Food waste reduction in the supply chain
With some 1.3 billion tonnes of food wasted globally each year, almost one third of all food produced, reducing food waste has become a key sustainability objective for many businesses and organisations. It is estimated that the cost to the Australian economy of this waste is about $20 billion each year. The triple bottom line benefits for reducing food waste are clear; lower costs through greater efficiency, reduced environmental impact and better prices for consumers.
However, reducing food waste has proved to be a difficult challenge, as it is often hard to conceptualise and define why and how food is wasted, particularly across the entire supply chain. For example, debate abounds regarding the inclusion in food waste of pre-harvest food, or the inclusion of food for non-human consumption, such as animal feed or energy production. This is further impacted by the reductionist focus of existing literature, which typically examines food waste at a single point in the supply chain, resulting in a lack of understanding regarding business-business interfaces and the tensions that inhibit the ability of a supply chain to reduce overall food waste.
The Australian National Food Waste Baseline indicated that of the 7.3 million tonnes of food waste produced in 2016/17, primary production was responsible for 31% of waste, manufacturing for 24%, consumers for 34% and retailers only 3%. However, while retailers are only directly responsible for 3% of waste, commercial mechanisms deployed by retailers, such as restrictive food standards, result in waste ‘up’ and ‘down’ the food supply chain.
To address this issue, this paper uses paradox theory, exploring contradictions and ‘invisible’ tensions within the supply chain to explore what paradoxes are preventing the reduction of food waste.
Method and sample
This research uses data from semi-structured interviews with individuals (N=40) holding senior positions in the horticultural industry across the supply chain (from farmers to retailers to food rescue). This data draws on two data sets: the first set (N=12), conducted in 2017, focusing on retailers, national/state grower associations and food rescue organisations. The second set (N=28), conducted in 2019, focused on growers, processors, wholesalers and waste management with a particular emphasis on large growers and processors that sell to Australian supermarkets.
Data was analysed via thematic analysis and triangulated through document analysis of government and stakeholder publications (across policy, regulation and management).
Key findings
Four macro-level paradoxes emerged from data analysis: 1) the Policy Paradox; 2) the Market Paradox; 3) the Responsibility Paradox; and 4) the Marketing Paradox.
The Policy Paradox
This first paradox relates to the inherent tension in production targets that call for a doubling of food production, while sustainability targets call for a halving of food waste. While both are reasonable targets to address industry and environmental concerns, taken together they result in food waste targets becoming exponentially more difficult to achieve. Interview participants in particular highlighted the paradox of government policy promoting higher output levels at the farm level at a time when excessive waste could be limited to increase effective output.
The Market Paradox
The second paradox relates to the impact that just-in-time logistics has on distorting the supply and demand factors that inform production at a farm level. The perishability of food as a commodity results in a finite window of time in which the product can make its way through the supply chain and be consumed. Producers understand this and overproduce to ensure adequate supply. Retailers provide additional signals to overproduce as well, such as over-ordering produce to ensure fully stocked in-store displays regardless of fluctuating customer demand. Unfortunately for producers, it is common for big retailers, such as supermarkets, to not fully fulfil their obligations to purchase this requested produce when customer demand falls.
This highlights another aspect of tension in the market paradox, namely the power imbalance between producers and food retailers due to market concentration. Many suppliers are reluctant to raise concerns regarding this imbalance due to fear of losing business, which reduces visibility and transparency of waste within the supply chain. This may result in retailers being insufficiently aware of the impact their logistics are having on food waste up the supply chain.
The Responsibility Paradox
The third paradox relates to the complexities of attributing responsibility for waste in the supply chain, with producers blaming retailers for unrealistic food standards and retailers defending their specifications as reflective of consumer demand. Participants were mixed in their attribution, although most agreed that consumers were indeed demanding high-quality produce. Secondary research highlighted that while consumers were willing to purchase fruit and vegetables outside of size and shape standards, they were much less inclined to purchase food with even minor blemishes. Competitive pressures also amplify this paradox, as no retailer wants to be the first to reduce food standards and then be attacked for lowering quality.
The Marketing Paradox
The fourth paradox relates to how retailers’ marketing and CSR practices may shift responsibility for waste up and down the supply chain. While ambitious 0% food waste targets have been set by many retailers, many of these targets only look at the retailer’s own practices. Participants highlighted that retail decisions such as modification and selection to reduce waste (such as “top and tailing” sweetcorn) or packaging/bundling produce in larger quantities may reduce waste at a retail level but push waste up and down the supply chain to farmers and consumers.
Participants from food rescue organisations also highlighted that much of the produce donated via CSR programs is at the end of life and needed to be sent to landfill anyway. It was also noted that sometimes retailers claimed kudos for food donated by producers who failed to meet their specification, with the suggestion that these practices reorganise food waste rather than reducing it in the first place.
Recommendations
In identifiying persistent and inhernelty intractable paradoxes that lie at the heart of food waste in Australia, this paper highlights the difficulties in employing selective or simple solutions. Rather, it suggests that these paradoxes need to be embraced and accomodated, with food waste decisions made through holistic and consultative perspectives across the entire supply chain. In this way, this research cautions against the somwhat linear and control-based interventions currently deployed by food retailers, suggesting instead that managers deeply inspect B2B relationships and look up and down the supply chain to formulate shared responces to food waste. By being open and reflective of the impact of their practices beyond their own organisation, retailers can demonstrate a macro-level commitment to genuinely addressing a salient consumer issue.
Researchers
More information
The research article is also available on eprints.