Top food companies say there are billions to be made by cutting food waste

The average business saves at least $14 for every dollar spent on reducing food waste, according to a new study by Champions 12.3, a coalition of governments, retailers, research organizations and advocates determined to reach the UN’s global goal of cutting food waste at the producer and consumer levels in half by 2030. Some of the group’s heavy hitters include Kellogg Company, Sodexo, WRI, and Tesco, a popular UK chain of supermarkets.

The report looked at 1,200 business sites managed by 700 companies in 17 countries, and found that “half of the business sites earned greater than a 14-fold financial return on investment” in food-waste reduction.

“[Food waste] amounts to economic losses of $940 billion per year,” says the report. “It means that more than a billion tons of food never gets consumed each year, while one in nine people remain undernourished. In addition, food loss and waste is responsible for an estimated 8 percent of annual greenhouse gas emissions.” If food waste were its own country, it would be the third largest emitter of such gases in the world, after China and the U.S.

“We see [food-waste reduction] as a real business driver. It makes a lot of sense financially and it’s a great way to engage people,” said Diane Holdorf, chief sustainability officer at Kellogg.

Kellogg plans to participate in a voluntary U.S. initiative by the Grocery Manufacturers Association and the Food Marketing Institute to revamp food-safety labels in order to prevent confused customers from tossing food prematurely. The company will be moving entirely to “Best if Used By” labels.

Ted Monk, vice president of sustainability and corporate responsibility at Sodexo, said his company has lowered food waste at 92 percent of its client sites, in part by improving food production and delivery processes, but also through employee education.

“Educating our hourly employees that the average family of four spends $1,500 a year on food that is never consumed is more relevant than talking about the water, energy and greenhouse gases that are used to produce that food,” said Monk. Sodexo used surplus food that would have otherwise gone to the landfill to make a million meals for the needy last year.

Dave Lewis, a group chief executive at Tesco, said that some governments have lagged behind in addressing the food-waste issue because much of the data available to date have been aggregate and relatively simple. In many cases, the information available hasn’t broken down food waste by industry sector. For example, in the UK the dairy industry has very little waste (roughly 1 percent), while the produce industry is in the 20-percent range. This suggests that the two industries would require very different approaches to further reduce food waste.

However, Lewis stressed that on this issue in the UK and the U.S., governments are leaders, thanks in part to initiatives like the joint USDA and EPA program launched in 2015. Kellogg was one of the 15 food companies that joined the initiative, meant to match the UN goal of reducing food waste domestically 50 percent by 2030. But Holdorf admitted she’s not sure where that initiative stands now, given the change in administration.

“Understandably, I don’t think this is at the top of the administration’s agenda. We know that there are changes in the industry leadership, but many of these programs make great sense and show private-public partnership towards common goals,” she said.

Tesco’s Lewis pointed out during a press call that there is plenty of room for the business community to step up and chart the next stage of food-waste cuts, regardless of whether governments are willing to contribute. Tesco, for instance, now contracts with growers, communicating with them when and where they should harvest crops, in order to “design out” waste. On the consumer side, the chain no longer offers “buy one, get one free” sales,” since they often led to customers buying more than they needed.