Supply chain transparency: Reducing food loss and waste

family sitting together on a laptop

August 20, 2020By Mikael Bengtsson

In a world where up to 800 million people are chronically undernourished roughly one-third of food produced for human consumption is lost or wasted across the entire supply chain every year. In a report by the World Resources Institute (WRI), “The most immediate reasons food leaves the human food supply chain tie back to concern about a food’s safety or suitability for consumption, or there being no perceived use or market for it.” These causes are further exasperated by “deterioration or suboptimal quality, or issues such as the food’s appearance, excess supply, and seasonal production fluctuations.”

To minimize food waste, it’s important to understand not only why it occurs, but also where in the supply chain it occurs.

On the farm—As many raw materials are agricultural or harvested from nature farmers are very reliant on weather conditions. In fact, global climate change threatens up to 25% of crop yields according to a report by World Economic Forum and McKinsey & Company. Availability may be seasonal, and quality, purity, and nutritional attributes may vary too much. Needless to say, a lot of food or raw materials are wasted already on the farm.

In the factory—Poor food handling skills, lack of proper training, aging manufacturing equipment, and product line changeovers are the biggest causes of waste in the factory.

Transportation—Food waste can occur if proper temperatures aren’t maintained during transit from the farm to the factory, or from the factory to the warehouse or the retailer. Unplanned delays can also add to the spoilage of fresh products or products with limited shelf life.

In the warehouse—Poor planning and scheduling can produce excess inventory, resulting in products with limited shelf life sitting in the warehouse too long. Proper temperatures, humidity levels and storage containers need to be maintained in the warehouse to reduce food waste.

In the store—Most food waste in retail stores are linked to limited shelf life, or the lack of the food’s appearance (texture, color, freshness).

At the tableThe average US household wastes 31.9% of the food it buys. We buy and cook more than we can eat, we throw away food that has reached its expiration date, and we throw away fresh food because we don’t know how to store it properly to keep it fresh longer.

Most food waste in developed countries occur in the latter part of the supply chain. Not only does the waste cause huge economic losses, the environment is also severely affected. In the US alone, the production of lost or wasted food generates the equivalent of 37 million cars’ worth of greenhouse gas emissions. It is clear that food and beverage manufacturers need to improve supply chain processes and efficiencies to help reduce food waste.

To learn more about how to reduce food loss and waste across the supply chain, download the best practices guide “Benefits of improving supply chain transparency in modern food and beverage manufacturing."

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