Report: Companies Save $14 For Every $1 Spent on Eradicating Food Waste

It is not hard to find dystopian scenarios that wonder how we will be able feed the 9 billion people expected to live on this planet by 2050. Deforestation and social unrest could only be the start. But the reality is that in wealthier nations, including here in the U.S. and the United Kingdom, up to 40 percent of all food is wasted before it ends up on a dinner plate or in a lunch bag. Worldwide, the United Nations’ Food and Agriculture Organization estimates about a third of all food is lost or spoiled.

The World Resources Institute (WRI) suggests about 25 percent of all calories in the food we produce are being squandered. The global food supply will only grow more complicated as farmers and food companies confront more pressure to feed an increasingly hungry world. More efficiency in the supply chain, in addition to tactics such as reforming food donation laws, revamping date labeling or even composting, are a start.

But WRI went further, making the business case for companies to be more conscious about food waste and drive the world toward a more efficient food supply.

And stamping out food waste can pay dividends: For every $1 spent on eliminating waste, companies collect an average $14 return on investment, according to a WRI report released last week. Better training and improved packaging are among the many recommendations WRI says food companies could adopt to boost that bottom line.

Such a statistic should excite any company’s chief financial officer. So how did the WRI reach this conclusion?

As the saying goes, such an approach needs to be “holistic.” For example, efforts to improve on-site storage on a farm will not be helpful if a farmer has no surplus market to sell his or her crops. And what about food that isn’t attractive enough to sell? Educating customers or selling 'ugly' fruits and vegetables at a discount is a start, and to their credit, more grocery chains are doing so.

That same distribution center saddled with misshapen fruits and veggies could also redistribute them, along with excess food, to food banks. Food that reaches its “sell by” date is also primed to be donated. But local regulations sometimes impede donation, burdening companies with more waste disposal fees. So again, we are talking about a total integration of supply chain efficiencies, as well as regulations, that can help farmers and food producers slash waste and save money.

Such efforts could also work at restaurants and for foodservice companies that manage places like university cafeterias. If a company in this space buys less food, they can sell more product at a high profit.

And waste diversion solutions are not all necessarily high-tech. One Michigan university, for example, went “trayless” at its campus cafeterias a decade ago. Students could eat as much food as they wanted, but would have to use a plate and make multiple trips. One year later, Grand Valley State University reduced food waste by 13 metric tons, or 55 pounds per student, per year (and incidentally, conserved over 30,000 gallons of water from not having to wash trays).

At a high level, WRI and its partner on the report, the U.K.’s Waste and Resource Action Program (WRAP), offer three recommendations for the private sector.

1. Companies need solid food loss and waste management protocols.


2. And they must set ambitious food waste reduction targets for their operations and supply chain.


3. It's an overused word, but one apt for this case: Collaboration is key. Companies can partner with NGOs and government agencies to root out waste and find opportunities to raise consumer awareness.

If consumers in developed and developing countries can accept concepts like smaller portions at restaurants and interpret date labels without the knee-jerk reaction to toss otherwise perfectly fine food, that will accomplish a great deal. There really should be no reason for hunger or more environmental degradation, even as the world’s population continues to grow. Farmers have proven they can grow more food on the same amount or even less land; it is up to companies to guarantee that those advances in agriculture actually pay off.

Image credit: Brian McGuirk/Flickr