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Food Waste and the Wasted Opportunities for Businesses and Governments

March 14th, 2017

As the discussion on sustainability gains traction, food loss and waste still remains a less explored area with immense scopes for governments and businesses, particularly in foods, to take up actions which can not only address grave social issues, but also curb long-term risks and create revenue boosting opportunities. This article forms a part of our upcoming strategy briefing on Global Food Waste.

What is food loss and food waste and why is it essential to prevent it?

Food loss and waste have damaging environmental and social repercussions and need to be addressed with utmost urgency:

  • Food loss and waste occur when foods suitable for human consumption are discarded or used for alternative purposes leading to a loss in both quantity and quality. It is primarily driven by inefficient production and distribution methods, mostly in developing countries, as well as consumer purchase in excess of their needs, more prevalent in developed countries;
  • Addressing food loss and waste can help to curb global hunger. It is estimated that 1/3 of the food produced is wasted while approximately half of the global population are said to live below the extreme poverty line, which means they are deprived of basic food and shelter;
  • Food loss and waste initiative is more imperative in the face of a looming world food crisis with population growth exceeding food production. By 2030, world population is projected to increase by 1.1 billion with India accounting for 18.7% of the total growth. Food production needs to keep up with the projected population growth, which, however, is reversely matched with falling yields in many cases;
  • To take the example of India, rice, the country’s stable diet, at 157 million tonnes was the country’s second leading crop in 2016, but between 2011 and 2016, yield of rice equalled -0.6 coinciding with a drop in precipitation of 11.1 millimetres during the corresponding period. If this continues, food deficit will intensify, but can be partly addressed by reducing food waste;
  • There are also environmental implications of food loss and waste – natural resources used in the process of making the wasted food could have been used for alternative productive purposes, but more importantly, food wastes are disposed-off in landfills, which discharge greenhouse gases, thus exacerbating the risks of global warming.

Government and business organisations need to intensify their effort.

Addressing food losses and waste requires a collaborative effort from the civil society organisations, businesses operating in food, packaging and transportation and governments:

  • FAO has undertaken an initiative called Save Food, operating a number of different programs across the world including helping small farmers in the food deficit areas to improve their farming techniques, but initiatives from governments and business organisations need to be more visible;
  • The role of governments entail developing and executing public policies to create an enabling environment including investing in infrastructure which will help to curb food waste. Food businesses will need to improve their production planning and preservation and packaging technologies and at the same time intensify pressure on the upstream operators to reduce food waste. Retailers can help by donating foods nearing expiry date to soup kitchens, although there are government regulations that may prevent them from doing so. All key stakeholders can play a key role in raising public awareness to change consumer behaviour to buy less which can help to prevent food waste;
  • Despite the crucial roles each of the stakeholders can play, their presence in this area continues to remain obscure. Nestlé’s food waste is hidden inside its zero waste policy, which includes all types of wastes including industrial wastes. Unilever UK & Ireland is starting to talk about it although admits is it an uncharted territory. Mars and Mondelez have reduced their pack sizes to meet their target for calorie reduction. The reduced pack sizes help to curb food waste, but this was initiated as part of a different goal instead of addressing food loss;
  • FAO initiatives are commendable, but more need to be done to include private organisations from the foods, packaging and transportation industry. The top 20 players in the packaged food industry accounted for 25.2% of the total industry revenue, equalling US$415 bn in actual terms in 2016. Given their financial clout, they are in a strong position to make such initiatives more effective through various means including innovations, raising public awareness and intensifying pressure on governments as well as both upstream and downstream players in the supply chain;

Top 20 Packaged Food Company Global Revenue vs Rest: 2016

The top 20 packaged food companies generated a combined global revenue of US$ 415,343 million in 2016

Source: Euromonitor International Packaged Food

  • While this can be a powerful weapon for governments to address hunger in their respective countries, it is only the French government which has passed a law in 2016 forbidding retailers to bin food which are suitable for human consumption.

Revenue boosting opportunities in the private sector

While addressing food loss and waste can address key social and environmental concerns, there are scopes for commercial gains:

  • A key underlying theme in food waste is the speed in the supply chain, particularly in the developing countries, where the lack of sophisticated road network delays the distribution time. This combined with the hot tropical climate cause food to perish faster, creating opportunities for both packaging and food transportation companies to innovate solutions that help food to last longer in the face of infrastructural deficiency and less suitable weather conditions;
  • Tetra Pak introduced a form of packaging with an embedded chip to show signs of spoilage and the duration the package has been outside the refrigerator. This makes the product exciting and useful, helping to boost the revenue prospects. But such innovations could be expensive for developing countries, leaving more scopes for affordable packaging innovations;
  • There are opportunities for pesticide and fertiliser companies to prevent crop damage and increase the production yields – however, the environmental implications need to be taken into consideration for these. General Mills is working on a technological innovation to use tomato skins and seeds as the main source of nitrogen to boost the yield for tomato growers;
  • There are opportunities for companies working in the agricultural fields to introduce affordable techniques and devices to farmers in developing countries that can help to reduce waste during the harvesting process. Solar driers are devices used by African farmers to dry cocoa beans at the right moisture level for the international manufacturers;
  • Cold storage facilities in developing countries have strong prospects given food can be stored over a longer period of time while they are being supplied to the market in batches in line with consumer demand;
  • Food waste can be converted to energy, which is more environmentally friendly although this is further down the line while the immediate objective of food loss and waste is to narrow the gap between food production and global hunger;
  • Niche initiatives are emerging which can contribute towards reducing food waste. VeggiDome is a transparent container for fresh vegetables that resembles a cake stand with a dome like lid. It can be placed on dining tables, making the vegetables more visible. The container has an inbuilt technology that helps to keep the vegetables fresher for a longer period of time, which may have otherwise wilted in the obscurity of the refrigerators.
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Oru Mohiuddin

Oru Mohiuddin is a Strategy Analyst for Euromonitor International. She has a Master in International Development from University of Birmingham and has been working in the company since 2007. Professional interests include tracking beauty trends with a particular focus on colour cosmetics, hair care and evaluating company performance.

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