Food waste is often discussed as a consumer or sustainability issue, but for wholesalers and food and beverage (F&B) supply chains, it is an operational one. Stock that can’t be located, products that have to be written off, and supply not meeting demand all hit margins and a company’s reputation with its stakeholders and customers.
Our research into the UK F&B supply chains highlights just how significant this challenge has become. On average, businesses are losing more than 12% of their fresh or perishable stock each year, with over half of supply chain managers saying that waste levels have increased in the past 12 months. Here’s the kicker – much of this loss is not driven by market volatility or supplier disruption, but by internal processes that are no longer keeping pace with the expectations placed on them.
For wholesale managers, the message is clear – food waste is a symptom of systems, processes and assumptions that have quietly fallen out of date, and it’s time to fix this, writes John Burgess, Innovation Director, Balloon One.
Waste becomes visible in the warehouse
While forecasting accuracy and demand volatility play a role in managing food waste effectively, the smooth running of the warehouse is a critical piece of the puzzle to get right for supply chain managers. In fact, after forecasting, managers have said that warehouse operations contribute the most to avoidable food waste.
This shouldn’t come as a complete surprise given warehouses are expected to handle a growing number of products, tighter delivery windows, and increasingly strict traceability requirements. But many operations are still relying on systems that pre-date the pandemic, or even using spreadsheets and manual processes, which is providing a barrier to seamless operations.
Small inefficiencies quickly become bigger issues in this environment. Stock is received without visibility over expiry dates or the right labelling, and teams under pressure make judgement calls rather than intentional decisions. The result? A product that reaches its expiry date before it reaches the customer.
The complacency paradox
One of the most striking findings from our research is what we can describe as a “complacency paradox”. Despite rising food waste levels and an understanding that much of this is avoidable, nearly two-thirds of supply chain managers say they are confident their current warehouse systems are adequate.
It might not seem to make sense, but their confidence is understandable. Many systems are working fine, are familiar to users, and by now are deeply embedded in day-to-day operations. They do their job in the sense that orders go out and customers are supplied. But as we know, good enough is often the enemy of great (or in this case, fit for purpose).
The danger of adopting a mindset that accepts adequacy is that it masks gradual decline, and systems that were once sufficient become limiting as volumes increase and supply chain complexity grows.
Where supply chain leaders should focus
But it’s not all doom and gloom, and there are clear opportunities for improvement across the supply chain – many of which will already be on managers’ minds.
Manual or loosely enforced rotation processes struggle in high-volume environments, but systems that actively enforce FEFO (first-expired, first-out) principles, rather than relying on picker judgement, can significantly reduce write-offs. This also provides a way to mitigate human error, ensuring supply chain professionals can focus their energy on the tasks that drive more value.
A lack of system integration between forecasting, Enterprise Resource Planning (ERP) and warehouse systems remains a major challenge for supply chain managers. Connecting demand signals, inventory visibility, and operational execution through an integrated ecosystem that provides end-to-end visibility ensures that data flows seamlessly from demand planning to final delivery. This helps eliminate data siloes and reduces the errors that lead to over-ordering and poor stock rotation.
Building the business case for modernisation
Updating and connecting systems will allow managers to go from short-term firefighting to making longer-term strategic decisions.
Food waste loss is often a result of predictable and repeated operational issues, occurring at the same points, under the same conditions, week after week. For supply chain managers, addressing these issues requires assessing where waste is actually occurring, how decisions are being made on the warehouse floor, and whether systems are supporting or compensating for complexity.
For wholesalers, food waste is one of the clearest indicators of good operational health. In an industry defined by tight margins and high expectations, managing avoidable waste signals an organisation is focused on its future growth, strengthening brand reputation, and enhancing customer satisfaction.
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