December 18 2018

first_imgDecember 18 , 2018 FareShare: Combating food waste at retail is a ben … Demand for ‘imperfect’ produce prompts Oddbox … From the pages of Jim Prevor’s Perishable PunditJohn Bovay has been wowing audiences at The New York Produce Show and Conference for the past two years. He always has a way of researching the hot topics of the day – this year it is Food Waste. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:John BovayAssistant Professor andExtension EconomistDept. of Agricultural andResource EconomicsUniversity of ConnecticutQ: At last year’s New York Produce Show, you covered  GMO and Non-GMO Food Labels: Implications Of The New Federal Law For Growers, Marketers, And Consumers. And two years ago, food safety impacts. Now you take a hard and questioning look at calls and mandates for food waste reduction. You certainly don’t shy away from hot topics.Food waste concerns are escalating. Policies to reduce food waste have reached heightened levels on a local, state, national and global scale. It’s not clear what impacts this will have on the produce industry. The economics of food waste seem complicated. We’re excited to learn more about your research to better understand the issues and implications, as well as what actions executives should take….A: What you say is true. Here are some links for more information on USDA, EPA and United Nation food waste reduction policies. food waste problem has been recognized by scholars for over a century and is gaining tremendous traction in academia as well as popular attention. Yet the magnitude of food waste has never been consistently measured. As a result, one cannot satisfactorily answer the seemingly straightforward question of whether a century’s attention to food waste — or viewed differently, a century of economic growth that has caused changes and shifts in the extent of food waste — has resulted in a more acute or mild problem.We review the economics of food waste, provide historical evidence on the extent of the problem with a focus on the U.S., and we draw conclusions about how various drivers have affected the amount of food waste at various stages of the supply chain over the decades.Based on a draft paper of our ongoing research I’ve been working on for some time, we wanted to review historical evidence on food waste and look at the ways it is measured and estimated over the history of efforts to measure the food waste problem. People have been talking of food waste since the 1800’s, actually, and have been aware of food waste as an economic problem; that not selling or buying food and throwing it away is costly. We’ve been hearing a lot about it recently: There have been more than 4,000 scholarly articles written with food waste in their title just in the past 5 or 6 years.Part of the motivation for this research paper was to take a longer perspective on it and to assess whether this food waste problem has become more of a problem in the past few years, or whether we’re actually doing better, and there’s just sort of a buzz around it now, and we’re hearing so much about it.I don’t know if we’re able to reach conclusions based on the available evidence, because the data is very inconsistent. The methodologies for gathering data, for estimating the amount of food waste and measuring the share of food wasted are unreliable or flawed, so it’s impossible for us to say right now whether the food waste problem has been getting worse or improving over time. But we do have some evidence that production is becoming more efficient and less food is being wasted or lost upstream, but with lower prices and increased income of consumers they are wasting more of it.So, that’s an overview of what we do in this paper.Q: Can you elaborate on why the methodologies are inconsistent or unreliable? Is there even consensus on how to define or classify food waste? Is that where the problem starts?A: One of the main things to keep in mind is the definition of food waste is not even consistent. Food waste is sometimes defined as food that is edible but wasted; sometimes it’s defined as food that’s wasted downstream. In other words, the jargon, or terminology of food waste implies some kind of moral problem — that people have food at their disposal and then they dispose of it.Also, the definition of food itself is difficult to agree upon. People can’t agree for purpose of measuring whether orange peels should count, or avocado pits should be included as food waste. So that’s part of the problem, just this basic definitional concept.Q: You mention the moral aspects connected to food waste. Does that cloud the issues further?A: So that’s not really my focus. I’m an economist, and we try to divorce morals from what we do.Q: That’s an important point.A: But there is this sort of moral connotation of food waste. In fact, in the bible, in John 6:12, after feeding the 5000, Jesus says gather the pieces that are left over, let nothing be wasted.Q: Sorry to sidetrack you into notions of morality, and religious bible passages…A: That’s OK. Professionally, that’s what inspired me to become an economist and to do work that would create policies that would create a better world. The ethics are not something I write about, but it’s something that inspires my career.Q: That’s admirable. So, let’s get back to the science and the expert research you’ve been doing to best inform decisions and solutions on food waste reduction. In a somewhat profound sense, factually-based strategies could also be the most moral too. Just how difficult is it to get those facts?A: There are inconsistencies of estimates of food waste because people define food differently, and waste and loss differently. This makes it really hard to compare say an estimate of food waste generated by collecting garbage from households in the 1980s to a similar study done today. Just because inevitably there are going to be differences in terms of what counts as waste, study to study.That kind of approach is one of the two major approaches to estimating food waste. It’s what we call a “bottom-up” approach, where you’re going and collecting physical evidence on what’s wasted, surveying landfills, surveying trash cans and/or asking people to keep diaries of what they buy and what they eat and throw away.And this will create or give you a sense of the picture of food waste, but because it’s relying on very small samples, how many households is it feasible to sample the garbage of, you’re not going to have very reliable estimates when you talk about the national or global scale of food waste.On the other hand, there are “top-down” approaches, which are based on data of shipments of food, production of food, typically at the national level. These have better coverage but they’re courser because the individual estimates are probably less reliable because of the methodology. There is a lot of assumptions that go into it.For example, the USDA has been putting out periodic estimates of food waste for the last couple of decades. They focus on the retailer and consumer levels that are occasionally making headlines coming from the USDA. I have a lot of respect for the work that they do. I used to work in the same small group of researchers as the people who generate those estimates and reports. The problem is that their task is just really immense, and they’re not able to go in and estimate using real estimation methods on the amount of food wasted on the individual commodities.Q: How do they compensate for this complication?A: They make assumptions. For example, canned peaches, 6 percent of what reaches the retailer doesn’t get sold. Mozzarella cheese, 6 percent of what reaches the retailer doesn’t get sold. This 6 percent is a really common assumption they apply in their analysis and how that drives they’re overall estimates when they apply assumptions like that.Q: That’s a bit disconcerting since those headlines are often taken quite seriously in driving policy…A: All in all, when we ask a question like, “Has the level of food waste risen or decreased in the last 20 years,” and we try to assess it, what we’re left with is an incomplete picture, because all the studies out there that allow us to approximate answers to a question like that are just based on layers and layers of assumptions that are driving whatever changes we might think we’re seeing.And as I said earlier, if you were going to use the more micro-level “bottom-up” approach, you would see too many differences in methodology, more based on definition, as well as possibly people changing their behavior if they know they’re their under study.Q: Can you discuss this phenomenon further?A: For example, if I were to give you instructions to take a picture of your plate of food before and after each meal, you would probably be a lot more conscious of what you put on your plate to be sure you didn’t put too much on your plate.Q: That’s such an interesting point, which could be applied to other studies too… for instance, if you ask people to monitor their produce consumption, they may be apt to eat more fruits and vegetables during that time period. A: One of the studies from the UK found consumers reported 40 percent less food waste when they were asked to report their purchases, and what they ate and what they threw out, as opposed to the observational studies where the surveyors were just surveying the contents of the trashcans.  This is because the people filling out the forms were so conscious of what they were eating and what they were throwing out, it evidently changed what they reported.  Q: I don’t want to interrupt your flow, but do you analyze how these different numbers and messages affect the actions people are taking?A: That’s a good question to segue from here. This paper I’m going to be presenting is the first paper I’ve written on food waste, but I’m looking forward to a couple more research projects that are more about generating original data. One of them is going to involve a series of experiments, possibly with university dining halls, where we present kitchen staff and diners with information about food waste and see what messages are most salient to them, and how we can use messaging to reduce food waste.We’re just in the initial logistical stage right now. We probably won’t be implementing the experiment for another year, but that’s something that I’ve been thinking about a lot.Q: Are you going to be monitoring the food waste, weighing plates…or that’s not what this is?A: That’s the concept. It’s probably not weighing plates but weighing what’s disposed.Q: And is there a reason why you’d be focusing on university dining halls?A: We wouldn’t necessarily be focusing on university dining halls; it’s just that it may be more convenient. For this kind of experiment, we do want to partner with institutions that have more than one kitchen. In order to do an experiment properly, you have to have a sense of what behavior is like without these sorts of intervention. We’ll need to have data on food used and food wasted for a year prior to any intervention. We’ll need to see seasonal patterns. For example, if were using a university dining hall, maybe students eat more at the beginning of the semester or at exam time, and we absolutely have to control for that. We wouldn’t want to collect three months of data in an experiment. We really need to see a whole year’s worth of activity.Q: Any other areas you’ll be delving into?A: Yes, there is, and I’ll only be speaking about this briefly during the presentation. The other area is developing a national estimate of the amount of food wasted on farms, and we would start by focusing on vegetables. Again, like the other aggregate food waste studies, there is very little data out there on farm food waste. There are observational studies and data on dozens of farms, but we’re looking to develop a set of estimates that is much more comprehensive than that.Q: And do you have a hypothesis going into this, key goals in mind?A: Won’t have discreet hypotheses. The first step would just be measurements. Then we would be looking into drivers of food waste as well as implications for market prices, for producers’ profits, of various possible policies for reducing food waste.So, one of the things we’re thinking of, for example, is understanding whether more buyers were willing to buy lower graded produce from vegetable farmers around the country, not just processors but people willing to sell lower graded produce to the fresh market; how would that change market prices, how would that change prices for higher graded produce, how would that change well-being of consumers, particularly the lower income consumers?Q: Then with all those numbers, it also comes down to retailers putting the products on the shelf, and bottom line, the market demand for these lower-grade products. We’ve covered strong retail efforts to merchandise and promote “misfits” and Ugly-fruit type programs in our sister publication PRODUCE BUSINESS.At the same time, there have been mixed sales results at retail, with some retailers including Price Chopper/Market 32 and Hannaford discontinuing their “misfits” produce trials.A: These are some of the questions we’re looking at, and this would be a project that would take several years, first to gather data and then to do the analysis.Q: These research papers you’re doing could be very valuable to the produce industry.A: Thank you. I hope so.Q: So, do you want to give more detail on the economic findings of your research you’ll be presenting, and some of the key takeaways?A: Sure. One of the things I’ll say is that I want to lay the groundwork… why are we interested in food waste. It’s not just about product costs; it’s not just about consumer prices, but also the environment costs. There are estimates that around a quarter of inputs to crop production that are used to produce food are ultimately going to be unused. There are estimates that around two percent of U.S. greenhouse gas emissions are due to wasted food; not food production in general, but just wasted food.Food in landfills is also an important contributor to greenhouse gas emission. Decomposing food gives off methane, which is much more potent than carbon.Then the other major reason to be interested in food waste, besides the environment, is food security. It’s possible, but not necessarily true, that food waste increases food prices. It’s also possibly true, on the other hand, that food waste reduction regulations could increase food prices. For example, if food producers were forced to pay a tax on food that was wasted, it’s not clear whether that would affect food prices positively or negatively.Food regulations could increase food price, and if food producers are forced to pay taxes on food waste, it is not clear whether that effect will be positive. It would initially push up prices but eventually push down prices.Q:  The produce industry often turns on basic supply/demand fluctuations; how does this fit into the equation?A: If there were a tax on producers who wasted food, this would essentially increase the cost of doing business as a producer or farmer, and this would push up prices and wouldn’t help poor folks that need lower food prices.That’s the basic supply-and-demand story.There are potentially some policies that could reduce food waste and, in so doing, reduce the cost of food for low-income people as well as other consumers.It is not clear requiring anybody to reduce food waste would bring costs down and solve the food security problem.So why we care about food waste is one set of points I’d like to draw out.Then the other thing we need to consider carefully in relation to food waste reduction is whether actions should be taken by individual sellers or growers of food or whether it’s some type of centralized government policy. We need to simply establish whether the benefits from food waste reduction exceed the costs.Q: Essentially a cost/benefit analysis to determine the ideal balance; in other words, a goal of reaching zero food waste may not be advisable, and actually could be detrimental?A: There are economic concepts of optimal levels of pollution, for example, and we can think about socially acceptable amounts of food waste where society’s benefit from a reduction of one pound of food equals society’s cost to reduce food waste by one pound.For example, the EPA and USDA announced a goal of reducing food waste by 50 percent 12 years from now, in 2030.  It’s not clear whether that 50 percent reduction would cost something that is closer to the social optimum or maybe further away.Maybe we’re very close to the socially optimum level already.Certainly, individuals and individual producers are making decisions optimal to them at every moment. So maybe that’s going to get us close to the socially optimal level already. It just so happens that the optimal level may be something like one-third of the food supply, which is the ballpark common knowledge of what the amount of food waste is currently.We don’t know what the optimal level is, and we certainly don’t know whether a 50 percent food waste reduction is closer to the optimum or sensible in terms of costs and benefits.It’s not just the EPA and USDA, it’s also the United Nations. The UN goal is a little different; it just focuses on retail and consumer food waste.  Q: I see what you’re saying, that it’s critical you’re working with the correct numbers before making these sweeping goals…A: That’s right. So, the food and ag organization at the UN is developing a new methodology to better measure food waste, so they can measure their progress in respect to that goal. They need to know what the level of food waste is now, and then assess the progress in respect to that goal.Q: But they don’t know if that’s the right goal, if the premise is correct…A: Exactly. We don’t know whether that goal is economically sensible, whether the benefits exceed the costs.Q: They could reach their goal, and it ends up being a negative, even though it appears virtuous…What are the potential economic costs?A: It could possibly be throwing money at a problem that is not correctly defined…The other thing I’ll say is this: I’m not sure where the UN is on spending money on food waste reduction and measuring it, which is costly.The EPA and USDA have been providing some funding for this. It’s not just a press release. They are funding various activities and initiatives for food waste reduction. They’ve also been funding education programs.Then in addition to that, local governments have in some cases incentivized food waste reduction. Seattle, for example, is now charging its residents for municipal food composting. You’re not allowed to throw out food in your regular waste basket. You have to throw it out in a special bag, and they charge by the bag.Here in Connecticut, certain large commercial food facilities, including most supermarkets, are required to send their waste off to a digester.So, these are all initiatives that are somewhat costly and, at this point, we don’t know whether the benefits are justified based on those costs.Q: Can the same be said regarding supermarket mandates to replace plastic bags with paper ones?A: That’s a really good analogy. I would say municipal or state policies around food waste reduction are analogous to local bans on plastic bags in that it may be a good idea for the environment to reduce use of plastic bags, but we don’t know whether those benefits justify the costs.The other thing I’d like to say, obviously businesses have incentives to not waste food or to sell as much food they acquire as they can. So, regulations around food waste that are targeted at businesses may be inherently overly paternalistic, just because businesses have a case not to waste food, and clearly have incentives not to waste food.Q: What about environmental issues connected to food waste, or costs that are harder to quantify from a business perspective?A: It may be true there are situations where environmental costs are not accounted for by individual businesses that are purchasing in the food chain, so there may be good reasons to put caps or impose fines on food waste, but we just don’t know yet.  Q: So, for this research, are you totally focusing on fresh fruits and vegetables?A: One of the research projects that hopefully is beginning soon will be focusing just on vegetables, but the general work — the research I’ll be presenting at the Show — looks at food waste for all different commodities.Q: Can you point out notable differences between the different commodities?A: There are. Obviously fresh fruits and vegetables are easily spoiled and highly perishable, and grains and cereals are much less easily spoiled. For example, USDA estimates current loss of dairy products from farm to retail is 1.5 percent, whereas for vegetables the loss is somewhere in the 10-30 percent level.At the consumer level, we’re seeing much more waste from the different commodities, but again it’s higher for vegetables than for other things.USDA, says 42 percent of leafy greens and yellow vegetables are wasted by consumers, and 30 percent for most fruit, compared to 23 percent for dairy and meat. And for potatoes, which are not highly perishable, consumers are only wasting 16 percent, that’s according to the USDA.Here’s another example that illustrates the importance of perishability on food waste.  USDA estimates from farm to retail about 5 percent of fresh pineapple is wasted. And consumers waste 37 percent of the fresh pineapple that they buy.Canned pineapple is completely the opposite. For canned pineapple and pineapple juice, USDA is saying about 41 percent is wasted from farm to retail and only 9 or 10 percent is wasted by consumers.Q: Do you see these trends continuing?A: When we’re talking about historical trends in food waste, we see food has become cheaper over the decades no matter what timeframe you look at, when you control for and make adjustment for inflation, there are exceptions, but overall in the aggregate for commodities.At the same time, incomes are rising as a society.   In the U.S. and globally, we have increased demand for food quality. Part of what that means is we’less likely to accept an ugly carrot that is not perfectly straight, or a potato that has spots or milk a few days too old.Some of my colleagues at the University of Georgia have written that food waste is a luxury good, and they find evidence for this, that with rising incomes sometimes people are willing to waste food.It could be with rising incomes and decreasing food prices, the optimal level of food waste, where the costs of reduction equal the benefits from reduction, may be rising.We also have a lot of changes in our culture. People are cooking less at home, eating out more, and it’s not clear how that is affecting food waste. It does mean we are making less frequent trips to the grocery store, and it’s quite possible that fresh vegetables are wilting in the fridge and getting thrown out. Q: Do you think the whole move toward omni-channel retailing and increased purchases online could make a difference?A: I hope so. Other things on the supply chain upstream… we’ve had a lot of advances in technology that have allowed producers to reduce loss. They’re able to harvest more efficiently using machines. They’re growing different cultivars of fruits and vegetables that have enabled them to produce more, part of that is harvesting more of what you plant. So, we’ve seen upstream reductions in food loss.Also, there are innovations that have enabled food sharing. I think we’re going to see a lot more innovation in terms of food waste reduction, facilitating transactions enabling farmers to find buyers for food that previously they would have just plowed back into the soil. I think it’s a really exciting time to be building a business around food-waste reduction.I met a lot of entrepreneurs this summer at a food waste conference, who are doing great things making a profit while insuring food gets used instead of wasted.Q: You mentioned food sharing?A: I have seen an app out there that allows consumers to say, hey I have leftover lasagna, who wants it? There’s an app that a company operates in a few countries in Europe that allows restaurants to advertise the food they have at the end of the day at a discounted price, it’s called Too Good to Go.Q: Is there anything else you think would be important to point out for this preview? A: Another big issue has been date labeling, I won’t get to talk about that at length, but there is a possibility that federal law could start to standardize date labels; it probably will only be for certain products, and not everything in the grocery store. But very likely, there are going to be more uniformed standards for “sell by,” “best by” date labeling on packages, where there is currently a lot of confusion, and what they really mean.   Brad Rickard has done interesting research on this particular issue, and other studies related to the food waste issue, which he’s presented at past New York Produce Shows [Important Research On Food Waste Unveiled At New York Produce Show: Cornell’s Brad Rickard Dives Into The Question Of Whether Zero Food Waste Is Good For Overall Health (Or The Produce Industry]Q: Brad’s research on food waste complements what you’ll be delving into at this year’s Show.A: I’m looking forward to seeing Brad again at the Show.Q: And he will enjoy reconnecting with you as well.  [Editor’s note: Cornell’s Brad Rickard and Karina Gallardo of Washington State University will be presenting a thought-provoking talk as well:Cornell and Washington State University Team Up On New Research Interactive Presentation At New York Produce Show Gives Industry Buyers A Chance To Weigh In On What They Prefer ******There is a semantic problem with this issue. The word “waste” is inherently pejorative. It might make sense to use it in certain contexts, say a child whose “eyes are too big for his stomach” who thus loads up his plate at a buffet with quantities of food that it is highly predictable he won’t be able to eat.We can say that child is “wasting” food. We can say his parents are allowing “waste” by not better controlling their child’s behavior. It is a pejorative term filled with moral opprobrium. It is not a reasonable way of thinking about the food system.Food left in a field because a farmer makes the judgement that it is not profitable to do a fifth picking of pepper, for example, because the cost of resources – to pick, to pack, to cool, to transport, to distribute, to retail, on and on – is not properly seen as waste. It is actually avoiding waste – the waste of all these resources that the market would not be willing to pay for through the sale of these few and small peppers available to be picked in this picked-over field.To focus our attention on “Food Waste” and ignore the waste of all the other inputs involved in producing food is illogical and irresponsible.Even consumer “waste” has more to do with value judgements than optimal national policy. At the Pundit household, we buy loads of fresh foods and, often, throw it out. Why? Because we are fortunate to be able to not tether ourselves to the possibility that the contents of our crisper may go bad.If the children suddenly have to do a play rehearsal or an extra team practice, if they stay late at school for extra help because an extra test has been added to the schedule, if we are invited to a last-minute barbeque at a neighbor or have to make a sudden business trip –we can make the decision to do all these things even though it may mean we throw out some leafy greens!  We could decline these opportunities. The Pundit Grandmother might well have said “ I already made a  salad and defrosted some lamb chops; you can’t go to your friend’s house for dinner tonight” But would that make our lives better? If we decided to forgo the fresh foods we prefer and only buy frozen vegetables, that would reduce our food waste, but at the cost of life less pleasant. 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