Transcript Slide 1

Food Waste in America
Opportunities to Fight Hunger
July 2011
Summary
• Feeding America and A. T. Kearney collaborated to evaluate
food waste and donation opportunities along the US food
supply chain
• This study evaluated all food channels with a focus on
foodservice channels
• Approximately 80 billion pounds of food is wasted annually,
50 billion pounds in foodservice channels
• The common enemy of companies and Feeding America is
landfill waste
• Supply chain partnerships can ensure this waste is minimized
and redirected to donation
Feeding the Nation’s Hungry
Feeding America’s mission is to feed America’s hungry through
a nationwide network of 200+ member food banks and engage
our country in the fight to end hunger
Total Product Donations Increasing
National Retailer donations are offsetting a decline from
National Manufacturers
3500
Feeding America Annual Food Sourced (million lbs)
2,950
3000
2500
2000
1500
1000
500
0
2,600
2,100
National
Donation
Local
Donation
Purchase
Federal
2007
Source: Feeding America
2,200
2008
2009
2010
4
Demand Outpacing Supply
Worst Employment Recession Since WWII
% Job
Losses
Relative to
Peak
Employment
50.2M Americans are Food Insecure
Current
Recessio
n
0
Months after Peak Employment 47
Nearly 7 Million Unemployed for Over 26 Weeks
Unemployed
over 26
Weeks
1969
Source: calculatedriskblog.com; USDA
Month/Yea
r
Current
5
US Food Production = 900B lbs
Estimated US Food Supply Chain(1) (billions of lbs)
Production
Raw Inputs
Farming
(1,270)
Agri-Processing
(405)
International
Trade
Manufacturing
(710)
Imports
(82)
Exports
(94)
Wholesaling
(673)
Note: (1) Industrial waste is not included; numbers may not balance
Source: USDA: 2007 U.S. Census of Agriculture; 2007 U.S. Economic
Census; National Restaurant Association; others
Alternative Channels (519)
Animal Feed
Biofuels
(311)
(208)
Primary Distribution (861)
Grocery (396) Foodservice (465)
Retail
Restaurants
(372)
(407)
Institutional
(38)
Convenience
(14)
Hospitality
(17)
Drug Stores
Caterers
(10)
(2)
Usage
Consumed
(664)
Packaging Waste
(138)
Food Waste
(78)
Secondary Distribution (~19)
Closeout
Dollar
Donation
Stores (1) Stores (14)
(3-5)
6
We are living in a Food Paradox
The
Food
Paradox
 In 2009, the number of food
insecure individuals rose to 50
million
 Obesity easily exceeds 30% in
most age groups, including children
 Americans throw away tens of
billions of pounds of food each year
Waste
A coordinated effort is needed across the industry to tackle these issues
Source: USDA; CDC; A. T. Kearney analysis
7
Grocery Supply Chain Support
Additional Donation Opportunity in Existing Programs (B pounds)
Current Donations
Opportunity
1.5
1.0
1.0
0.4
0.5
0.3
0.5
0.4
0.0
Produce
Donation Program
Source: Feeding America
Manufacturing
Donation Program
0.2
Retail Donation
Program
8
US Food Waste = 78B lbs
Annual US Food Waste Generation(1) (estimated, B lbs)
Procurement
All Other
Sources(2)
Uncooked food waste
that occurs along the
supply chain
12.0
27.0
50.8
Foodservice
Preparation
4.9
33.9
Plate
Waste that occurs at
the site during
preparation
Waste of food that has
already been served to
consumers
(1) Post-recycling
(2) Consumers, grocery channels, etc.
Source: EPA; www.zerowasteamerica.org; BioCycle; Industry interviews; ATK analysis
9
Evaluation Framework
The Three P’s of Food Waste
Food Waste
Procurement
Description Uncooked food waste that
occurs along the supply
chain
Example • Excess
Reasons for • Damage
Waste • Test
Source: A. T. Kearney analysis
Preparation
Plate
Waste that occurs at the
site during preparation
(includes trimmings)
Waste of food that has
already been served to
consumers
• Process design
• Lack of training
• Quality requirements
• Incentive to “push” food
• Portion sizes
• Lack of tracking
10
80% of food service waste from
Restaurants
Estimated Foodservice Waste
by Industry (billions of lbs)
Wholesaling
(3.4 B)
Procurement
Preparation
Preparation
Procurement
Procurement
Institutional
(4.2 B)
Plate
Preparation
Hospitality
(2.2 B)
Restaurant
(40.7 B)
Procurement
Plate
Plate
Solutions ‘out of the box’
Hotels: Companies donate
part of food purchase
Institutional: Go “trayless”
in cafeterias
Caterers: Passengers
donate value of their meal
• There is excess food at
banquets & conventions,
which typically is discarded
• Students at Northwestern
University weighed their
plate waste to quantify
their waste stream
• On average, 1-2 first class
meals are thrown away at
the end of each flight
• Companies can prevent
plate waste by reduce their
food purchase (e.g.
decrease menu options,
smaller tray sizes, etc)
• Trays were then eliminated
trays at select cafeterias,
limiting customers from
taking excess food
• Anecdotal evidence
suggests that “going
trayless” reduced plate
waste by 30%
Source: Industry interviews; A. T. Kearney analysis
• Airlines could provide firstclass passengers the
opportunity to refuse their
complimentary meal in
lieu of a donation to
Feeding America
• Monetary savings can be
donated to FA to purchase
food for the hungry
12
Partnership Strategies
“Quantify”
“Reduce”
“Donate”
Identify and
Quantify the
Waste
Explore Ways to
Reduce the Waste
Recover and
Donate the
Remainder
• Where is food waste
occurring?
• How can we reduce the
amount of waste?
• Is the waste edible? Can it
be donated “as is”?
• Why is there waste?
• How much waste is there?
• How much waste will
remain?
• Who owns the waste?
• What kind of waste is it?
• If not, are there steps that
can be taken recover the
waste?
• What is the cost of these
steps?
Strategies for waste reduction and donation can live in harmony,
as the common enemy is dumping and landfill waste
Source: A. T. Kearney analysis
13
Goal: 0 Landfill
Reduction Strategy
(Quantify, Reduce, Donate)
Desired Change in Waste Flow
Identify Waste
Decrease
Product
Losses
Maximize
Saleable
Product
Capture
Edible
“Waste”
Reduce
Inedible
Waste
Dumped
Donated
Maximize
Donation
Source: A. T. Kearney analysis
Minimize
Dumping
Increasing Time
14
Need vs. Opportunity
Secondary market is increasingly important revenue stream for
manufacturers but impacts donations
…and macro trend validated at donor
levels through interviews
Non-Produce National Pounds over
time
Our lean enterprise initiative is really taking
hold
Pounds (MM)
400
300
The business environment forced us to
embrace secondary markets
200
We’re selling to secondary market 2x what
we donate
100
Recession has driven us to tighter production
plans and reduce new product introductions
2004
2005
2006
2007
2008
2009
2010
2011F
0
Fiscal Year
15
YTD FY11 June 1, 2011
Waste solution opportunities
Through out the Supply Chain
Dry, frozen, refrigerated
Short-coded
Past code with approved
extensions
Discontinued
Mislabeled
Unlabeled / brites
Test product
Promotional Items
Private label/ licensed
Packaging changes
Line start up waste
Reformulations
Seasonal Items
Overruns
Customer returns
Food service sizes
Bulk Product
Low weights/short fills
Ingredients
Boxes, Containers,
Shelving & Equipment
Benefits of Donating
•
•
•
•
•
•
Waste reduction
An inventory management solution
Potential tax benefits
Centralized donation process; local community support
Security and integrity of brands
Savings in storage and transportation
•
•
•
•
Savings in dumping fees: $4,000 per truckload!
Cost-free way to handle unsaleable product
Sophisticated tracking, reporting and recall procedures
Supports ‘green’ initiatives and corporate commitments to
sustainability
Join in the FIGHT
Institute Corporate Donate do not Dump policy
• Clear process for all employees
• Early identification of unsaleables
• Immediate action to donate
• Extended code dates on consumables
Engage locally with your community food bank
• volunteer
• event sponsorship
18
Thank you
Steve, a former shipping and receiving associate, and his wife
both worked two jobs to support their daughters. But that was five
years ago. The couple now relies on unemployment benefits to
feed 15-year-old Katie and 10-year-old Olivia. Until things turn
around, they turn to their local food shelf for assistance. This
agency of the Second Harvest Heartland food bank in St. Paul,
Minn., provides them with the food the parents need to keep their
family fed. There’s a Steve in your own community.
www.feedingamerica.org to see how you can help.