Optimizing Production, Supply Chain Key to Reducing Food Waste and Improving Industry Sustainability

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The food industry is responsible for about a third of the world’s greenhouse gas emissions, with about 10% of that coming from food waste, but by optimizing production and the supply chain it could reduce waste that could help improve sustainability, according to a report from S&P Global Ratings.

Every year one-third of food produced worldwide is wasted, nearly $1 trillion worth. The report says nearly 14% of the world’s food is lost before being available to consumers, making sustainable production and supply chain processes important to improve sustainability. The 10% of resulting emissions is in addition to food produced by farming and processing.

S&P says companies that can adjust their production models can strengthen their resilience and reduce food-related emissions while also improving margins with more valuable products.

The United Nations has a 2030 target for reducing food waste by half and the S&P report says better collaboration on production at each stage can led to more sustainable food supply. More than 190 countries agreed to the plan, which is part of the UN’s sustainable development goals. Responsible production and consumption is No. 12 on the list of 17 goals.

Despite that, only 1% of food companies’ business models support sustainable production and consumption, according to a 2020 Trucost survey of 3,500 businesses.

There has been work done to address food waste.

The Department of Energy, for example, recently awarded $6 million of grants to produce sustainable products like biofuels and plastics from food waste. Southern Company Gas received another grant to help develop clean hydrogen from food waste.

Some of the ways to improve the sustainability of food productions and supply chains, which could lead to reduced emissions, according to S&P, include helping farmers and producers with better technologies, data and training.

Improved technology to increase the shelf life of food and improving crop use as well as investing in efficiency materials and packaging can lead to more sustainability. Ideas to improve sustainability have been introduced, such as improving farming practices through ideas like regenerative agriculture and grocery stores advancing technologies to reduce waste on their end.

The report also suggests encouraging retailers to be involved in the whole process, by being involved in “whole chain” and initiatives like the World Resource Institute’s 10x20x30 initiative.

Increased regulation also may have an impact on food waste.

In the United States, the report says, the Environmental Protection Agency officially aligned with the UN’s goals this year and in 2017 12 states had introduced bills tackling food waste that included incentives for farmers and businesses. It also says five states have organic food waste bans, which has led to more food donations.

The report says by making changes and increasing investments in sustainable production and technologies, food industry could see improved financial success in the future.