A 4-step approach to reducing corporate food waste

We waste a lot of food. Around 30 percent of food grown today is never eaten, although this figure varies considerably across geographies and the different points in the value chain. Not only is this a shame — nearly a billion people suffer from chronic hunger — but better using the food we produce also has clear financial and environmental benefits. The four steps below provide companies with a guide for taking action and realizing the following opportunities:

• Adding to the bottom line — whether by reducing waste disposal fees, generating savings through improved inventory management, gaining tax deductions for donations or selling organic matter to others.
• Reducing greenhouse gas emissions — food decomposing in the landfill creates methane gas, which is more potent than carbon dioxide.
• Improving supply-chain stability — by easing the demand for ever more food production and the related need for the resources and inputs to grow, process and transport our food.
• Providing food to those in need — as the best possible use for food that won’t be sold.

The two largest sources of food loss and waste are from what we, the eaters in industrialized countries, do with our leftover or spoiled food at home and away (often referred to as “food waste”); and poor farming and post-harvest practices, especially in emerging economies (often referred to as “food loss”). The middle of the food system generates waste, too — from trimmings and ends as well as errors in production runs or improper food handling — although the amount of food waste generated by food retailers, wholesalers and manufacturers is less than what takes place up- and downstream.

The drivers of food waste — and therefore also the drivers of reducing it — largely are financial or legal. The incentives for donating food, for example, as well as existing waste management fees, infrastructure and regulations influence the extent to which companies put food to “better use” – whether that’s to feed hungry people or redirected to some place other than a landfill. At a macro level, in a time of increasingly scarce natural resources, food insecurity and a more volatile economy, it also just makes sense (and cents!) for us to be more efficient and recapture the value of the food that’s currently lost up and down the value chain.

4 Steps to Reducing Food Waste

While the path to reducing food waste is as varied and fragmented as the many ways in which it is created in the first place, companies can take four clear steps:

1. Assess your food waste and current activities
2. Identify the internal business case for reduction, donation and recycling
3. Take action within your span of control
4. Look up and down your value chain and partner for solutions

1. Internal assessment. Understanding how much food waste your company generates and its related costs is an obvious first step. Also important is gaining a view into where the waste goes, and taking an inventory of steps your company is already taking to reduce and manage food waste. The industry-led Food Waste Reduction Alliance (FWRA) recently published a report on data from U.S. retailers, wholesalers and manufacturers about food donation, recycling and disposal. Using the questions asked in the FWRA survey (posted at the end of the report) is one practical option for developing your food waste profile.

More challenging but also important is to understand the losses that take place in your supply chain at the growing, post-harvest and distribution stages as well as the extent to which your products have a link to consumers’ wasteful habits. This end-to-end view can give you great insights identifying, among other things, new ways to position your products as a solution to food waste. Spice and condiment brands such as Knorr, for example, are promoting their products as part of creative leftover dishes. Betty Crocker created a popular cookie recipe that incorporates the leftover cereal at the “bottom of the box” — pairing nicely two of General Mills’ product categories.

2. Business case development. The business case for reducing waste will vary by company based on location and waste management fees, type of products bought and sold, as well as regulatory and tax environment. For most companies, it will be some combination of both tangible and intangible benefits — whether saving money or generating new sources of revenue, meeting emerging regulatory requirements or greenhouse gas reduction goals, or building consumer trust and engaging with the local community.

3. Taking actions within your span of control. The U.S. EPA has developed a food waste recovery hierarchy with the preferred options to make the most of excess food. The initial step is logically to reduce waste in the first place, and many companies are already working hard to drive efficiency in their operations. When items can’t be sold for whatever reason, donating safe and wholesome food to people in need is recommended next, followed by feeding animals. Ideally it is only after these waste avoidance measures are exhausted that companies turn to waste management. The EPA recommends industrial uses, composting and renewable energy options and as a last resort, disposal through incinerators or landfills.

While companies are taking positive steps, a range of obstacles exist to increased recycling and donation. The FRWA’s survey among U.S. food retailers, wholesalers and manufacturers found transportation constraints and liability concerns are the most common barriers to increased donations. The most frequently cited obstacle to increased food recycling is an insufficient number of recycling options. A best-practices toolkit soon will be published by the FWRA, which will provide guidance to address some of these real and perceived barriers. A related compilation of best practices and guidance was also launched recently by FoodDrinkEurope, aimed in particular at helping food and drink manufacturers.

4. Looking up and down the value chain and partnering to take action. Taking action to reduce waste outside one’s four walls is harder but necessary to tackle food waste, and is also increasingly expected of companies. Looking to the U.K. as an example, 45 leading retailers, brands and manufacturers recently signed on to a third round of commitments surrounding food waste agreeing to influence consumers and reduce household food and drink waste by 5 percent by 2015 from a 2012 baseline.

Partnerships are especially valuable when stepping outside one’s direct operations. Stakeholders with whom companies can explore solutions vary greatly from local municipalities, to entrepreneurs providing innovative new technology, waste management and logistics providers, producer and consumer groups, and the hunger-mitigation community. A wealth of multi-stakeholder initiatives — with more emerging — are aimed at tackling food waste.

In sum, reducing the amount of wasted food is an opportunity to meet multiple corporate objectives. Assessing your waste and current activities, building the case for internal support and taking action both in your own operations and all along the value chain are four simple steps that will help you create a practical and action-oriented path to what is a fragmented and multi-faceted issue.

Mandarin oranges image by Nithid Memanee via Shutterstock.

A version of this article originally appeared in the July 2013 edition of Walmart’s Sustainable Agriculture newsletter.