The following Supply Chain Matters commentary is part of a three-part series exploring the rather significant amount of food waste that occurs across global regions and their associated supply and distribution networks. We will further explore how applied use of technology in the notions of more agile food supply chains can further help in mitigating overall food waste.

 

Background

The environmental and social responsibility aspects for food waste have significantly come to the forefront both prior to and since the start of the ongoing global COVID-19 coronavirus pandemic. The pandemic coupled with the economic disruption that has affected global citizens and businesses has brought more awareness and concerns relative to the challenges of food waste. There are the growing concerns related to the increased environmental impacts of climate change effects that will continue into the current decade.

A recently published report by the United Nations Food and Agriculture Organization (FAO) quantifies that more than one-third of global greenhouse gas emissions stem from human activity and can be attributed to the way food is produced, processed and packaged. This report highlights how global food systems are becoming more energy intensive, reflecting trends in retail, packaging, transport and processing.

According to an analysis by Boston Consulting Group, efficient supply chain infrastructure alone could reduce the amount of food wasted by $250 billion per year on a global basis, This study estimates that the challenge amounts to $1.5 trillion by the end of this decade.

In the United States, upwards of 63 million tons of food waste is tendered to landfills, with the cost of growing, processing or transporting this spoiled food estimated to be approximately $218 billion. An estimated 40 percent of grown food across the U.S. is wasted as it traverses various steps in the food supply chain. That is just in the United States.

The United Nations’ Food and Agriculture Organization (FAO) estimates the world produces enough food waste — about 1.4 billion tons — to feed as many as 2 billion people each year. That equates to roughly one-third of the global food supply.

eliminating food waste in supply chains

The Challenge Continues

Improving overall food supply and feeding global populations will continue to be a significant challenge with the increased occurrence of natural disasters, floods or drought caused by the ongoing forces of climate change affecting our planet.

The World Health Organization warned in 2018 that climate change is expected to cause approximately 250,000 additional deaths per year between 2030 and 2050.  The organization further noted:

The risk of food contamination with heavy metals and persistent organic pollutants following changes in crop varieties cultivated, cultivation methods, soils, redistribution of sediments and long-range atmospheric transport, is increased because of climate changes. Climate sensitive risk factors and illnesses will be among the largest contributors to the global burden of food-related disease and mortality, including under-nutrition, communicable, non-communicable, and diarrheal- and vector borne diseases.”

Increased disruptions in domestic or global transportation networks brought about by more frequent severe storms, floods or unconstrained wildfires add to food spoilage.

Experts indicate that without changes in current conventional methods of farming or in the raising of animals, our food supply will increasingly be constrained.

 

Specific COVID-19 Impacts

This pandemic has clearly brought to the forefront the environmental and social responsibility stakes of food waste and the needs for added flexibilities within food related supply and distribution networks. Organizations were hampered with rigid practices that hampered abilities to adapt to significant disruption.

One year ago, the pandemic’s impact forced the immediate shutdown of businesses, schools, restaurants and food outlets across the United States and other countries. Domestic and global transportation networks were disrupted due to lockdown measures or added quarantine directives. Farmers had little choice but to dispose of their products due to the disruption of product demand and processing capability. Dairy Farmers of America, one the nation’s largest diary cooperatives, estimates that farmers were dumping as much as 3.7 million gallons of milk daily. A single chicken processor was destroying 750,000 unhatched eggs every week.

In April of 2020, a published report by The Washington Post indicated that farmers across the U.S. Midwest were forced to euthanize their pigs because slaughterhouses were either shutdown or hampered by high levels of sickened workers. Lettuce grown in California’s prime growing regions were shriveling, waiting to be plowed back into fields.

As the pandemic wore on, larger numbers of people with furloughed or laid off jobs were increasingly seeking the aid of charitable food banks to feed their families. As the Post described it: “Across the country, an unprecedented disconnect is emerging between where food is produced and the food banks and low-income neighborhoods that desperately need it.” That condition remains across the U.S.

A supply chain learning that came from the pandemic was that the food supply chains supporting wholesale food distribution to institutions such as restaurants, schools and other food preparation businesses were efficiently designed for bulk packaging and distribution for those products. As food producers and processors assessed their market disruption alternatives, they found that they lacked the resources or capabilities to temporarily perform retail outlet packaging without considerable added costs and machinery. The notions of rigid, inflexible supply chains led to other food waste, as well as a need to rethink flexibility in packaging and distribution.

 

Wholesalers, Brokers, Retailers Have Their Role

Key participants among food related product demand and supply networks each have an important role in continuing to eliminate food waste.  From more accurate and efficient ordering and distribution of food to active programs to identify potential spoilage before it occurs.

Many wholesalers and retailers actively collaborate with local and regional food banks to ensure that inventory deemed close to “best before” are routed to such food banks daily to feed people in need.  In the U.S., high volume retailers Walmart, Amazon Whole Foods, Costco and others actively support such efforts and continue to be recognized for such efforts.

Nationwide food and grocery retailer Kroger’s Zero Hunger/Zero Waste Foundation is doubling its commitment to end hunger and eliminate food waste across that company by 2025. The retailer has already decreased total food waste generated in stores by 13 percent and improved food waste diversion by almost 18 percent. The effort includes the launch of a second innovation fund to help fund start-up companies with solutions addressing food waste. A total of one million dollars was awarded in 2019.

Reportedly more than 200 food suppliers, manufacturers and retailers, under the umbrella of the U.S. Food Loss and Waste 2030 Champions initiative, are committed to halving their food loss and waste by that time.

In Part Two of this series, Supply Chain Matters will address how interoperability of technologies supporting more agile food supply chains can play an effective role in helping to better minimize food waste.

 

Bob Ferrari

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