Firms should be increasing local sourcing of ingredients and inputs as part of efforts to tackle food waste, according to a think tank.
In a report the Boston Consulting Group (BCG) said 1.6bn tonnes of food worth around $1.2tn are lost or go to waste each year – one third of the total amount of food produced globally.
The report said food waste was driven by issues around awareness, supply chain infrastructure, supply chain efficiency, collaboration and the policy environment. It said coordinated action to address these factors globally could reduce the value of food waste by nearly $700bn each year.
BCG said improving supply chain efficiency would “not only help slash food loss and waste, it will also improve operational efficiency and potentially reduce costs for companies”.
The report said localisation of the supply chain would reduce the amount of time products are in transit and therefore spoilage.
BCG said companies could set KPIs related to food loss and waste, track performance against those metrics and adapt their processes to improve performance.
The report said better collaboration across the value chain could allow more accurate supply and demand forecasting models, while a “data clearinghouse” set up by a public agency could collect and aggregate consumer demand forecasts and share the data with farmers and producers.
BCG said producers, processors, handlers and retailers could “structure contracts and agreements in a way that reduces loss and waste”. For example, food commodity buyers could set prices in contracts that reduce the incentive for farmers to overproduce.
“Companies that take action to reduce food loss and waste will do more than address a critical societal issue,” said the report.
“They stand to reap significant business rewards. First, they will reduce costs in the supply chain by leveraging new technologies and improving process efficiencies.
“In addition, food loss and waste reduction efforts can unearth new revenue streams by transforming losses, byproducts, and waste into new products.”
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