For food manufacturers, cutting down on food loss is a win-win
Last year, food waste cost the Canadian economy $49 billion.
A significant amount of this waste occurs at the manufacturing stage, and of that, a good deal is recoverable — meaning it can be eaten by humans, upcycled, or recycled in some way.
Perhaps no one feels the economic effects of food loss quite like manufacturers. For Canadian food manufacturers, food loss is expensive. Not only does it drain profits — but it also poses a significant environmental burden.
This article explores the consequences of recoverable food loss on manufacturers, and identifies the economic and environmental opportunities of diverting this food into the circular economy.
Food waste: Loss vs. waste
Although food waste, which occurs at the consumer end of the food cycle, is a broader concern, the focus for manufacturers is on minimizing food loss during production. Every gram of food lost at the manufacturing stage represents not just money lost, but also greenhouse gas emissions created when the food breaks down in landfill.
How much food are manufacturers losing?
According to a 2022 report from Second Harvest, 3.2 million tonnes of edible surplus food is created in Canada each year by food manufacturers — and that’s just the food fit for human consumption. Plenty more appears in landfill despite meeting the criteria for other upcycling and recycling opportunities.
What food loss costs manufacturers
The financial cost of food loss
The financial cost of food loss during production may be a key concern for some manufacturers. Others may not have paid much attention until now, but whether they are aware of the problem or not, many large-scale manufacturers can be losing millions of dollars per year on discarded ingredients that are, in fact, recoverable.
The environmental cost of food loss
Food loss doesn’t just cost manufacturers — it also costs the planet. Every ton of food that ends up in landfill generates about 2.2 tons of carbon-dioxide-equivalent greenhouse gases (GHGs). Specifically, food rotting in landfill emits methane, a greenhouse gas 25 times more potent than carbon dioxide. Globally, food waste emits more greenhouse gases than aviation.
In the past, greenhouse gas emissions may not have been high on the food manufacturer’s agenda. But in the era of tighter ESG regulation and carbon footprint scrutiny, every ton of carbon counts. Manufacturers are already battling high GHG profiles as a result of the energy intensity of production processes; they don’t need to add more in the form of recoverable food loss.
Anything that ends up in landfill carries a corresponding GHG profile, driving up carbon footprints, slowing progress on ESG targets, and exposing companies to reputational and regulatory risk.
So food waste poses both financial and environment or ESG-related risks for manufacturers. But the flipside of risk is opportunity — and the companies that take the lead on tackling food loss will be the ones to reap the benefits.
Step 1: minimize food loss
But despite the enormous costs of inaction, many manufacturers have been slow to address the problem of food loss and the opportunities posed by food recycling programs. Perhaps they are unaware of the financial opportunity of recovering food, have looked into it in the past with little success, or simply don’t know what’s possible for their food loss. Indeed, many manufacturers don’t have a strong grasp of the composition and sources of their food loss, why certain ingredients are lost during production, the economic value of these castoff ingredients in the circular economy.
Faced with the overwhelming task of addressing their food loss, many manufacturers put it in the ‘too-hard basket’. But assessing your waste profile is simple when you work with a waste management consultant to conduct an audit. A waste audit is a formal review of the amount and different types of waste being created by a given manufacturer. Audits can reveal the composition of your food loss, determine its sources, and help to reduce food loss at each stage of production. By reducing food waste, food manufacturers can see a 15-20% improvement in operating costs and a 5-11% profitability boost.
Step 2: Capitalize on the circular economy
Minimizing food loss can improve the bottom line, but manufacturers may be unaware that their discarded food has value that can also improve the top line. In the circular economy, discarded food products can become so much more than landfill. Food can become a source of fuel and energy in the form of biofuels and biogases; it can be transferred into organic fertilizers, turned into fibers for textiles, molded into medicines and pharmaceuticals, and even converted into bioplastics and packaging.
In particular, foods such as bakery goods, crackers, potato peels, donuts, and more can become nutritious starting ingredients for high-quality animal feed. This process generates additional revenue for food manufacturers (PRI clients receive $50-100 in value for every tonne of bakery food waste upcycled), reduces their GHG profile, and reduces demand for land (and its associated GHG emissions) needed for growing grain for animal consumption.
PRI Environmental can help you minimize food loss and increase profits
PRI Environmental helps food manufacturers in Ontario and Quebec recycle bakery goods into high-quality animal feed. We conduct process audits to determine how your company operates and where waste is created, as well as opportunity assessments, which offer a detailed look at how you can bring your business into the circular economy and capitalize on overlooked revenue streams.
When we work with clients to minimize food loss, we’re not just diverting waste from landfill and lower harmful emissions; we’re creating something new from the waste that will help provide food for animals across the country.
Interested in learning more about PRI Environmental’s waste recovery options? Contact us today.