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Businesses make €14 for every €1 spent on reducing food waste: Study

By Louis Gore-Langton , 09-Mar-2017
Last updated on 09-Mar-2017 at 14:52 GMT2017-03-09T14:52:41Z

 ©iStock
©iStock

The average company investing in food waste reduction will see a fourteen fold return on their investments and half will see substantially more, says a new report. 

Never mind starvation or the environment – eliminating food waste makes immense financial sense, according to a new study making the ‘business case’ for food supply efficiency.

Many initiatives and organisations working to reduce food waste have emerged in recent years, some showing high success rates.

In order to encourage businesses, either private enterprises or local governments, to invest in developing sustainable practices, the study sought to quantify potential savings increased food chain efficiency can bring.

The research was spearheaded by ‘Champions 1.23’ a coalition of executives from government, corporations, universities and civil society farmers unions.

The coalition is named after UN sustainable development goal (SDG) number 12 on responsible consumption and production, the third target of which is to ‘By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses’.

Members of the board, the ‘Champions’, include executives from Nestlé, Tesco, Kellogg, the EU and the UN.

Business

The study took data from over 700 different companies, 1,200 business sites in 17 different countries including China, Vietnam, the US, UK and Australia.

99% of sites implementing food waste reduction schemes showed a positive financial outcome (above breaking even) and the median site saw a fourteen fold return on their investments in such schemes – a 1,300% return.

More than half of sites analysed made more than this, with the highest showing a €618 return on every €1 spent. These companies were generally those ‘closest to the fork’ – food service outlets like restaurants which generally already have required storage and distribution facilities.

Food producers and processors on average tripled their investments, though some marked up to 318 fold returns. 

Government

The UK’s public drive to eliminate household waste was one of the most successful such initiatives ever run – achieving an overall 20% reduction in waste over a five year period.

A number of methods were used to encourage household change including a ‘Love Food Hate Waste’ ad campaign, changes to food date-labelling and packaging.

The cost of the campaign was just under €30m, and savings estimated from households (based on purchase value of prevented food waste only – not packaging) was around €7.5bn. Local governments also saved €99m in disposal costs, avoided 3.4m tonnes of greenhouse gas emissions, 1bn m3 saved in water, and 430,000 hectares of land were saved in food production.

This showed an average return of €250 for every €1 spent on the campaign. Similar results were found examining efforts made in particular six London Boroughs, where households were shown to save €84 to every €1 spent.

Liz Goodwin, Senior Director of Food Loss and Waste at World Resources Institute, said: “The success we saw in the United Kingdom proves that it’s possible to make real inroads in reducing food waste. The challenge now is to get every country, major city and company to realise that reducing food loss and waste is a win-win. There are far too many tough, intractable problems in the world – food loss and waste doesn’t have to be one of them.”

Advice

The 'Champions' have offered advice to companies based on the obvious profit in efficiency that is awaiting exploitation. 

Firstly, set targets - each company should set clear goals on what to achieve and in what time period, these should be based on the UN's SDG of cutting overall food waste in half by 2050. 

Second, begin to measure and quantify what your company wastes per year and why  - "As the financial benefit-cost ratio analyses indicate, measurement can have a large positive payback" the report reads. 

Third, act to reduce waste according to recorded targets and statistics. The report details different areas of action required in different regions: 

"In many developing regions, a majority of food loss occurs from the point of harvest until the food reaches the market. Thus investing in better infrastructure and technologies to improve storage, processing, and transportation will be critical. In developed regions, as well as in rapidly growing urban areas just about everywhere, a significant share of food waste occurs closer to the consumption stage of the food supply chain. Thus steps to prevent the production of surplus food, facilitate food donations, improve packaging, streamline food date labeling, and better educate consumers will be vital."

The Champions 12.3 project plans to continue until the SDG of halving food waste by 2050 is achieved. 

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