Food Waste Solutions Present Opportunities for Brands
According to estimates from the USDA’s Economic Research Service, the United States accounts for approximately 133 billion pounds of food loss annually. That translates to one-third of the national food supply, worth $161 billion each year. As awareness of this crisis grows, a number of cities have passed ordinances requiring restaurants, grocery stores, bars and farmers markets to donate or compost all organic material waste, which could begin having significant effects on the food and restaurant industry.
Austin is the most recent community to join a growing list of environmentally conscious cities by instituting the Universal Recycling Ordinance (URO). The URO decrees that everything “that grows or once grew” — items ranging from dirty pizza boxes to leftover veggie scraps — be properly contributed or converted into usable material. San Francisco, Seattle, New York City and the states of Connecticut, Massachusetts, Vermont and Rhode Island have all passed some sort of ordinance or law regarding food waste.
For impacted restaurants and retailers, the process of attaining compliance may seem daunting. Austin’s Office of Sustainability’s website outlines a number of country-wide best practices, beginning with organic diversion, where excess perishables are donated to food banks or soup kitchens.
For restaurants and retailers concerned about the potential repercussions of donating easily spoiled foodstuffs, it’s important to note that the Good Samaritan Food Donation Act — signed into law in 1996 by President Bill Clinton — protects businesses donating perishables to nonprofits from criminal and civil liability. Similarly, many areas have moved to composting initiatives, with both Seattle and San Francisco providing special trash receptacles for eligible waste.
In January 2018, ReFED, a nonprofit committed to reducing food waste, and the Food Waste Reduction Alliance, a collaboration of the Grocery Manufacturers Association, the Food Marketing Institute and the National Restaurant Association, released the first-ever Retail Food Waste Action Guide. According to the guide, food waste represents an $18.2 billion opportunity for grocery retailers, equal to roughly double the profits from food sales. Similarly, the savings could total $16 billion for full-service restaurants and $9.1 billion for limited-service restaurants. The guide also includes an overview of the challenges facing retailers and restaurateurs, while providing ideas on advanced initiatives for prevention, recovery and recycling.
Notably, the guide stresses the value of prevention-focused solutions, such as dynamic pricing and markdowns, as they are expected to create three times the net economic value of recovery and recycling solutions combined. To that end, it also highlights best practices, such as measuring and identifying root causes of waste, and engaging in industry collaborations such as consumer education campaigns and standardized date labeling.
The reasons to minimize food waste are many, whether through government mandates or other motivators. Restaurants, retailers and food suppliers adopting these initiatives could also help bolster their profit margins, with the added benefit of creating a greener, less wasteful world.