Click play for the full discussion with Juan Aguiriano
Approximately 30% of food is lost or wasted every day. That accounts for enough food to feed an extra 2 billion people every day. And since the world population is expected to grow from 7 to 10 billion people in the coming years, reducing food waste is critical.
All the resources associated with food waste represent a massive economic loss. The land used, fertilizers, water, energy, and farm labour, cost the economy roughly $936 billion a year.
There are around 700 million people worldwide who suffer from undernourishment or malnutrition. So, the food wasted each day is three times the size of the population that currently needs food.
Obviously, it’s easy to talk about this in theory, but very complicated to solve in practice, because this waste takes place across many points of the value chain. But it’s a subject that is growing in importance in the minds of consumers, as well as companies and their investors because it is an opportunity for a win-win-win across the board. Reducing food waste would be better for people, the planet, and the economy.
The good thing is that public perception has changed. So now, 78% of consumers associate food waste with sustainability (based on research by the Kerry Group, available on kerrygroup.com).
As a consequence of this shift in mindset, consumers are starting to buy products that are marketed as more sustainable, circular products, which reduce food waste. 44% of consumers are willing to pay extra for food & beverage products devoted to solving food waste. This is excellent news for companies in the industry because preventing food waste is no longer just a “nice to have.” It’s become a “must-have” for the planet and for consumers and a ‘must do’ for food companies. Companies can now tell their investors and decision-makers, “sustainability is more than doing the right thing: it is a business opportunity for us.”
In emerging markets, food loss happens primarily in production, post-harvest and processing stages. In developed markets, food waste is driven by retail and consumer behaviours. As a result, the consumption stage is responsible for more than 40% of food waste globally. The largest percentage of the waste is attributed to the US and Australia, which are responsible for up to 50% of total food waste each day. An American consumer, for example, wastes 10 times more food annually than a consumer in Southeast Asia.
Food waste can be analysed in a variety of ways, one of which is by sector. Bakery is the highest processed food waste category in terms of volume, and meat is the highest food waste category in terms of economic value, as well as environmental footprint.
Regarding the bakery sector, 25% of consumers do not finish their bread before it expires, which translates to approximately 32 million loaves of bread wasted every day. However, studies show that half of that food waste could be prevented or reduced by extending shelf life, which is becoming possible using clean label solutions. There are natural and economically viable solutions that can extend the shelf life of bread by 75%, but these are not yet universally used.
If you calculate the environmental impact of wasting one loaf of bread, it comes to half a kilo of CO2 per loaf and 568 litres of water. So, multiply the 32 million loaves of bread every day by this footprint, and this could make a huge reduction in economic cost, and also yield a massive reduction in environmental impact.
In terms of meat, it gets even more interesting, because meat is already the number one consumer concern in regards to food safety, and it’s also the most carbon-intensive food sector. Unfortunately, 20% of meat is wasted every day. That’s enough to feed 80 million people. Preventing just one kilo of beef waste would save 60 kilos of CO2 and 14,000 litres of water.
So, what is the solution to all of this? Well, it comes down to the principles of a circular economy. A great place to start is to improve preservation solutions. That means maximizing shelf life in a way that is acceptable to consumers. There are a number of historically “chemical type” preservatives that risk creating health issues, but these are now being phased out and are replaced and reformulated with “clean label solutions.”
Clean label solutions use more natural ingredients through fermentation, enzymes, organic acids, and so on. There’s a broad range of products that can replace chemical preservatives in order to maximize food safety and shelf life at the same time.
Another step is to minimize packaging. However, this is where it gets complicated, because if you shrink-wrap every food in plastic, it lasts longer, but then you’ve created another form of waste, which is too much plastic. That’s why everything needs to be looked at holistically: the total sustainability impact rather than just one of the factors. Look at the total lifecycle of the product, what you’re actually reducing, and where you reduce the most. Then, look at different options for the packaging, because different substrates have different lifecycle impacts.
Lately, more brands have launched products that have a longer shelf life, less packaging, and more food waste minimizing claims. These brands have seen an increase in sales and their products are growing faster than competitors.
Another element to consider is reuse. In situations where you can’t reduce waste, can you reuse it? This usually comes down to industrial or manufacturing options. Take the beer industry for example. This industry has a relatively large footprint since it generates a lot of spent grain. So, many producers are taking a very interesting approach by repurposing the spent grain into useful ingredients that can be used to create something else, such as plant-based protein beverages. And by doing so, they are closing the loop. Instead of cultivating cereals to create plant protein, they’re reusing cereals that have been first processed into beer.
There are many creative ways to reduce and reuse in order to fight the global food waste crisis. Companies within the food industry have an ethical obligation to make these changes, and they may also see the benefit in their own profitability by doing so.
Interested in discussing the food and beverage industry in-depth? Get in touch with Borderless today.
