The economics of waste

Rapid innovation in food production has proven to be a double-edged sword. It seems the more we make, the more we waste, by Markus Miklis.

Wasted food is the pits. It’s one of the most harmful and far reaching trends in our modern culture. If you care about climate change, deforestation, water extraction, biodiversity, the economy or your own wallet, you care about food waste.

The American food market generated $640,346m in revenue in 2017, making it the leading food market globally (Statista 2018) – ahead of even highly populated countries like China, with more than four times the US population. Partly due to new farming innovations, global food production has increased by 17% in the last 30 years (Forbes 2018). While these numbers represent the achievements of a globalized and industrialized world, there is a downside to this massive uptick in production. 50% of the land (USDA 2018) and about 80% of freshwater in the US is used exclusively for food production, yet over 30% (133 billion pounds) of the overall food produced for human consumption is lost or wasted. (EPA 2018) The ramifications of this statistic are far reaching: it represents a major squandering of resources used in food production, including water, land, energy, labor and capital. The increase in resource-intensive production techniques has also resulted in higher greenhouse gas emissions that are a major contributor to climate change.

Roughly one third of the food produced in the world for human consumption every year— approximately 1.3 billion tons— gets lost or wasted.

Beginning with the production, harvest and distribution stages, down to retail and final household consumption, there is a disturbing pattern developing in which inefficiency results in needless and huge waste throughout the entire supply chain. Some responsibility for this loss lies with the growing agricultural industry, but a hefty portion also lies with us, the consumer. Whether it’s rejecting food for cosmetic reasons or shopkeepers overloading shelves to entice customers, every level of the chain holds some of the responsibility.

Global quantitative food losses and waste per year are roughly 30 % for cereals, 40-50 % for root crops, fruits and vegetables, 20% for oil seeds, meat and dairy plus 35% for fish.

A recent report by the Wallace Center at Winrock International, summarizes the scale of the challenge: “Despite its productivity, the conventional food system in the United States is fraught with inequity, negative environmental impacts and threats to human health” (CommunityFood 2018).

Taking a step back from all this negativity and looking ahead, we can clearly see that the world of food production and mass consumption needs to evolve. There are positive signs from initiatives all over the world that are revolutionizing the food supply-chain from production to consumption.

In industrialized countries, more than 40% of losses/waste happen at retail and consumer levels.

Food production: think globally, farm locally.

The world has become a smaller place and consumers have become accustomed to eating a mind-bogglingly wide array of products, regardless of season. Thankfully, the ‘local’ movement is driving a number of solutions that aim to utilize resources more effectively and reduce the pollution brought on by large scale food transportation. One example is the rise of nonprofit organizations like Alaska Community Action on Toxics, who created Yarducopia — a yardshare program that relies on sharing economy principles. The program connects landowners who lack the time to garden with would-be gardeners lacking the land necessary to cultivate food. Produce is shared between the homeowner and the volunteer, and 10% is donated to a charity of their choice.

Another encouraging production trend is taking root in a decidedly more urban neighborhood, taking advantage of undesirable, vacant property to cultivate food locally. Using free urban land for agricultural purposes is just the first step in improving the food system and making it more community based. City councils across the US are increasingly aware of cultivated gardens possessing fruit trees that are neglected. These are places where fruit goes unharvested and is left to rot. For example, the City Food Policy Council of Salt Lake City partnered with the Green Urban Lunch Box (GULB) organization to tackle the problem of spoiled and unharvested fruits, by starting the FruitShare program. Staff and volunteers of GULB are helping homeowners prune trees and harvest fruit to avoid waste and the loss of perfectly good food. In 2016 the FruitShare program harvested 125,000 pounds of fruit which they distributed to homeowners and local food assistance programs.

Though local food production in urban areas is no mass revolution, it offers a hopeful signal and suggests a growing awareness of the problem in society. Programs that match unused land with volunteers build social capital throughout communities, remove barriers to healthy food and improve the lives of everyone involved.

Food distribution: Dumpster divine.

We’ve all heard of bakeries throwing out perfectly good bread, and have perhaps seen dumpsters full of edible food at the rear of large supermarkets, but is it time we begin to consider our part in that cycle of waste? In industrialized countries about 40% of food waste occurs at the retail and consumption stages. This is partly due to the high ‘appearance quality standards’ regarding weight, size, shape and look of produce. It is further compounded by an increase over the last decade in the amount of food available for purchase in all industrialized countries.

Consumers expect to see fully stacked shelves. Often perfectly edible products are discarded when they reach their sell-by dates. Now, due to the popularity of discount supermarkets it is easier and more ‘affordable’ to let food ‘get lost’ – at least financially speaking.

50% of the land and about 80% of freshwater in the US is used exclusively for food production.

Fortunately, there are many initiatives to prevent and reduce food waste. Berlin-based shop ‘original unverpackt’ (translates to ‘orginally unpackaged’) opened in 2014 stocking food in an old-fashioned way: instead of mutiple brands fighting for attention, the store features far fewer choices — for example only two choices of rice are on offer. This is paired with a bulk shopping experience where customers must bring their own containers to carry food home. The initial goal was to reduce waste generated by food packaging — but it ended up helping to avoid overly staked shelves and ‘taught’ consumers to be make decisions more consciously (NY Times 2018). In the last few years operations like this have started to appear in many countries.

Learning to love waste.

It’s not just the little guys making a difference: nations and trade associations have recognized the problem too. The U.S Department of Agriculture and the Environmental Protection Agency launched the, “U.S. Food Loss and Waste 2030 Champions,” where businesses and organizations aim to reduce their own food loss and waste by 50% by the year 2030 (EPA 2018).

Three leading food industry bodies — the Grocery Manufacturers Association (representing food and beverage companies), the Food Marketing Institute (representing food retailers), and the National Restaurant Association (representing the food service industry) — are partnering to form the, “Food Waste Reduction Alliance.”

Alliance members reduce food waste within their own operations and support programs such as, “Reducing Consumer Confusion on Product Date Labels” by simplifying the labeling procedure. The current range of date labels creates much confusion. Consumer are faced with sell-by dates, use-by dates, expires-on labels, best-before instructions and best-by dates. It’s no surprise many people play it safe and discard food prematurely (EPA 2018).

Food-recycling is another way to reduce waste. In June 2017, west-coast retailer Salt & Straw sought to raise awareness of food waste by launching their ‘Rescued Food’ ice cream range. The ice cream shop partnered with local nonprofit organizations who supplied them with food collected from restaurants, grocery stores and markets, while still fit to eat. Salt & Straw chose to pay full market price for this unconventional source of ingredients in order to prove the economic value of surplus food. Using this ‘rescued food’ they created new ice cream flavors including whey-preserved strawberry ice cream and Banana Bread Pudding ice cream.

France takes food waste even more seriously, becoming the first country in the world to forbid food waste by supermarkets. Recently introduced legislation compels French supermarkets to donate unsold, edible food to charities and food banks.

French supermarket chain, “Carrefour” not only donates unsold food to charities but creates additional value by transforming damaged and inedible produce into biofuel that powers the supermarket’s trucks.

As yet such innovations are scattered and relatively small in scale. However the threat of regulation looms and may prompt more businesses to take action in the hope of avoiding the imposition of legislation. And while industry is traditionally resistant to regulation, it is much more responsive to consumer preference and pressure.

Consumers ultimately hold the power to demand more responsibly sourced and produced products. And the signs suggest we’re increasingly favoring brands placing an emphasis on sustainability. So go ahead, grow those beans in a neighbor’s yard, eat tomatoes from the garden of your local playground, and pick up that misshapen apple.