Risks and opportunities from global food loss and waste
Estimates suggest that one third of food is lost or wasted across the entirety of the value chain. The economic, environmental, and social costs of this are staggering: the annual value of wasted food is commonly estimated around $1 trillioni. It accounts for 8-10% of global greenhouse gasesii, while contributing to water use, pollution from agricultural inputs, and increasing pressure on biodiversity and land conversion. Social implications include contributing to food insecurity and reduced productivity.
Food waste is a multi-faceted problem with causes ranging from pests and disease on farms, to lack of adequate labour and infrastructure, to poor forecasting, misaligned incentives, and lack of consumer awareness. Although the issues are complex, food price inflation and food insecurity are increasing incentives for consumers, companies, and governments to reduce food waste.
This will lead to a changing landscape for companies – they will increasingly need to account for, and take action to reduce, food waste within their operations and supply chains. Addressing food waste will also be a necessary step as part of the pathway to net zero and biodiversity goals. This evolution will provide numerous opportunities. Solutions to reducing food waste can create markets for new technologies, products, and business models; help to engage customers, lead to innovations in supply chains, and reduce costs.
Continued research, collaboration and engagement across our fundamental and responsible investment teams will help us to identify possible winners and losers as this theme evolves, and to encourage companies to make progress on their food waste strategies.
Stage of production | Food production that is lost or wasted, %iii | Risks and costs | Opportunities |
|---|---|---|---|
Pre-harvest Key drivers of food loss: • Pests and disease • Drought and extreme weather • Inadequate harvesting techniques, lack of adequate or economic labour | 8%iv | Increased costs and volatility within food supply chain Lost revenues for producers | Biocontrol (enzymes and microbes) Early pathogen detection and biopesticides Predictive pest analytics Machine learning for rapid molecule development for pests |
Harvest to processing Key drivers of food waste: • Lack of infrastructure and energy for crop drying and refrigeration • Lack of storage and transport infrastructure | 13%v | Increased costs and volatility within food supply chain Lost revenues for producers | Digital marketplaces and logistics Clean label packaging or coatings |
Retail, food service and consumer Key drivers of food waste: • Inaccurate demand forecasts • Lack of consumer awareness, overbuying due to grocery promotions | 17%vi | Lost revenues through wastage Costs to consumers through food waste at home Lost value from food by-products | Sensors and AI to optimise inventory Supply chain innovation and collaboration; engaging customers through food waste awareness Food retail business models based around capturing the value of surplus food Direct to consumer models with ingredient sizing ‘Upcycling’ of food by-products |
