Why grocery food waste is big business

A total of 119 billion pounds of food, or 40% of all food in the US, goes to waste every year

The amount of food that goes to waste in the U.S. alone every year is, frankly, shocking: a total of 119 billion pounds of food, which equates to 130 billion meals and more than $408 billion. The craziest stat is that nearly 40% of all food in America is wasted. 

Of that waste, $29 billion comes down simply to food date label confusion, meaning people throwing out perfectly good food because the packing told them it had gone bad, or because they didn't fully understand what the label was telling them (ask most people the difference between a "sell by" and a "best by" date and most of them will likely have no idea). 

This is especially bad a we're already being called a global food crisis, one in which 345 million people around the world are facing acute food insecurity this year. Hundreds of million of people are starving and others are throwing out food that's still good to eat. There's a big disconnect going on.

However, wherever there's a crisis there's also an opportunity, and both big corporates, as well as startups, are coming to the rescue, helping to solving this problem through the initiatives and new technologies that aim to cut down on food waste. 

Grocery store technology

The front line of helping to put an end to food waste in the United States is happening in the place most of us first associate with food: the grocery store.

A survey of 219 grocers in North America conducted in 2021 found that the vast majority, 84%, said they planned to invest in technology that could help them reduce the amount of food they aren’t able to sell or otherwise have to write off over the next two years.

While 42% define food waste as items that are unsold, 28% think of it as food sent to a landfill, while the rest consider food waste to be products that are lost to shrink or cannot be sold at full price. Any way you define it, though, this is food that can be consumed by somebody but is currently being used by nobody, and these grocers want to put an end to that.

One way they're is by finding alternative uses for what they haven't sold, including over 23% donating it, and around 11% using it to make prepared food. They're also funding new ways to entice consumers to buy these products, including using discounts to help sell food before it expires. Those aren't new methods, but they are also using technology which allows them to better forecast demand so they don't overbuy, and to improve their ability to track date codes or freshness. 

Among the major grocers, a number of them have put initiatives in place to help reduce waste; Kroger, for example, has implemented its “Zero Hunger | Zero Waste” program, which looks to increase access to fresh, affordable food through its retail stores, digital channels, and local partnerships. That includes cutting greenhouse gas emissions, food waste and energy consumption; educing waste in its operations; optimizing water use; offering more sustainable packaging; and practicing sustainable sourcing. 

The program also includes a $10 million Innovation Fund that invests in new solutions to improve food security and prevent food waste; companies that have been funded include Journey Foods, a portfolio intelligence company that solves food science and supply chain inefficiencies with software; Replate, which creates technology to reliably redistribute surplus food from businesses and events directly to nonprofits; Food Forest, which uses technology to source products through multiple channels; and Take Two, a plant-based food company. 

Walmart, meanwhile, has vowed to eliminate food waste by 2025 by working with suppliers to use less packaging, design for recyclability, and improving waste reduction systems. The company also hosts an annual “Fight Hunger. Spark Change.” campaign, which it says has helped generate more than $165 million for Feeding America and local food banks, helping to secure nearly 1.7 billion meals for people facing hunger.

Another major grocer, Safeway, has also said it wants to cut down on food waste, with the short term goal of diverting an average of 70% of material from landfills with an ultimate goal of up to 90% waste diversion, through recycling, composting, and waste control initiatives. The company has also launched its Food Rescue initiative, which educates consumers on how to reuse or recycle their food waste. 

Startups in the food waste space

As always, even as the major players get in on the action, the real innovations happen on the other end of the spectrum, with new startups coming along with new ideas on how to reduce food waste. 

In addition to some of the companies mentioned above, there's also Apeel Sciences, a company that develops plant-derived shelf life extension technology for fresh produce, as well as MatSmart, a company that sells surplus food online, and Mill, developer of a kitchen bin that dries, shrinks, and de-stinks leftover food. 

Other startups in the space include FoodHero, an online grocery marketplace for excess food; Aravita, which uses artificial intelligence to o place fresh food orders, avoiding spoilage due to overstocking or lost sales due to under stocking; Divert, which provides sustainable infrastructure solutions that eliminates waste from the retail industry; Alterpacks, a material technology startup that provides food waste and sustainability solutions; Misfits Market, a subscription box service for organically sourced produce; Freshflow, a company using AI to build food supply chain technology; and Full Harvest, B2B marketplace for ugly and surplus produce. 

Interestingly, even as the problem continues to fester, funding to these startups dropped in 2022, with $1.7 billion, down from $2 billion in 2021, though that was still much higher than the $978 million the space saw in 2020. The number of deals fell to 117, from 206, which the lowest deal count since 2018.

 (Image source: myethicalchoice.com)