Avery Dennison: Retailers are Losing Billions to Waste

As businesses evaluate their performance after the 2025 peak trading season, new data indicates that food waste is impacting profitability throughout 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, which spans from post-farm processing to the final point of sale.

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

The challenge of supply chain visibility

Despite a growing financial impact with 54% of leaders reporting that waste-related costs have increased over the last three years, 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 a critical blind spot between manufacturing and distribution.

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. Inflation adds another layer of complexity to demand forecasting with 74% of retailers reporting it is more difficult than ever to predict consumer needs for fresh meat.

During the 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 previous years.

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.”

Innovation for efficiency

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: The retailer worked with Avery Dennison to trial RFID sensor technology in high-moisture meat cases enabling staff to monitor digital use-by dates and manage stock rotation.

Kroger: An RFID initiative in bakery departments across 2,750 stores has improved inventory visibility and cut down on waste.

Chipotle: By using RFID solutions in 200 locations the company traces ingredients from distribution centres to ensure freshness and reduce spoilage.

Ben & Jerry’s: The implementation of automated temperature monitoring and inventory systems has decreased product loss and saved more than 700 labour hours annually.

Mr. Fresh (China): Mr. Fresh uses proprietary packaging to regulate ethylene and oxygen levels for lychees extending their shelf life by 3–5 days.

Nestlé (Colombia): The introduction of smarter resealable packaging has maintained product freshness for weeks in humid conditions.

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. 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.”

Leadership and future commitments

Industry experts argue that retailers are central to creating change across the system, given their unique position.

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

This call for leadership extends to reframing waste not as a cost but as a market opportunity. 

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

The 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 ambition and reality.