In discussions about food waste, the focus is often on environmental impact and social responsibility. For companies across the supply chain (production, distribution, retail, logistics and foodservice), there is another core issue: waste is an operating cost that reduces margin, creates stock inefficiencies and increases management complexity.

$540 billion in global losses borne by companies

A recent report commissioned by Avery Dennison and developed with support from Cebr estimates that global losses linked to waste across the retail supply chain could reach around $540 billion in 2026, up from about $526 billion the previous year, with a cumulative 2025-2030 cost estimated at $3.4 trillion.

These figures provide a useful baseline for identifying operational priorities and the most common sources of inefficiency.

The cost of waste: why it weighs more today

The report highlights a point that matters directly to CFOs and supply chain managers: waste is not occasional - it is a structural cost line. On average, the research links food waste to around one third of revenues (33%) across the supply chain, starting after the primary stage (in the field or in farming) and extending through to the point of sale, including processing and packaging, warehouses and distribution platforms, transport and handling.

At the same time, macroeconomic pressure makes planning harder. When the economic environment becomes unstable, estimating sales ("how much" and "what") gets more difficult. This is driven by systemic factors such as:

• Inflation and volatile demand: volumes and mix shift faster (for example, shoppers move to different price tiers or toward promoted products). As a result, a forecast made a few weeks earlier may no longer hold, leaving the business with quantities or assortments that do not match demand.

• Consumers more sensitive to price and promotions: even small price changes or an aggressive promotion can move demand from one product to another or from one retailer to another. That increases the likelihood of sharp spikes and sudden drops, especially in fresh categories.

• Ensuring availability (OSA) without overstocking: retail and distribution must prevent stock-outs (to avoid losing sales and trust) while also limiting unsold product. With unstable demand, this balance becomes harder to maintain.

Overstocking: what happens in practice?

To reduce the risk of running out-of-stock, many organizations play it safe by increasing inventory and orders. But in fresh and short shelf-life items, higher stock increases the chance that part of it will not sell in time. That stock then ends up as last-minute discounts (markdown) that erode margin, or as outright waste.

This is why overstocking (inventory levels above real demand) is often described as a recurring factor that turns uncertainty into waste: it is a defensive response to the risk of missed sales, but it can generate unsold product and write-offs when demand does not follow the forecast.

Where waste concentrates: categories and critical moments

Not all categories weigh the same: meat, fruit and vegetables, bakery are among those where reducing waste is more challenging (perishability, turnover, demand variability, temperature management).

For meat in particular, the estimate points to $94 billion in waste-related losses in 2026, with additional pressure during seasonal peaks (when demand shifts quickly and forecasting becomes less reliable).

For many companies, these losses do not come from one single step, but from many small inefficiencies combined (reorders, returns, waste, cold-chain breaks, picking and preparation errors, and mismatches between promotions and real availability).

The three critical areas: inventory, transit, visibility

One of the most relevant takeaways for B2B is the emphasis on end-to-end visibility (the ability to continuously monitor inventory, movements and product conditions across the entire supply chain, from the warehouse/processor to the point of sale or the customer). Many companies still lack a clear, continuous view of where losses occur, especially at certain handover points.

Industry studies and analyses often identify three recurring areas:

1. Overstocking and excessive coverage: as uncertainty grows, the temptation to increase stock to avoid shortages grows with it. In fresh categories, extra-stock can quickly become write-off (losses recorded in financial statements for goods that cannot be sold and must be discarded).
2. "Blind spots" in transport and transit: movement is often where monitoring is weakest, with limited granular data on timing, transport conditions and accountability. Many organizations report low visibility into how much product is lost along this leg.
3. Data not integrated across functions and partners: without integration between forecasting, purchasing, warehouses and points of sale (and without shared standards with logistics partners), a domino effect follows: suboptimal orders, promotions that drain some areas and overload others, and an increase in returns and waste.

What it means for distributors: controlling the "most opaque stretch"

For distribution players (grocery and foodservice), waste is often driven by two variables: time and conditions. The most immediate levers include:

• Cold chain management with specific KPIs: logging and making events traceable helps reduce disputes and waste. In practice, this means measuring with objective data how many deliveries stay within temperature thresholds, how many minutes are spent out of range and where waiting times and delays build up (loading, transit, unloading), then linking those events to returns, complaints and waste. This quickly highlights the routes and touchpoints to fix (procedures, timing and organization) before issues become financial losses.

• Reducing real transit time: it is not enough to rely on "on paper" lead times set in agreements. You need to measure actual time from departure to delivery, including stops, queues at loading/unloading points and delays. With accurate data analysis, you can identify where slowdowns accumulate, address bottlenecks (delivery windows, loading/unloading times, vehicle utilization, inefficient routes and delivery sequences) and reduce product risk, especially for fresh.

• Dynamic allocation of fresh: when demand shifts, being able to reallocate products where they are needed (across customers or areas) prevents unsold stock from becoming waste. In practice, this means tracking daily sales and inventory by category and remaining shelf life, and using that information to move the highest-risk lots quickly toward channels and destinations with stronger absorption (for example higher sell-out stores, foodservice customers with steady consumption, or areas running a promotion), reducing both waste and pressure for last-minute markdowns.

• Data collaboration: distributors often have visibility across many customers' orders, returns and turnover. Turning that view into shared insights improves planning and reduces overstock. In practice, collaboration involves the distributor, producer and B2B customer (retail or foodservice) regularly sharing key data such as sales/consumption, inventory, remaining shelf life and promotional calendars, so reorders, allocations and production volumes align with real demand.

In other words, distributors can become efficiency enablers, because they operate in the stretch of the chain where many companies report the least control.

For producers and brands: shelf life, formats, planning

For producers and processors, the challenge is not only "how much to produce", but how to produce in line with real demand and market requirements, especially for perishable goods. The aim is to cut downstream waste and unsold stock by ensuring products reach sales channels in the right condition, in the most appropriate formats and in volumes the market can actually absorb.

A first factor is commercial shelf life and perceived quality. If lots arrive with too little remaining shelf life, the risk of returns, last-minute discounts and waste rises. Making remaining shelf life more consistent at delivery - and reducing lot-to-lot variability - improves rotation and reduces losses across the chain.

The second factor concerns formats and portions. In many markets, consumption is more "fragmented" than in the past (snacking, on-the-go and away-from-home), with demand shifting toward smaller portions and single-serve formats. Habits, usage occasions and price sensitivity change. More flexible formats (for example smaller packs or variants designed for different uses) can reduce unsold stock by helping retailers offer the product in ways that match actual demand. This is a practical lever to limit waste both in retail and in home consumption.

Finally, there is planning. If planning happens only upstream, based on rigid estimates and internal targets, production can drift away from what the market really absorbs. When plans are updated regularly using supply-chain signals (actual sales, inventory, rotation speed, customer feedback), volumes and mix can be corrected in time. This reduces structural overproduction and, in turn, the likelihood that product ends up heavily discounted or discarded.

Retail: ensuring availability without increasing losses

For stores the trade-off is always the same: having the product available when customers want it, without overloading shelves and backrooms. In fresh and fast-turnover categories, excess stock quickly becomes unsold product. The question becomes: how to grow sales without building inventory that later forces discounts or generates waste.

Three practical levers commonly used in retail help manage this balance.

• Smart markdown: reduce prices earlier rather than waiting until it is too late. If a product slows down and the risk of unsold stock rises, a targeted, rule-based earlier reduction can keep it moving, preventing waste or last-day markdowns that wipe out margin or push prices below cost.

• The second lever is assortment. Too many similar, slow-moving SKUs (variants competing with one another) can fragment inventory and increase unsold stock. A more disciplined offer - for example by clearly differentiating usage occasions (everyday, premium, ready-to-eat, single-portion, family) and price tiers - supports more consistent sell-through and reduces both waste and reliance on discounts.

• The third lever is reordering based on real turnover. In fresh categories, ordering "by calendar" or using standard quantities can easily create overstock when demand shifts quickly. Linking reorders to actual sales and inventory (and factoring in remaining shelf life) supports more precise purchasing and reduces the build-up that leads to unsold stock.

Foodservice: processes and planning for fresh

In food service, waste often occurs between the kitchen and storage because fresh ingredients have tight timelines and orders can change day to day. In practice, waste happens when more than necessary is prepared (bases, sides, ready dishes or components that do not sell), when portioning is inconsistent (dishes use more or less raw material than expected), and when inventory is not managed systematically (older products left at the back, deteriorating).

Reducing these losses does not require complex processes - just a few clear rules and simple data applied consistently. First, it helps to link the menu to real turnover: promote (including through daily specials) dishes that use ingredients nearing their usable limit, rather than leaving them in the fridge until they must be discarded.

Finally, strong kitchen inventory management makes the difference: track consumption, rotate stock correctly (use first what came in first), and control temperatures and storage practices. These simple steps reduce both "silent" waste (spoiled ingredients) and visible waste (preparations thrown away after service).

In this context, distributors can become operational partners for foodservice by anticipating signals that affect orders (delays, shortages, shorter-than-expected remaining shelf life) and quickly proposing alternatives (equivalent SKUs, different formats, adjusted delivery frequency).

Monitoring and useful metrics

To turn waste reduction into concrete action (and margin recovery), businesses need to move from generic recommendations to shared data updated regularly. Sharing specific KPIs (Key Performance Index) enables departments (purchasing, planning, warehousing, logistics and sales) to work from the same picture and act consistently. Where possible, these indicators should also be aligned across supply-chain partners (producers, distributors, retail customers and foodservice) to prevent upstream losses, unsold stock and waste.

Below are 5 essential KPIs to activate (or strengthen):

• Waste rate by category (quantity and value): how much product is discarded or not sold in time, by category (e.g. meat, fruit and vegetables, dairy, baked goods). Measuring both kg/units and euros helps prioritize action: the category with the highest waste is not always the one with the biggest margin impact.

• Value loss on fresh from waste and markdowns: how much value is lost because product is discarded or sold at reduced price to avoid unsold stock (end-of-life discounts, "recovery" promotions). The goal is to separate what is "saved" through markdowns from what is lost anyway, to understand whether action is timely or only happens at the last moment.

• Days of inventory cover for the most perishable items: how many days current stock can cover sales/consumption, especially for short-life SKUs. This is a key indicator because it quickly flags when inventory is "too high" relative to sell-through, increasing the risk of unsold stock and waste.

• Transport and handling events and their impact: how many anomalies occur along the journey (delays, extended stops, route deviations, temperature excursions, delivery non-conformities) and how they affect returns and waste. Counting events is not enough - link them to outcomes (for example, measure waste against specific anomalies).

• Waste, returns and disputes classified by cause: understanding why they happen matters (quality issues, temperature excursions, order-prep errors, transport damage, misaligned forecasts or orders). Standardizing causes (with a simple but effective taxonomy) helps identify recurring patterns and assign targeted corrective actions to the teams responsible for each step (production, warehouse, transport, store).

Decide better and earlier

In short, the $540 billion figure illustrates the scale, but the most practical message is this: waste falls when the supply chain can make better decisions earlier, supported by reliable, shared information. That means paying closer attention to transit, remaining shelf life and inventory cover, and also integrating the information systems used by different players (so data on orders, inventory, deliveries and expiry dates flows consistently) and adopting tools that turn data into operational decisions.

Here, AI-supported analytics and forecasting models can help identify shifts in demand and logistics anomalies earlier, while more robust sourcing approaches can reduce sensitivity to random variables (sudden demand swings, unexpected peaks, delays, shortages). The goal is to build processes that enable fast, dynamic corrections - more frequent and targeted reorders, timely reallocations, and SKU or format substitutions - so uncertainty does not turn into unsold stock, late markdowns and fresh waste.