McKinsey Quarterly 2023 Number 1

Since food loss happens primarily at the farm, what can food manufacturers and grocers do about it? Quite a lot.

Our research revealed that some food loss results from exogenous factors, such as weather events, or suboptimal practices within a spe cific stage of the supply chain, such as poor equip ment maintenance—but some loss is linked to - - the interdependencies and interactions among the players in the value chain. Growers may overproduce because they are uncertain about market demand, while manufacturers and retailers often don’t have much transparency into supply. Stringent customer specifications can lead to excessive postharvest outgrading. Most procurement contracts don’t create incentives for reducing food loss. Solving the food loss problem will therefore require fundamental changes in the ways that stake holders work together. For tomatoes alone, the - potential impact is more than 40 million tons saved every year. Globally, CO 2 emissions linked to tomato loss would fall by 60 to 80 percent. And if this can be done with tomatoes, it can be done with other food categories as well. How companies can turn food loss into big wins Since food loss happens primarily at the farm, what can food manufacturers and grocers do about it? Quite a lot, it turns out. An effective action plan would entail, first, establishing a baseline and setting targets; then system atically developing and implementing - initiatives; and, finally, putting in place the enablers for lasting change. Ultimately, addressing food loss will require mind set shifts by all stakeholders. Food manufacturers - and retailers will need to see food loss as a result of inefficiencies and missed opportunities across production, procurement, R&D, the supply chain, and sales—not as an inevitable cost of doing business or a niche topic that concerns only the sustainability department.

McKinsey Quarterly 2023 Number 1

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