Approximately one in three food calories globally is wasted between “farm and fork.” Food spoilage and waste occurs during crop growth, harvesting and processing, in retail and restaurants, and in the home. As a result, millions of tons of food waste are generated annually, with the majority ending up in landfills or incinerators. In the United States, food scraps represent more than 14 percent of the total municipal solid waste stream (PDF).
Such waste means the loss of a tremendous amount of potential value.
Today, companies are beginning to understand the social, environmental, and economic costs of food waste and starting to recognize the benefits of reducing waste or diverting it to better uses. These opportunities can be pursued through innovation, collaboration, and leadership.
Innovation: Waste Means Energy
Many innovations are emerging to capture value from food waste. For example, some vehicles can be powered by used grease and vegetable oil from quick-service restaurants. There’s also a smart phone app called FlashFood, through which restaurants send an alert to volunteers who can pick up leftovers and distribute the food to those in need.
On a larger scale, anaerobic digestion, a process used to break down biodegradable material, produces relatively cheap biogas that can be used as a source of energy similar to natural gas. While not a panacea, it is potentially an attractive alternative, especially in Europe, where electricity and gas costs have increased dramatically recently.
Finnish researchers have demonstrated biogas’s viability at industrial sites. Companies could pipe excess biogas to other industrial energy users and households or for vehicle use. For households, individual biogas plants offer a cost-effective, less carbon-intensive source of energy. The Appropriate Rural Technology Institute (ARTI) in India, for example, calculated a two-year payback—with additional carbon savings—for a US$200 biogas plant.
More food waste/energy solutions will emerge as cost pressures shift developed markets toward sustainable lifestyles (one such pressure is rising landfill taxes in the U.K.). Companies must watch for such technologies, some of which may be found in less developed markets at the bottom of the pyramid.
Collaboration: Scaling Solutions
Because food waste is so pervasive, making real progress requires shifts in consumer behavior, public policy, and market incentives. Partnerships are needed both vertically in the food value chain and horizontally into other value chains, often with atypical bedfellows.
Some companies are already participating in powerful multistakeholder initiatives in Europe and North America. The EU’s FUSIONS project was established in 2012 and now involves more than 80 groups from business, government, and civil society that are developing strategies to reduce food waste. The U.K.’s WRAP business coalition issued the Courtauld Commitment (PDF), a voluntary “responsibility deal” in which more than 50 grocery retailers, brands, manufacturers, and suppliers have agreed to improve resource efficiency and reduce food and drink waste. And the U.S.-based Food Waste Reduction Alliance (FWRA)—a three-year effort launched in 2010 by the Grocery Manufacturers Association, Food Marketing Institute, and National Restaurant Association—is focusing on solutions to food waste generated by manufacturers, retailers, and restaurants.
In the future, multistakeholder efforts like these will increase in importance for companies, both to respond to regulation (the EU has issued a directive on decreasing biomass waste to 35 percent of 1995 levels by 2020) and to develop “circular models” that increase the net value per ton of food.
Leadership: Understanding Complexity
Given the complexity of the global food waste challenge, leadership is required from all parts of society, including business.
Today, major retailers such as Ahold, Sainsbury’s, and Tesco, among others, are testing new choice editing strategies that steer consumers to environmentally friendly alternatives. Through on-product messaging and recipes, stores are helping cut out unnecessary waste and increase awareness about how to do this at home.
The biggest leadership challenge, however, is to design food waste out of the food chain, from farm to fork. Businesses must take a holistic approach to food value chains, understanding and addressing both the technical and cultural barriers to eliminating food waste. As consumers in the high-growth markets of Asia and Latin America increase the volume of food they send to landfills, businesses supplying to and sourcing from these countries must understand the challenges, convene the right civil society and business partners to surface solutions, and provide the resources to implement them.
Ending Waste, Finding Value
Through innovation, collaboration, and leadership, businesses can reduce food waste in ways that benefit their bottom lines. Businesses in multiple sectors and across the globe can build on the promising models described here to help ensure the journey from “farm to fork” is less wasteful.
The issue of food waste provides insights for other sectors as well. There are at least three ways for companies to capture value currently being thrown away:
- Watch for new technologies, especially in markets at the bottom of the pyramid.
- Lead or participate in vertical collaborations in your own industry and horizontal collaborations across industries.
- Uncover the technical and cultural barriers that produce waste in your industry.
A version of this article is also being published as part of the NBS Thought Leaders series.