work in a travel environment, so you've got to adapt what you do and sort of learn from that. On the targets piece, I think cage-free eggs has been a challenge globally of late. In the last year, there's been avian flu in a lot of places.
It's been very difficult, you know, to get free-range eggs, let alone kind of cage-free. We've seen that particularly in the United States. I know, Michael, you've had a big challenge with cage-free egg sourcing. Asia Pacific has also got quite a few challenges in that space. Whereas actually we've got 11 markets that are already at 100% cage-free eggs. You know, Europe region, I think you're at about 85% at the end of last year. You're probably gonna be 100% by the end of this year. We're definitely getting there. The markets that are having more challenges with, we're doing a lot of work in that space.
We're working with animal welfare NGOs who are helping us to identify suppliers in regions where we're having more challenges, and we're seeing the situation start to improve now that the kind of avian flu thing has sort of started to settle down a bit more.
Hi. Darragh O'Sullivan from Jefferies. Given that staff turnover has been a large challenge for the hospitality industry, can you give us any indication of what staff retention rate is at the moment? If you're not able to give us a number on that, are you able to provide us a bit of color on where it's trending over the last few years?
Yeah. Why don't I try and pick that up? The trick with a. Sorry. The problem with an overall macro number on staff retention is that it misses some of the key contributing factors as to how it plays out for real. What I mean by that is that a huge portion of the staff that leave our business leave within the first day or the first week of starting work, right? There's a certain element in this industry where people try it out, and they do one day, don't come back the next day, or they do two days, don't come back after that. Our staff retention generally, once you pass three months, is very high.
The challenge in terms of trying to set up our business is being better on figuring out with people in the screening process whether or not it's gonna work for them or not, so we don't end up with this, you know, very high turnover phenomenon in the first week or two, or sometimes day or two, of people working with us. That's the overall point, I would say. The general direction of travel for us on retention is actually really good. Right? The entire industry had a massive task last summer of, certainly the northern hemisphere part of the industry, actually ramping up to meet traveler demand. Pretty much everywhere, the industry was desperate to just access people, right?
As a result, actually, there were some, with the benefit of hindsight, Darragh, hiring decisions that everybody made in a desperate attempt to try to keep up with recovering travel numbers that ended up having quite high levels of attrition because we just didn't go through the same processes we might have gone through when you had a bit more time to plan for it. We've actually seen really, really nice, both engagement scores, hence my response to the earlier question, and retention levels as we're, as we came out of last summer. We've gone through the winter and as we're planning for this summer.
What I would say, and I say this touching some form of wood as I make this comment, is that we're not seeing challenges now around sourcing the number of people that we need to be able to meet this summer's demand. We feel quite good about the way we've got our business set up. It is undoubtedly true, as you well know from other conversations that we've had, that that has built some inflationary pressure into the cost of people in our business. As we also say, that movement up in entry-level wages across the world is a societal good, and we're not fighting it. We do have to mitigate it in terms of how we handle our supply chain, our cost base, and through to pricing.
We're in quite nice shape actually as we go into the summer. Our retention levels, once we get through that, what I might call trial window, are exactly where we would want them to be and are a function actually of the positive engagement scores that I referenced a second ago.
Okay.
Yeah.
Yeah.
Hi there. Ling from Shore Capital. Just a few questions here. Firstly, you talked a lot about, you know, bringing down your carbon footprint of your recipes, for example. In that process, have you to some degree, built up some resilience within your supply chains as well? We know, of course, that there's a lot of climate risk or climate risk that is gonna occur regardless of what we do anyway. Secondly, in terms of-
Why don't we take up John Padjook, 'cause it goes a little bit to the TCFD stuff in terms of climate resilience in the business. Yeah.
Yeah.
Sorry.
It would help me if you just clarify exactly what you're trying to get to. Are you trying to get to the macro long-term picture in terms of-
I think it, you know, even in the next 12 months, for example, you might see issues such as droughts impact your ability to grow grain, for example. Even in the long term, how supply chains from a logistical standpoint might actually impact your supply chain.
Just picking up Patricia's point. If you look at our TCFD reporting, we do focus on where the major risks are from climate change against, you know, two scenarios. One where there is positive action to maintain global warming to 1.5 to 2 degrees, another where that isn't effective, and we're looking at a 3.5 to 4.5 degree rise in global temperature scenario. We talk very explicitly about the fact that one of our risks is around supply chain sourcing and some of the pressures that that might bring with it. I'm talking here about the measures to maintain low levels of global warming.
We talk, by the by, about the primary risks under that scenario, being around, you know, essentially carbon taxes and the implications of those taxes and similar, on our supply chain and our product costs as well as energy costs. We talk about the impact in terms of packaging and, of course, we talk about the impact on global air volumes. Coming back to the short term, we, you know, we, of course, have got the normal sort of business continuity and contingency plans in place to deal with short-term volatility in supply chain. Frankly, a lot of that was tested
Pretty extensively during COVID, albeit we're operating at lower volumes. Look, I don't know if there's anything you wish to add in terms of our overall supply chain policies and how we create resilience there.
Having been through the last two years, you can imagine we've got pretty. I do need it. Thanks. Having gone through a pretty torrid time over the last two years with COVID, clearly we had a lot of learning. I think all the evidence we have now is that the supply chains are coming back. There's good supply of products. The shipping industry is now back, you know, to high levels of product movement. I think we are expecting a much easier supply chain sort of process this going forward than we've had in the past. There will be droughts, et cetera, you know, the supply chains are pretty flexible. I think the world has moved away from Ukraine as a big producer of wheat, oil, et cetera.
I think the supply chain is pretty resilient going forward.
Yeah. Okay. I might take all of your remaining questions actually if it's okay, just because we're. I'll take, I know you had a question across the way and then we'll see if we can deal with them in one go and wrap up. Yeah.
Thanks, Mike Wills from Federated Hermes. Just a quick question coming back to the labor point, sort of big cost base for you guys. I guess my question is in the context of the last couple of years where you said ESG has become into sharper focus and most of your clients being government-oriented, what pressures are you feeling towards living wages and what extent have you assessed the sort of payback you get from that in terms of higher wage but lower turnover and the kind of the convergence that might come from that in terms of contract wins?
Yeah. Yeah. There's a lot in that. The answer to your question is that we recognize and plan for the fact that entry-level wages in our business are gonna grow more quickly than wages in other parts of our structure. We're not fighting that. Now, there are levels of pragmatism that we have to adopt in terms of the pace at which we actually push that ourselves. I think, frankly, the decisions we make on that do vary country on country and channel on channel. Because, you know, our ability to actually fund all of the things we're doing, including our, you know, strategy and commitments around pay in various forms, that require us actually to be a profitable business as well.
I think the, a reasonable assumption that you could adopt for our, for our business is that you'll continue to see above inflation levels of movement in entry-level pay. We will work to from a kind of organizational design perspective to make sure that that can work for us both in terms of progression routes and our economic model. We will work in collaboration with our brand partners and our clients, where an impact of that is an impact on pricing, then we will you'll see that feed through in some form into pricing. Kind of the essence of our whole business is that we have to actually work through those judgments around around the pace at which we do that.
I think it's reasonable. I might just make one last thing, and it's more a question for kind of classic results presentation and strategy, which is do bear in mind that we're making very, very significant investments in digital, and part of that investment is actually enabling us to run our units in all sorts of ways with less people. You know, that's obviously a very important unlock in terms of our ability to fund the movements that I'm referencing in terms of in terms of people. Listen, just before wrapping up, he's kinda got used to me calling him out at the last minute.
Mike, can I just ask you if you just had any concluding thoughts as you've listened in, and also you've got the reference point of being on this journey, frankly, before I joined, right?
Yeah.
It'd be appropriate for you just to give some concluding thoughts before we wrap up.
Patrick has done this to me so many times. The number of times I had to do it in India was just ridiculous. Standing back from this conversation, there are two observations. One is the high interest in the audience on the details of all of this, and I don't think that would be the case pre-COVID, right? I think our instincts in those dark days of COVID that we had a chance, once we survived, to think about our long-term strategy, even though we're in the middle of the crisis, was a very, very wise decision. Some of the executives on the front there were critical to that. The second observation, I think there's been a huge change in SSP over that period.
I think COVID made us think broader about our contribution to society, the importance of our colleagues, and the sustainability agenda. I think if you went back four or five years and did a side-by-side comparison, I suppose, Jonathan, you could do that for us. If you did a side-by-side comparison, I think the culture has changed quite a lot, and in my mind in a very positive way that means our business is going to be not just the great profit engine that it's been. I'm not allowed to talk results. The great profit engine that it's been over the whole time since the IPO. Importantly, that's sustainable over many, many years because of what we're putting in place now.
It won't go away because we're behind the game and have a crisis because we haven't addressed what society expects from us. 2 observations, your interest and a big culture change in SSP.
Awesome.
Right.
Very good. Very good.
Thanks, Mike. I'm conscious we said we'd be finished by 10:00, it's just coming up to 10:00 now. To conclude with where I started, a word of thanks for everyone who's joined us, in particular for our team who've put this together. If I could just acknowledge one of the, and sort of amplify one of my reactions to an earlier question is we are also in learning mode here, right? You will see lots of very good examples of what other people are doing in different aspects of sustainability, and the more we can learn and get better, the better it will be for us in terms of our agenda too.
Let's please try to keep this as much of a two-way dialogue as possible, because, you know, that's gonna make our business better and ultimately it'll feed through to some of the wider purpose-driven aspirations that we have. That's it. Thank you. The next SSP investor engagement is end of May, when we're gonna have our half-year results and we'll see, I'm sure some of you, when we do that. Thanks for spending the morning with us and goodbye. Thanks to everyone who listened in.
This presentation has now ended.