More than a billion tons of food is lost or wasted worldwide every year. Reducing this could benefit businesses from farm to fork, and have a meaningful impact on climate change, too
T he “vegan meat” market is expected to double in size over the next four years, topping $8 billion by 2025, according to market research. Veganism, vegetarianism and even flexitarianism are on the rise worldwide, as millions of consumers take the view that meat and fish-free diets are better for their health and the planet.
The trend has provoked a surge in demand for fake meat, and companies in the sector are booming. Earlier this year, Redefine Meat raised $29 million to commercialise its technology, which uses 3D printing to produce plant-based steaks. And Future Meat Technologies, which develops lab-grown meat, recently announced it had brought down the production cost of a cultured chicken breast to just $7.50. United Nations data suggests that animal agriculture is responsible for 14.5 per cent of global greenhouse emissions, so the ecological upside from such technologies is obvious.
Of course, replacing steaks and burgers with lifelike alternatives could prove to be a game changer in the food industry, but food waste has been a hotbed of innovation, too. And the commercial and ecological potential of companies in this area easily rivals that of fake meat.
Around 1.3 billion tons of the food produced in the world for human consumption every year gets lost or wasted
“Around 1.3 billion tons of the food produced in the world for human consumption every year gets lost or wasted, equal to over $1 trillion or over one per cent of global output,” says Marc Zornes, chief executive and co-founder of Winnow Solutions, which uses artificial intelligence (AI) and sensors to lower food waste in commercial kitchens. “And from a climate perspective, food waste contributes around eight per cent of global greenhouse gas emissions. If food waste were a country, it would be the third-largest emitter of greenhouse gases after the US and China.”
With such efficiency savings – and ecological gains – in sight, a new generation of companies has been sprouting up to reduce inefficiencies across the entire chain of food production and consumption. A report from the Ellen MacArthur Foundation and Google estimates that technologies employing AI to design out food waste could help to generate up to $127 billion a year by 2030. Such innovations range from machine vision that pinpoints when fruit and vegetables are ready for picking to algorithms that project demand so that supermarkets don’t overstock certain foods.
Short shelf life
The inefficiencies start at the source, the farms themselves, says Jozef Wallis, chief executive of consultancy TerraPrima Group.
“With crops like avocado or blueberries, it’s important to harvest them at exactly the right time and transfer them to cold storage fast,” he says. “If you don’t, their shelf life diminishes by the hour. They can become unsaleable or simply last less time on supermarket shelves before they have to be thrown out.”
Employing artificial intelligence to design out food waste could help to generate up to $127 billion a year by 2030
TerraPrima’s sensors, spread around a farm, feed data to an AI-driven system that informs farmers about the optimal time to harvest crops and line up logistics, as well as improving other aspects of efficiency. Such high-tech solutions, Wallis says, have become increasingly accessible even to smaller farmers in emerging markets. TerraPrima’s sensors collect data on such variables as light, soil moisture and temperature, and the information is fed back to a dashboard that uses AI and machine learning to guide farmers’ decisions. Such technologies can be lined up with innovations from other precision agriculture firms – such as robotic crop pickers or drones – to significantly reduce waste. “This all feeds through to the bottom line for agricultural firms, improving profit margins, so farmers don’t need to be focused on the environment to find this appealing, though many are, of course,” says Wallis.
Moving along the chain, a host of companies seeks to address the tier of waste once food has progressed to supermarkets. San Francisco-based Afresh Technologies has developed algorithms incorporating variables such as weather and peak freshness to forecast demand for certain fresh produce. “Ordering the right number of bananas – not too many, not too few, for example – simultaneously prevents waste from ordering too much and prevents lost sales from ordering too little,” says Matt Schwartz, the company’s founder. “Our system uses AI, deep learning and probabilistic methods, to ensure store managers are able to strike the right balance – helping them to predict inventory, forecast demand and optimise ordering decisions.”
This can have a significant effect on the profitability of supermarkets, which is usually a low-margin industry. “Grocery chains typically have net margins of one to three per cent, while waste in fresh food averages around five to seven per cent of sales,” explains Schwartz. “In some cases, by halving waste, supermarkets can literally double their profitability.”
The company’s research among current customers shows that grocers using the technology have seen chain-wide reductions in food waste of at least 25 per cent – in some cases significantly higher – and increases in produce operating margins of around 40 per cent. Afresh Technologies’ platform is already deployed in hundreds of stores across the US, including chains such as WinCo Foods, Fresh Thyme Market and Heinen’s. Looking ahead, there are plans to expand beyond North America, with Europe a clear target market.
Some innovators in this space are moving the other way, from Europe to the US. Copenhagen-based Too Good To Go has developed an app that links consumers with local food stores, enabling retailers to sell food at a discount that would otherwise be thrown away. “Food waste is often hard to predict, so stores don’t usually know exactly what food will be surplus to requirements on any particular day,” says co-founder Lucie Basch. “Our app allows companies to offer ‘surprise bags’, which increases flexibility and also provides consumers with an element of novelty.”
Food waste contributes around eight per cent of global greenhouse gas emissions. If food waste were a country, it would be the third-largest emitter of greenhouse gases after the US and China
This has several benefits for businesses and their customers, says Basch. First, the app increases sales and reduces inefficiency. Second, the surprise element of the packages exposes local consumers to products that they might not otherwise have tried – which have the potential to become favourites. Third, consumers recoup around three times the cost of the app subscription in discounted food.
Some 50,000 companies across 15 countries have partnered with Too Good To Go to sell surplus food – from small local bakeries to large supermarkets such as Carrefour, and hotel chains such as Accor. Launched just five years ago, the group’s app is thought to have saved around 60 million meals from going to waste. Yet, Basch believes the company has barely scratched the surface of potential demand. Heading the group’s push into the US, she estimates Too Good To Go has so far reached just five per cent of its addressable global market.
Restaurant and hospitality industries are also profligate wasters of food. Around one in six meals served outside the home are wasted in the UK, according to the Sustainable Restaurant Association. Globally, food waste costs the hospitality industry more than $100 billion annually, money it can ill afford to lose after months of lockdown restrictions.
Part of the waste is due to kitchen inefficiencies. Kitchens can waste up to 20 per cent of food purchased, often equivalent to total net profits, because chefs too often lack the necessary tools to accurately measure and manage waste.
“We install motion sensor cameras that capture images of food being thrown away,” explains Winnow’s Zornes. “Our system is then able to translate these images into menu items – anything from meatballs to fries.”
In other words, Winnow takes into consideration the items that individual restaurants are serving so it can more accurately identify what is being thrown away on each site, rather than just assess the quantum of waste. “Our analytics platform and reporting suite help teams pinpoint waste quickly, giving managers the insights they need to cut costs and reduce impact,” says Zornes. “Once you know where waste is occurring, improved forecasting and production planning allows you address the issue at its root cause.”
The company calculates that this technology enables clients to halve their food waste, generally saving restaurants between three per cent and eight per cent on food costs. Total savings have now reached $42 million, the company estimates, with 36.5 million meals saved, cutting carbon dioxide emissions by 61,000 tons.
Kitchens can waste up to 20 per cent of food purchased, often equivalent to total net profits, because chefs too often lack the necessary tools to accurately measure and manage waste
There is plenty of waste to be addressed at the final stage of the food chain too – in our homes. Most households throw away an eyebrow-raising 40 per cent of the food brought home, according to smart food storage group Ovie. The Chicago-based company produces containers that turn from green, to yellow, to red as food nears expiry. This is more than simply an ecological problem: Ovie estimates that such waste costs the average US household $2,000 a year. Ovie’s storage kits can monitor the freshness of a full range of produce, which is especially useful since food expiry labels can be overly cautious, or hard to interpret by consumers. Another solution to this problem has been proposed by Ynvisible and Innoscentia. Based in Vancouver and Stockholm respectively, the two companies have joined forces to produce labels incorporating digital sensors that monitor the real-time quality of food.
Across the food chain, efforts to reduce food waste have produced a burgeoning ecosystem of smart companies and technologies. Many of these firms remain at an early stage of development, but growth is widely expected as businesses, investors and consumers recognise the effect of food waste on their purse and on the planet n