A Rise in Food Prices Could Stem the Tide of Food Waste
During this summer when the news channels were repeatedly showing images of corn drying in the fields due to the drought, another news article told a very different story. One that is not seasonal yet has reached epidemic proportions in the US — food waste. This particular article about consumption and waste caught my attention. It highlighted a report by the US National Defense Resource Council which found that an average family of four throws away food worth about $2,275 each year. Despite all the grim statistics showing how much food is wasted at restaurants and what the total food waste impact is on methane and carbon emissions, I found the most important sentence in the whole article to be: “The relatively low cost of food at retail is a major factor in household food waste.”
Food’s Long Journey
So, who is to blame? The article puts a lot of emphasis on portion control and consumer behavior, but I believe strongly in the laws of supply and demand and would therefore suggest that the food and consumer goods manufacturers have an important role in this problem. The food business, in general, is typically a place of small margins. There are a lot of middle men involved in a product like a candy bar. Starting with a cocoa farmer, a pound of cocoa beans travels from Ghana, is transformed into cocoa butter, powder, and liquor, then is shipped a lot of different places to be added to butter and sugar and nuts and other flavors, and is then packaged and shipped again. It is then bought at a shop after school by a hungry teenager who eats it, puts the wrapper in the garbage (hopefully), and goes home to catch news snippets about the epidemic of obesity in children.
Adding the Cost Back In?
All along that supply chain, the margins are small. There are so many different stops along the way that, overall, there are a lot of places where profits are made and costs are incurred. The retailers – the ones with the most direct contact with consumers – have squeezed this supply chain so much over the past 30 years to offset their own tiny margins, that it feels like most of the players involved are staring frozen into the incoming headlights of economic ruin and don’t know where to turn next. Think about that same candy bar and imagine that at each stage along the supply chain, one percent of the cost is added back in. While it’s true that it’s likely that the executive suite at each business would walk away with bigger paychecks, it’s also true that there will be more resources available to all the players along the supply chain. The possibilities for innovation, environmental impact reduction, creative thinking and experimentation, and the development of healthier (more socially responsible) foods are endless.
Higher Food Prices and the Consumer
And what would that mean to the consumer? It would clearly mean more expensive food. It would mean that the teenager might buy a candy bar once or twice a week instead of every day. It would mean that the portions on his dinner plate would be smaller. It would mean that the portions of his French fries in the school cafeteria would be smaller. It would also mean that his mother would likely make the most of the $2,275 that she would normally throw away per year and buy, store, and cook food with a lot more care. She might also go as far as to demand higher quality for the food that she’s paying so much more for. Perhaps she’ll demand better tasting food with more nutrients for her children to grow on.
And for those who currently live in poverty and live with access to only cheap, badly made food, the pressure might eventually force them into small community subsistence farmers feeding themselves and their children on homegrown beans, tomatoes and fruit grown on the balcony, yard, or in the empty lot down the street.
Some in the industry say that food manufacturers look at food waste in the same way as the home cook that buys too many vegetables and lets them go soft in the fridge instead of taking a few minutes to throw them in a pot to make soup. The flour that is wasted on the factory floor would not be ignored should the price of wheat rise significantly.
However popular this perspective is amongst scientists and NGO agriculture and resource management specialists, this take is not going to make me very popular with most food companies, I know. And it is not going to go down well with most consumers, either. Who wants to pay more for anything?
But at some point, we’re all going to have to face the reality that the current situation with our food – whether you’re a farmer, a manufacturer, a retailer, an executive and/or a mom – is unsustainable and something needs to change. A blanket rise in food prices is an excellent place to start.
Sara Pax is the president of Bluehorse Associates, a developer of innovative environmental sustainability metrics solutions built for the food and beverages industry featuring the Carbonostics suite of user-friendly, web-based applications delivering carbon & energy accounting, product carbon footprinting, product portfolio analysis and lifecycle assessment. Visit: www.carbonostics.com.
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