Avery Dennision: How Retailers Lose Billions to Food Waste

As the food and drink sector reviews trading figures following the busy January 2025 peak season, emerging evidence suggests that waste across the supply chain could be significantly undermining profitability for retailers and manufacturers alike.

Materials science and digital identification company Avery Dennison has published research titled 'Making the Invisible Visible: Unlocking the Hidden Value of Food Waste to Drive Growth and Profitability', which predicts that the economic cost of food waste could reach US$540bn annually by 2026.

Analysis conducted independently by the Centre for Economics and Business Research (Cebr) reveals that expenses linked to food waste currently represent an average of 33% of total revenue across the retail supply chain, covering everything from post-farm processing through to the point of sale.

The study surveyed 3,500 food industry leaders worldwide, highlighting a substantial disconnect between recognising the scale of the problem and implementing effective solutions.

Visibility gaps in food operations

While 54% of leaders report that waste-related costs have risen between 2022 and 2025, the ability to track where and how waste occurs remains limited.

Approximately 61% of organisations admit they do not have full visibility into where food waste is generated within their operations.

Furthermore, 56% of companies lack a comprehensive understanding of the volume of waste produced during transit, representing a critical knowledge gap between manufacturing and distribution stages.

Perishable categories present the greatest management challenges.

Half of the leaders surveyed identify meat as their primary concern, followed by fresh produce at 45% and baked goods at 28%.

Waste in the meat category alone could result in US$94bn in lost output by 2026.

Inflation has added further complexity to demand forecasting, with 74% of retailers stating it is more difficult than ever to predict consumer demand for fresh meat.

During the November and December 2024 holiday trading period, 67% of food businesses anticipated that meat waste would impact their margins.

Julie Vargas, VP and GM at Avery Dennison, says: “The biggest challenge is what we can’t see.

"From transit to shelf blind spots are silently eroding margins. With the right innovation we can turn this loss into measurable value and shift the conversation on food waste...into a business-critical one.”

Technology solutions across categories

The research advocates for a "Net Positive" approach within food and drink businesses, repositioning waste as a potential resource rather than simply a cost.

Several major food retailers and brands are deploying technology to address these operational challenges:

Walmart has collaborated with Avery Dennison to trial radio-frequency identification (RFID) sensor technology in high-moisture meat cases, allowing staff to monitor digital use-by dates and manage stock rotation more effectively.

Kroger has implemented an RFID initiative across bakery departments in 2,750 stores, improving inventory visibility and reducing waste in fresh baked goods.

Chipotle is using RFID solutions in 200 locations to trace ingredients from distribution centres, helping to ensure freshness and minimise spoilage.

Ben & Jerry's has introduced automated temperature monitoring and inventory systems, which has reduced product loss and saved more than 700 labour hours each year.

Michael Colarossi, VP and Head of Enterprise Sustainability at Avery Dennison, adds: "For too long, food waste has been positioned almost exclusively as a sustainability and societal issue.

"We must recognise it as the business opportunity it truly is. More than seven in 10 (73%) business leaders told us that they see tackling food waste as a growth opportunity.

"That's why the US$540bn in lost value should be a clear call to action for the food retail supply chain to cut waste and boost efficiencies."

Food retailers as system leaders

Industry experts suggest that food retailers occupy a unique position to drive change throughout the supply chain due to their influence across multiple stakeholders.

Deon Stander, President and CEO of Avery Dennison, says: "Retailers influence every part of the value chain. When retailers act the entire system responds."

The scale of investment required to implement comprehensive tracking systems across global operations presents both a challenge and an opportunity for competitive differentiation.

Retailers who move first on waste reduction technology may gain significant cost advantages over competitors whilst simultaneously meeting consumer expectations for sustainability.

With the cumulative cost of food waste projected to reach US$3.4tn between 2025 and 2030, the urgency for action across the sector is clear.

The United Nations (UN) Sustainable Development Goal 12.3 aims to halve food waste by 2030, yet 27% of industry leaders believe they will not achieve this target, underlining the gap between stated ambitions and operational reality in the food and drink industry.