Environmental and Economic Damage: The Negative Externalities of Food Waste and Modern Solutions


Food waste, the throwing away of perfectly safe and edible food, is a multilayered problem. As a product of the interconnected business dealings between networks of farms, production facilities, markets, and restaurants on local, national, and even international levels, it has been historically difficult to locate the points of breakdown and solve the problem of food waste. From crops left unsold on the farm to food lost in manufacturing & transportation to products unused due to the appearance to large sums of uneaten food thrown away at homes, grocery markets, and restaurants, food waste plagues every aspect of the industry.

The FDA reports that an astonishing 30-40% of the food supply is wasted each year in the United States. This $150 billion-plus problem is hard to accept since, in 2020, over 38 million Americans were without consistent access to food. Simply put, while American homes and restaurants throw food away, millions of their fellow citizens are suffering as a result of food insecurity. To this point, California recently passed a law making it illegal to throw food away to combat the widespread nature of this issue. Unfortunately, this problem is not unique to America as food waste is a global issue.

Food waste is a particularly pernicious phenomenon, especially considering how many environmentally detrimental emissions are released at each step in the process. The food industry is responsible for 26% of global greenhouse emissions. This large sum is already unfortunate, however, its effect is compounded since 50% of habitable land and 70% of freshwater withdrawals are used for agricultural purposes in support of the industry as well. Additionally, the prevalence of factory farming and large-scale gasoline-powered transportation adds to the food industry’s annual greenhouse footprint.

As many regions in the world continue to suffer from weather disasters inflamed by climate change, the issue of food waste is as topical and important as ever. While the public and the media are starting to pay attention to how the food industry intersects with our environmental problems, it has not yet received the attention it deserves. Instead, debates over plastic straws and airline travel – while an important part of a holistic environmental policy – clog up the public zeitgeist. This is unfortunate as many people do not even realize that the “carbon footprint of food waste is greater than that of the airline industry,” according to the Washington Post. While it is a shameful phenomenon to throw out perfectly edible food as people throughout the world are hungry, it is particularly shameful considering how much damage we inflict on the environment to grow, produce, and deliver these ingredients just for them to end up in the trash.

Less catastrophically but still damaging, food waste is also responsible for many restaurants going out of business. As restaurants are still recovering from the effects of 2 years worth of COVID-19-related lockdown and social distancing laws, these businesses need to save every dollar they can. This is especially true considering how it is notoriously difficult to make it in the restaurant industry in the first place. Many people would find it surprising to learn that even successful restaurants use less than scientific methods when implementing their food supply purchasing strategies. From mom & pop shops to large franchises to 5-star restaurants, the industry has hardly kept up with innovations in data analytics.

Although it may seem harmless in the grand orchestra of restaurant operations, throwing out a 20-cent ingredient adds up at scale. Studies show the industry spends around $162 billion in food waste-related costs annually. Surprisingly, this phenomenon is rampant in larger corporate brands as there are numerous layers of bureaucracy to get through once a store manager realizes they do not have the proper amount of ingredients or are wasting supplies. From a purely business perspective, this is unsustainable and counterproductive to long-term success.

Fortunately, as technology continues to advance and positively disrupt all sectors of the international economy, the restaurant industry will eventually follow suit. A growing number of large food conglomerates and small restaurants are leveraging data analytics tools to evolve their old-school ingredient supply management strategies.

AFresh, one of the leading forces behind this movement in grocery retail, just raised a massive $115 million Series B round. Powered by artificial intelligence, AFresh helps eliminate the food waste problem by helping grocers intelligently manage their fresh food inventory. Currently, they have partnerships with grocers in over 3,000 stores in 40 states. Their most recent round of fundraising makes it clear that the investment community believes in this technology just as much as the grocery retail industry does.

Similar to how AFresh is disrupting the grocery retail industry by helping grocers reduce food waste as well as save money, ClearCOGS is threading the same needle, but in a different industry. ClearCOGS is another leading force in the movement to reduce waste by providing innovative and modern solutions for restaurants. ClearCOGS is an artificial intelligence company that is tailored specifically to help restaurants use data to reduce waste and operate more efficiently.

This is in contrast to the many tools that are focused on reporting analytics and sales forecasting. For busy restaurant owners and operators, this model does not work. This is precisely why ClearCOGS’s proactive solution — sitting on top of the decision management layer to offer solutions for inventory management, optimizing food stock & prep, and decreasing waste — is transforming the industry

To this point, Wampler states, “We want to empower restaurants to make proactive, data-driven decisions. Instead of reacting to the world around them, we want to give them the tools to proactively grapple with the opportunity cost of their decisions…like weighing stockout vs. waste – among others.”

While it is difficult to grapple with the sheer scale of how much food is wasted – unnecessarily – across the globe, the issue is slowly getting the attention it deserves. As visionary entrepreneurs use new technology to pursue moral missions, there is hope yet to solve this problem. Considering the way technology has helped solve complex problems in other industries, there is reason to believe that these new data-driven companies can help the food industry as well.

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