Home 9 Impact Economy 9 Blended Finance & Philanthropy 9 Changing the Food Waste System

This month, millions of Americans will sit down to Thanksgiving dinner with friends and family to celebrate the traditional abundance of the harvest, realizing that abundance through endless dishes of turkey, mashed potatoes, stuffing, and perhaps a green vegetable or two. After the celebration, however, when people have lost their taste for turkey sandwiches and other leftovers, much of this delicious food will be unceremoniously scraped into the trash bin. In fact, an estimate from my organization ReFED, a national nonprofit dedicated to reducing food loss and waste, shows that more than 305 million pounds of food will go uneaten just on Thanksgiving Day alone.​

But food waste is not just a Thanksgiving problem – and it’s not just limited to individual households. ReFED has estimated that 35% of food goes unsold or uneaten in the United States, and while a small portion of this surplus food is donated to people experiencing hunger and more is recycled, the vast majority – 54 million tons, or 24% – becomes food waste. Unsurprisingly, the EPA estimates that food is the largest item in U.S. landfills, composing 24% of landfill inputs.

Ironically, the Thanksgiving celebration of abundance comes only a week or so after national and NGO leaders will be gathering at COP27 in Egypt to take stock of the world’s progress toward its goals under the Paris Agreement, in an effort to keep the global temperature rise well below two degrees Celsius, and preferably below one and a half degrees. Unfortunately, a new report from the United Nations shows that only 26 of 193 countries that agreed at last year’s COP to be more ambitious with their climate actions have actually followed through.

If food waste were a country, it would be the third largest GHG emitter in the world, after China and the U.S.

So, what’s the food waste connection? When food goes to waste, it has generated greenhouse gas (GHG) emissions over its long journey from farm to table, via transport, processing, packaging, distribution, and cooking. Globally, 8% of GHG emissions come from wasted food, meaning that if food waste were a country, it would be the third largest GHG emitter in the world, after China and the U.S.

In recognition of these facts, Project Drawdown has named food waste reduction as a top climate change solution, and United Nations Sustainable Development Goal 12.3 targets a 50% reduction of food loss and waste by 2030. Food waste is a systemwide problem requiring system-level change to address, and while that may feel like an intimidating challenge to take on, it doesn’t need to be that way. Across the value chain, there are actionable solutions to food waste that simply need the right kind of funding to accelerate them, and there is a role to play for every type of capital in meeting this challenge. ReFED estimates that an annual investment of $14 billion to implement food waste reduction solutions could reduce food waste by 45 million tons each year, which would be enough to allow us to meet our goal under SDG 12.3.

Many of the solutions that live upstream in the value chain – on farms, in manufacturing facilities, in retail locations – are introducing efficiency into historically manual parts of the value chain through data, automation, AI, or other technologies. For example, Afresh provides an AI-enabled solution to retailers to allow them to more effectively match supply with demand in stores, reducing waste. Afresh raised $115 million in a Series B round earlier this year.

Other upstream solutions are allowing food businesses to capture more value from the food that they process or sell. There has been a boom in upcycling companies that are identifying by-products – like spent grain, fruit or vegetable pulps, and rinds – that would not otherwise be consumed and processing them into new food products. For example, Hidden Gems, a grantee of ReFED’s recently launched Catalytic Grant Fund, is building out a reverse distribution system for avocado pits, which typically end up in landfills to the tune of 15 million pounds per week, and creating a platform for avocado seed-derived products, including Reveal, an antioxidant tea drink.

As they grow, these emerging solutions require investment to develop, de-risk, and scale; initially that funding might take the form of impact-first investment or philanthropic grants or from venture capital funds, depending on the business model, and as they scale, from corporate finance. As a prime example of this funding progression, shelf-life extension has emerged as a major food waste solution category, with companies such as Apeel Sciences, Mori, and Hazel Technologies offering edible coatings or ethylene-inhibiting sachets to slow the decomposition process. In their early stages, these companies were funded by philanthropic and impact investors, including the Bill and Melinda Gates Foundation and the Betsy and Jesse Fink Family Foundation, and they have gone on to raise millions from traditional venture investors.

Across the value chain, there are actionable solutions to food waste that simply need the right kind of funding to accelerate them, and there is a role to play for every type of capital in meeting this challenge.

At the end of the value chain, many recycling solutions – like centralized composting and anaerobic digestion – tend to be particularly capital-intensive, typically requiring project finance and introducing additional opportunities for impact-first or philanthropic funders to play a catalytic role. While policy and government support for responsible waste management catches up, these funders can enable the construction of new projects or fund technical assistance for existing facilities that are adopting new technologies to allow them to accept food waste. The presence of grant or low-cost funding in these examples enables the entire project and makes it much more likely to be successful in delivering both financial returns and impact.

If we were to make the $14 billion-a-year investment to scale solutions like these, ReFED calculates that it would result in $73 billion in annual net financial benefit – a five-to-one return. Plus, every year, it would reduce greenhouse gas emissions by 75 million metric tons, save 4 trillion gallons of water, and recover the equivalent of 4 billion meals for those in need. Over ten years, it would create 51,000 jobs.

The benefits are clear, the roadmap is clear, and – because of our connection to the food system – each of us has a role to play in realizing this vision. This November, as you celebrate the harvest and enjoy the bounty of delicious food that it permits, pay it respect by considering the long supply chain that delivered it to your plate, the emissions that it generated, and the edible food that inevitably was lost along the way. Celebrate your food by committing to changing the system that allows so much of it to go to waste.

Caroline Vance serves as ReFED's Capital, Innovation, & Engagement Director, working to drive more investment into food waste. She has worked in impact investing at Deutsche Bank and currently serves on the Board of Upaya Social Ventures. She is also a term member of the Council on Foreign Relations.

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