More than 1.5 billion tons of food go to waste every year. The figure represents an urgent global crisis that's only expected to escalate. In their recent exploration of the issue, the Boston Consulting Group estimates that food loss and waste will reach 2.1 billion tons ($1.5 trillion worth of food) by 2030.

It's easy for consumers and corporations alike to feel discouraged. The situation appears especially dire when juxtaposed against the world hunger epidemic. As trillions in food go to waste, more than 850 million people suffer through undernourishment.

"The challenge," BCG says, "is enormous." They also acknowledge, however, that there is a "clear path forward" for the right organizations. While the world's food waste problem is most definitely an aberration, they believe it also represents a $700 billion opportunity.

To support this argument, BCG identifies five key contributing factors: lack of awareness, inadequate supply chain infrastructures, supply chain efficiency efforts that ignore food loss, poor communication, and insufficient regulations. In addition to driving the food waste issue, these five areas also present the 'clearest path forward' for companies looking to make things right.


Problem: Poor visibility hampers awareness and presents challenges at every stage of the food and beverage value chain. Consumers, for example, are often misinformed when it comes to sustainable practices. This fact is especially clear in the debate between fresh and frozen foods. Erroneously believing that fresh food is always healthier, consumers demand out of season products. "Those purchases," however well meaning, "come with high transport costs and large amounts of waste."

Grocery chains, for their part, perpetuate irresponsible consumption through in-store promotions. Drawing customers with can't-miss prices, they inspire unsustainable shopping. When those customers can't finish the goods they've purchased, they make an outsize contribution to global food waste.

Solution: BCG writes that boosting awareness represents the biggest opportunity in the fight against food waste. With the right strategic initiatives, organizations can help eliminate as much as $260 billion in lost or wasted food every year.

Corporations are advised to start by raising awareness as the farm level. By working with farmers to improve harvesting techniques and drive sustainability, organizations can "protect their crops against pests, diseases, and weeds, and reduce loss during and after harvest." BCG points to CropLife International as a shining example. The organization currently provides training to 3 million farmers and agricultural professionals in over 60 countries.

Once they've established a responsible foundation at the farm level, organizations can turn their attention to consumers. By redesigning packages and introducing free trade campaigns, providers can work to build a more socially-conscious class of consumers. Something as simple as adding new information to labels can go a long way in breaking bad habits.

Supply Chain Infrastructure

Problem: Climate-controlled supply chains significantly extend the life of perishables and cut down on lost and wasted food. Unfortunately, many emerging markets still lack a dependable cold chain infrastructure. The resulting storage and transportation issues lead to large-scale issues across the value chain.

Solution: Investing in cold chain infrastructure could correct wasteful practices to the tune of $150 billion dollars every year. Maersk, the study reports, has already made considerable strides in this area. By arming its refrigerated containers with "remote container management," the shipping giant gains total visibility into their "location, temperature, humidity, and power status." The solution allows Maersk and its customers to proactively make adjustments to avoid waste product. "Pay as you store" solar-powered refrigeration units have also proven transformative in developing regions across the globe. Kenya, in particular, has seen these units eliminate waste and help farmers sell their crop at more agreeable prices.

BCG also encourages organizations to better re-purpose and recycle unsold goods, spoiled food, and byproducts. Whether this means investing in new tools or identifying third-party allies, there are already numerous examples to follow. Tesco, for one, "repurposes baked goods into animal feed, converts oil waste into biodiesels, and is piloting the use of the FoodCloud app."

Supply Chain Efficiency 

Problem: New digital supply chain solutions make it easier to align supply with demand, expedite transactions, and track food waste to its source, "but companies have been slow to adopt these tools."
To make matters worse, organizations rarely develop KPIs for addressing and eliminating food waste. According to BCG, efforts to improve food supply chains tend to focus on levers like "equipment availability and speed on the manufacturing line." BCG goes on to imply that organizations consider food waste both too challenging and too costly to address.

Solution: Digital solutions not only represent a $120 billion answer to food waste, but could boost efficiency and reduce costs altogether. For a start, companies would do well to mimic the 'locavore' craze and begin sourcing more of their ingredients from nearby suppliers. Reducing transit times will invariably cut down on spoilage and provide for a more efficient value chain. Though this may require a hefty investment in training and technology for local farmers, the potential value-adds are almost limitless.

It's imperative that companies begin developing KPIs tied to food loss, track their performance against them, and work to refine their operations. Organizations like General Mills and Wal-Mart have already set ambitious goals tied to recycling and waste diversion. There is no reason to suspect your organization cannot follow suit.


Problem: Predictably, poor communication between links in the food value chain helps inefficient and wasteful practices take hold. BCG points to the importance of transparent, well-designed agreements between farmers and processes. Without them, they write, "farmers may harvest earlier than is optimal to relieve cash flow pressures." Reducing the quality and quantity of their output, this move sets the state for additional waste elsewhere in the value chain. 

Solution: Like any supply chain initiative, tackling food loss and waste will mean breaking down silos and working together. BCG urges organizations of all types to join forces in producing more accurate forecasts for supply and demand as well as contracts that will discourage food waste. By sharing accurate, actionable data with farmers and producers, agencies can begin to cut back on overproduction. Farther down the value chain, contracts should feature volume and price stipulations that promote sustainable planting and harvesting.


Problem: While a wealth of industry standards and government regulations impact the global food supply chain, few work to minimize food waste. "Disposing of food waste," the report states, "remains very cheap" and tax policy presents no penalties or incentives that might inspire responsibility. Many of the regulations that do exist - conservative expiration dates and arbitrary cosmetic standards, for example - only make matters worse. What's more, the differences in standards from country to country contribute to rampant inefficiency. 

Solution: BCG calls on both corporations and governments to take initiative and promote sustainability. By standardizing the language on expiration labels, for example, retailers and distributors can reduce the sort of confusion that leads to food waste. Nestle and General Mills have already joined an industry-wide fight to do just that.

The report also advocates for national and state regulations that would both promote recycling and discourage waste. They cite recent French legislation as an example. Since 2016, French grocers have incurred hefty fines for discarding edible food. According to NPR, the law has inspired a cultural shift and "encouraged the development of a whole ecosystem of businesses" working to address food waste. 

BCG contends that taking action against the food waste is not merely responsible, but potentially quite profitable. In addition to lower costs and new revenue streams, committed organizations will enjoy the opportunity to "burnish their brand and improve their ability to attract and retain talent."

This could prove critical at a time when young professionals are increasingly skeptical of corporate motivations. The most recent Deloitte Millennial Survey found that 75% of respondents believe businesses "focus on their own agenda rather than considering the wider society."  Only 47% believe they have any interest in improving society. Taking steps - even small ones - to combat food loss and waste could help reverse these sentiments and win back the generation that'll drive the future of Supply Chain Management.

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