Opportunity 8: Food waste (A$ billion in 2025)

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2 Opportunity 8: Food waste (A$ billion in 2025) This includes opportunities to reduce food across the value chain, including with end consumers. According to the FAO, total food waste is worth about US$1 trillion (A$1.3 trillion) today - roughly US$680 billion (A$904 billion) is lost in industrialized countries and US$310 billion (A$412 billion) in developing countries. 170 Food waste can be broken down into several sub-segments (Exhibit 11): Opportunities to reduce food waste in the value chain. Between 20 and 30 percent of food is wasted somewhere along the value chain, even before allowing for food waste at the point of consumption. 171 The majority of losses in the value chain occur in developing countries, where poor storage facilities and inadequate transport infrastructure mean that a significant share of food is wasted after harvest. Basic technologies, such as plastic storage bags, small metal silos, and plastic crates, can have a major impact through improved storage and transportation of food. Pilot efforts in Benin, Cape Verde, India, and Rwanda have documented reductions of food loss by more than 60 percent during field trials of a variety of low-cost storage techniques and handling practices. 172 Companies are seeking other innovative ways to reduce food waste through other channels such as using improved storage and transportation systems. For instance, Unilever has committed to using hydrocarbon refrigerants to create sustainable cold chain to reduce food loss and waste Key barriers relate to capital requirements (particularly for cold storage systems) and the need for a significant behavioural change of key actors, particularly smallholder farmers. Consumer waste reduction. WRI estimates that roughly 35 percent of food is wasted at the consumption level Most of this occurs in developed countries: for example, one-third of fruits and vegetables purchased by consumers in North America and Oceania are thrown away, whereas only 5 percent is wasted in Sub-Saharan Africa. 175 There is a range of technologies and business models that can be harnessed to reduce consumer food waste. These include packaging solutions to avoid spoilage (like BluWrap and ethylene-removal technology); retrofitting dining facilities to switch to trayless dining (smaller plates and trayless dining can nudge customers to waste less in all-you-can-eat settings); better tracking of waste within restaurants and food service; and the promotion of secondary retailers who can make products from the still-usable produce Key barriers include low consumer incentives (given food is a relatively low budget item for consumers in developed countries) and the need for behaviour change amongst consumers, retailers, and restauranteurs Global food losses and food waste, FAO, Identification of appropriate postharvest technologies for improving market access and incomes for small horticultural farmers in Sub-Saharan Africa and South Asia. Part 2: Postharvest Loss Assessments. Lisa Kitinoja and Marita Cantwell, World Food Logistic Organization, Reported by The Guardian, July 29, Reducing food loss and waste, World Resources Institute and UNEP, June Global food losses and food waste, FAO, A roadmap to reduce US food waste by 20 percent, ReFED, 2016.

3 Despite the global efforts to reduce food waste and prevent food loss, several companies have also come up with methods to turn the remaining food waste into energy; these methods help to conserve space in landfills and generate energy for other productive purposes. In the UK, Sainsbury s supermarket has built a food waste powered plant which is used to power the store. It has been estimated that all the grocery chain s stores in England, Scotland, and Wales can produce enough waste to power roughly 3,000 homes annually EXHIBIT 11 Food waste in the value chain Share of food loss by stage in value chain; Percent; Production Developing countries Developed countries Handling & Storage Processing & Packaging Distribution & Market 28 Consumption Definition During or immediately after harvesting on the farm Examples of activities by players ConAgra Foods streamlined operations and packaging to save over 300 tonnes of pie dough a year. Solution provider examples After produce leaves the farm for handling, storage, and transport Investments in cold storage facilities by major retailers, including Walmart During industrial or domestic processing and/or packaging New packaging films have been used to double duration of good life During distribution to markets, including losses at wholesale and retail markets Supermarket commitments (e.g., M&S, Sainsbury) to create market for non-uniform vegetables Losses in the home or business of the consumer, including restaurants / caterers Major catering companies (e.g., Compass) have made commitments to minimize food waste. Retailers leading consumer education. Waste reduction Waste value extraction Catering / restaurants: Winnow / Lean Path are solutions-providers that bring technology to help caterers and restaurants reduce waste. Energy: Turning Earth, a Pennsylvania-based recycling company produces electricity and natural gas from food waste. Fertilizer / Animal feed: Number of established Japanese players People: Land banks established in Europe, but not yet commercial opportunity 177 Reported by Forbes, November 20,

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5 Asia snapshot: CHINA. In 2013, over 200 billion Yuan s (A$43 billion) worth of food was thrown away annually nationwide in China. 178 Researchers from China Agricultural University found that edible food thrown out by restaurants each year is equivalent to nearly 10 percent of the country s annual crop production, or enough to feed 200 million people. Beijing has been pushing for recycling programmes for 15 years yet only 4.4 percent of household garbage within sampled communities was sorted adequately for recycling in On top of that, parts of China still have underdeveloped cold chain logistics, resulting in food spoilage even before the food reaches the consumers. Despite these challenges, awareness on food waste is increasing in China, in part helped by grassroots organizations like the Clean Plate Initiative, which advocates for zero food waste when dining out. Some local companies have gained traction. One example is the Shanghai Tongji Plant Biomass Energy, which started in 2012, and has built waste-to-energy plants across China to turn food waste into biogas, fertilizer and building materials. 180 INDONESIA. In 2011, Indonesia was estimated to be losing close to 30 million tons, or about 20 percent, of agriculture crops and almost 1.8 million tons, or about 30 percent, of fisheries products. 181 Food losses occur both at the post-harvest stage and along the value chain with losses highest (at about 50 percent) in the case of perishable commodities such as fruit and vegetables. McKinsey Global Institute (MGI) estimates that improved harvest and post-harvest techniques, coupled with investment in infrastructure including a cold-supply chain, could create additional revenue for Indonesian producers of US$35 billion (A$47 billion) by A challenge in capturing this opportunity is that there is a lack of data on post-harvest food waste such as how waste varies by sub-national geography and commodity. 183 Despite these challenges, food waste is receiving increased attention in Indonesia. For example, global innovation competitions have been conducted in Jakarta to crowdsource for food waste reduction. 184 The winning group in the 2015 competition came up with a food sharing app to share data on leftovers to donate them to others Information obtained from Collective Responsibility, November 19, Reported by Eco-Business, June 14, Jenny Gustavsson et al., Global food losses and food waste, Food and Agriculture Organization, The archipelago economy: Unleashing Indonesia s potential, McKinsey Global Institute, September Reported by Food Security and Food Justice, January 25, Information obtained from Embassy of Sweden, May 26, Information obtained from Embassy of Sweden, May 26,

6 INDIA. A study by the Indian Institute of Management in Kolkata revealed that only 10 percent of foods are stored in cold storage facilities in India; leaving the rest (around 370 million tonnes of perishables) to be exposed to the elements, thus, contributing to the massive food wastage. 186 Other factors include erratic electricity supply, the poor management of the government-run Food Corporation of India (FCI), and the lack of incentives to invest in the supply chain sector. 187 The government has recognized this issue and has taken steps to try to mitigate it. For instance, in 2012, Delhi revised its regulation to allow up to 51 percent foreign direct investment in supermarkets, hoping that more funding and new technologies can help India create modern food supply networks. 188 JAPAN. Consumer food waste in Japan is significant, in part driven by food retailers being concerned by the appearance of foods, or food not meeting stringent physical requirements. 189 It has been estimated that the average store in Japan produces about 10 kg of food waste each day. 190 The Mottainnai Action project aims to raise awareness on foods which are discarded due solely to their physical appearance and show that these foods can still be eaten and enjoyed. 191 Lawson, a Japanese convenience store chain, has been contributing to food waste reduction by reducing the generation of waste and promoting food recycling across its stores. The company uses sales data to optimize the merchandise assortment in stores, reducing the cases of expired food products. It also has waste oil recycling and food waste to animal feed recycling programmes which benefit prefectures such as Kanagawa and Kagoshima. 192 There are also efforts on use technology to help curb food waste in the food production segments. For instance, the Japan Weather Association has collaborated with food producers such as Mizkan Holdings and Sagamiya Foods to develop a novel artificial intelligence system to predict food demand based on weather information and sales data. 193 This system aims to help companies scale back redundant production and cut food inventory losses. 186 Reported by Development News, July 2, Information obtained from the World Economic Forum, August 12, Reported by The Financial Times, April 11, Reported by Japan Today, February 15, Information obtained from Lawson, Reported by Japan Today, February 15, Information obtained from Lawson, Reported by Nikkei Asian Review, April 28,