Clément Maclou, Senior Manager, Future of Food theme ODDO BHF Asset Management.

According to the United Nations Food Waste Index Report 2021, we globally waste 1.3 billion tons of food each year. A staggering one-third of all food produced globally is lost or wasted, representing food for more than 1.2 billion people. At the same time, the number of people in the world affected by hunger keeps on increasing and is estimated at approx. 800 million. After remaining broadly unchanged between 2014 and 2019, the prevalence of undernourishment climbed to almost 10% in 2020, from 8.4% a year earlier. So, it is obvious that food waste is a key part of the solution to reduce hunger but there is more to come according to the UN. “Food waste reduction offers multi-faceted wins for people and planet, improving food security, addressing climate change, saving money and reducing pressures on land, water, biodiversity and waste management systems.”

The roots of Evil

Before looking at the solutions to tackle food waste let’s start with facts and figures to better grasp the magnitude of the problem. There are two main kinds of wasted food: food loss and food waste. Food loss, the biggest category, refers to food that has been produced and has not reached the final consumer because of a non-intentional factor. Usually, this is due to an inefficient infrastructure in the product supply chain and production & harvest losses. Food waste, on the other side, refers to food that has been rejected intentionally, mainly because of esthetics (shape, color, etc), inappropriate planning and consumer education.

For the sake of simplicity, we will be talking about food waste as the aggregation of the food loss and food waste that occurs during production, processing, distribution, and consumption. As a matter of fact, waste happens throughout the value chain, from farm to fork, with distinctive causes. For example, during the distribution phase, waste occurs because it is expensive to transport and to respect the cold chain, so in the absence of an immediate buyer the most business- oriented answer is to throw it away.

When looking at the numbers, the total amount of food wasted represents 220 kg per person per year or more than $2’000 of spending per US consumer. All those numbers were recently updated and showed that the previous set of data, released in 2011, were clearly underestimating the magnitude of the problem.

By category, unfortunately all products are affected by food waste from a staggering 45% of fruits and vegetables to 30% of cereals or 20% of meat and poultry. The variation in percentages is explained by the nature of the products (fragility, length of conservation...), their price and cultural image. Vegetables, for instance, are fragile, often cheap and could be subject to rejection by the collective unconsciousness in case of imperfect looks. Whereas meat is sturdy, expensive and often considered as a sign of social success.

By country, without any surprise the top wasting countries are the most populated ones such as China, India and the US. However, when looking at per capita data, North America, Europe and industrialized Asia are on top of the list while Sub-Saharan Africa and South & Southeast Asia are at the bottom of the ranking. But overall, the spread between the best and the worst country is not that large and it is interesting to look beneath the surface as there are significant differences with regard to the phases during which waste occurs.

A World Economic Forum study highlights (cf chart below) that in the developed countries, the most significant proportion of waste is happening during the consumption phase, where the food is rejected mainly because of the perception of the consumer of what a quality product should look like esthetically speaking. The repercussion of this cultural behavior is a higher amount of food waste during the production and distribution stages, as farmers and retailers tend to reject those un-esthetic products in the first place because they know that the products will not be bought by the consumers.

In developing countries, on the other hand, food waste is mainly due to inefficient infrastructure mostly during product transport and storage. In this situation, waste is less intentional and the solutions to tackle it will, of course, differ from developed countries.

The third biggest source of GHG emissions

The waste of such gigantic amounts of food is not only a social problem with regards to the 800+ millions of undernourished people but is also a major ecological issue. Three times the volume of water of Lake Geneva is necessary to produce this wasted food or 1.4 billion hectares of land. Another environmental implication is the methane emissions which are calculated to be 3.3 tons per year, caused by pesticides and fertilizers used, emissions during the industrialization of the food, waste to landfills and transportation. In fact, according to the UN, if food loss and waste were a country, it would be the third emitter of GHG after China and USA, representing 8 to 10% of all global emissions.

As a result of those negative social and environmental impacts, it is no surprise to see regulations tightening. In 2013, the UN included food waste at the menu of the SDG’s (Sustainable Development Goals). The goal 2 “Zero Hunger” aims to eradicate hunger and ensure the access to safe and nutritional food to everyone in the world, while the goal 12 “Responsible consumption and production” aims to halve per capita food waste at the retail and consumer levels by 2030 and reduce foodSolutions concrètes et opportunités d'investissement losses along the food production and supply chains.

The EU has decided to commit to meeting those goals, hence the European council is monitoring the development of national strategies, adoption of legislative and non-legislative initiatives and consumer awareness campaigns. More concrete and measurable actions will be announced by the end of 2022.

In the USA, many states have now implemented laws regarding liability protection, tax incentives, date labelling or waste bans, in order to cope with the objective set in 2015 by the Dept of Agriculture to cut food waste in half by 2030.

Concrete solutions

As a prerequisite to proposing concrete solutions, governments, NGOs and private companies must have sufficient and reliable data to measure food waste. The good news is that two major organizations are now offering top-notch methodologies and indexes to do so. On one side, the FAO is producing the Food Loss Index (FLI) that focuses on food losses that occur from production up to (and not including) the retail level. It measures the changes in percentage losses for a basket of 10 main commodities by country in comparison with a base period. On the other side, the UN is producing the Food Waste Index (FWI), a methodology for countries to measure food waste, at household, food service and retail levels.

Both the FAO and the UN are also proposing solutions such as raising consumer awareness, using more technology, educating farmers, implementing new ways of working and good practices to manage food. Some startups are often named, including the apps Too Good To Go or Feeding India, and the FAO even offers online, open-source 3D designs of innovative equipment for download and use.