The Massive Food Wastage Problem and How Tech Can Help in Minimizing It
The world is facing a food wastage problem. Every year, over 1.3 billion tons of of food is wasted and it's costing the global economy billions of dollars. This has become an increasing problem.
The Menace of Food Wastage
Waste not, want not, goes an old saying. However, humankind doesn't seem to have learned much from it, and consequently, continues to pay for its wanton wastefulness with a massive number of people still struggling to find two square meals a day.
The 2021 Food Waste Index released by the United Nations Environment Programme (UNEP) estimates that 931 million tonnes of food are wasted every year worldwide. Out of that, households generate 569 tonnes. Foodservice and retail sectors produce 244 million tonnes and 118 million tonnes respectively.
The US is among the countries that waste food the most. Each person in the US discards about a pound of food every day. According to the US Environmental Protection Agency (EPA), this amounted to 103 million tonnes of food waste produced in America in 2018. The United States Department of Agriculture (USDA) had noted that between 30 and 40% of the food supply in America goes to waste.
Nonprofit organization Feeding America points out that over $218 billion is wasted annually as a result of food being discarded by consumers in America. Dairy products are squandered the most. An average family of four in the US typically throws out $1,600 worth of food every year.
Food waste invariably finds its way into landfills. According to the EPA, food makes up 22% of the country's municipal solid waste and is the single largest component of rubbish that ends up in incinerators and landfills.
US restaurants are notorious for wasting food. About 30 billion pounds of food is believed to be discarded by US restaurants every year. A 2014 survey by the Food Waste Reduction Alliance found that around 85% of food that remains unsold in American restaurants is thrown away. The annual expenditures associated with wasted food in the restaurant business are estimated to be $162 billion.
This wastage of food looks more unacceptable when you consider the sheer number of people that don't have food security. Today, nearly 700 million people across the world are still battling hunger, while three billion have no access to a healthy diet. Despite the US being widely considered to be the epitome of human advancement, according to a 2020 study by Feeding America, over 54 million Americans, including 18 million children, have no food security.
Wastage at Various Levels of the Supply Chain
1. At producer level- At the farm level, wastage of food frequently results from market factors such as high labor expenses, labor shortage, price volatility, a product falling short of buyers' aesthetic standards, damage due to adverse weather conditions, and pest attack. Since production is often planned in advance, producers are unable to quickly change course when demand patterns change in the middle of the season. For example, field crops are planted well before harvest, and animals continue growing, and producing eggs, milk, and so on. Then suddenly when demand plummets as it did during the pandemic, producers are left with no option but to abandon their produce.
2. At processor level- Facilities that process food, especially meat processors, took a hit as a result of the pandemic. Covid outbreaks among the workers in numerous meat packing facilities in the US and temporary shuttering of plants caused a significant reduction in food processing capacity. This meant that farmers could not get their produce to the processing unit, and some of them had to euthanize poultry birds.
3. At foodservice level- Foodservice businesses produce both kitchen waste and plate waste. With meticulous demand planning and inventory management, businesses can control their kitchen waste. No amount of forethought, however, could have prepared restaurants for the abrupt closure of business as happened during the pandemic. Faulty demand projections, messy stock-taking and monitoring, and overpurchasing are some of the common factors causing food wastage in restaurants.
4. At retail level- Food waste at the retail level occurs frequently as a result of overstocking of perishable goods done to make sure that the customers are happy with the range of products on offer, and to cover for products nearing their stated or actual shelf life. Demand for costly products decreased with households facing income shocks due to the pandemic. Consequently, such products, unsold for a long time, had to be discarded.
5. At household level- Prior to the pandemic, food wastage at the level of the households in affluent countries was the largest along the supply chain. Food waste at the household level is caused by a number of factors, including inadequate demand planning and inventory management, ambiguity surrounding date labels, and bulk buying.
Reasons for Food Wastage
1. Poor inventory and supply chain management- A restaurant may end up ordering more supplies than it would need as a result of miscalculating future demand, and product popularity, or due to worrying too much about stock-outs. Infrequent counting of stocks, and relying on manual methods that let human errors creep in may also give business owners a wrong picture of what needs to be ordered and in what quantity. All these factors may lead to food sitting idle and rotting on the restaurant shelves.
2. Food spoilage- This may happen in restaurants and homes as a result of poor visibility in refrigerators, inappropriate food storage, ingredients being only partially used, or misjudgment of food needs.
3. Cooking more than necessary- People often end up preparing and serving excessive quantities of food. According to research conducted by the Cornell Food and Brand Lab, serving sizes mentioned in the classic cookbook 'The Joy of Cooking' have grown by 36% since 2006. Overpreparation of food invariably leads to food wastage. Additionally, a lot of people toss leftovers out because they forget to eat them.
4. Confusion over date labels- Almost 80% of Americans, according to an RTS report, throw food away prematurely because they misinterpret date labels, such as 'sell by', 'expires by', 'best used by', and so on. Hence, in their bid to avoid foodborne illnesses, these people end up discarding perfectly consumable food.
5. Impulsive buying- Sales of unique products and advertisements that encourage bulk and impulsive food purchases result in consumers buying items that may not figure in their normal consumption plans. Consequently, there is every chance of such food items spoiling before they can be consumed. Americans often purchase food impulsively, overestimating their food requirements.
6. Lack of planning- Without shopping lists and meal plans, people can't estimate correctly the amount and type of ingredients they would need throughout the week. The food you have at home may spoil before you can utilize it as a result of unplanned meals from restaurants or food deliveries.
Impacts of Food Wastage
Food wastage has adverse and often irreversible effects on the environment. Apart from generating greenhouse gases like carbon dioxide, methane, and chlorofluorocarbons that contribute to global warming, food wastage also leads to a wastage of water and energy used in food production. Moreover, food decaying in landfills results in nitrogen pollution that in turn causes dead zones and algal blooms. The World Wildlife Federation estimates that the amount of greenhouse gases generated because of food wastage and loss is equal to the emissions of 32.6 million cars.
Landfills constitute the third-biggest industrial source of methane, and food waste accounts for 8% of all greenhouse gas emissions worldwide.
Food that has been produced but not consumed yet takes up nearly 1.4 billion hectares of land. This makes up around 30% of the world's total farming land. The water that goes into producing wasted food could quench the thirst of nine billion people at the rate of about 200 liters per individual per day. In fact, by discarding just a single burger, you would have the same quantity of water going down the drain as during a 90-minute shower.
Restaurants need to limit their food costs to 35% of their revenues in order to be profitable. However, rampant wastage of food would impel restaurants to invest in physical space for storing products that are unusable, resulting in avoidable logistics expenses. Inventory carrying costs would rise too, and desperate measures like heavy discounts to get rid of excess stocks quickly would mean a substantial amount of financial loss for businesses. Food wastage, therefore, adds to food costs.
How Tech Can Help in Reducing Food Waste
A specialized solution for restaurant management can easily monitor the number of stocks that has been ordered, the amount that is in the storehouse, and the amount that is sitting on the shelves at the restaurant. It provides business owners with real-time snapshots of how their restaurants are functioning.
The goal of restaurant inventory management is to maintain and track both raw materials as well as processed goods so that purchases can be made strategically, food costs can be analyzed, and food waste can be minimized.
For larger benefits, businesses that are financially well endowed may look to integrate inventory management software with point of sale (POS) and supply chain management systems. A restaurant can, in fact, grow its business to entirely new heights by integrating inventory management systems with business intelligence, and data analytics technologies.
An excellent example of technology helping in reducing food wastage is the Just-in-Time (JIT) strategy for inventory management. It is one of the most widely used inventory management methods. It aims to deliver inventory to the production floor 'just in time' to be put to use, minimizing wastage and boosting output in the process. The JIT technique aims to deliver the precise quantities of raw materials required to finish production.
On average, 80% of a company's profits come from just 20% of its stocks. As a result, handling these products must be prioritized. The Zip Inventory software, which is available in the Hubworks app store, lets businesses access variance reports showing the expenses associated with wastage for each ingredient.
Food wastage can also be controlled by recipe standardization. This not only guarantees consistency in food flavor and quality but ensures that food is wasted less as the proportion of each ingredient required to prepare a dish is clearly documented. Zip Inventory, in this regard, helps to standardize recipes.
Inefficient demand planning and demand forecasting would result in a discrepancy between predicted and actual usage of food. This can be prevented with the help of efficient inventory and supply chain management solutions.
When restaurants order and purchase substantially more than is necessary, the chances of resource wastage increase, and the profitability of the business comes under threat.
Therefore, restaurants should aim for inventory optimization and supply chain planning. These can be accomplished by analyzing POS data for identifying the menu items that are liked the most and those that receive only a lukewarm response.
Top 5 Tech Solutions for Restaurants to Cut Food Waste
1. Zip Inventory- Some of the advantages of this software has been outlined in the preceding section. It lets business manage their inventory efficiently. Users can choose count frequencies for each product using this software. It distinctly identifies the goods sold and their prices and makes inventory reports constantly available. A related product is Zip Forecasting, which can be linked to POS systems for generating sales projections. With Zip Ordering, moreover, you can establish quantity alerts, which ensure that the orders are by and large accurate. Besides, business intelligence reports are provided by the Plum POS, and these can be interpreted with the help of Zip POS Dashboard for making smarter judgments. All these highly advanced tech products are part of the Hubworks stable.
2. Tenzo- It uses machine learning for sales forecasting and ensures that supply orders are accurate, and food wastage is minimized. Tenzo connects with all frontline POS and inventory management platforms, letting businesses increase communication efficiency, conserve time, and reduce errors. Tenzo is mobile-friendly, allowing you to stay in the loop wherever you are. By correctly estimating sales for each dish, Tenzo allows businesses to save money and the environment. It lets restaurants calculate the percentage wastage for each ingredient. Sales can be predicted up to 21 days in the future with the help of Tenzo's predictive analytics engine.
3. Winnow- It lets businesses reduce food wastage by half, and thereby, become more profitable, productive, and sustainable. Winnow Vision offers artificial intelligence-enabled tracking of food waste. Once trained, this technology needs almost no data entry or staff training, and yet provides meaningful insights into the food wastage in your kitchen. With the help of smart meter technology connected to food waste bins, the Winnow food waste management system tracks the ways in which food wastage is happening. Besides, Winnow Sense shows you how much is being wasted by your customers.
4. Too Good To Go- You can list surplus food as a surprise Magic Bag on the Too Good To Go app. Customers looking for unsold food can pre-pay for Magic Bags through the app. Customers can then pick up their Magic Bags from your establishment. This technology lets businesses discover new consumers while recovering sunk costs. Food wastage can also be minimized and the environment saved. Too Good To Go has partnered with some of the biggest food businesses in the world to redefine product packaging, reclassify product labeling, and change how we determine whether a food item is safe for consumption.
5. Copia- It lets businesses donate surplus food, receive better tax deductions, and get valuable information for making food-purchasing decisions. Restaurants utilize Copia's technology to comprehend trends in overproduction, lessen surplus over the course of time, and guarantee that extra food is reallocated to feed the hungry. You may arrange pickups of your extra food through the Copia app. A company can anticipate a $14 return on investment for every dollar it contributes to reducing food waste.
Final Word
Therefore, as is evident, the sustainability of food systems is threatened by food loss and waste. The wastage or loss of food causes entire resources used for producing food to get squandered as well. This includes land, labor, and water. Additionally, the landfilling of food waste produces greenhouse gases that contribute to climate change. Food security and availability can be significantly impacted by food loss and waste, which consequently raises food prices.
Food systems can never be resilient without being sustainable. Hence, businesses must prioritize the implementation of integrated strategies intended to lower food loss and wastage.
While three million child deaths across the world happen as a result of malnutrition, 3.9 billion gallons of milk are simply thrown away in the US, according to the World Food Program. This is totally unacceptable. The Food and Agricultural Organization (FAO) estimates that one-fourth of the food that is wasted each year could feed everyone who is hungry in the world.
Tech solutions need to be adopted in a big way by households, retail shops, and foodservice businesses to cut food wastage.
By 2050, the UN predicts that the world's food output would have to be doubled, in part due to the rising demand for meat, which comes from resource-guzzling livestock. The catch is that food production has to be increased without acquiring more land while adjusting to the challenge of fast deteriorating soils. In such a scenario, minimizing avoidable food loss and waste would make our lives a lot easier as we seek to ensure food security for our coming generations.
