Avery Dennison: The Real Cost of Food Waste for Retailers

As businesses assess their performance in early 2025, emerging data suggests that food waste could be significantly affecting profitability across the global retail supply chain.

A report titled 'Making the Invisible Visible: Unlocking the Hidden Value of Food Waste to Drive Growth and Profitability' from materials science and digital identification specialist Avery Dennison forecasts the economic cost of food waste to climb to US$540bn each year by 2026.

Independent analysis by the Centre for Economics and Business Research (Cebr) shows that food waste expenses currently account for an average of 33% of total revenue within the retail supply chain.

The research, which included 3,500 global food industry leaders, points to a considerable gap between awareness of the sustainability challenge and concrete action to address it.

Visibility challenges hinder progress

Despite 54% of leaders reporting that waste-related costs have increased between 2022 and 2025, visibility remains a primary obstacle. Around 61% of organisations acknowledge they do not have complete visibility into where food waste happens in their operations.

Additionally, 56% of companies lack a clear grasp of the waste volume generated during transit. This lack of transparency creates significant challenges for implementing effective waste reduction strategies.

Perishables are the most challenging categories to manage. Half of leaders identify meat as their main difficulty, followed by fresh produce at 45% and baked goods at 28%.

Meat waste alone is projected to result in US$94bn in lost output by 2026. During the 2024 holiday period, 67% of businesses anticipated that meat waste would reduce their margins, while 69% noted that managing this issue has become a greater operational concern compared to 2023.

Julie Vargas, Vice President and General Manager at Avery Dennison, said in the report: "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-driven sustainability solutions

The report suggests a "Net Positive" approach, reframing waste not as a cost but as a resource for growth. Several global brands are using technology to tackle these issues.

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

Kroger implemented an RFID initiative in bakery departments across 2,750 stores, improving inventory visibility and cutting waste.

Chipotle uses RFID solutions in 200 locations to trace ingredients and ensure freshness.

Ben & Jerry's implementation of automated temperature monitoring has decreased product loss and saved more than 700 labour hours annually.

Mr. Fresh in China uses proprietary packaging to extend lychee shelf life by 3–5 days.

Nestlé in Colombia introduced smarter resealable packaging that has maintained product freshness for weeks in humid conditions.

Michael Colarossi, Vice President and Head of Enterprise Sustainability at Avery Dennison, said in the report: "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.

"In fact, 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. Only by uncovering the blind spots in the chain can we take meaningful steps to reduce loss, build resilience and create lasting value for both businesses and the planet.”

Retailers hold sustainability leadership responsibility

Industry experts argue that retailers are central to creating change across the system, given their unique position in driving sustainability initiatives throughout the value chain.

Deon Stander, President and Chief Executive Officer of Avery Dennison, said in the report: "Retailers influence every part of the value chain. When retailers act the entire system responds."

With the cumulative cost of food waste expected to hit US$3.4tn between 2025 and 2030, the need for action is pressing.

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 meet this target, exposing the gap between sustainability ambition and reality.

This shortfall highlights the urgent need for retailers to accelerate their waste reduction initiatives and adopt innovative solutions.