Hotels, foodservice companies and retailers that implement food loss and reduction schemes generate returns of between five and 10 times their investment, according to data published by the World Resources Institute (WRI) and WRAP. The experts analysed nearly 1,200 business sites across 17 countries and more than 700 companies across foodservice, retail, manufacturing and hospitality.
Their aim was to estimate the “benefit-cost ratios” of taking action to reduce food loss and waste for a country, a city and a large number of companies.
They found that 99% of the sites earned a positive return on their investment in food waste reduction.
The team also discovered that “half the business sites earned greater than a 14-fold financial return on investment”. In other words, for every £1 invested in food loss and waste reduction, the median company site realised a £14 return.
“Company sites with the highest returns tended to be restaurants,” the authors of the paper noted. “Hotels, foodservice companies, and food retailers tended to have ratios between 5:1 and 10:1.”
“The underlying logic is relatively basic,” they added. “It takes financial resources to grow, harvest, store, process, transport, market and purchase food. Therefore, when food exits the food supply chain before reaching its intended use – consumption by people – some entity is not recouping a return on the investment it made.”
Research published last week showed Europe wastes 88 million tonnes of food every year, with more than a third (36%) arising at retail, manufacturing and foodservice level.
As well as the positive ROIs, the experts identified a nonfinancial business case. These relate to food security, waste regulation, stakeholder relationships and “a sense of ethical responsibility”.
Indeed, Nestlé has suggested reducing food loss not only secures its supply of raw materials but “will also have a positive impact on society by supporting rural development, water conservation and food security”.
Tesco boss Dave Lewis has also previously alluded to “a bigger goal [in tackling food waste,] which is how we might make a contribution to that massive inequality that exists already in terms of those who have food and those that don’t”.