Food waste: The world’s biggest market failure

What would you say if I were to tell you that you could make the world a better place by spending an extra $1,500 a year at the grocery store? Perhaps you would say that, for all that you believed in the cause, you really didn’t have $1,500 to spend supporting it. Which is fair enough: That’s a substantial chunk of change!

But what if I were to tell you that you could make the world a better place by spending $1,500 less at the grocery store? Without changing a single morsel of what you eat – the same brands, the same quantities, the same everything.

That, amazingly, is the world we live in, and gives you an idea of the enormous scale of food waste. I’m a natural skeptic of all large numbers which are hard to measure, but even if these ones are off by a factor of two or three or four, they’re still enormous: the average American creates 22o pounds of food waste every year, worth some $1,500. That adds up to 35 million tonnes of food wasted in America each year. Globally, the value of all the 1.3 billion tons of food thrown away each year is some $750 billion. That’s more than the GDP of South Africa and the Philippines combined.

Even local effects are enormous. A full third of New York City’s trash is food waste, which means that the city government spends about $180 million per year tipping it into landfills. That’s a lot of money before you even start looking at the other negative effects of food waste, such as what happens when you put tons of putrescible waste into puncturable plastic bags on city streets. (Hint: It’s not only foul odors, it’s also rats. Lots of them. In what should be a pleasant shared public space.)

Making a serious dent in this issue is a classic collective-action problem: It involves millions of people all making small changes, like ignoring expiration dates, storing produce better, reusing leftovers, and buying smaller quantities of food more frequently. We can all be better at such things, and it would certainly help if we realized how much money they could save us.

There are technology and design solutions too, which can make a dent: invisible natural coatings which preserve food’s shelf life, for instance, or just making refrigerators less deep so that food doesn’t end up getting hidden, out of site, at the back of the fridge. In the developing world, things like better roads and more extensive electrification will help to ensure that cash crops stay fresh to their final destination, rather than rotting long before they get there.

The really big prize, however, comes with large numbers people in the developed world changing their ingrained habits, about how they shop and how they consume. That’s not easy when food is a smaller and smaller part of household budgets. “It’s getting people to appreciate food again, as something people worked very hard to produce for you,” says Danielle Nierenberg, the president of Food Tank. “It’s storytelling. Making people relate to a farmer. Understanding what went into their food. Relearning common sense.”

The multi-billion-dollar question, then, is just this: How does one most effectively send that message, achieve that goal? Changing people’s behavior is one of the hardest things that anybody can try to do. Guilt trips don’t generally work well, or for very long; Nierenberg has more hope that a simple appeal to financial greed might be a better idea. After all, most of us would really like an extra $1,500 per year.

But so far, it’s early days, and for all that there are a few encouraging data points from places like England and Tennessee, no one has yet found the magic bullet. It’s frustrating, because these are the kind of problems that the capitalist system is meant to solve magically: if there are 750 billion dollar bills lying on the sidewalk, someone should have made a machine to pick them up. Instead, there are millions of people who are both overweight and undernourished, and millions of tons of precious nutrients being dumped into landfills every year. It’s the world’s biggest market failure, and we’re only just beginning to work out how to address it.

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