Investable Opportunities in Food Waste Solutions

Executive Summary

The American food system operates with tremendous yet largely avoidable inefficiencies, with the most recent data identifying losses of 30-40% of the available food supply. Food loss and food waste, respectively defined as the result of unintended or conscious circumstances, claim over 130 billion pounds of food in the US annually. Food intended for human consumption that is never eaten places a significant drain on natural, human, and financial resources; it contributes to environmental degradation, particularly during production and disposal; and raises social concerns in the midst of 49 million Americans who are simultaneously food insecure.

Each year, food production from farm to fork accounts for approximately one-tenth of our nation’s energy use, employs 50% of our land, and swallows 80% of all the freshwater consumed in the United States. This doesn’t even account for resources expended in the disposal and management of food beyond the consumption stage. Food rotting in landfills emits 16% of our nation’s methane while globally, food waste is the third top emitter of CO2 equivalents, after the US and China. Additionally, almost 1/6 of the US Workforce is employed in our food system. A resource intensive system operating at a loss of 30-40% means we are allowing these valuable inputs, along with significant amounts of pesticides, fertilizers, and money, to be thrown out to the detriment of a sustainable agricultural future.

We see food waste as being at the beginning of a secular and investable trend, made possible by the confluence of regulatory action at the state and municipal levels, Federal policy changes and awareness programs, and shifting consumer consciousness. The expansive volume of food waste remaining to be eliminated or diverted to productive ends presents an immediate opportunity for businesses to take advantage of this nascent market and implement solutions that will improve food system efficiency and address related environmental and social challenges.

Rather than eliminating food waste entirely, experts anticipate that most of it will be redistributed to more productive uses such as feeding the hungry or creating compost and renewable energy. Food waste solutions companies are innovating in the context of this mindset, identifying new markets or building out logistics and infrastructure to tackle the varying factors dictating our cripplingly wasteful food system. This growing industry emerging out of a paradigm shift towards a more environmentally, economically, and socially efficient system needs to be acknowledged and supported as these solutions companies can offer investors significant social and environmental returns while running profitable operations.