The $400 billion opportunity: addressing food loss in supply chains
An estimated third or 1.3 billion tonnes of food is lost or wasted every year. With supply chain delays, increasing costs, narrowing margins, climate shifts and rising food insecurity, it’s becoming imperative for businesses to minimize inefficiencies across their supply chains.
An estimated third or 1.3 billion tonnes of food is lost or wasted every year.
UN Environment Programme
Tackling food loss and waste is a great place to begin. It can help grow customer loyalty and brand trust and also support meaningful environmental and social change. Simply put, doing good can be good business.
The global impact of food loss and waste
Food waste happens across retail, foodservice and to end consumers where food is thrown away as it’s past the perceived expiry date or for cosmetic or spoilage reasons.¹ Food loss occurs between harvest to retail, with about 14% of the world’s food discarded in these two stages,² a cost of $400 billion USD.³
$940B
Estimated total global cost of lost or wasted food from seed to fork
8-10%
Food loss and waste contribution to global GHG emissions
#3
Food loss and waste would be the third largest contributor to GHG emissions if it were a country
1.4B
Hectares of land used to produce lost or wasted food
25%
Of water used in agricultural production gross food that is lost or wasted
The impact of greenhouse gas emissions and water use from food loss and waste are certainly cause for concern (see graphic above). Meanwhile there are other factors that greatly affect the bottom line, operational efficiency and ability to take on new opportunities, including the use of agricultural inputs, fuel, equipment, labour, capital and time that goes into the farming, processing, storage, transportation, sales and marketing of food that ultimately isn’t consumed.
Our solutions help drive more efficient production
With data and tools for supply chain management, trade promotion excellence and food quality, safety and compliance, we can help create value.
Quantifying the business opportunity
What if that $400 billion in lost food, time, effort and labour was used more productively in our supply chains?
1300% ROI
Every $1 investment in food loss reduction yielded $14 ROI.⁴
78%
78% of consumers want to support environmentally-friendly companies.⁵
Addressing food loss offers benefits for everyone from growers to distributors to manufacturers to retailers. According to a World Resources Institute study of 700 companies in 17 countries, for every $1 a company invested in cutting food loss, they saw a $14 or 1,300% percent return on investment (ROI). Most improvements were no-cost or low-cost investments of less than $10,000, such as better waste tracking or packaging or upgrades to quality, cold chain, inventory management or manufacturing processes. The resulting benefits included the creation of new products repurposed from food waste, avoiding the cost of unsold food and ingredients and reducing labour and waste management costs.
There are also ethical, environmental, consumer and regulatory benefits. In addition to reducing the impact on the environment and helping improve food security, there are opportunities for marketing, revenue and brand trust and loyalty growth with supply chain partners, investors, regulators and consumers. As consumer interest in the sustainability of how food is produced and willingness to pay more for sustainable products increases, promoting your sustainable practices and passing along price savings to customers can aid brand reputation and customer loyalty.
Improve every aspect of your trade promotions
Our planning, optimization, execution and analysis tools help retailers and foodservice providers manage trade spend, increase efficiency and provide insight into where promotional efforts offer the most benefit for the business
Many companies have already made zero-waste commitments or adopted sustainable practices to cut or repurpose food waste. Through the 10x20x30 initiative, over 10 of the world’s largest food retailers including Carrefour, Kroger, Sodexo, Tesco and Walmart committed to work with 200 of their suppliers to halve their food loss and waste by 2030. When it comes to repurposing waste, Nestle’s Research and Development team upcycles their agricultural by-products such as cocoa pulp to create new products and revenue streams for example.
These initiatives highlight that the causes, consequences and potential solutions for food loss are interlinked and require more than one company or point solution to solve the issue. In the long term, better collaboration and integration from seed to fork will help drive overall transformation. This end-to-end connection could, for example, enable producers, processors and manufacturers to get downstream signals from each other and end consumers to prevent over planting and overproduction and improve forecasting. A more collective view of food production to reduce waste and loss will be critical to thriving towards a zero-waste future.
