(Un)Wasted Opportunity

Background

Over 820 million people go hungry each year.

“So then let’s focus our efforts on producing more food”, you might think.

Wrong.

The issue is not entirely based on how much we produce, but more so on how we allocate existing food supplies.

Shockingly, 1.3 billion tonnes – approximately 1/3  – of food produced goes to waste every year. This gross mismatch of food produced and hungry consumers, presents a significant logistics issue, centering around inefficient distribution of food.

Fixing industry-wide food waste presents significant opportunities to reduce world hunger and more efficiently utilize land and water resources –  in effect reducing carbon emissions and other activities contributing to climate change. Indeed, business model innovations in this space focused on reducing food waste address several Sustainable Development Goals (SDGs): End Hunger, Responsible Consumption and Production, Life on Land, Life Below Water, Good Health and Well-Being.

Business Innovation

One such business model is to connect surplus food from supermarkets and restaurants with consumers via an App. Employing business model innovations to 1) solve for information risk and 2) align incentives, consumers can select among leftover food items at reduced prices. This –in turn– saves consumers money and increases the seller’s revenue. In effect, a secondary market is facilitated where 1) information on goods available with sellers is shared with interested buyers at the time that they want it most and 2) incentives between the buyer and seller are aligned. Additionally, because the product is an App, the technology is scalable and easily adopted by consumers and can leverage existing platforms. This could contribute to a more circular economy as instead of a proportion of food being thrown out, it will be consumed.

One initial concern is that the model increases salvage value for stores, which decreases overage costs,  and this could consequently result in a perverse incentive for the restaurant or grocery store to overproduce (further). This is a risk that the new business model will have to address – perhaps by providing sellers with a cap on quantities of food to stock and/or prepare at any given time.

Julia Streuli – Hana Shashaa – Irene Salas – Renee Ros – Ashini Kothari