The enormous scale of American food waste

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The enormous scale of American food waste

Each year, 30-40% of the food produced in the United States is lost or wasted.

This waste occurs throughout the supply chain, although the majority of it occurs in downstream channels like households and retailers. Globally, 80 billion pounds of food are wasted each year, representing 242 pounds of food per person.

In this graphic sponsored by Global X ETFs, we highlight some of the most alarming facts about food waste in America.

Food Waste Tracking

The following chart, using data from Recycle Track Systems (RTS), breaks down the sources of US food waste.

Category Percentage of total waste (%)
Households 43%
Restaurants, grocery stores, food service businesses 40%
Farms 16%
Manufacturers 2%

Percentages may not total 100% due to rounding.

Surprisingly, households are the biggest source of food waste. One reason for this is people’s habit of overbuying, which naturally leads to large amounts of food spoiling.

Another culprit is the lack of standardized packaging. It’s estimated that more than 80% of Americans throw away edible food because they misunderstand expiration labels. Consumers should note that these labels are do not regulated by the United States Food and Drug Administration (FDA).

The second largest component of food waste is retailers like grocery stores. According to the Food Industry Association, the average grocery store has more than 31,000 items on its shelves. Many of these goods are not sold in time and end up in landfills.

Supermarkets do not want to sell [food] it’s close to the expiration date because customers won’t buy it. Food is still good if it’s approaching – or even past – the expiration date.
– Tom Abinanti, New York State Assemblyman

In 2016, France tackled this problem by becoming the first country to adopt legislation on the prevention of food waste. This law required supermarkets to sign an agreement with food banks to donate unsold (but still edible) produce. Reports pointed out that the amounts of donations increased by 30% the following year.

AgTech and food innovation

The UN predicts that by 2050, food production will have to increase by 70% to meet global population growth. Without improvements to existing supply chains, this increase will lead to much more waste.

Fortunately, AgTech and food innovation play a central role in developing better systems. This includes blockchain-based food tracking, tamper-proof packaging, and in-store sensors that improve inventory management.

Combined with the need for greater food production, this global challenge represents an opportunity for ESG-conscious investors to support the transition to a more sustainable future.

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