Food is Wasted in the Supply Chain, Not Only at Home

Gavin Parnell, Director of Go Supply Chain Consulting Limited, considers the impact of food waste, and the challenges this presents to the supply chain.

Food Waste

When we think of food waste we immediately think of the consumer and piles of household waste.  In the developed markets of the world, consumers throw away around 30% of their fruit and vegetable purchases through spoilage. A European consumer wastes almost 100 kilograms of food annually, which is more than his or her weight (70 kilograms) and wastes 15 times more food than a typical African consumer. Much of this waste, if managed better, could feed many millions of hungry people.

The problem is nearer the source

Retailers are doing their bit to try and limit food waste but the reality is that most wastage occurs upstream in the supply chain. Losses occur right from agricultural production, through post-harvest handling and storage, processing and distribution. For almost every type of food, producers account for more than half the loss by value. The UN’s Food and Agriculture Organization estimates that the world wastes 1.3 bn. tonnes of edible food every year, or more than a fifth of total agricultural output. The focus must clearly be on addressing the core problems at each stage in the supply chain. The Barilla Center for Food & Nutrition (BCFN) was established in 2009 with the goal of researching major global issues connected with food and nutrition.  Their ambition is to reduce food waste by 50% by 2020.

 The business case

 The management consultancy firm McKinsey believes the amount of global food waste presents a huge opportunity for business and investment as innovation does not seem to have been properly applied to this issue.  That’s not entirely true, some inroads have been made in the area of more effective packaging and research is on-going to try and preserve fresh foods in transit.  The BCFN researchers there say that “intervention is needed throughout the entire food supply chain, from farmers to processing, and from distribution companies to the end user, in order to prevent waste.  Before food is even purchased, losses occur due to improper handling, quality deterioration during transport, and inadequate infrastructure for cooling and storage.”

Possible solutions

Jerome Peribere, President & CEO at Sealed Air Corporation, suggests that these are worth our consideration:

  • Collaboration:  We must look beyond a single product or service to consider the value chain, where the solution is part of a broader lifecycle involving sourcing, distribution, use and even disposal. By thinking this way, we improve access to a more secure food supply chain – one that is safer and more nutritious; more efficient and less wasteful.
  • Innovation plays a vital role in preventing food from going to waste. Packaging technologies that extend shelf life, reduce damage or help consumers to portion or reseal foods, have all been shown to reduce food spoilage during distribution.  Use of packaging technologies such as modified atmosphere packaging, for produce and baked goods, leads to significant extension in the time that foods can remain fresh.
  • Education is essential. From production to consumption, understanding the factors that lead to food contamination and spoilage can dramatically reduce illness and prevent food from spoiling before it can be consumed.

According to Rabobank, a global leader in financing food and agribusiness (F&A) says that we are currently losing EUR 60 billion of value each year through food that is lost in the supply chain and never reaches the consumer. As a result, F&A companies have much to gain from tackling food waste, and embracing innovation can reverse some of these losses.  “In our experience, F&A companies that are re-configuring their supply chain partnerships find that the benefits extend beyond food waste reduction, such as improving product consistency, enhancing inventory management and increasing logistics flexibility,” explains Paul Bosch, analyst at Rabobank.

Rabobank suggests food processors and retailers should start to select partners who see the benefit in reducing waste and have the potential to benefit from the additional effects on the supply chain.

Food for thought….

If 40 percent of the food we produce is never consumed, this means the water, energy and resources used to produce this food are wasted. In addition, food waste that decomposes in landfills is a significant source of greenhouse gas emissions.

Food waste generates 3.3 billion tons of carbon dioxide, which accelerates global climate change.  If wasted food was a country, it would be the third largest producer of carbon dioxide in the world, after the United States and China.

Gavin Parnell is a Director of Go Supply Chain Consulting, a specialist in optimising logistics in chemical supply chains.    

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