The Shocking Truth about Food Loss & Waste in the Supply Chain
One third of all food produced for human consumption is lost or wasted and, as it turns out, that has a huge impact on climate change. According to statistics recently released by the Food and Agriculture Organization of the United Nations, (FAO), food loss and waste accounts for about 4.4 gigatons of greenhouse gas emissions each year (World Resources Institute).
Let’s put that number into perspective…
- If food loss and waste were a country, it would be the world’s third largest emitter next to China and the United States.
- Food loss and waste generates more than 4 times as much greenhouse gas emissions as aviation.
Beyond environmental concerns, this also has an enormous economic impact. About $940 billion of food is lost or wasted per year. This is a big deal, and all members of the food supply chain—from farm to fork—share the responsibility of reducing the greenhouse gas emissions and financial strains caused by food loss and waste.
A Discrepancy in Supply & Demand
A major cause of food waste is a misalignment of supply and demand. Crops are often overplanted and left behind in the field, retailers often downsize product orders at the last minute, and consumers often buy more than they need at home. Waste due to overproduction alone can reach up to 56 percent of a company’s total output. This typically occurs when supermarkets make large-quantity forecast orders in advance, but won’t confirm the order until 24 hours prior to delivery date—often lowering the amount at the last minute. The manufacturer, which produces the large quantity ahead of time, is then left with a surplus and no one to sell to. In this scenario, not only is the food lost, the energy and resources that went into making the products are also lost (FAO). One way manufacturers can combat this problem is working with retailers that are willing to buy excess inventory, like Grocery Outlet. Products sold this way are inherently cheaper, but it’s better than losing the sale altogether.
Better communication along the supply chain can also help. Building stronger relationships with buyers and developing a deep understanding of their sourcing decisions are ways for suppliers to mitigate risk. Another thing food chain companies can do is join forces via farmers’ cooperatives or professional associations. Doing so may lead to a better understanding of the market and more efficient planning (FAO).
Reducing Food Loss during Transportation
Between harvest and consumption, food has to pass through a complex supply chain, often traveling to and from various processing or storage facilities before it ends up in the hands of retailers, and later consumers. Because of the perishable nature of food, a lot can go wrong during transportation. Damage or contamination is a huge concern, and the industry is under stricter food transport safety regulations than ever before thanks to the FDA’s Food Safety Modernization Act (FSMA).
Temperature violations that lead to food loss have been a major issue for trucking companies, as many do not have established standards for accepting or rejecting temperature-controlled shipments. Being able to identify the potential locations, equipment, and circumstances under which a violation can happen ahead of time can improve the likelihood that your products will arrive in good condition. Shippers should also make sure the carriers they work with have reliable equipment to avoid problems due to defective insulation or poor air circulation. By avoiding issues on the road, transportation efficiency increases while negative environmental impact decreases.
Other Ways to Minimize Your Carbon Footprint
All members of the food chain must work collectively to combat climate change. Below are some additional steps your company can take to reduce greenhouse gas emissions caused by food loss and waste.
- Create a shorter supply chain by reducing the physical distance between production facility and point of consumption.
- Work with retailers who are committed to reducing food waste—like those that reject high fruit and vegetable cosmetic standards, or those that donate surplus product to food banks.
- Choose intermodal when possible to reduce fuel consumption. This is now a viable mode option for food shippers due to significant investment in refrigeration equipment in recent years.
- Gain insights from your customers’ historical data to ensure more accurate forecast orders in the future.
- Consider using food waste prevention technology, like LeanPath.
- Standardize and clarify expiration date labels on products to help reduce waste by consumers.
- Take the EPA’s Food Recovery Challenge.
- Simply raise awareness about the occurrence and impacts of food loss and waste within your organization. Knowledge is power.
Are you at risk of food loss due to mismanaged temperature-controlled transportation? Our team has a high level of expertise when it comes to moving fresh, frozen, or refrigerated commodities. We are experts in FSMA and the food chain, and we work with some of the most reliable carriers in the industry who share our expertise in moving high-touch freight. Our carriers are committed to meeting our high standards, your standards, and most importantly your customers’ standards. Contact us for more information.