Axios Pro: Climate Deals

November 23, 2022

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1 big thing: The supply chain's food waste problem

Illustration: Gabriella Turrisi/Axios

Though innovations in the supply chain have cut refuse and improved access to fresh food, solving the waste challenge remains an uphill battle, Megan writes with Retail Deals reporter Kimberly Chin.

Why it matters: The issue presents a trillion-dollar opportunity for myriad startups focused on food waste — if they're able to navigate complex silos and shifting regulations.

Context: Food waste companies raised $1.85 billion in private funding as of September, per Crunchbase.

The big picture: The cost of incorporating food waste technology into the supply chain is high — and the current alternative (i.e., the landfill) is much cheaper, says Callie Babbitt, a Rochester Institute of Technology professor.

  • The food supply chain is siloed, posing an obstacle to incentivizing the mass scaling of new technology, says Babbitt, who leads a group working on circular economy solutions.

Zoom in: When economic incentives fall short, state and local policies aligned with waste reduction can spur innovation in the supply chain.

  • California passed a statewide law requiring food waste separation and management by businesses and residences alike.
  • New York has passed a similar bill that calls for businesses to donate excess food and to recycle scrap that can’t be donated.

Meanwhile, corporate America is working to better mitigate its carbon footprint, especially the ever-elusive Scope 3 emissions.

  • Scope 3, which encompasses the carbon footprint of a product's entire lifecycle from seed to landfill and often accounts for a large portion of a company's total footprint, is often hard to measure given the siloed nature of the supply chain.

The bottom line: Ironically, the most effective way to scale food waste technology is to de-scale the supply chain, says Ruben Smit, CEO of grocery e-commerce startup Sunrise Daily Goods.

  • The more localized the supply chain becomes, the easier it becomes to mitigate waste, Smit says. "All of these outcomes are possible if you keep the supply chain short."

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