Talk about putting your money where your mouth is. Investing just a single dollar in food waste reduction techniques generates around $14 dollars in return, according to a report released last month by the World Resource Institute. Restaurants typically experience the highest returns, with hotels, food service companies and food retailers tending to have ratios between 5:1 and 10:1.
In the corporate sphere, WRI looked at food waste reduction efforts at nearly 1,200 business sites across 17 countries and more than 700 companies, including food manufacturing, food retail, hospitality, restaurants and other food service. They found that 99 percent of the sites earned a positive return on investment. The median benefit-cost ratio — where half of the sites achieved a higher ratio while half achieved a lower ratio — was 14:1. In other words, half of the business sites earned greater than a 14-fold financial return on investment.
The report also explores how food waste reduction efforts play out at the city level. Recognizing the important role cities play in cutting food waste, it uncovered some financial impacts of food waste efforts.
Reducing food loss and waste can generate a “triple win” by saving money for farmers, companies and households. It also can help feed more people while alleviating pressure on water, land and climate. But despite this clear economic benefit, nearly 40 percent of the food we grow in the United States goes to waste, costing as much as $161 billion each year. Manufacturers are major generators of this food waste, creating more than 7 billion pounds each year. This level of inefficiency in the food system has huge economic, social and environmental consequences.
Targeting, measuring and acting on food waste
In an effort to do something about this, the WRI report encourages leaders to “target, measure, and act” to realize the business case for themselves. To help guide businesses and governments toward food waste reduction, it offers the following action items:
- Targets set ambition, and ambition motivates action: Every national, regional and city government and company should set a target for reducing food loss and waste that is aligned with Sustainable Development Goal Target 12.3: “By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses.”
- What gets measured gets managed: Governments and companies should measure their food loss and waste to understand how much, where, and why it is occurring, and monitor progress over time. One useful tool for this is The Food Loss and Waste Accounting and Reporting Standard, a global standard that provides requirements and guidance for quantifying and reporting on the weight of food and/or associated inedible parts removed from the food supply chain — commonly referred to as “food loss and waste.”
- What ultimately matters is action: Leaders must start implementing practices, programs, and policies that reduce food loss and waste. While efforts to address food loss and waste are not new, since the launch of the SDGs in 2015 there have been a number of new actions by governments and businesses to tackle this issue. Food retailers, for example, now are selling imperfectly shaped but perfectly nutritious produce that in previous years would have been discarded at the farm because the produce did not meet cosmetic standards. Internet-based apps are now being used by food retailers and restaurants to get unsold — yet still safe — food quickly to charities, feeding those in need and avoiding food waste. Many companies are beginning to explore the power of microbes to turn food waste into valuable resources.
The way forward: More action by more entities
With the business case so clear, why are so many companies and governments slow to get onboard with food waste reduction? According to the WRI report, many business leaders still don’t believe there is a solid “business case” for reducing food loss and waste. The associated costs of food loss and waste in some cases are too often buried in operational budgets and are accepted as a “cost of doing business.” In other cases, decision-makers may believe that the costs of taking action — such as identifying food loss and waste hotspots, purchasing new equipment or implementing process or behavioral changes — outweigh the benefits.
And there also are other strategic yet non-financial reasons for reducing food loss and waste, including food security, waste regulations, environmental sustainability, stakeholder relationships and a sense of ethical or social responsibility. While quantifying these types of benefits in financial terms is tough, they still are considered an important part of the business case for action.
While there is no off-the-shelf solution for global food waste — exactly what should be done varies between entities and by stage in the food supply chain — more action by more entities across more regions needs to occur to address the grand scale of this challenge.