The scale of the problem is staggering. Each year, 1.6 billion tons of food worth about $1.2 trillion are lost or go to waste—one-third of the total amount of food produced globally.1 To put the figure in perspective, that is ten times the mass of the island of Manhattan. And the problem is only growing: BCG estimates that by 2030 annual food loss and waste will hit 2.1 billion tons worth $1.5 trillion.
This massive misuse of resources is emerging as a critical global issue, with the UN’s Sustainable Development Goals setting a target of halving food loss and waste by 2030. The urgency reflects the fact that the food waste disaster has far-reaching implications. According to the UN’s Food and Agriculture Organization and the World Resources Institute, it accounts for 8% of global greenhouse gas emissions. And it is difficult to imagine solving the hunger problem—some 870 million people around the world are undernourished—when so much of the global food supply is lost between the farm and the table.
The challenge is enormous, but there is a clear way forward. On the basis of an extensive analysis of the food value chain from production through retail and consumption, BCG has identified five drivers of the problem, issues that—if addressed—could reduce the dollar value of annual food loss and waste by nearly $700 billion and create major progress toward hitting the SDG target. Certainly no one group, government, or company can make this happen. Rather, real headway will require commitment and coordinated action from consumers, governments, NGOs, farmers, and companies.
Companies that play a major role in the food value chain in particular can be catalysts for change. Through our research, we have identified 13 concrete initiatives companies can take to address those five drivers and help slash the amount of food lost and wasted every year.2 This is not only a chance to help the world—it is a compelling business opportunity. Recent research by BCG has found that companies that are effective at addressing societal challenges tend to be rewarded with higher margins and higher TSR. Companies that play a role in the food value chain stand to reap tangible business benefits such as lower costs, the opening of new markets, and new revenue opportunities. Just as important, these companies can burnish their brand and improve their ability to attract and retain talent as they tackle a daunting global challenge.
A Growing Problem—and a $700 Billion Opportunity
Food loss or waste occurs at all steps in the value chain—but it is most pronounced at the beginning (production) and at the end (consumption). (See Exhibit 1.) In developing countries, the problem is largely a function of the production and transportation of food from farms, while in developed countries it is most prevalent in the consumption phase, among both retailers and consumers
To understand the scale and scope of the problem, BCG created a food loss and waste model. (See “Quantifying the Food Waste Challenge.”) That work reveals a disturbing upward trend line: BCG projects the volume of food loss and waste will rise 1.9% annually from 2015 to 2030 while the dollar value will rise 1.8%.3 Food loss and waste are projected to increase in most regions around the world, with a significant spike in Asia in particular.
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