A Shared Economy Model as a Solution to the Global Food Waste

A Shared Economy for the Food Value Chain

Advances in agricultural processes are synonymous with efficiency in food production — a privilege that has benefited the human population. On the flip side, food became a victim of abuse — as food waste and loss became the norm across the value chain. Today, the narrative is changing: food waste is a global crisis; it constitutes a loss of natural resources and betrays the socio-economic significance of food. The UN warned that a potential increase in the global population by 2030 would trigger increased demand for food, which will exert pressure on the scarce natural resources and heighten the risk of global food insecurity. Food waste is a silent problem that forcefully obstructs the attainment of global ideals, such as global food security, economic efficiency, resource efficiency, environmental sustainability, and a pollution/emission-free natural habitat for humans. In recent years, politicians, regulatory agencies, corporate entities, consumers and players within the food value chain have embarked on a process of self-reflection and evaluation of their internal processes. The current figures on food waste in economically advanced countries portend grave social, economic and environmental dangers if not addressed. There have been as accelerated efforts to sensitize food producers and retailers and influence consumer attitudes by promoting behaviours that reduce household food waste. However, structural changes and increased collaboration is the missing element within the supply chain.

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It is an open secret that food waste is a nagging problem across all stages of the supply chain- especially in farms, retail stores and households. The shared economy model preaches the “monetization” and “utilization” of goods and services — synonymous with Uber and Airbnb. This can be imported to the different chambers of the food value chain to achieve more sustainable patterns through market platforms that facilitate the smart exchange of surplus food. A variety of initiatives, digital platforms and start-ups serve as a testimony to the benefits of a collaborative model that collects surplus food and link retailers and food consumers and retailers. In the upstream section of the food value chain, technology potentially offers limitless possibilities to bridge the gulf between farmers, distributors and consumers of fresh food produce — presenting a market-oriented solution to the global food waste crisis. This can be complemented by an expansive network of peer-to-peer, business-to-peer, and business-to-business actors, who provide an outlet to the misfits market for edible food products that do not meet the aesthetic expectations regarding size, colour, and shape. Food waste is an attitudinal problem that requires regulatory instruments and behavioural solutions. Policy instruments aimed at addressing food waste should not only focus on the consumer market, but capture the infrastructural deficiencies in the channels of the food chain where food waste occurs.

Consumer Apps, Digital Platforms and Shared Economy

There is a variety of digital innovations in the food value chain that are initiatives of the consumers, by the consumers and for the consumers. Consumer-centric digital platforms offer a variety of opportunities to transform the food ecosystem. Technology-based solutions like Too Good To Go creates a business-to-consumer marketplace for surplus food destined for the bin- a situation worsened by the coronavirus pandemic. This optimizes food production, processing, storage, delivery, consumption patterns and market demands. The Too Good To Go app helps businesses make smart decisions to significantly reduce food waste and shorten the distance situated between food producers and consumers in the hospitality industry. These platforms also assume the form of the ancient system of trading like “trade by barter” (food swapping), gifting, meal sharing or direct sales. Foodsharing and travelspoon exemplify this collaborative consumption model. This has been dubbed the “uberization” of food to illustrate how technology can be leveraged to change buying behaviours, connect food producers, retailers and buyers for delivery and storage capacity. This encompasses transactional sharing platforms, commercial kitchens or virtual restaurants that project the “restaurants without seats” model, network of shoppers, food banks, and business-oriented individuals offering home-made meals within the “seats without restaurants” model. For instance, consumers can share the food in their fridge or kitchen with other consumers before going travelling on vacation or for an extended business trip.

A subscription model presents the personalization of food and eliminates the middlemen in the food supply chain. Companies like HelloFresh have redefined the food and beverage industry with easy-to-follow recipes with clear nutritional information, high-quality and fresh ingredients in convenient meal kits. Pre-portioned ingredients or partially-prepared food ingredients and recipes for home-cooked meals prevent left-overs from meals, and surplus herbs or spices. Thus, “meal kits” offers value and cost-benefits for the reduction of food waste. Foodora also offers a single platform to seamlessly order regular meals or a specialized menu from a variety of restaurants. Similarly, platforms like Coop Danmark invented the “fetch” app to allow individuals to receive compensation for using bicycles to shop and deliver food to customers living within the area.

The Benefits of the Shared Economy Model on Food Value Chain

The sharing economy principles of social connection can significantly minimize food waste, and promote sustainable consumption patterns, which translates to socio-economic and environmental sustainability. This explicitly refers to innovative models that facilitate the collection and distribution of excess food between consumers. A “shared” approach in food value chains offers a common framework for online freight marketplace, food inventory and sales reports. This potentially translates to the efficient management of food surplus, convenience and innovative solution for unsold food products. For instance, retailers can upload data about food marked for the landfill and food banks, consumer networks, and local charities receive a real-time notification. This may require prior registration and adequate knowledge about measures on food safety and hygiene. Retail giants that dominate the traditional space exhibit a preference for standalone applications and platforms, rather than embrace a shared economy and marketplace. The hospitality sector, small-scale food vendors and consumer-to-consumer segments have been receptive to a market synergy. However, initiatives and start-ups aiming to reduce food waste are gradually shifting focus on farmers and retailers, although the consumer-to-consumer exchange of food surplus appears to be the missing link that has managed to attract stakeholder attention.

Of course, the legal imperatives in several countries prohibit the distribution of unused and unsold food, thereby forcing restaurants and retailers to avoid legal risks by disposing and not donating food. However, a solution is embedded in a shared economy that invites the government or state regulatory agencies to collaborate and mediate processes within the “shared economy”. Digital platforms have the potential to capture the entire value ecosystem of food production, storage, transportation and supply. A consumer data-driven model can disrupt the rigid value chain structure that exists across the production, logistics, retail and service sectors of the food value chain. The formula is a simple one: shared economy plus shared responsibility equals sustainability. In this case, the sharing model is similar to the betting market: cash in on food surplus and value chain collaboration to keep food out of landfills, for a cash-out value within the logic of global food security, economic and environmental sustainability.

Written by Alexej Shevel | Change & Challenge

Co-founder of Change & Challenge

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