Saturday, 9 November 2013

Reducing food waste: Time for a rethink?

A report published last week by the Waste and Resources Action Programme (Wrap) showed that British families are throwing away around £60 worth a food a month. This report comes hot on the heels of figures from supermarket giant Tesco showing it generated almost 30,000 tonnes of food waste in the first six months of the year. Apparently 68% of bagged salad ends up in the bin, and 20% of bananas. Clearly, this does not look like an efficient outcome. Which raises questions about why it happens and how we can stop it.
      To most the answers seems obvious - consumers are making biased choices and need help to stop doing so. For example, food journalist Joanna Blytham is quoted as saying consumers are being 'ripped off' by supermarket promotions: "What we could say to consumers is 'wise up' ..... The minute you walk into the supermarket you may be able to get a few bargains but, more likely than not, you'll be nudged into buying stuff you didn't really want or need and it will go in the bin." Consumers, therefore, are buying things they simply do not want. But are consumers really so dumb?
      Consider this quote from Wrap Chief Executive Dr Liz Goodwin: "Consumers are seriously worried about the cost of food and how it has increased over recent years. Yet, as Wrap's research shows, we are still wasting millions of tonnes and billions of pounds." If consumers are seriously worried about the price of food then they have a big incentive to cut waste. Moreover, given that most of us shop at least once a week, we also have plenty of chance to learn from our mistakes (if they really are mistakes). Indeed, waste has been cut dramatically over the last few years. Given the incentives and opportunities to reduce waste, the fact that much waste still remains suggests to me that this is not just about consumers making bad choices.
      In elaborating on this point the crucial thing to recognise is that buying a food is a choice with uncertainty. The family goes out shopping on Monday without knowing whether they will eat out on Wednesday, or what they will feel like eating on Thursday, or how hungry they will be on Friday. The task, therefore, is to choose a bundle of goods that is expected to keep everyone happy. The optimal bundle of goods should almost certainly involve buying food that will be wasted. To give an illustration: suppose you are going for a picnic in the countryside where there are no shops. You estimate what the family will likely eat. How much food do you take? Pretty much everyone (especially those with children) would take more than the estimate. Then you have more food if you need it. You also can have a bit more variety to satisfy your tastes.
      The savvy consumer will, therefore, generate food waste. If they always want to have enough food in the cupboard and they like variety they will buy more food than they probably need. This is the optimal thing to do! Ex-post they end up wasting food, but this is a fair price to pay for having what they want when they want it. And, as a society we are now rich enough to pay for what we want when we want it.       
     Personally, therefore, I think food waste is much more a reflection on consumer preferences than consumer bias. I think consumers knowingly buy more food than they will probably need. If I'm right then we may need to rethink how to tackle the 'problem' of food waste. In particular, the real culprit is uncertainty and not supermarket offers. We need to think, therefore, of ways to reduce uncertainty. This probably means we need to encourage consumers to shop more often, and to make stores more accessible. The big, once a week shop in an out-of-town supermarket is most likely to lead to waste. Regularly picking stuff up to eat on the way back home from work is least likely to lead to waste.
      Interestingly, over the last decade Britain has seen a surge in the number of supermarkets opening small stores in town centres, rail stations etc. In other words, food shopping has become easier and more accessible. I wonder whether that has anything to do with the fall in food waste that we have seen in recent years?     

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