McKinsey Quarterly 2023 Number 1

the on-farm protocols for food loss measurement readily available online. Set targets for both your own company and suppliers, and integrate food loss visibility and reduction into incentive structures. Stay aware of—or, even better, participate in—industry efforts to harmonize reporting and certification standards. Forward-thinking companies are actively engaging with suppliers to map food loss hot spots in the supply chain and to understand their causes. Some companies are developing (and providing public access to) an integrated database of suppliers’ performance across locations. Others are conducting an annual external audit or requiring third-party assess ment of suppliers’ performance on this issue. A few best-practice companies are using - digital technologies, like blockchain, to make products traceable at every stage along the journey from farm to store. Don’t wait for perfect data; just gather enough information to sense the scope of the problem. Generating awareness of how much loss happens—and where—is an important first step in creating urgency for change. Decide what to do—and do it Our research revealed four levers that retailers and food manufacturers can pull to make meaningful impact: minimizing loss during production and processing, minimizing loss during transit, selling more of what is produced, and structurally preventing loss. Each lever comprises a set of potential actions. Some will require significant investment and new ways of working. All will pay off, resulting in not just a reduction in food loss but also a more efficient value chain, EBITDA improvements, and lower CO 2 emissions. No single combination of levers will be right for every company; each stakeholder will need to select the mix that best fits its particular context. Regardless of the chosen course of action, each company must fundamentally change how it interacts with other stakeholders in the food ecosystem. The following are specific ways in which manufacturers and retailers can go against business-as-usual approaches and make big strides toward addressing food loss: • Work with suppliers to better match supply and demand. This will require much more communication and transparency among the players in the value chain. Retailers will need to give farmers more information about expected demand; farmers will need to give There is enormous potential to sell more of the food that farmers produce. Food that would otherwise be lost can be turned into new products and thriving businesses.

McKinsey Quarterly 2023 Number 1

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