As discussed in the first part of this two-part series on food waste solutions, food waste has consequences for all populations, from economic to social and environmental. Because there are many ways in which food waste occurs, we need a wide range of solutions and array of technologies to make an impact. In part two, we focus on prevention and recovery solutions that can stem the flow of food waste before it gets thrown out.
Since food waste involves a complex set of inefficiencies, we need a comprehensive suite of innovations to address it.
One of the leading causes of food waste across the supply chain is a lack of demand planning and inventory management. For example, 40 percent of food waste in the U.S. due to administrative mistakes, spoilage, theft, and other losses. These inefficiencies cost the grocery industry alone more than $50 billion a year in lost profits.
Artificial intelligence (AI) can enable nuanced demand planning and help track waste across the supply chain. An AI-fueled inventory management system can process hundreds of factors that influence demand and create accurate forecasts to help grocers and restaurants order and stock with greater precision. Machine learning algorithms can continue to improve accuracy over time by defining the relationship between various factors and a product’s sales. According to ReFED, improving demand planning by optimizing inventory management and forecasting systems can create $5 billion in net financial benefit for retailers.
AI can also enable detailed waste tracking that offers retailers insights into which products they are throwing away and why. Technologies that quantify, categorize, and pick up patterns in food waste can help companies optimize their supply and offerings based on data. Waste tracking and analytics can help food service and restaurants generate over $1 billion in additional profit through reduced food purchases costs and divert 571,000 tons of food. McKinsey estimates that AI can generate an economic opportunity of up to $127 billion a year by 2030 by designing food waste out of the system.
To facilitate food waste recovery, companies with food at risk of going to waste need to be able to transfer it to other companies or individuals who have a use for it. This requires creating new connections in the food supply chain where there are currently missing linkages. Digital platforms are now being used to bridge these food system players. Digital platforms can enable supply chain redesign and the formation of novel connections that can allow for the rescue and use of food that would otherwise go to waste. These platforms benefit players across the supply chain.
In addition, platforms can also educate consumers about the economic, environmental, and social importance of reducing food waste or remove pre-existing beliefs around food waste recovery. Platforms can also introduce new tools into a company’s production, logistics or marketing processes.
Digital platforms can facilitate connections across the food supply chain such as between food businesses, between food businesses and consumers, between food businesses and charities, and between consumers. For example, a number of businesses are working on getting retailers and consumers to think differently about ugly produce that would otherwise go to waste traditionally.
Additionally, app-based companies are helping consumers access discounted food nearing its expiration date. For example, Flashfood is a mobile marketplace that enables shoppers to save on fresh and non-perishable items about to go to waste. So far, the company has diverted 30 million pounds of food from landfills and has saved shoppers almost $90 million in grocery bills.
Active packaging modifies the condition of foods to combat spoilage and improve their sensory or safety properties. This holds new potential for food preservation because of recent advances in packaging, biotechnology, and material science. Solutions include packaging technology that removes oxygen in the product, antimicrobial packaging, ethylene scavenging to limit the overripening of produce, moisture migration technology to delay staling in baked foods, and packaging designed to reduce flavor loss.
Alternatively, intelligent packaging enables tracking and monitoring of food which can ease decision making and improve supply chain operations, thereby increasing shelf life. Intelligent packaging can take the form of indicators and sensors that provide real-time information on the state of the food and its surrounding environment, and data carriers such as RFIDs that provide information or control the flow of food products.
While these technologies have yet to penetrate the market because of the high implementation costs and challenges translating to the real world, they have potential to transform food packaging to benefit consumers, manufacturers, and retailers. According to Supply Chain Dive, applying sensory technology to increase traceability could reduce food waste by at least 5 percent within the supply chain.
Food production and processing generate a significant byproduct which is usually discarded. There is a growing movement to turn discarded byproduct into new food items. The Upcycled Food Association (UFA) defines upcycled foods as foods that “use ingredients that otherwise would not have gone to human consumption, are procured and produced using verifiable supply chains, and have a positive impact on the environment.”
The UFA launched a new Upcycled Certification Standard in 2021 so companies can highlight products that incorporate upcycled ingredients and reduce food waste. According to a report by Future Market found that the upcycled food market is worth $46.7 billion with an expected CAGR of 5 percent over the next ten years.
According to Project Drawdown, reducing food waste is one of the top solutions for reducing carbon emissions. It has the potential to draw 87 gigatons of CO2 out of the atmosphere, which is significantly more than other solutions such as a global plant-based diet (64 gigatons), electric cars (12 gigatons), and even utility-scale solar power installations (42 gigatons).
Effective solutions will require partnerships between different parts of the food and ag sector and between businesses, consumers, governments, research institutions, and nonprofits. There is no panacea for food waste, this is an all-hands-on-deck effort.
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Tonya Bakritzes is a Managing Director on S2G Ventures' Platform Team where she oversees the fund’s brand strategy, marketing and communications and provides strategic guidance to the fund’s portfolio companies.