The $250 Billion Problem You Don’t Know Exists: How Food Waste Is Costing Your Company Money & Damaging the Environment

By Jim Ludema

Doug Rauch, former president of the popular grocery store chain Trader Joe’s, sparked headlines last fall when he announced his new venture: selling expired food.

Rauch’s grocery store and restaurant, called The Daily Table and scheduled to be launched in Dorchester, Mass., is committed to bringing nutritious food just slightly past its expiration date to hungry hordes looking for a bargain. A gallon of expired milk will sell for $1, priced to compete with a liter of soda.

“The number-one leading problem is affordable nutrition,” Rauch told the Boston Globe. “For the 50 million Americans who are food insecure, their solution is not a full stomach. It’s a healthy meal.”

While The Daily Table isn’t a business venture (it’s organized as a non-profit), Rauch’s concept has pure business implications. Food waste is the $250 billion problem you didn’t know existed, and it’s costing businesses and consumers a lot of money while damaging the environment.

The High Cost of Wasted Food

A recent report published by the Natural Resource Defense Council (NRDC) and the Harvard Food Law & Policy Clinic estimates that 40 percent of food in the United States goes uneaten each year: that would fill the Rose Bowl with wasted food, each day. For an American family of four, that amounts to $1365-2275 in wasted food each year. American grocery stores pitch an average of $2,300 in recently expired items every day.

Globally, the numbers are staggering: $250 billion (with a “B”) worth of food is wasted each year. After hearing this statistic, and encountering the stories of some remarkable businesses attempting to tackle the problem, the Center for Values-Driven Leadership decided to address the issue of food waste with this series.

Businesses that have found a way to reduce their food waste see significant savings in food costs. In our first story, we’ll look at one of these companies, MGM Resorts International, who made a few relatively simple alterations in their buffet lines and found a daily savings of more than $8,000 a month.

But’s not just large businesses that are benefiting from reducing their food waste. This series also features Tasty Catering, a Chicago-based small business that worked with employees to track food waste. They learned that for every $100 in food costs, they were tossing 1.6 pounds of scraps. By targeting the reduction of that number, the company reduced food costs by 7%, a significant percentage in their business.

Learn More about Food Waste:

Reduced Waste, Increased Sustainability

While cost savings may be a big incentive for tackling food waste, the environmental implications are equally important. TriplePundit reports that 97 percent of food thrown away in the U.S. ends up in landfills. Rotting food produces methane, the greenhouse gas. Food waste also implies wasted resources: land, water, and oil.

The NRDC/Harvard study mentioned earlier highlights research by McKinsey & Company that projected roughly 100 million acres of cropland could be saved if developed countries reduced consumer food waste by 30 percent. An article from the PLoS ONE journal says “Food waste now accounts for more than one quarter of the total freshwater consumption and ~300 million barrels of oil per year.”

If it is true that food waste is a significant contributor to environmental degradation, then the converse is also true: reduce food waste, and increase sustainability. Businesses may also find an additional benefit: reduce the production of soon-to-be-wasted food, and your employees will work more efficiently (and find new, cost-saving innovations along the way).

Zingerman’s, the legendary family of businesses based in Ann Arbor, Michigan, found this to be true. In this series, we’ll share four lessons the Zingerman’s companies have learned in their effort to eliminate kitchen waste, saving money and the environment along the way.

Why This Matters, Even if You Don’t Work in the Food Industry

As a grocery-shopper and family-meal preparer, reducing food waste is in your best interest for your family’s budget. But as a business leader, it may be low on your list of priorities if you don’t work in the food industry.

Here’s why it still matters: even in a small business, food waste is likely costing your company thousands each year and needlessly expanding your environmental footprint. For the final story of this series, we’ve spoken with executives and event planning experts from a dozen companies and compiled a list of tips you can use to reduce food waste in your company.

We invite you to share your own food waste reduction stories here, or on our Linked In group.

Find More from Our Food Waste Series

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Jim Ludema, Ph.D., is the co-founder and director of the Center for Values-Driven Leadership. Find more sustainability articles and videos from the Center, including this video, Convincing the Sustainability Skeptics in Your Company (and Beyond).