By Kai Goerlich, Idea Director, Thought Leadership, SAP
Last week, France made a significant step in fighting food loss. In a new legislation, France will now force big supermarkets to donate unsold food to charities instead of throwing it away or spoiling it so it cannot be eaten. For matters of sustainability, we can only hope that other countries will follow France’s lead. Many retailers already donate food to charities if the law allows them to do so, and Carrefoure, one of the biggest supermarkets in France, signed the French Ministry of Agriculture’s National Pact to combat food waste. Is that the first sign of a turnaround?
The problem of losing food is not new. FAO estimates that the per capita food loss and waste in Europe and North America is 280-300 kg per year, which is roughly 30% of the produced food. This is not only ethically questionable, but outright unsustainable, as we will have to feed a 1 billion more people by 2030, according to the UN.
The scope
We estimate that the global overall resource potential between 2015 and 2030 totals up to $33 trillion (see chart above) if we assume a linear growth in that period. Of course, we will find it difficult to further increase the assumed resource footprint, so that $33 trillion is the money equivalent in resources that we actually need to save in order not to incur critical shortages. Food and water – water is closely connected to food, as 75% of the water is used in the agricultural process – have a combined savings potential of $8 trillion in that time period of time, or roughly 25% of the global resource potential and one-fifth of the current global trade volume.
A problem of production and consumption
Overall, we lose food on two fronts: in industrialized countries most is lost at the retail and consumer levels, and in developing countries most is lost in production and processing, according to FAO. According to a research study by IHL Group/OrderDynamics, nearly 60% of the retail losses come from overstocks and returns. Using data from WTO and UNEP, we can estimate that the volume of food overstocks and returns worldwide sums up to over $200 billion per year. Between 2015 and 2030 we could save around 75% of the $4 trillion in food and more than 50% of the $4 trillion in water estimated to be produced additionally in that period of time.. And even more could be gained if we would fight the losses on the production side in developing countries.
What is in it for retail and consumers?
As shown, with a little optimization, we could actually save a lot of money and resources in the food chain. Retailers can reduce their environmental impact and gain a lot for their business operations and consumers can reduce their food bills. Here are our ideas to help fight food loss.
Initial steps for retailers
- Fully digitize your assets and close any gaps between back-end and front-end to minimize overstocks and returns and reduce your losses.
- Think of the new circular economy as your waste might be somebody’s gain. Set up a new supply chain for unused or unusable food by selling or donating it. Get new partners into your supply chain, simplify the sharing of knowledge and data in a network of partners, and improve roduct stewardship.
- Offer more help for consumers on how to use “ugly” food, reducing your losses.
Fast ways to fight food loss for consumers
- Check the way you cook and store food as a great deal of food is unused and lost. It saves money and it is good for the planet.
- Buy more seasonal foods and balance exotic food purchases to minimize losses by reducing the amount of food transported from far away.
- Don’t shy away from food that looks not-so-pretty — it might work well for smoothies, soups, etc.
- Live with a little less and don’t expect to have a 100% filled store until the very last minute as the overstock usually gets thrown away.
Food and water are two of our most precious resources. Optimizing them not only reduces the environmental footprint but is good for business as well.
Is simplification part of your business’s future strategy? See Business Simplification [Infographic]
