As consumers and brands increasingly focus on environmental and social sustainability, more and more food manufacturers are defining goals to tackle food waste during production. Statistics confirm that reducing food waste in food manufacturing companies is a pressing topic: 620 million people worldwide suffer from famine while one third, or 1.3 Gtonnes, of the food produced, goes to waste each year1.
What is more, food waste is a high contributor to climate change: According to the FAO, wasted food products are the highest emitter of carbon dioxide after the United States and China, with a carbon footprint of 3.3 Gtonnes of carbon dioxide1. These figures alone are already dramatic. However, FAO estimates that the global demand for agricultural products will increase further by 50% until 20502, mounting the pressure on our planet’s natural resources.
At iMonitor, we are passionate about reducing food waste and production loss. The reduction of food loss and waste along the global food supply chain is essential to improve the environmental sustainability of the food system3 so that more food can reach consumers while maintaining the same amount of resources used.
Why reducing food waste in food manufacturing companies?
Food waste occurs at any stage of the food supply chain. FAO3 estimates that annually, roughly 14% of lost food worth over 400 billion USD are lost in the post-harvest and pre-retail supply chain stages (storage on the farm, transport, processing, and wholesale). Food manufacturers can, therefore, play their part in making the global supply chain more sustainable.
But implementing efficient and sustainable waste management comes with financial investments in technology and process improvements. Food manufacturers may ask if they will get a positive return on investment on top of the feeling that they have done something good. Because in the end, businesses need to be profitable.
In this article, we are having a closer look at food waste and food loss and what food manufacturers can do to reduce their carbon footprint while reducing production costs and, therefore, increasing their profitability. As you might already guess, the topic is well worth a thought!
What is food waste or food loss?
Food waste or food loss is the reduction of food quantity or quality along the food supply chain3. The FAO distinguishes food loss and food waste, defining that food loss occurs along the supply chain from farmer/grower to before the retail level while food waste occurs at the retail and consumption stages of the supply chain3. Figure 1 illustrates the different causes for food loss and food waste at the different stages of the food supply chain.
In the manufacturing and processing stage, the rejection and disposal of non-compliant products are commonly caused by inadequate process management, human error or technical malfunctions3.
The benefits of decreasing food waste in manufacturing
Food manufacturers do not only serve a good cause but can also increase productivity and profits by reducing food loss in production. According to an analysis of over 700 international food companies conducted by Champions 12.3, 99% of the business sites generated a positive return on investment, with the median food production site realizing a 30% return on investment, or a 14-fold financial return, after investing in food loss reduction5.
Global packaging company Tetra Pak for example was able to reduce product loss by 30%, energy and water consumption by 35% and operational costs by 50% by refining its milk manufacturing technology4.
It is apparent that food manufacturers can benefit financially from reducing food loss during production. Reducing food wate means that manufacturers need to invest less into ingredients or other product components to produce the same amount of output.
Moreover, reducing food loss can also offer intangible benefits to food companies. Consumers increasingly demand that businesses take social and environmental responsibility seriously and are expected to reward those corporates who incorporate sustainability into their operations6. By reducing food loss, food manufacturers can improve their brand reputation and stakeholder relationships.
7 ways to reduce food waste in food manufacturing companies
What can food companies do to reduce food waste in manufacturing? Food manufacturers can implement an efficient waste management system and start monitoring their food loss. Inventory management and continuous monitoring systems used during production processes can help quantify their food loss and the main causes at their facilities. Figure 2 shows the common causes for food loss during processing.
Once the main reasons for food loss are identified, there are several ways manufacturers can reduce food loss during production. Beyond storage and packaging improvements, there are various other actions food manufacturers can take to reduce food waste:
1. Elimination of paper-based process checks
By digitising still persistent paper-based production checks, food manufacturers can collate all relevant data from various locations on the factory floor, offering live and comprehensive visibility. Digitalisation streamlines inter-departmental data flows, leading to increased production efficiencies and shortened release times. As a result, companies can accelerate the time-to-market of their products, meaning that fresher products reach consumers faster, reducing food waste and increasing customer satisfaction.
2. Use of IIoT and location awareness technology
IIoT (Industrial Internet of Things) sensors enable manufacturers to automatically capture data that would otherwise be captured manually by staff. IIoT sensors can be linked to the digital production system to automatically halt production processes, virtually eliminating production errors before expensive batch errors or food safety breaches occur.
The use of location awareness technologies can trigger mandatory staff actions based on their location and the current production process or step, reducing the potential of present false data entries.
3. Better analytics and forecasting methods
With the help of digital reporting tools, manufacturers can improve their forecasting and, therefore, apply strategic ordering, including the reduction of excess ordering, for example. Another example is in-built sensors that with the help of machine learning can predict when a piece of machinery needs to be maintained or replaced before it breaks down.
Manufacturers can analyse the data collected by IIoT devices and smart manufacturing software to enable further optimisation of the supply chain, for instance by sharing data with suppliers to streamline delivery and ultimately production processes.
4. Application of digital lean practices
Digital lean manufacturing practices enable food manufacturers to improve handling, production, and storage processes by identifying processes that do not create value. Smart manufacturing software in combination with automated monitoring provides real-time data analytics that helps identify and eliminate bottlenecks, for instance. Another example is the monitoring of product handling times across the production floor to uncover better practices and increased efficiencies.
5. Empowering staff
Organisations can train their staff on how to prevent food loss by correct food management and food waste practices. These training measures reduce food loss at the facility and improve food safety culture among staff in general.
Smart processes with direct access to digital SOPs help staff to carry out timely checks without delays.
6. Facilitate food waste reduction at consumer level
Food manufacturers can assist consumers to reduce food waste by standardising food product dates on their product labels. 20% of food waste occurring at the consumer level is caused by confusion over date labels7, such as between “use by” or “best before” dates. FDA for instance, recommends using a standardised “best if used by” on all food packaging to avoid confusion.
Moreover, food manufacturers can provide consumers with food handling and storage tips on food packaging.
7. Redistribution of food loss
Food companies can also arrange partnerships with food aid organisations such as food banks and donate food that cannot be used for further production but is still edible. This supports a good cause by feeding people in need but can also boost the company’s reputation as a sustainable organisation.
Strong business case for food loss reduction
Reducing food loss during manufacturing not only contributes to the good cause of contributing to an environmentally sustainable food production system by improving the efficient use of resources and reducing the company’s carbon footprint3. It also offers several financial and intangible advantages for food manufacturers.
Industry 4.0 solutions such as smart food manufacturing software and IIoT devices can help manufacturers realise these benefits by combining the advantages of real-time detection of non-conformances with digitising the production floor.
Do you want to learn more about how digitalisation can help you reduce food loss all while increasing profits? Contact us today.
1Food and Agriculture Organization of the United Nations. (2013). Food wastage footprint – Impacts on natural resources. http://www.fao.org/3/i3347e/i3347e.pdf
2Food and Agriculture Organization of the United Nations. (2017). The future of food and agriculture. Trends and challenges. http://www.fao.org/3/i6583e/i6583e.pdf
3Food and Agriculture Organization of the United Nations. (2019). The state of food and agriculture. Moving forward on food loss and waste reduction. http://www.fao.org/3/ca6030en/ca6030en.pdf
4Boston Consulting Group (2018). Tackling the 1.6 billion ton food loss and waste crisis.
5Champions 12.3 (2017). The business case or reducing food loss and waste. https://champions123.org/sites/default/files/2020-08/business-case-for-reducing-food-loss-and-waste.pdf
6Westbrook, G., Angus, A. (2021). Top 10 global consumer trends. Euromonitor International
7U.S. Food and Drug Administration (2019). How to cut food waste and maintain food safety. https://www.fda.gov/food/consumers/how-cut-food-waste-and-maintain-food-safety
8Ju, M., Osako, M., Harashina, S. (2017). Food loss rate in food supply chain using material flow analysis. Waste Management (Vol. 61). pp. 443-454. https://doi.org/10.1016/j.wasman.2017.01.021