Gartner : A (Partly Baked) Circular Economy Solution for Food Insecurity

Happy December, everyone! After a tumultuous second year of the pandemic, I was poised to write about the Omicron variant and the potential new supply chain disruptions it might unleash. Of late, Omicron seems to be more wave than tsunami and I am glad to end the year, and this blog, on a more hopeful note.

Recently, I was sourcing content for a customer presentation and ran across an excellent Supply Chain Symposium session delivered by my colleague Tom Enright titled, "The Future of Retail Belongs to Those That Collaborate." Tom covered a lot of ground, but one theme that got my gears going was the untapped opportunity to collaborate with others on last-mile delivery. It is an open secret that, at any point in time, nearly half the delivery vehicles on the road are hauling dead air, not freight. The irony is that driver and vehicle shortages have plagued our industry and significantly disrupted customer service levels this year.

This spurred a thought. Where else might we creatively collaborate to solve two problems, one of uncoordinated supply and the other of unmet demand? How about the twin problems of food waste and food insecurity?

Food Pantry Plus Chopped Meets Bombas

If I were to pitch this idea to a venture capitalist, I might use the above elevator pitch. Stick with me, as I build my case.

Let's start with the uncoordinated supply problem. Globally, we waste about 1.4 billion tons of food per year. On an absolute level, the U.S. discards more food than any other country - an estimated 30-40% of its food supply. The largest portion comes from households, but another 40% is discarded through businesses such as restaurants and grocery stores.

On the demand side, there were a significant number of people in the U.S. - nearly 15% last year - who were food insecure. Some are homeless, while others struggle behind the closed doors of their homes.

At a macro level, it seems that superior coordination could bridge perishable excess supply with persistent excess demand. Part of the issue is converting the current mix of discarded food that is not yet spoiled into edible meals for those who need them.

In my house, we will sometimes watch the Food Network television show, Chopped. In each episode, four chefs compete in a three-round contest, where they attempt to incorporate unusual combinations of ingredients into dishes that are later evaluated by a panel of three judges. And when I use the term unusual, I really mean it. One episode had the chefs prepare dishes using dirt pudding, beef hearts, gummy body parts and pig ears. Most of the food discarded by businesses each day is less exotic, and more easily usable, than anything worthy of Chopped.

One (perhaps half-baked) idea that occurred to me is to leverage local health-department-certified food preparation spaces that do not have a front of house (AKA ghost kitchens). These ghost kitchens might take in some of the discarded, but still usable food flowing out of businesses such as grocery stores, and with some creativity turn them into meals made available each day. Local restaurants or food delivery platforms (e.g., Grubhub in the U.S.) could add the option for customers to order these meals on their websites. In a similar way that companies such as Bombas offer to donate one of their products for each one purchased, the ghost kitchen could donate a meal, or percentage of meals to those in need. The restaurant would earn a service fee for advertising the meals, which would be delivered turnkey by the ghost kitchen. The kitchen would retain a larger portion of the revenue to cover its operating costs, which would be mainly space, utilities and labor, since the food itself would mostly come free. I did not get as far as solving the inbound and outbound last-mile logistics part of this equation, but it most certainly would work better in densely populated areas.

The Future is Ecosystem-Based

I've shared some less conventional thoughts on how we might solve two endemic societal problems, not just in the U.S., but globally. For those more creative and entrepreneurially inclined, please consider these as open-source ideas that you might add to and create an economically viable business (or non-profit) model. It's a lot easier for me to spill some digital ink than to operationalize the idea, but it seems there's a kernel of opportunity if we more creatively intertwine different ecosystems together. My sense is that this approach can be our way forward for many of our other collective challenges.

Wishing you all a joyous holiday season and a happy and healthy 2022.

Stan Aronow
VP Distinguished Advisor
Gartner Supply Chain
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