As the food and agricultural industries strive to feed a growing global population while reducing resource use and environmental impact, waste is a significant issue. A new report from Rabobank’s Food & Agribusiness Research and Advisory group (FAR), titled “Don’t Waste a Drop!” outlines how a convergence of factors are driving food and agriculture companies to transform waste from a liability to a revenue source.

 According to the report, global food and agricultural supply chains generate about 1 billion tons of waste each year, with about 2,000 cubic kilometers of water used to produce the wasted food.

The report identifies categories of factors driving companies to change their approach to waste. “Push” factors include resource scarcity and regulation. “Pull” factors include consumer expectations and potential new revenue. “Enabling” factors include technology and scale. Given these combined forces, companies are finding ways to reduce waste, and to turn waste into revenue-generating byproducts such as livestock feed, fertilizer, energy or other products.

The authors note that in developing countries, most food waste tends to occur in the production and post-harvest phases, while in developed countries, waste occurs at the consumption end of the chain. A chart in the report shows North America and Oceana with relatively small levels of waste during agricultural production, processing and packaging compared with other parts of the world. At the consumption end of the chain, however, North America and Oceana account for a significantly larger portion of food waste, although Asia accounts for the largest share.

The report provides examples of waste-reduction or waste-use efforts underway at several companies based on company sustainability reports. Coca-Cola and Mars Food, for example, have targeted zero waste and 20 percent and 25 percent water reduction respectively. Walmart has targeted zero waste and 100 percent renewable energy, but without a target date listed in the report.

Nestle’ is using 800,000 tons of waste coffee grounds from its factories around the world to generate 3.5 percent of its energy consumption. Starbucks is exploring the use of enzymes to break down coffee and food waste into sugars and subsequently into succinic acid, which can be used to make bio-based products such as plastics.

Paul Bosch and Justin Sherrard, Rabobank analysts who authored the report, say, “There are now examples in all sectors and all parts of the supply chain of waste being utilized to access new markets for energy and materials, and to generate higher returns in the process.  While there are different business models and success criteria that apply, we believe that more food and agriculture companies will follow because the drivers behind this shift are too important to ignore.  Leader and early adopters are most likely to get the best returns.”