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Digitizing Sustainability: A Path to Preventing Food Waste in the Supply Chain

By Kushagra Agrawal

Food waste is a pervasive issue that spans the entire journey of our meals, from the fields to our homes. It involves everyone in the food supply chain, including producers, processors, retailers, and consumers. According to the Food and Agricultural Organization of the United Nations, food waste refers to the discarding or alternative use of safe and nutritious food throughout the entire chain, from primary production to the end consumer. While definitions may vary, the numbers are staggering – approximately 30% of production is wasted annually [1], amounting to 88 million tons in Europe and 35 million tons in the United States [2].

In response to these alarming figures, governments, non-governmental organizations, and the food industry are joining forces to implement multi-stakeholder strategies. Both the European Union and the United Nations have set a goal to halve food waste by 2030, emphasizing sustainability in primary resource use and waste reduction across the supply chain.

A new economic paradigm, the circular economy, has emerged, encouraging countries to adopt a more sustainable approach. Circular-economy principles aim to minimize waste and maximize resource efficiency, aligning with the goals outlined in the Sustainable Development Goals (SDG) document. Various solutions have been proposed to combat food waste. The ReFED study group of the Rockefeller Foundation suggests practical approaches, while scholars are increasingly delving into the complexities of food waste. Past studies have measured waste in supply chains and explored reasons behind it. Conceptual frameworks have been developed to guide businesses in preventing and managing waste [3].

An area of growing interest is the integration of digital technologies into the food supply chain. While addressing perishable products, this approach requires overcoming technical challenges and ensuring privacy and data protection. However, current research has not sufficiently explored organizational and managerial perspectives or examined synergies and practices for coordination along the digital food supply chain.

In the realm of food waste management, the last decade has witnessed a surge in studies that aim to quantify and understand the dynamics of food waste across various supply chains. Consumer-level waste accounts for a significant portion, ranging from 46% to 65%, with the remaining attributed to areas such as agriculture, production, and distribution. Existing research reveal that the root cause of food waste lies in overproduction, driven by the need to cover uncertain downstream demand and mitigate the risk of shortages. Communication challenges among supply chain actors further exacerbate the issue, particularly in the case of products with short shelf lives [3].

Efforts to prevent food waste have primarily focused on redistributing surplus food for human consumption and animal feed, educating consumers to minimize household waste, enhancing supply chain collaboration, and implementing governance actions such as voluntary agreements and regulatory frameworks. While redistributing food and consumer education show promise, broader strategies to increase efficiency along the supply chain are still in the early stages of implementation. To understand the intricacies of food waste prevention, it is crucial to move beyond individual actors and delve into overall organizational processes within the supply chain. Analysing interconnected events and actions provides insights into the sequence and history of practices, shedding light on the structure and behaviour of each organization.

Digital technologies, including data analytics, blockchain, Internet of Things (IoT), and cloud computing, have transformed the operations of companies, fostering collaboration and new business models. These solutions enable the storage and sharing of information, facilitating networking, and mediating transactions between firms. The adoption of digital solutions promotes connectivity, coordination, and efficiency along the food supply chain, ensuring the timely transfer of goods and safety of food products. Digital solutions have the potential to create a digital ecosystem, fostering collaboration among companies and external partners. This collaborative approach improves organizational practices, strategies, and processes, contributing to both financial performance and environmental sustainability. Big data analysis plays a crucial role in enhancing sales forecasts, managing sales and promotions, and aligning retailers with suppliers.

To investigate food waste management practices across the food supply chain and assess the impact of digital technologies, some organizations in the Greek food industry or Greek branches of global companies were involved. These organizations, chosen for their strong incentive to prevent food waste, actively participated in industry-wide sustainability efforts, employing various digital tools. There are researches that focuses on understanding their practices, barriers, and drivers through a multiple case-study approach involving in-depth interviews with key managers from each organization.

Data collection took place from July to September 2020, involving semi-structured interviews conducted through Skype with customer logistics managers, supply chain directors, distribution managers, and warehouse coordinators. The selection of organizations in Greece was based on the industry’s unique characteristics, including the presence of both SMEs and larger companies, fostering collaboration for efficiency. The food industry’s significant role in the Greek economy and the pressure on firms to organize productions sustainably and prevent food waste further justified this choice.

Data were gathered from two sources: (1) semi-structured interviews to explore digital technology usage and food waste initiatives, and (2) archival data from news sources, databases, and reports to triangulate information on digital technology, food waste initiatives, and supply chain integration. The interview protocol covered eight areas of investigation, providing a comprehensive understanding of the organizations’ perspectives. Data analysis followed a grounded theoretical model, involving three steps: identifying first-order categories in the data, grouping them into second-order categories, and organizing them into four aggregate analytical dimensions. This structure formed the basis for a framework representing food waste management practices across the supply chain and within organizations. The validity of findings was ensured through independent coding by researchers, resolving discrepancies through discussion.

In the ongoing quest to curb food waste, the integration of digital technologies emerges as a promising solution. This transformative shift in organizational practices within the food supply chain is highlighted by a comprehensive study involving key players in the Greek food industry. Different researchers explore the dynamic interplay of factors influencing the adoption of digital tools and collaborative practices to prevent food waste. As we peer into the future, the global challenge of food waste demands a proactive, multi-stakeholder approach. Governments, NGOs, and the food industry are aligning efforts to meet ambitious targets, such as the United Nations and European Union’s goal to halve food waste by 2030. The circular economy paradigm is gaining traction, emphasizing sustainability and resource efficiency, resonating with the principles outlined in the Sustainable Development Goals.

Digital technologies, including data analytics, blockchain, IoT, and cloud computing, are at the forefront of this transformative journey. By fostering collaboration, connectivity, and efficiency along the food supply chain, these technologies hold the key to unlocking a digital ecosystem that enhances organizational practices, strategies, and processes. The potential impact extends not only to financial performance but also contributes to environmental sustainability.

References

1. J. Gustavsson, C. Cederberg, U. Sonesson, R. Van Otterdijk, and A. Meybeck, “Global food losses and food waste,” Rome: FAO, 2011, pp. 1-38.

2. FUSIONS, “Estimates of European food waste levels,” Brussels, Belgium: European Union, 2016.

3. M. C. Annosi, F. Brunetta, F. Bimbo, and M. Kostoula, “Digitalization within food supply chains to prevent food waste. Drivers, barriers and collaboration practices,” *Industrial Marketing Management*, vol. 93, pp. 208-220, 2021. DOI: 10.1016/j.indmarman.2021.01.005.

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