NIS 4.3 billion
Food Waste and Rescue in the Retail and Distribution Sector
The volume of food sales in Israel in 2020 stood at about NIS 88 billion a year, sold to consumers through supermarkets, open markets, grocery stores, small retailers, and the institutional sector. The total loss in the retail and distribution sector stood at around 420 thousand tons of food, valued at approximately NIS 4.3 billion, which constitute about 5.5% of retail food sales. Of this, the amount of rescuable food was about 335 thousand tons, valued at approximately NIS 3.5 billion (13). In addition, the environmental cost of food waste in the retail and distribution sector was approximately NIS 735 million (14).
The main causes of food waste in the retail and distribution sector are food that has reached or will soon reach its expiration date, food with aesthetic defects on the packaging or the product itself, and food damaged in the sales process. Food manufacturers, distributors, and retailers have a clear economic incentive to minimize food waste by managing their supply chain effectively, maintaining proper storage conditions, and planning their inventory.
Nevertheless, surplus food in the retail and distribution sector is inevitable, even when the distribution and sales systems are planned optimally. This is because retailers must ensure that a wide variety of food is available to their customers at all times, as consumers do not tolerate shortages of food items they desire. Hence, the potential loss to retailers due to the unavailability of food products is far greater than the cost of creating surpluses. In other words, food surpluses are an inherent part of the retail selling process.
Economic Waste in the Retail and Distribution Sector
Financial Loss in the Retail and Distribution Sector
Online retail may be more environmentally friendly than traditional retail, in part due to the decrease in number of individual trips to various stores and consolidation of many items being delivered to multiple addresses in a single trip. A study conducted by the University of Washington and published in 2014 (15) found that if routes are planned efficiently, delivery services could potentially reduce up to 80% of carbon emissions produced by consumers travelling to stores.
Waste in the retail and distribution sector has high economic value as it includes all the previous investments made in growing, manufacturing, packaging, and transporting the food. This waste refers to food that was ready to be sold and consumed but was wasted before it reached the end consumer. Due to the characteristics of this waste, the vast majority of the food at this stage is rescuable. In fact, this sector holds about 55% of the rescue potential, valued at about NIS 3.5 billion out of the total rescue potential of NIS 6.4 billion in the economy. The increase in the rate of rescuable food waste in the retail sector (out of the total rescuable food waste in the economy) stems from the decrease in total rescuable food waste, resulting from the Covid-19 crisis and the shift to household consumption at the expense of institutional consumption.
International Comparison: Rate of Waste in the Retail and Distribution Sector
Consumers Transition to Purchasing in Stores with Lower Percentages of Waste
Food waste in the retail and distribution sector stems from three main factors
Retailers and food manufacturers work to reduce waste and rescue food based on economic considerations. Food waste is reduced in several ways:
1. Discounts on surpluses
When products are about to expire or their packaging has defects, retailers sometimes offer them at a discount.
2. Food donation
This is done in a centralized and coordinated manner, based on agreements with food rescue non-profit organizations or in other cases, as local initiatives in supermarket branches.