Loss and waste in the food chain is a big issue to the public, business and policy-makers. Waste is a multi-headed monster, but investing in solutions brings both economic and environmental benefits.
A restaurant that prepares meals from discarded food. An entrepreneur who uses left-over lemons to make ice tea. And large multinationals that form a coalition to halve food waste. The issue of 'waste and loss throughout the food chain' is a hot topic. Most consumers find food waste simply wrong and are frustrated by the fact that one-third of the food produced is not consumed while millions of people are going hungry. As many as 83 percent of Dutch consumers regard food waste as a serious problem. It’s high on policy-makers’ and food producers’ agendas as well. The United Nations (UN) stimulates tackling the issue with the Sustainable Development Goals (SDG). The 12th SDG proposes (in 12.3) that we should halve per capita food waste at the retail and consumer levels by 2030. According to the UN, we also need to reduce food losses along production and supply chains, including post-harvest losses.
Loss and waste along the chain
But where should we start? The problem occurs throughout the chain. It begins on the field, where part of the crop may fail or be lost during harvesting. Some of the food that makes it to the processors and sellers may be lost on the way to the factory or store. It gets damage or perishes during transportation or storage. And even if food does reach the factory or store in good shape, consumption is still not guaranteed. Because losses arise during processing in the food industry. And some of the food that reaches the store is not sold. Last but not least, much of the food consumers buy, never gets eaten.
"Measures against food waste and loss contribute towards solving both the climate and global food problems. And they can speed up the transition to a circular economy. "- Bas Rüter, Director of Sustainability
Rabobank's Sustainability Director Bas Rüter thinks we are underestimating the "multi-headed" problem, especially when it comes to food loss at the start of the chain. He gives the example of the long waiting times for ships to unload agricultural cargos at a North Brazilian port. "Waiting may take up to two months. A lot can go wrong with food in two months."
According to Rüter, tackling food losses seriously begins with the farmers in developing countries. Low-tech investments in replanting, logistics and storage for example can reduce losses and lead to a much higher yield per hectare. But it’s a huge task. "This would mean giving millions of farmers in developing countries the opportunity to invest in more sustainable production." Offtakers and financiers can help by providing guarantees and favourable credit terms, for example.The end of the chain, the Western consumer, presents another huge challenge believes Rüter. To combat waste, Western consumers should change their buying and cooking habits. Will they only choose perfect products, or are crooked cucumbers good enough? Are they willing to eat left-overs? It’s all about changing our habits. But behaviours don’t change overnight.
An analysis by RaboResearch Food & Agribusiness illustrates the extent of the problem. The researchers estimate that European food production and distribution alone, creates a loss of 60 billion euros annually. Additionally, European consumers throw away 30 billion euros-worth of food each year (see Facts & Figures).
Fortunately, big problems usually also offer great opportunities. Both in terms of the environment and the economy there are many gains to be made. Measures against food loss and waste have a major impact on sustainability. Wasting food means wasting energy and water (for example, the cultivation of 1 tomato takes more than 12 litres of water). Rüter points out that measures have a three-pronged effect on sustainability. "They help solve both the climate and world food problems and speed up the transition to a circular economy."
For companies, it is economically very interesting to invest in solutions. European entrepreneurs can save 5 billion euros through innovations in harvesting and storage immediately after harvest. And another 5 billion euros can be saved through innovations in packaging and better monitoring of freshness (see Facts & Figures). According to Rüter, reducing food losses increases competitiveness. He mentions packaging that allows fresh salmon to be transported by ship from Chile to Europe. "That means undercutting a competitor who uses plane transport."
Bring chain partners together
Taking opportunities to reduce waste or loss is easier said than done. Interdependencies in the chain form a major obstacle. If a retailer wants to counter waste or loss, this means that an earlier link in the chain should invest in better packaging, for example. Such an investment may be very interesting in the long term, but whether a food supplier has the resources or guts to make it remains to be seen. Because their customer may only be interested in price.
To prevent waste and loss in the food chain, chain partners must join forces. Rabobank sees itself as a coordinator and a driver, based on our vision Banking for Food. Reducing waste is one of the conditions for meeting the rapidly rising demand for food. Like efficiency improvements in production and better cooperation along the production chains.
You can’t find solutions on your own. Which is why Rabobank works in coalitions. One of them is Champions 12.3, through which multinationals, NGOs, governments and activists join forces to halve food waste by 2030. In the Netherlands, Rabobank is part of the Circular Economy inFood Taskforce, which will present its ambitious approach to a circular food supply in March 2018.
Rabobank drives solutions on many fronts, says Rüter. One of these is stimulating and highlighting innovations, for example in packaging. Rabobank customer It's Fresh!, for example, has developed a filter that absorbs ethylene, allowing for example avocados to stay fresh for a long time. Another customer, Liquid Seal, produces a liquid, biodegradable coating for hard-shelled fruit. This also extends the life span. Rüter: "We like to share such knowledge about innovations with customers, as well as our knowledge of doing business in a circular economy. We raise our customers’ awareness of the possibilities and how they can benefit. "Another way Rabobank contributes to solutions is through funding, for example in countries in Africa and South America. Through the Rabobank Foundation, the bank helps farmers to form cooperatives, enabling them to invest in better storage opportunities, for example.
Second life for residual flows
Dealing with food waste takes more than just driving and joining forces. In this respect, the Netherlands has learnt its lessons. In 2015, the government concluded that despite an ambitious 20 percent reduction target, waste levels were the same. The reason? A fragmented, uncoordinated approach. This prompted Rabobank to enter into an intensive cooperation with De Verspillingsfabriek in Veghel in 2015. The company gives residual flows from the food industry a second life. For example, by processing unsold tomatoes and unused tomato parts to tomato soup. Rabobank and Wageningen University work with the founder and catering entrepreneur Bob Hutten to make THREE SIXTY (which is home to De Verspillingsfabriek) the innovation and expertise centre for circular solutions to combat food waste. Starters can collaborate with scientists and benefit from the knowledge and network of Rabobank specialists. This creates a learning community (FoodWasteXperts).
Circular Economy Challenges
Through Circular Economy Challenges, Rabobank, together with KPMG and CSR Netherlands, challenges customers to see and seize opportunities in the circular economy. The method is regional and practical. For example, food producer Coroos discovered ways to add value to residual flows and treat wastewater differently. By the end of 2017, 100 companies should have made a circular action plan. Rüter: "Participants often serve as an example to other companies in the region. That's exactly what we want. "
The bank's contribution as a driver is modest, compared to the consumer. By changing their cooking and buying habits, consumers can bring about a U-turn- Bas Rüter, Director of Sustainability
To get consumers more involved, Rabobank and Stichting Natuur en Milieu (the Dutch Nature and Environment Foundation) launched a campaign to encourage consumers to change their behaviour. "We find that this works extremely well. We’re now working to widen the campaign,” says Rüter. He hopes to set it up with as many other parties as possible. Because: "Our contribution as a driver is modest compared to what the consumer is capable of. By changing their cooking and buying habits, consumers can bring about a U-turn.”
Facts & Figures
- 90 billion euros is lost in Europe every year in the production and distribution of food, 60 billion at the production and distribution level and 30 billion on the consumer level through food waste. RaboResearch Food & Agribusiness.
- European businesses could save 10 billion euros annually by taking measures against waste and loss through innovations in harvesting and storage (5 billion), packaging (2.5 billion) and better monitoring of freshness (2.5 billion). RaboResearch Food & Agribusiness
- Every dollar an entrepreneur invests in food waste can yield 14 dollars. World Resources Institute.
- Avoiding food waste is number 3 of the 100 most significant measures against climate change. Project Drawdown.
- The biggest reasons for throwing away food are: "It tastes or smells bad/looks bad (54%), "Sell-by date" (34%) and "Cooked too much" (26%). The most commonly mentioned solutions for combating food waste are: smaller packaging (43%), using a shopping list (33%) and information about food preservation (24%). Study Nature & Environment and Rabobank
Rabobank supports the following initiatives
Two years ago we initiated a movement to prevent, reduce and give added value to food waste. We started by investing in a sustainable frontrunner (De Verspillingsfabriek). Then we applied our expertise and network to set up a learning community and put together a national agenda. This new ecosystem is attracting increasing numbers of companies and stakeholders. We also provide expertise and inspiration to the different local and regional communities created around our local banks.
- Protix. A company that produces fish feed out of insects (bred on residual streams) instead of using fish as the protein source. Rabobank financed the start-up through the Dutch GreenTech Fund and improved the regional chain cooperation through its local banks.
- Betuwe Fruitmotor. A co-operative that produces cider out of residual fruit. Together with fruit growers, this company is working on a regional zero-waste economy. Through its Cooperative Dividend Rabobank contributed 60,000 euros to the initiative and advised on the business model and setting up a cooperative.
- World is U Food tour. World is U is an educational youth programme that Rabobank co-founded. During World is U Foodtour, Rabobank Peel North asked young people to give their views on food issues and stimulates local campaigns on food waste.