The Crisis of Food Waste at Consumption
The crisis of food waste
Production of food is resource intensive, requiring huge amount of energy, chemicals, arable land, and water. Alongside climate change, excessive food waste only further aggravates food insecurity regionally and globally. If food loss is a country, it is ranked third behind China and United Stated as one of the largest CO2 emitters. Food waste itself constitutes to approximately USD$500–830 billion of economic losses per year globally. Food waste tends to occur more on the production (supply) side where economic prosperity is low; while food waste tends to occur more on the demand side where economic prosperity is high. In the food recovery hierarchy, the most important element for tackling food waste is to address surplus as observed in the food recovery hierarchy indicated below. Activities further down the pyramid become increasingly less favourable as the environmental footprint increases.
While a lot of focus has been given to the optimisation of production for the reduction of food waste; the same cannot be said about tackling of consumption waste.
What makes tackling of consumption waste difficult compared to supply side waste?
Measurement of consumption waste is difficult since every consumer has to measure their food waste behaviour, be it in the house, dining out, take away, or on-the-go. Bringing a weighing scale everywhere they go is not practical and very cumbersome. Self-reported estimates of their food waste behaviour tend to be qualitative rather than quantitative, and may be skewed by their own internal bias, shame, or oversight.
Directly measuring diners’ left-overs at dine-in food outlets can also be problematic. If measuring the left-overs is the responsibility of food outlets, they typically do not see this measurement as an activity that can generate revenue, nor cut cost. Rather, their argument is that this measuring activity increases operating expenditure, since extra staff has to be allocated which more than offset savings of raw materials used. Even if the design of the measurement can be cost-effective which leads to a feasible solution to food waste at consumption, there is still an issue with scalability. Different dine-in food outlets, especially if they are not under similar franchise, have different kitchen management systems that have been specifically tailored to their own food menu. When management systems are different, transfer of best practices are thus not easily scalable.
What is the impact of consumption waste on the environment and society?
In South East Asia, an average person wastes 150g of food for each of his/her meal (the numbers are even higher in increasingly richer economies). The environmental impact of 150g of food is approximately 250g of CO2 emission, 32 minutes of electricity for one household, and 17 litres of water wasted. Every 3–4 days, the waste from consumption that each person generates would be enough to FEED ONE HUNGRY PERSON!
The most common type of food that is wasted at consumption is carbohydrate-type staple food such as bread, potatoes, noodles, and rice. The second most common type of food waste at consumption includes salad, fruits, and vegetables.
Why food outlets should utilise Corporate Social Responsibility (CSR) to reduce food waste at consumption?
Implementing CSR with a focus on reduction of food waste at consumption effectively kills two birds with one stone, they are brand building, and reduction in operating expenditure. Food outlets can cut back on resource use thus allowing for more cost effective use of their resource. As our economies become ever more dynamic, pressure from competitors will drive organisations to pursue CSR as a sort of competitive advantage as people increasingly start to appreciate a brand’s social impact. Through CSR initiative, food outlets can also serve to educate their diners about why and how their consumption habits can become more sustainable on the environment and society.
Thus, should CSR and marketing be a combined approach?
Yes, CSR and marketing should be viewed in tandem. CSR without a marketing element is just merely self-talk and self-praise. This would fail miserably at executing and scaling social good; while marketing without a CSR element is just amoral capitalism. CSR marketing is capitalism with a conscience. Marketing has long always used behavioural economics or behavioural science to increase sales and revenue by increasing the conversion rate of would-be buyers to committed buyers. It is time that behavioural economics be applied for social good which has no direct financial equivalence. The long term impact of the reduction in food waste is increase in food security that is beneficial to both food sector and consumers in the long term. This CSR marketing approach can also be referred to as “nudge”. Jessica Marati Radparvar highlighted the important behavioural change insights to embed CSR into one’s business outreach. The learning and behavioural change should be intuitive with least amount of cognitive load. Cognitive shortcut is what marketing is good at, as it makes behavioural change seemingly effortless. Otherwise, in the age of information overload, many of us are too busy personally and professionally, that unless there is a viral video shared within our social networks, it is hard to be constantly aware of the struggles people around the world are facing daily.
What are the typical falsely held assumptions that dine-in food outlets have against CSR initiative?
“First assumption: Food businesses worry about putting off diners from coming back again to their restaurants when businesses redesign their food menu to account for food waste reduction. Typically, food businesses would think that their diners do not like paying the same amount for reduced portion of food in the name of reducing food waste.”
Rebuttal: We believe that the above is a result of poor choice architecture. A good example of a food business that has implemented a good choice architecture is a restaurant (in Malaysia). This restaurant knows that rice is most common food waste in its restaurant. To complement their main dish while incorporating CSR-themed food waste reduction, they give diners the option to have the usual full bowl of rice, three quarter of a bowl, or half a bowl. Their innovative endeavour in 2018 has resulted in 240,000 finished meals. As a consequence, the proceeds from the savings (amounting to USD$6000) on raw material achieved by this restaurant were donated to food aid. This would not have been achievable without their diners’ co-participation who were empowered by the implementation of good choice architecture. As of 2019, their restaurants are still full of diners during meal times.
“Second assumption: Measuring food waste incur operational overhead that does not contribute to operational efficiency in the kitchen nor increase revenue.”
While we are aware that most food outlets are already operating at really tight margin at net profit margin of approximately 5%, we believe that there is cost-effective approach whereby there is no need to increase operational overhead, if data collection is properly planned and executed. Food waste can be measured indirectly by production manager (production manager always need to keep track of stock) or financial auditing (for business to remain legal) by the amount of stock that food outlets hold for every unit of revenue generated. For example, if a food outlet needs USD$1000 worth of potatoes for every USD$10,000 revenue generated; with CSR initiative, a food outlet may only need USD$600 worth of potatoes for every USD$10,000 revenue generated. That would have meant that through indirect measurement, USD400 worth of potatoes are wasted for USD$10,000 revenue generated without CSR initiative.
Moving forward
Different outlets have different menu whereby CSR-driven redesign of food menu for the reduction of food waste will not be an endeavour that is easily scalable. However, one thing is certain, it is easier for franchise-type food outlet to scale innovation of food menu due to similarity in business model and food menu. Also, for scalability of best practices in food waste reduction at consumption, we would advise on focusing on the most common types of food waste which are carbohydrate-type staple food and plant based.
Would behaviour economics/behavioural science be a prospective tool? Nudge has become more common in the recent years, being applied in the US and UK to improve public health services and governance policies. In Spain, it has led to increase organ donation from the public. Initial study by a Norwegian team indicates that it can be successful when applied to food waste reduction. They successfully reduced waste at consumption by 20% just by reducing sizes of plates. We are optimistic that a scientific nudge can be scaled globally to reduce food waste at consumption for the future of our food security.
“This article was written with research input from Shirley Chiu. We would also like to thank Cass Sunstein and Richard Thaler as we were inspired by their book, Nudge: Improving Decisions about Health, Wealth, and Happiness to investigate its application in food waste reduction”
