Food Waste in AmericaOpportunities to Fight Hunger
Food Waste in AmericaOpportunities to Fight Hunger
July 2011
Summary
• Feeding America and A. T. Kearney collaborated to evaluate food waste and donation opportunities along the US food supply chain
• This study evaluated all food channels with a focus on foodservice channels
• Approximately 80 billion pounds of food is wasted annually, 50 billion pounds in foodservice channels
• The common enemy of companies and Feeding America is landfill waste
• Supply chain partnerships can ensure this waste is minimized and redirected to donation
Feeding the Nation’s Hungry
Feeding America’s mission is to feed America’s hungry through a nationwide network of 200+ member food banks and engage
our country in the fight to end hunger
4
National Retailer donations are offsetting a decline from National Manufacturers
Feeding America Annual Food Sourced (million lbs)
Source: Feeding America
2007 2008 2009 20100
500
1000
1500
2000
2500
3000
3500
2,100 2,200
2,6002,950
Federal
Purchase
LocalDonation
NationalDonation
Total Product Donations Increasing
5
Worst Employment Recession Since WWII
Months after Peak Employment
% Job Losses
Relative to Peak
Employment
Nearly 7 Million Unemployed for Over 26 Weeks
Month/Year
Unemployed over 26 Weeks
1969 Current
0 47
Current Recessio
n
50.2M Americans are Food Insecure
Source: calculatedriskblog.com; USDA
Demand Outpacing Supply
UsageAlternative Channels (519)
Estimated US Food Supply Chain(1) (billions of lbs)
6
Production
International Trade
Farming(1,270)
Agri-Processing(405)
Manufacturing(710)
Wholesaling(673)
Primary Distribution (861)
Drug Stores(10)
Retail(372)
Caterers(2)
Hospitality(17)
Institutional(38)Convenience
(14)
Foodservice (465)Grocery (396)Restaurants
(407)
Secondary Distribution (~19)CloseoutStores (1)
DollarStores (14)
Exports(94)
Imports(82)
Note: (1) Industrial waste is not included; numbers may not balanceSource: USDA: 2007 U.S. Census of Agriculture; 2007 U.S. Economic Census; National Restaurant Association; others
Animal Feed(311)
Donation(3-5)
Biofuels(208)
Consumed(664)
Food Waste(78)
Packaging Waste(138)
Raw Inputs
US Food Production = 900B lbs
7
Hun
ger
Waste
Obesity
TheFood
Paradox
7Source: USDA; CDC; A. T. Kearney analysis
A coordinated effort is needed across the industry to tackle these issues
In 2009, the number of food insecure individuals rose to 50 million
Obesity easily exceeds 30% in most age groups, including children
Americans throw away tens of billions of pounds of food each year
We are living in a Food Paradox
8
Additional Donation Opportunity in Existing Programs (B pounds)
Source: Feeding America
ProduceDonation Program
ManufacturingDonation Program
Retail DonationProgram
0.0
0.5
1.0
1.5
0.5 0.40.2
1.0
0.4
0.3
Current Donations Opportunity
Grocery Supply Chain Support
9
12.0
4.933.9
Annual US Food Waste Generation(1) (estimated, B lbs)
(1) Post-recycling(2) Consumers, grocery channels, etc.Source: EPA; www.zerowasteamerica.org; BioCycle; Industry interviews; ATK analysis
Procurement
Plate
Preparation
Waste of food that has already been served to
consumers
Waste that occurs at the site during
preparation
Uncooked food waste that occurs along the
supply chain
50.8
27.0
Foodservice
All Other Sources(2)
US Food Waste = 78B lbs
10
Food Waste
Procurement Preparation Plate
Example Reasons for
Waste
Uncooked food waste that occurs along the supply chain
Waste that occurs at the site during preparation (includes trimmings)
Waste of food that has already been served to consumers
• Excess• Damage• Test
• Process design• Lack of training• Quality requirements
• Incentive to “push” food• Portion sizes• Lack of tracking
The Three P’s of Food Waste
Description
Source: A. T. Kearney analysis
Evaluation Framework
ProcurementWholesaling
(3.4 B)
Plate
PreparationProcurement
Institutional(4.2 B)
Hospitality(2.2 B)
Plate
Preparation Procurement
Restaurant(40.7 B)
Plate
Preparation
Procurement
Estimated Foodservice Wasteby Industry (billions of lbs)
80% of food service waste from Restaurants
1212
Hotels: Companies donate part of food purchase
• There is excess food at banquets & conventions, which typically is discarded
• Companies can prevent plate waste by reduce their food purchase (e.g. decrease menu options, smaller tray sizes, etc)
Institutional: Go “trayless” in cafeterias
• Students at Northwestern University weighed their plate waste to quantify their waste stream
• Trays were then eliminated trays at select cafeterias, limiting customers from taking excess food
• Anecdotal evidence suggests that “going trayless” reduced plate waste by 30%
Caterers: Passengers donate value of their meal
• On average, 1-2 first class meals are thrown away at the end of each flight
• Airlines could provide first-class passengers the opportunity to refuse their complimentary meal in lieu of a donation to Feeding America
• Monetary savings can be donated to FA to purchase food for the hungry
Source: Industry interviews; A. T. Kearney analysis
Solutions ‘out of the box’
13
Identify and Quantify the
Waste
Explore Ways to Reduce the Waste
Recover and Donate the Remainder
“Quantify”
• Where is food waste occurring?
• Why is there waste?• How much waste is there?• Who owns the waste?
• How can we reduce the amount of waste?
• How much waste will remain?
• What kind of waste is it?
• Is the waste edible? Can it be donated “as is”?
• If not, are there steps that can be taken recover the waste?
• What is the cost of these steps?
Strategies for waste reduction and donation can live in harmony, as the common enemy is dumping and landfill waste
Source: A. T. Kearney analysis
“Reduce” “Donate”
Partnership Strategies
14Source: A. T. Kearney analysis
Increasing Time
Desired Change in Waste Flow
Dumped
Donated
Identify Waste
Decrease Product Losses
Capture Edible
“Waste”
Maximize Saleable Product
Maximize Donation
Minimize Dumping
Reduction Strategy(Quantify, Reduce, Donate)
Reduce Inedible Waste
Goal: 0 Landfill
Secondary market is increasingly important revenue stream for manufacturers but impacts donations
15
20042005
20062007
20082009
20102011F
0
100
200
300
400
Non-Produce National Pounds over time
Our lean enterprise initiative is really taking hold
The business environment forced us to embrace secondary markets
We’re selling to secondary market 2x what we donate
Recession has driven us to tighter production plans and reduce new product introductions
…and macro trend validated at donor levels through interviews
Po
un
ds
(M
M)
Fiscal Year
YTD FY11 June 1, 2011
Need vs. Opportunity
Waste solution opportunities
Dry, frozen, refrigerated Short-codedPast code with approved extensionsDiscontinuedMislabeled Unlabeled / britesTest productPromotional ItemsPrivate label/ licensed Packaging changes
Line start up wasteReformulationsSeasonal ItemsOverrunsCustomer returnsFood service sizes Bulk ProductLow weights/short fillsIngredientsBoxes, Containers, Shelving & Equipment
Through out the Supply Chain
Benefits of Donating
• Waste reduction• An inventory management solution• Potential tax benefits• Centralized donation process; local community support• Security and integrity of brands• Savings in storage and transportation• Savings in dumping fees: $4,000 per truckload!• Cost-free way to handle unsaleable product• Sophisticated tracking, reporting and recall procedures• Supports ‘green’ initiatives and corporate commitments to
sustainability
Join in the FIGHT
Institute Corporate Donate do not Dump policy• Clear process for all employees• Early identification of unsaleables• Immediate action to donate• Extended code dates on consumables
Engage locally with your community food bank• volunteer• event sponsorship
18
Thank you
Steve, a former shipping and receiving associate, and his wife both worked two jobs to support their daughters. But that was five years ago. The couple now relies on unemployment benefits to feed 15-year-old Katie and 10-year-old Olivia. Until things turn around, they turn to their local food shelf for assistance. This agency of the Second Harvest Heartland food bank in St. Paul, Minn., provides them with the food the parents need to keep their family fed. There’s a Steve in your own community. www.feedingamerica.org to see how you can help.
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