“Transportation is a huge factor in determining our product pricing, and Flock Freight has helped us a lot in achieving a price that was more in line with our goals.”
- Alice Cuccioli, Director of Logistics and CS at Gimme Seaweed
2023 F&B RESEARCH STUDY
How freight inefficiencies are fueling America’s food and beverage waste + price increases.
AMERICA HAS A WASTE PROBLEM
REPORT OVERVIEW
Uncovering the culprit behind food and beverage (F&B) freight inefficiencies.
America has a food and beverage waste problem.
Nearly 40% of all food in America is wasted each year — and the end consumer isn’t the only contributor.
F&B waste is not just about what is left untouched at the table. It also includes food that has lost its value, such as what’s damaged during transportation.
Freight damage, loss, and delays are costing shippers millions. These losses don't merely eat into profits — they also result in wasted food and dissatisfied consumers.
This study, conducted in collaboration with Drive Research, investigates how freight inefficiencies are a key contributor to the rising F&B prices and waste. Study findings and insights are based on a survey of 200 F&B shippers from companies of varying sizes.
Freight damage and loss are the leading cause of waste in F&B supply chains.
In 2022, nearly half of F&B shippers reported fully wasted shipments due to damage and loss, and 100% of shippers reported partially wasted shipments.
Additionally, delayed shipments, which were the third top contributor to waste, forced 46% of shippers to throw away entire shipments.
Nearly 2.4 million pounds of food
are wasted annually per shipper.
To put it into perspective, 2.4 million pounds of wasted product is equivalent to:
2 Million
2 million + meals 1
55
55 full truckloads
20 K
nearly 20,000 gallons of diesel 2
753
753 metric tons of greenhouse gas emissions from landfills 3
Freight damage and loss-induced waste varies by company size, with larger corporations leading the waste charts.
So, what happens to these damaged goods? Tragically, 41% of shippers reported throwing them away.
Some manage to sell these products at a discount or hand them out to employees. Even though some shippers donate damaged goods, only 18% of those goods are deemed suitable for donation based on applicable state and local health, food handling, and food safety laws.
Regardless of the severity of damage, the FDA discourages consumers from purchasing F&B products that are visibly damaged to avoid the chance of ingesting harmful bacteria. When damage can affect the safety and well-being of consumers, often the only option is to throw goods away.
1. 1.2 lbs of food per meal. Source: Feeding America
2. 55 truckloads, 44,000 lbs each, 2,000 mile routes. Sources: EPA equivalency calculator, Flock Emissions White Paper
3. Assuming it’s produce, landfilled compared to composted. Soure: Natur-Bag food waste calculator
Nearly 2.4 million pounds of food are wasted annually per shipper.
Damage and loss cost the average F&B shipper more than $6 million annually in 2022.
In the freight industry, every incidence of damage and delay carries considerable financial implications.
But the losses don't stop at damages. Time is also a valuable commodity, and delayed shipments cost shippers over $200,000 in wasted goods. Add a bill of over $400,000 for on-time-in-full (OTIF) fees, and the cost of delays become painfully clear.
Not only are shippers paying the price of wasted goods and fees, 89% reported that transportation delays negatively impacted their sales by an average 8% in 2022.
Damage. Loss. Delays
Shippers are losing more than just profits.
"The amount of food wasted per shipper annually due to freight inefficiencies is not just a financial loss, but also an ethical and environmental concern that demands our immediate attention.”
- Chris Pickett, COO at Flock Freight
The ripple effect of these delays increases the volume of goods wasted, generating further losses and straining relationships with an essential part of any business: the customer.
F&B customers, typically grocery stores or distributors, are catering to consumers who eagerly anticipate their ordered goods and who are often left frustrated by late or damaged deliveries. This dissatisfaction can escalate, potentially harming business's reputations and ultimately impacting their bottom line. In an era where customer reviews can make or break a company, maintaining customer satisfaction is paramount.
Additionally, the F&B industry operates on a tight schedule, and punctuality is crucial. Many F&B distribution centers have strict OTIF requirements that may even deny business with a shipper if they make late deliveries too many times. Consistent and efficient service not only satisfies customers, but it also maintains crucial partnerships within
the industry.
Transportation costs are the
#1 factor in rising F&B prices.
In 2022, food prices experienced the largest annual increase since the 1980s with 66% of F&B shippers reporting a 1-20% price increase.
What caused this inflation? 77% of shippers identified transportation costs as a driving force behind changes to product pricing. F&B waste followed closely with 53% of shippers having to bake in the extra cost for wasted goods.
Transportation costs are not just a logistics concern for F&B shippers, but also a key factor in the industry’s pricing strategy and market competitiveness.
Increasing the gap for affordable living.
Walk into any grocery store and the price increases are immediately noticeable and painfully felt by consumers. This is especially true for low-income consumers who spend nearly 30% of their total income on food. Transportation inefficiencies, and in turn, rising prices are making more F&B products less affordable for most Americans. Ultimately, reducing transportation costs has a positive impact on a business's bottom line and in lowering end consumer price points.
FlockDirect® reduces these inefficiencies.
Drive up profit, drive down waste with FlockDirect®.
By offering shared freight space on direct and terminal-free routes, FlockDirect® diminishes these transportation inefficiencies with reduced damage, more reliable deliveries, greater cost savings — and ultimately less F&B waste.
Leveraging advanced A.I. technology, FlockDirect® moves goods along optimized, terminal-free routes — saving shippers $200k in wasted, delayed freight and $400k in OTIF fees. These routes also avoid the high risk of damage common with standard LTL shipping to deliver 99.8% damage-free and save millions of dollars annually.
By shipping FlockDirect®, F&B companies like…
100%
Saw 100% damage-free rate.
$500 K
Saved over $500k in total shipping costs.
$230 K
Saved $230k in total shipping costs.
97%
Recieved 97% on-time delivery rate, while also reducing their damage and waste.
More than just reducing damage and delays, FlockDirect® provides a sustainable shipping option for F&B shippers.
Flock prioritizes waste reduction and freight efficiency by:
- optimizing our shared truckload model that reduces CO2e emissions by up to 40%, prevents product waste, and maximizes trailer usage
- continuing to uphold the highest standards of social and environmental performance that helped us become one of the few certified B Corps in the freight industry
- partnering with groups like Feeding San Diego to provide funds and meals to those in need
- purchasing carbon offsets to support shipper’s sustainability goals through our carbon-neutral Frequent Flocker program
Reduce truckload transportation costs by up to 20% with Flock - so you can keep products reasonably priced, earn higher profits, and maintain accessibility to living essentials for all
Book a demo to see how FlockDirect® can help you deliver on-time and damage-free.
Methodology
The data supporting the content and objectives set forth in this paper come from an online survey conducted by Drive Research, a third party not affiliated with Flock Freight. The survey took an average of 24 minutes to complete and included 44 questions and received 200 responses. Fieldwork for the survey began on June 14 and ended July 7, 2023.
Target industries included food and beverage companies that do not ship exclusively produce. T arget participant titles varied based on the size of the business (i.e., transportation buyers, load managers, transportation managers, VPs of supply chain, directors of transportation, logistics managers). A strong mix of company sizes to segment the data by the market included a distribution of $10M to $99M annual revenue, $100M to $499M annual revenue, and $500M or more annual revenue.
With a probabilistic sample, a total of 200 responses at the 95% confidence level offers a 7% margin of error. If the survey were conducted with another random pool of 200 respondents, the results would yield within +7% or -7% of the stated totals in the reports. The margin of error can be used as a guideline to understand the reliability of these results.