If you’ve read this Substack for a while now, then you’ve probably figured out that how I operate is that I take a topic and talk about why the prevailing ideas surrounding it are nonsense. Typically, I’m talking about vague topics like climate, innovation, etc. . . This week I’m going to do the same old thing except I’m gonna focus on a more specific topic – food waste.
No, this is not a diatribe about how we ‘waste’ so much food per year and how it’s a great failing on our part, yada yada yada. Instead, I’m going to talk about why 99% of the discourse around food waste is wrong.
Why am I picking on food waste? Because it is a topic I know a fair amount about. You see, once upon a time I worked at a morally bankrupt company that claimed that their mission was combatting said waste. More recently, I’ve seen some data, and have played around in the subject space. In short, I have more experience dealing with the topic than the vast majority of morons who talk about it.
What’s my overall take here? Food waste is not a problem. In fact, it’s a boogeyman peddled by folks with mashed potatoes for brains and proclivities for pearl-clutching. In fact, as I’ll argue hereafter, the elimination of food waste would hurt the poorest segments of the population.
Whenever food waste – which is a misnomer itself – comes up in the public discourse, discussions tend to be driven by three assumptions:
1. Food waste is bad for the environment;
2. Food waste raises the cost of food in general;
3. Food waste is an inherent moral failing.
All of these assumptions are bullshit. But let me step back for a moment and touch upon the nature of food waste.
Does food waste exist? Well, that depends on the definition. If we count food that is grown/produced but not consumed by a person or animal as waste, then it certainly does exist. However, the word ‘waste’ does a lot of heavy lifting in the name. What it insinuates is that the supply chain fails to deliver food to hungry mouths. This is not really true. For example, you can go to this handy dandy USDA website and download some excel files which break down where in the supply chain waste occurs.
Let’s take fresh strawberries as an example. The USDA estimates that 8% of berries grown do not make it from the farm to the grocery store. A further 14.2% do not make it from the store to the consumer. Finally, 35% of what you buy, ends up not being eaten. If one accounts for the declining mass of produce on its way to our fridges, then about 26% of all strawberries grown in America, are thrown out by the people who purchase them at the end of the supply chain.
Put differently, no one is starving because of losses in the supply chain. In fact, given that the USDA estimates that 52% of the berries are lost from farm to consumer, the takeaway is that half of the food losses have nothing to do with the supply chain. We instead have an overabundance of food.
Now, let’s try to avoid the racist refrain that ‘there are starving children in Africa.’ The Irish historian Cormac Ó Gráda has a great study – perfectly titled Famine – which lays out the evidence that famine in the modern world is isolated, limited, and a result of government, rather than market, failures.1 In his own words:
“The rapid growth of population in places such as Niger and Ethiopia confirms the marginal role of famine nowadays. . .”2
Later on, Ó Gráda notes that “the prospect of a famine-free world hinges on improved governance and peace. It is as simple – or as difficult – as that.”3 The implication here is that a dearth of food is rarely – if ever – a market failure, but rather almost entirely a product of governmental misaction:4 Something that 9.8/10 talking heads on the subject fail to realize.
An absolutely classic study on the historical performance of markets versus governments in times of dearth is Andrew Appleby’s “Grain Prices and Subsistence Crises in England and France, 1590-1740.” Appleby rather persuasively shows that free markets – i.e. freer price discovery – [the English system] vastly outperform government instituted prices [the French system] in terms of feeding the hungry in times of crisis.5
Don’t get me wrong, I’m not trying to instigate a ‘let them eat cake’ mindset here. Famines used to suck ass on huge scales. Back in the day, I wrote a thesis on how famines drove French peasants in the ancien regime to commit relatively widespread sex-selective infanticide.6 Which, you might go ‘that seems kind of iffy’ but it’s getting published as part of a broader study by Routledge in Q4 2022, so.... The point here is that I’m not one to minimize the horror of hunger.
Anyways, let’s get back to the three assumptions. The first is that food waste is bad for the environment. This assumption relies on the occurrence of anaerobic processes in compost facilities and landfills which beget methane. Methane is a greenhouse gas that is ~4 times worse than CO2. It’s true that this occurs. However, if you have modern waste facilities then you will have oxygenating processes that release CO2 rather than methane which reduces the impact. It is important to note that a decomposing carrot releases the CO2 it absorbed in the first place meaning that it’s a net-zero process – from the point of view of the crop. Obviously, transportation, farm equipment, and applied petrochemicals increase the collective associated emissions, but those occur regardless of whether one wastes the food or not.
Secondly, modern waste facilities will also often have methane – or just generic gas – capture units that again, mitigate the effects. Whether or not a population wants to pay for those facilities is a different question, but it is not a problem exclusively of food waste. Any organic material will undergo the same process whether it was fully ‘utilized’ or not.
A rebuttal I’ve heard more than once is that poor regions and countries cannot afford these modern technologies. Therefore, somehow, food waste is bad on a global scale. This seems like a dubious line of reasoning to me for at least two reasons. The first is that if food waste is a product of affluence, then you would not expect waste in areas of dearth. The second reason is that if the wasting of significant amounts of food is a human universal – and thus found the world over – then you have a much larger problem on your hands. Either way, this line of argument is either meaningless or nonsensical.
Then there’s the second assumption – that food waste raises the price of food in general. This notion is ridiculous. As mentioned above, something like a third of all food purchased at retail in America is ultimately not consumed. If we take, I don’t know, broccoli and arbitrarily slap a price of $3 a pound on it, then a loss of 33% of its mass through underutilization means that the consumer is paying $4 a pound in terms of calories consumed. Under a 0% waste system, the consumer would be willing to pay at least $4 a pound at the retail level. The occurrence of food waste indicates that collectively, we are getting a hell of a discount on our food. We choose to consume less. Why? Because food is so gosh darn cheap. Tossing out a head of broccoli is a painless exercise vis-à-vis our pocketbooks.
Shane Hamilton has an excellent book – that everyone should buy – called Supermarket USA that lays out the extreme lengths to which the United States (and the West in general) went to in the post-war period to create systems of abundant and cheap food.7 We can squabble about the externalities of that system in terms of diet and environmental impact, but the fact remains that there is no scarcity of food in America – or the West – on an aggregate level. Indeed, the world collectively produces more food than it needs. You can squabble about the exact distribution of said surplus, but then you’re grappling with marginal issues reflecting regulatory and governmental failures. The fact of the matter is markets feed mouths.
In fact, a huge problem exists for anyone trying to ‘disrupt’ the food system in that the existing model is optimized for cash flow – rather than factors like resource input. Harkening back to the shitty company I worked at once upon a time, what they claimed to do was take food waste, apply technology and techniques to it, and then sell it on a bulk basis. Effectively taking ‘free’ inputs in the form of waste, and then selling it for more than the cost to convert it into a viable product. An overlooked consideration was that existing products are so stupidly cheap that the application of basically any value-add process priced the firm’s products out of the mass market. The result is that you then have to convince people that former waste is worth a significant upcharge in a higher-end niche market.
Why does a company like Beyond Meat struggle to print money? Because they compete against the world’s most financially efficient meat producers. You can talk about unfair subsidies and the lack of capital costs associated with long-lived ranches and other facilities, but the cheapness is still real.
Then there is the assumption – very much Calvinistic in nature – that the existence of food waste is a moral failing. This is some straight-up Presbyterian shit. The idea that we produce too much food and somehow this is a tragedy is really strange. When we label food waste a moral failing, the result is frankly bizarre responses.
As mentioned above, a fair amount of food gets tossed at the retail level. Naturally, people look at the amount thrown out and feel like something ought to be done with it. It doesn’t take a rocket scientist to piece together that the obvious thing to do is give the food to the less fortunate. It’s good, old, classic charity. But you have to step back for a second and ask why it is that the food is being tossed in the first place.
For consumer packaged goods, they’re tossed because they are near or past their ‘best before’ date. As we all know, ‘best before’ does not mean ‘unhealthy after.’ Instead, it means that the food is no longer perfect. This is a regulatory failure begotten by overly cautious governments and food producers. The donating of these items reflects the reality of the underlying food safety. The government says you can’t sell the items, so tossing it really does look like a waste of good food. The simple solution here would be to instigate ‘healthy until’ dates on products and thus extend the shelf life.
As for fresh produce, the picture’s quite a bit different. Now, I have experience testing shitty-looking produce vis-à-vis health standards and can tell you that very gross-looking produce is, in fact, perfectly safe to consume. Is it tasty? No. But it is safe. Nonetheless, though, fresh produce gets tossed because of consumer revulsion. This situation is drastically different from what occurs with consumer packaged goods. I will eat chips past their expiry date, and even things like yogurt so long as it looks and smells fine. But at some point, I don’t want to consume overly soft potatoes. Thus, fresh produce waste at grocery stores reflects human preferences. To then claim that there is a moral failing here is ridiculous. It’s even more ridiculous to then give said food to the less fortunate. As though the cure for hunger is the scraps of the average bloke. If people gave a shit about poor folks, then they’d give them food equal in quality to what the average person would consume. Something which is easily done by purchasing the food in the existing marketplace. Again, it’s not a market failure, but a government failure.
The gist of the matter here is that food waste is not immoral. People hear about large numbers of food being tossed each year and go ‘awe shucks, that should really be sent to those in need.’ But that’s not a food waste problem. If the issues here are food deserts, and poor diet, then eliminating food waste does no one any good. Reducing food waste does not shift consumer behavior in terms of purchases. Instead, what it does is reduce the amount of food produced per year. You might want to redirect the food that is produced to various charities and good causes, but that’s something that can be solved through purchasing the food. If you believe that there is a mass of starving people in your community, then you can solve that through civic action and local government policy. Food waste has nothing to do with it. We waste food because we have – based on purchaser preferences – an overabundance of food.
This is why I pull the few hairs I have left on my scalp out whenever I see a news story, thought piece, or bullshit post on LinkedIn about food waste. It’s a made-up problem. If the initial question on the matter is “Why do some people go hungry” the answer is not “because we throw out food.” If you feel a moral outrage about hunger in your community, or around the world, then the answer is not ‘eliminate food waste’ but rather ‘buy food, or donate money to do so, for those who go without.’
Globally we live in a world that has never had so much food available for such little cost. Yet somehow we have gotten ourselves into the mindset that excess food is bad. The existence of food waste is a sign of success rather than failure. Oh, how our ancestors would have killed to live a life where they could throw out a third of the food they purchased. This is what winning looks like. Can we find greater efficiencies in supply chains? Sure. But never forget that 50% of the waste occurs in your own house. If we all increase our consumption efficiency then that’s 26% less demand in the system, thus reducing the supply accordingly in the long run. Paradoxically, by eliminating food waste, prices would rise, which, if you’re trying to help the poor, seems like a shitty solution.
In my mind, food waste is a topic that idiots try to capitalize on. For example, there’s a business school professor at my alma mater who has three brain cells and an ever-expanding sense of self-importance who yammers on about the subject to any media outlet that will call him. The usual bit is that Canadians have ‘avoidable’ food costs. Which is how an idiot would view the situation. Returning to the broccoli example above, if you purchase 5 pounds at 3 bucks a pound but consistently throw out 1.67lbs then you are paying 4 bucks per consumed pound. That 1 dollar difference per pound is the price you’re willing to pay for the optionality of consuming the 1.67lbs. It’s not a ‘wasted’ cost. Consumers pay for it because even if they’re really paying 4 bucks a pound of consumption, that’s okay by them. If the point was to save money on a per pound basis, then they’d eat the other 1.67lbs. The cost is only ‘avoidable’ if you imagine food to be scarce, in which case you’d optimize your purchases to ensure that you get enough to eat.
Do you see the problem here? Food can’t be scarce if a significant amount of food waste exists. Because if it were scarce, you’d be a damn fool not to eat all of what ends up in your fridge. Thus, we can’t conceptualize food waste as an economic problem centered around scarcity and finite resources. What we have is overabundance and practically infinite amounts of calories available. While there are those who clutch their pearls at the thought of food waste, I say the more the merrier. It is this overabundance that lowers prices and feeds the masses in ways previously unheard of. While I admit that it’s counterintuitive, the fact of the matter is that food waste increases food availability. The average person might waste and end up spending that hypothetical $4 per pound, but the poor purchase it for $3. That sounds like success to me.
Next week we’ll probably be back to financial topics.
Photo by Tim Mossholder via Unsplash
Cormac Ó Gráda, Famine: A Short History, (Princeton: Princeton University Press, 2009).
Ibid, 260.
Ibid, 282.
For a historical example see Gráda, Corma and Chevet, Jean-Michel. “Famine and Market in Ancien Régime France.” Journal of Economic History, 62:3(2002), 706-733.
Andrew Appleby, “Grain Prices and Subsistence in England and France, 1590-1740, ” Journal of Economic History, XXXIX:4(1979), 865-887.
Evan Johnson, “Massacre of the Innocents: Routine Infanticide in Mézin, 1649-1743,” (Honour’s Essay: University of King’s College, 2017). Available at: https://www.academia.edu/40375749/Massacre_of_the_Innocents_Routine_Infanticide_in_Mezin_1649_1743
Shane Hamilton, Supermarket USA: Food and Power in the Cold War Farms Race, (New Haven: Yale University Press, 2018).