Innovation Can Turn Food Waste Around

European food & agribusiness (F&A) is currently losing EUR 60 billion of value each year through food that is lost in the supply chain and never reaches the consumer. As a result, F&A companies have much to gain from tackling food waste, and embracing innovation can reverse some of these losses.

“Looking at the chain between farm and fork, most wastage occurs within and between F&A companies during agricultural production, post-harvest handling and storage, processing and distribution. For almost every type of food, producers account for more than half the loss of value,” says Rabobank F&A Supply Chain Analyst Paul Bosch.

F&A companies can save billions of euros by using new, innovative approaches to reducing food waste. Rabobank has zoomed in on three areas where innovation can tangibly reduce food waste: harvesting and handling crops, packaging food and monitoring fresh produce. In Rabobank’s view, these three areas of innovation could realise up to EUR 10 billion of savings for F&A companies each year. These savings—not including potential consumer reduction of food waste—would be a significant step towards achieving the EU aspiration to reduce food waste by 30 percent by 2025.

Innovation Needed to Reduce Food Waste

Food waste reduction pioneers

The initiators of such innovations—the ‘pioneers’—are most likely to use these innovations as enablers to (re)position themselves in the market. However implementing innovations that reduce food waste can be a challenge, as the company that benefits most is often not the company that needs to invest most. “For example, if a food retailer wants to monitor freshness, the wholesaler, packager and perhaps even grower need to invest in the relevant technology. The question is whether or not they are willing to invest, since a reduction in food waste may result in the retailer buying less,” says Bosch.
In Rabobank’s view the key to reducing food waste is to explore and valorise the additional benefits innovations bring to the business model, and also in configuring business models that better share the benefits and costs of investing to reduce waste. “In our experience, F&A companies that are re-configuring their supply chain partnerships find that the benefits extend beyond food waste reduction, such as improving product consistency, enhancing inventory management and increasing logistics flexibility,” explains Bosch.