Food fight: the tools for halving food waste by 2030

Globally, food waste accounts for ~8% of greenhouse gas (GHG) emissions, and the excess food that is grown and never eaten could feed the 1B+ people facing food insecurity. According to ReFED, a data-driven non-profit dedicated to improving food systems, the United States produced $444B worth of unused or uneaten food in 2021, representing nearly 40% of total food production.

The food waste problem has garnered attention from climate solvers, including the United Nations Sustainable Development Goals (12.3) and Project Drawdown’s solution list. The ambition to reduce waste by 50% over the coming decade has been picked up by regulatory groups and corporations as well. The U.S. Food and Drug Administration and Environmental Protection Agency have developed a food loss and waste champions program, with voluntary commitments from top agrifood companies, including Albertson’s, General Mills, and Sysco.

The Agrifood Value Chain

There is a wide range of pathways for food once it is grown; in the best case, food is consumed by humans and in the worst case it is landfilled. Although there are myriad options in between, prevention of waste in the first place is far preferable to donations, composting, and anaerobic digestion. That is because at each point in the agrifood supply chain, emissions and value are ‘added’ to food, including waste management options listed above.

The big picture — behavior change and data management

The massive scale of industrialized agrifood supply chains creates several barriers to food waste prevention and reduction. First, as the complex ecosystem of growers, producers, manufacturers, suppliers, wholesalers, retailers, and consumers has stretched across the globe, all participants in the supply chain are more distanced. This distance has ultimately changed our collective relationship with the food we eat, driving deeper apathy for how we use it. Professional waste management services have also distanced us from the issues created from throwing away food (and other products), by shifting the problem to a far-off, rarely seen landfill. The linear food economy we know today stands in stark contrast to localized food chains, where nearby farms sustain local populations, who return excess nutrients to the soil through composting or other means. Modern consumers’ best options today are to compost themselves, or enroll in municipal or private composting programs; GreenBlue.org has aggregated U.S. composting programs in their open-source tool, which also serves to highlight a severe lack of access.

Before food ever reaches households or diners’ plates, suppliers face challenges in managing waste more effectively, many of which are related to data. Demand and inventory data management tools have been developed for specific customers and foods (e.g., produce), but disorganized date labeling and siloed operations perpetuate an inefficient system. Clearer insights on expiration dates, safety, and sources are required to improve waste reduction, especially in the middle and downstream supply chains.

Upstream — innovation in industrialized waste streams

Industrial agriculture in the United States and other developed countries has helped to drive down waste, allowing producers and manufacturers to capture inedible surplus for upcycling (e.g., animal feed and bioplastics) and other high value uses. For more perishable items, such as fruits and vegetables, companies like Apeel offer ways to extend shelf life and prevent spoilage in transportation and distribution. For food that can’t be recovered, Anuvia’s organic fertilizer offers a circular lifecycle, whereby food can be reused efficiently to grow more food and reduce our reliance on synthetic nitrogenous fertilizers.

Messy middle — the broken feedback loop in food service, space for digital innovation

In between producers and consumers, ~16 million tons of food leaves the U.S. supply chain as waste. Food services, including restaurants, catering, hospitality, and corporate dining, accounts for a vast majority of this waste, perpetuated by a broken feedback loop. Over 70% food lost at food service has already been sold and comes from customers’ plates, thus reducing the incentive for generators to reduce waste. Conventional wisdom, especially in restaurants, says that operations are already optimized and there are minimal gains to be had from focusing on reducing food waste. These factors, along with slim margins and labor constraints, have prevented meaningful progress in preventing restaurant waste.

While donations and dynamic pricing tools, such as Copia and Too Good To Go, offer alternative solutions for food surplus, demand forecasting and inventory planning is rarely informed by measurement of wasted food. Without robust zero waste policies, enforced at the business level, the incentives remain low for more integrative solutions. Chipotle, a fast-casual industry leader in sustainability, recently launched a partnership with PreciTaste, an AI-driven analytics platform that captures real-time demand, operations, and food waste.

Downstream — infrastructure buildout and education

Once food reaches households, the value of food waste declines precipitously. Beyond composting, which only 27% of U.S. households have access to, there are few options for avoiding the landfill; post-consumer food waste accounts for 24% of landfill waste. Limited access to infrastructure and poor education on food waste management have resulted in the food waste problem ballooning from residential sources, and new legislation seeks to remedy these problems. The COMPOST Act and the Zero Food Waste Act, both introduced in 2021, sought to spur investment in infrastructure, incentivize measurement and reduction, and increase consumer education through state and local programs. Unfortunately, neither act has a clear path to passing, but smaller programs have, including $350M in the IIJA, present opportunities for innovation.

Earlier this year, Mill unveiled its at-home composting solution. In the same way that Nest transformed homeowners’ relationship with energy, the founders hope to catalyze composting by bringing solutions directly to consumers. Beyond the home, the ongoing buildout of physical infrastructure for composting and recycling represents an opportunity for software providers to enable transactions and reporting, optimize logistics, and streamline organic waste sorting and processing. Companies like Divert, who raised $1B in 2022 for U.S. expansion of biogas renewable energy plants, are also providing new solutions for suppliers to prevent and manage waste more effectively.

Buoyant Ventures and Digital Innovations

As zero waste cities continue to advance the food waste dialogue, Buoyant is tracking the digital innovations that enable the midstream and downstream to reduce waste. Measurement, tracking, and reporting waste are critical first steps to enhanced management, and help shift attention to the major problem areas. Peter Drucker’s words, ‘what’s measured is managed’ hold true in food waste, and we see significant potential for growth in this category, much in the way that carbon accounting has taken hold in large corporations around the world.

At the same time that food waste is coming into focus for businesses and regulators, artificial intelligence continues to advance across the digital landscape. We have seen leaps in effectiveness and accuracy of such tools in other climate segments, and are eager to continue to explore the potential for AI to reduce food waste. Data management and analytics will be crucial tools for retailers, restaurants, and CPG producers to improve the supply/demand balance.

Buoyant Ventures invests in digital solutions for climate change mitigation and adaptation. If you are building a software solution to address food waste, please reach out to team@buoyant.vc or head to our investment consideration form, we’d love to hear from you!