Food loss and waste management in the supply chain

The food waste landscape

It takes an enormous amount of time, resources and energy to produce our food. However, it is reported by the Food and Agriculture Organisation (FAO) that one-third of food produced for human consumption is lost or wasted globally, which amounts to about 1.3 billion tonnes per year, at a global cost to the economy of $940bn. When this waste goes to landfills it produces greenhouse gasses, which in turn cause global temperatures to rise.

Food loss and waste have become an issue of great public concern, reflected in the increased global awareness of the problem. Governments, international organisations, the private sector and civil society have all implemented actions and policies to address the root of the problem in reducing food loss and waste.

What are food loss and food waste?

Since the FAO presented the estimate that around one-third of the world’s food was lost or wasted every year, much has changed in the global perception of the problem. To provide more clarity on the subject and to measure progress toward Sustainable Development Goal targets, it has now been split out into two areas, the Food Loss Index (FLI) and the Food Waste Index (FWI).

Food loss is the decrease in the quantity or quality of food resulting from decisions and actions by food suppliers in the chain, excluding retailers, food service providers and consumers. It refers to any food that is discarded, incinerated or otherwise disposed of along the food supply chain from harvest/slaughter, but excluding the retail level. It does not re-enter in any other productive utilisation, such as feed or seed - Initial estimates state that food loss is around 14 per cent.

Food waste refers to the decrease in the quantity or quality of food resulting from decisions and actions by retailers, food service providers and consumers.   Examples of food waste can be fresh produce that deviates from what is considered optimal in colour, shape and size, foods that are close to, at or beyond the “best-before” date, or unused/leftover food from household kitchens and eating establishments.

Food loss in the supply chain

Currently, a significant amount of food is lost along the food supply chain—during production, post-harvest, storage, processing and distribution. There is a lot of information out there about reducing food waste in homes and once it has reached shops, but information regarding waste in the supply chain is limited.

Not only will cutting down on food loss in the supply chain save businesses money, but it is a vital component in solving the world’s hunger problem. Roughly one-third of global fresh fruits and vegetables (FFVs) are thrown away because their quality has dropped below an acceptance limit, a high share of these losses are related to non-optimised handling during supply chain processes.

Learn more about how to reduce food loss in the supply chain in our Cold Chain Management white paper 

Key areas of food loss

• Packaging considerations - The packaging of food products can have huge effects on shelf life.
• Shelf life - A common term that relates to the number of days that a food product has left to be of ‘acceptable quality’ and safe to consume. The shelf life depends on the optimal temperature and transportation conditions, a mismatch of lead times and shelf life will lead to waste.
• Effective distribution decisions - Products with a shorter shelf life should be sent to higher turnover outlets. This way the products will be sold faster before reaching their due date.
• Implementing a First Expiry First Out (FEFO) strategy - Applying stock rotation in such a way that the remaining shelf life of each item is best matched to the remaining transport duration options, to reduce product waste during transportation and provide product consistency at the store.
• Supply and demand factors – Seasonal peaks can cause a surge in demand for certain products, requiring effective stock management, for example, demand for Turkeys will increase at Christmas, whereas the demand for ice cream will be lower if the weather is colder.
• Monitoring temperature control in transport – Studies have shown that a combination of the position of produce in a lorry and differences in pre-cooling and transport temperatures can have a significant effect on a product's shelf life expectations.

Temperature management in the supply chain

Food losses can be attributed to two main factors, waste due to oversupply and losses due to the natural decay of food products, which cannot be stopped but are accelerated especially by lacking or poor temperature management or unhygienic conditions.

Unnecessary losses of shelf life can be found in any part of the chain, especially in temperature management:

• Farmers not pre-cooling after harvest; the ‘cut-to-cool’ time is recognised as being very important for many commodities but is typically not monitored effectively
• Actual temperature conditions during transport and storage often do not meet the optimal product-specific requirements
• Foodservice providers and/or consumers storing products in their fridges at the incorrect storage temperatures

The problem of accelerated shelf life loss due to temperature management has been paid insufficient attention in comparison to consumer/ retailer waste statistics. Cold chain management is becoming increasingly important, as people's income grows they diversify their diet from less dry starchy products, such as rice, potatoes and cereals, to more fresh fruit and vegetables, fish and meat. Growing urban communities require longer and more complex supply chains, whereas rural societies often sell food the same day at local markets.

A globalised food supply chain inevitably requires a longer transport distance, with distant production locations, especially during the consuming country’s winter season, as production comes from locations in the opposite hemisphere.

The combination of consumer demand for out of season produce, and high food quality expectations have shown the importance of effective temperature measurement, not only to meet customer expectations but also to tackle the growing problem of food loss in the supply chain.

Learn more about how Cold Chain Management works 

Aaron Day, Technical Sales Manager at Muddy Boots by TELUS Agriculture, explains – "With increasing pressure on the agri-food industry to supply an ever-growing population while resources are depleting, identifying ways of improving the efficiency of our complex supply chains is vital. Despite being key to reducing food loss, temperature management is primarily food safety-focused and regularly siloed from product quality data. Innovation and integration of cold chain management break down these siloes reducing food loss and improving the quality of perishable foods.”