The Economics of Wasted Bread

It is still a shock to me when I end up throwing all kinds of bread from the full big blue bins at the food bank into the dumpster. The sight convinces me that there is something that is wrong with a system that allows such waste.   But, at the same time, it appears to me that the people in the business of selling food do not themselves think that there is an real problem that needs to be addressed.   It must be that there is money being made regardless of all the waste, and perhaps the organizations responsible for all this waste believe that this is still a pretty efficient way of operating when all factors that affect their bottom line are taken into account. So they keep charging along and doing what they do. It is only a volunteer at a local food bank dealing with the tons of food he is throwing away who is making this comment. So who really cares!

So here is what happens.   The food bank gets bread that is close to its expiry date from grocery stores. Since bread is a perishable product, it needs to be given out to people quickly once it gets here. The facility often ends up allowing people to take as much bread back with them as they want because they get so much of it, and because they do not want it to accumulate in the warehouse. The problem is that there is sometimes still too much bread left over, and the excess bread often needs to be thrown out into the garbage dumpsters – since there is even more bread being delivered to the food bank at the same time for the next day! If you tried to save all the bread that you got in the cooler you would not have the space for other essential items.

What must be going on is that the big grocery stores are, in general, putting more product on their shelves than they are selling.  They must know that they are doing this! For some reason they can afford the waste. They are almost certainly charging  prices for the bread that is much much more than its real value in terms of materials used and the cost of production. Because of their large volume of product, they are capable of operating a much more efficient system than a smaller mom-and-pop store, and they are also capable of selling this bread for a much lower price than the mom-and-pop store in spite of the tremendous amount of waste. Food is being thrown away in massive quantities! The only time you hear of the huge grocery stores running out of bread is when there is some sort of extraordinary event that is anticipated, most often related to the weather.

Isn’t there something wrong with a system in which we accept such waste without saying a word? This is especially galling when you hear of people suffering from hunger, and even starvation, even in these modern times.  Why do we not speak up?  Is it because many of us in this country who are relatively well-off do not see the real value of this kind of food, especially since it has become inexpensive to us? This kind of situation is not always simply a result of natural market forces. Think about farm subsidies and price controls that impact the price of grains.  Separately, think about competition between the big organizations with plenty of resources and small mom-and-pop stores that are trying to make their business work with a fundamentally different cost structure for doing business, where the big guys want to put the small guys out of business by flooding the markets with lower cost products.  Think about you and I trying to save a buck or two when we shop at the big stores, and our support of the system as it exists today.  While you could expect any economic system to have its own biases, there is something to be said about a situation where we end up with so much waste, especially when there is so much need.

How many of you grew up in a household where the value of food was emphasized one way or the other, the general idea being that you only took what you needed, and you always tried to consume what was on your plate without throwing food away? Unfortunately it seems that this principle does not easily scale to the bigger picture.  Or perhaps people do not even think in these terms any more.

Published by

K. Joseph

I am an engineer by training. I am trying to explore new horizons after having spent many years in the Industry. My interests are varied and I tend to write about what is on my mind at any particular moment in time.

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