The world is experiencing a food crisis driven by a number of factors, including food waste, a shortage of goods and increased costs.
Take wheat. Cultivated on every continent except Antarctica, it’s a key source of nutrients for an estimated 2.5 billion people. Now, a shortage of grain is straining global food supply and contributing to the risk of hunger around the globe.
Russia’s war on Ukraine alone eliminated 25% of the world’s wheat supply. Prior to the invasion, Ukraine — considered Europe’s “breadbasket”— had been producing enough to feed 400 million mouths. The World Food Programme now estimates that the ripple effects of the war could increase the number of people facing severe food insecurity by 47 million in 2022.
Another factor impacting the wheat shortage is climate change, with drought in some of the world’s biggest wheat-producing regions dampening supply. A drought in the southern U.S. plains, known as America’s “wheat belt,” has cast doubt over the upcoming winter harvest, while another has impacted crops in India, the world’s eighth-largest wheat supplier. Additionally, China, the world’s largest producer of wheat, announced its winter harvest was expected to be the worst on record after a heavy rainfall delayed planting.
Food Prices Are Soaring
The war and climate have also contributed to spiraling wheat prices. Now, all food categories are experiencing surging prices and inflation. In March, world food prices hit a record high, jumping nearly 13% and increasing the severity of food insecurity for 811 million people around the world. The jarring rise in prices is rooted in numerous issues spanning the globe. Pandemic-related disruption remains, as restrictions on movement continue to negatively impact production and trade. At the same time, increased transaction costs caused by the labor shortage are still being passed down to consumers. The world’s food supply is still being outstripped by demand, which continues to drive prices up, and unrest in other parts of the world have worsened agricultural output and production globally.
While inflation and food shortages persist, food waste compounds the issue. The 2021 RTS Food Waste in America Guide indicates that while the world wastes about 1.4 billion tons of food every year, the U.S. discards more food than any other country in the world — nearly 40 million tons every year. That’s estimated to be 30%-40% of the entire U.S. food supply, equating to 219 pounds of waste per person.
This level of food waste presents a unique opportunity for supply chain leaders to reevaluate how their supply chains are tracking and managing fresh food and goods. Food waste is often viewed as the cost of doing business, but in the face of global famine, a new approach is paramount.
According to the USDA Economic Research Service, 40% of food waste occurs before products even reach retailers and consumers. Food waste occurs across all ends of the supply chain, stemming from issues including improper storage during transportation, inaccurate order sizes and prioritizing appearance over nutrition at the retail level. The food industry has recognized that more needs to be done. Walmart has embraced selling "ugly" apples, while startup Do Good Foods is collecting unused food from grocery stores and food banks and turning it into animal feed for chickens, which it then sells for human consumption. The company launched its first product, Do Good Chicken, with select Philadelphia retailers this year. Each poultry product prevents four pounds of food waste from being sent to a landfill, eliminating the generation of three pounds of greenhouse gases.
It’s not just businesses that can make a positive impact on cutting food waste – consumers want to do their part to help, too. A recent survey indicated that nearly half of consumers are actively trying to cut food waste and 62% of consumers are willing to pay more for food and beverage products that are dedicated to stopping food waste.
Better Supply Chain, Better Outlook
The food supply chain is capable of drastically reducing food waste. Significant supply chain reforms, a crucial component of food waste reduction, rely on the adoption of both technology and data standards. Companies can minimize the amount of discarded foods by investing in advanced technologies that can manage inventory, create transparency and better forecast inventory needs. When data is digitized and guided by standards, the sharing of information between trading partners in a common language reduces communication errors, while supporting real-time product information updates so that retailers can make informed decisions about inventory.
Standards such as the Global Trade Item Number of GS1 for product identification help food manufacturers identify and trade items, while providing additional data to trading partners wherever a barcode is scanned. With information about the source and movement of products, the global food supply chain can more closely monitor and trace food to reduce spoilage. Real-time inventory visibility equips organizations to better handle perishable items, ensuring those products’ viability.
Coupled with standards, key technologies — ranging from the internet of things and artificial intelligence to blockchain and 2D barcodes — can be used to further upgrade food supply chain management and reduce waste. Take the case of Strella Biotech. It has been using GS1 standards by tracking serial shipping container code numbers to identify lots of food as they move between trading partners. Doing so makes it possible to tie Strella’s maturity data to certain lots, and thus make maturity-driven decisions such as first-in first-out or first-expired-first-out inventory management. That translates into a major waste reduction revolution for items with limited shelf life.
The startup also recognized that the lack of data on perishables and siloed supply chain partners was contributing to food waste. Now, Strella Biotech uses sensors, IoT networks and data analysis to interpret shelf life. Before produce changes in quality, it emits gases that sensors can detect. Stella Biotech then translates those emissions, applies environmental and upstream data points, and analyzes fruit behavior to determine its maturity.
Industry’s transition to data-rich, 2D barcodes on product packaging will also have the potential to assist with food waste. While the UPC barcode has aided price look-up at point-of-sale for the past 50 years, many industries, including food and grocery, have aligned to adopt 2D barcodes by 2027 that will not only provide far more information about products, but also better identify opportunities for sustainability, traceability and supply chain visibility.
While supply chain transparency and digitization won’t give the world more food, they can help bolster data about available supply so it can be redistributed to people in need as fast as possible. Every component of the supply chain needs to work together to reduce controllable bottlenecks and constraints through automation and data sharing.
Melanie Nuce is senior vice president of innovation and partnerships with GS1 US.
Timely, incisive articles delivered directly to your inbox.