Food waste reduction saves businesses $14 for every dollar spent, says global report

Businesses could save an equivalent of $14 for every $1 spent on reducing food waste, according to the latest report from global food waste coalition Champions 12.3.

The group has released a report, highlighting the cost benefits of investing in measures to reduce food waste. The report, ‘The Business Case for Reducing Food Loss and Waste’, features statistics showing a significant cost saving for businesses, suggesting a clear cause for taking action.

Research carried out for the report found that for every $1 companies invested to reduce food loss, they saved an average of $14 in operating costs. The report analysed financial cost and benefit data for 1,200 sites across 700 companies in 17 countries, with figures suggesting almost all sites achieved a positive return on investment to reduce food waste.

The 14:1 return on investment comes from not buying food that would have been lost or wasted, increasing the share of food that is sold to customers, introducing new product lines made from food that otherwise would have been lost or wasted, reducing waste management costs and other savings.

Data was drawn from companies across a variety of sectors including food manufacturing, food retail, hospitality and food service, with investments including quantifying and monitoring food loss and waste, training staff on practices to reduce waste, changing food storage and handling processes, changing packaging to extend shelf-life, changing date labels and other staff and technology investments.

The Champions 12.3 coalition of CEOs, government ministers, executives of research institutions, farmer organisations and civil society groups was formed last year to ‘inspire ambition and mobilise action’ against food waste and loss across the world. It is working in response to target 12.3 of the UN’s Sustainable Development Goals, which seeks to cut per capita food waste in half.

The World Resources Institute (WRI), the coalition’s secretariat, wrote the report in collaboration with the Waste & Resources Action Programme (WRAP), whose research estimates that the UK wastes 15 million tonnes of food per year.

Marcus Gover, Chief Executive of WRAP said: “Our experience suggests that there are two main barriers to food waste reduction: a lack of awareness of the scale of food waste in the business and the home and the business case for change.

“This groundbreaking report we wrote with WRI shows there is a clear business case for tackling food waste for businesses, municipalities and governments. Given this analysis, our message is simple; target, measure and act.  Above all act.  It makes sense socially, environmentally and above all economically.”

Median benefit-cost ratios of company sites varied between sectors

Chart: Champions 12.3

Savings for consumers

Household food waste in the UK amounts to approximately £700 of edible food thrown away each year per family. For USA households, statistics suggest it is nearly double that.

The report found that between 2007 and 2012, as part of the UK’s nationwide initiative to reduce food waste, which included the ‘Love Food Hate Waste’ consumer education campaign, for every £1 invested by the government, companies and WRAP, to cut down household food waste, consumers and local authorities saved £250. In that time, it says that avoidable household food waste was also reduced by 21 per cent.

While these figures are encouraging, recent statistics suggest the momentum has stalled, prompting calls for review of current initiatives and fresh approaches to combatting food waste.

“The success we saw in the United Kingdom proves that it’s possible to make real inroads in reducing food waste,” said Liz Goodwin, Senior Fellow and Director of Food Loss and Waste at World Resources Institute, former CEO of WRAP and the new Chair of the London Waste and Recycling Board.

“The challenge now is to get every country, major city and company to realise that reducing food loss and waste is a win-win. There are far too many tough, intractable problems in the world – food loss and waste doesn’t have to be one of them.”

Better relationships: More than financial benefits

Government and business leaders involved in the research reported additional benefits to reducing food waste, aside from solely monetary. They found their investment resulted in better relationships with customers and suppliers, increasing food security, adhering to waste regulations, upholding a sense of ethical responsibility and promoting environmental sustainability.

As a result of the business case for addressing food waste demonstrated by the report, it makes recommendations to business and government leaders to set targets to curb food waste, measuring food loss and waste in order to monitor progress, and to implement programmes and practices to reduce food waste. The recently launched ‘Food, Loss and Waste Accounting and Reporting Standard’, created by the WRI, provides guidance on accomplishing this.

One third of all food produced in the world is never eaten, and food waste is responsible for an estimated eight per cent of annual greenhouse gas emissions. SDG 12 seeks to ‘ensure sustainable consumption and production patterns’.

Dave Lewis, Group Chief Executive of Tesco and Chair of Champions 12.3 said: “A third of the world’s food is wasted – and yet almost a billion people go to bed hungry each night. That simply cannot be right.

“But even if the moral imperative doesn’t move us, the clear business case should swing people to act. What this research shows is that there’s now no social, environmental or economic reason why we should not come together and take action to reduce food waste.”

Food waste campaigner Tristram Stuart, Founder of charity Feedback, added: “This report demonstrates in the most concrete terms that saving food, saving money and saving the planet can be fully aligned: a call to action that no-one can ignore. It’s worth bearing in mind that those causing food waste aren’t always the ones who bear the full cost, so businesses – and policy makers – need to work together across supply chains to truly maximise the potential cost savings and environmental benefits of avoiding food waste.”

To accompany the report, the Champions 12.3 coalition has produced an infographic to illustrate the research.

The full ‘The business case for reducing food loss and waste’ report can be downloaded from the Champions 12.3 website.