This post originally appeared on the Edible Startups blog on February 18, 2014.
Rising to the Food Waste Challenge
According to an August 2012 report by the National Resources Defense Council (“Wasted”), in the US we waste a whopping 40% of our food each year. An estimated 64 billion pounds of surplus food is dumped into landfills each year, valued at $165 billion, and disposed of at a cost of $750 million per year. A typical American family of four throws away $1,600 in food every year – a number that’s especially interesting when compared to the incremental cost to a family of four of eating healthy every year: $2,016 a year. The purpose of this panel was to bring together and highlight organizations which are tackling this astonishing amount of waste via a range of strategies. Our panel featured:
- Roger Gordon, Co-Founder, Food Cowboy: DC-based startup which works with truckers, caterers, and supply chain companies to divert food from landfills to food banks
- Kelly Ernst Friedman, Program Director, Food Shift: Oakland-based nonprofit which works collaboratively with communities to develop long-term sustainable solutions to reduce food waste, most known for their fall 2013 education campaign via ads on BART
- Stu Rudick, Social Impact Investor, Mindfull Investors and Co-Founder, FoodStar Partners: Bay Area startup which works with retailers to sell soon-to-be-discarded food or produce which don’t meet aesthetic standards via flash sales
- Patricia Kelly, Business Development, Lean Path: Portland-based supplier of automated food waste tracking systems for hospitals, colleges, and restaurants
- Anea Botton, Founder, Valley Girls Foodstuffs: Seller of value-added food products made with gleaned produce and employing at-risk teens in Sonoma County(previously profiled in Edible Startups as part of an early Local Food Lab incubator class)
- Ashley Beleny, PR, Zero Waste Energy: Bay Area organization operating the world’s largest dry fermentation anaerobic digestion facility in San Jose to convert compost into energy (estimated to process ~90K tons per year of organic waste into 1.6MW of renewable energy and 32,000 tons of compost)
The barriers to reducing food waste
Clearly the amount of food wasted is huge. Waste spans the food value chain (shown above), with the highest share attributable to consumer losses (55% of total waste – food thrown out at home, unfinished dishes at restaurants i.e., “plate waste”) though a material amount of waste also occurs at the production, processing, and retail steps. Why does this waste occur? There are a few key barriers to more efficient usage of food that are important to understand when thinking about solutions:
1) Logistics and information: The ability to match supply and demand of food is a significant challenge. Across the value chain, organizations and individuals faced with excess food often do not have an outlet for selling or donating that food. Roger highlighted that, “the supply chain is 24/7 while most food banks operate Monday through Friday from 9-5. They don’t have adequate resources to staff volunteers beyond that.” He also cited that total food bank donations in a year are equal to the amount our supply chain wastes in 19 days (!). Stu agreed, “What’s missing is information – what can you do with food that’s going to be thrown out?” Both Food Cowboy and FoodStar are trying to provide that information, to truckers and retailers respectively.
Another interesting information challenge is the fact that many organizations aren’t aware of the scale of food they’re wasting. LeanPath is helping food service organizations like hospitals, colleges, hotels, and casinos gain transparency into their own waste. As Patricia noted, “you can’t manage what you can’t measure.”
2) Economics: Food waste seems to be a straightforward enemy – something most people would agree is a bad thing. However, like any systemic issue, there are incentives in place which support the status quo. The profitability of the grocery industry depends upon food waste. If consumers were to suddenly rationalize their grocery purchases to achieve near-zero waste, the grocery industry would take a massive hit. Roger cited that, “adjusting the supply of produce to meet demand [in terms of what is actually consumed] would take the grocery industry from a 1.5% average profit margin to a 0.7% loss—waste is essential to our economy.” How essential? $165B is about 1% of the US’s ~$17T nominal GDP; we’re not talking about the lifeblood of our economy, but the hit wouldn’t be immaterial either.
Across the food value chain, economics work in both directions – producers, distributors, and retailers profit from their customers continuing to over-purchase and waste, but all these groups would benefit if they were able to reduce the waste that hits their own bottom line (i.e., if retailers were able to reduce the amount of unsold food they throw out, or if consumers could save the money they spend on food they don’t eat). The fact that economics aren’t working entirely against change makes solutions to this problem more feasible than in other food areas.
3) Culture/norms: Our norms promote a degree of food waste in the retail and consumer stages of the value chain. Ideas about the aesthetics of foods as well asconfusion around “sell by” dates cause both retailers and consumers to discard good food. We are quick to dismiss bruised apples, brown bananas, wilted greens, etc. when taste and nutritional value may be perfectly good. Anea deals with this issue on-the-ground in Sonoma where she regularly procures produce that can’t be sold due to aesthetic reasons to use in her jams, pickled goods, and dried fruits. She explains, “Reeducation around produce aesthetics is hard.” Her secret weapon: empowered teenagers. “Get teenagers on board and behind a cause and they’ll tell everyone. They’ll change the attitudes of those around them because they’re influential.” I love Anea’s approach to making change in her community.
An obvious strategy to overcome the cultural barrier is discounting. If we go back to economics, at some point the price can be low enough that the demand for bruised, past-date, or otherwise sub-optimal food would meet supply. This is what Doug Rauch, the former President of Trader Joe’s, is doing with his new concept Daily Table, set to launch this May in Boston. Daily Table will take blemished food, use it to prepare meals, and sell those hot meals along with grocery staples (eggs, milk, bread, produce) at “junk food prices.” However this approach raises controversy: Roger protests that, “it’s not the duty of the poor to consume discarded food. This would institutionalize the problem of food waste and excuse it.” I understand his point, but the economist in me can’t help thinking that matching willing buyers with willing sellers at the right price is a good alternative to letting resources go to waste.
Opportunities, not problems
In a sector packed with trade-offs (big food vs. local producers, organics vs. GMOs, carbs vs. fats), few issues are win-win-win. Reducing food wastes offers the holy grail – environmental benefits, economic benefits (to an extent), and health benefits (improved nutrition by getting good food to those who need it). Beyond that, there’s something visceral about food waste. As Anea pointed out, “yes there are environmental and economic reasons to not waste food but beyond that there’s an innate feeling of sadness we all experience when we see food wasted.” So we can add emotional benefits to that list.
As the panel pointed out, the food waste conversation should be about opportunities, not about problems. So what are the opportunities? Food Shift is working to add employment to the list of benefits from reduced waste. They’re working to create jobs in food recovery, similar to what SF’s Food Runners do: they pick up excess food from businesses (restaurants, caterers, bakeries, hospitals, event planners, corporate cafeterias, and hotels) and deliver it (15+ tons per week) to neighborhood food programs. The challenge is to create paid jobs and not volunteer positions. I’ll be curious to see how Food Shift manages to sustainably fund paid positions, beyond using grant dollars.
There are also abundant opportunities in new sectors and technologies. To name a few:
- Technologies which postpone spoilage by reducing oxygen: BluApple and FreshPaperboth sell products which prolong fruit and vegetable shelf-life within the fridge;Organic Girl salad greens, along with many pre-rinsed salad producers, use technology to remove oxygen from their packaging
- Innovation which reduces time from field to fridge
- Companies which dis-intermediate retail altogether (Good Eggs, Quinciple, other online food delivery startups) to remove a step (and the corresponding waste) from the value chain
- Anaerobic digestion technology for turning food waste into energy, like that created by Zero Waste Energy
- One idea I loved from the panel is a branding/conscious consumerism campaign around food waste similar to “Eat Local” – some way to denote brands which perform above average in terms of waste so consumers can reward them with their dollars