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And the problem is only growing: BCG estimates that by 2030 annual food loss and waste will hit 2.1 billion tons worth $1.5tr.
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 percent 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 $700bn 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. 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 $700Bn 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). 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.
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