1. Food Waste in America Opportunities to Fight Hunger July 2011

2. Summary Feeding America and A. T. Kearney collaborated to evaluate food waste and donation opportunities along the US food supply chain This study evaluated all food channels with a focus on foodservice channels Approximately 80 billion pounds of food is wasted annually, 50 billion pounds in foodservice channels The common enemy of companies and Feeding America is landfill waste Supply chain partnerships can ensure this waste is minimized and redirected to donation

3. Feeding the Nation’s Hungry Feeding America’s mission is to feed America’s hungry through a nationwide network of 200+ member food banks and engage our country in the fight to end hunger

4. National Retailer donations are offsetting a decline from National Manufacturers 4 Feeding America Annual Food Sourced (million lbs) Source: Feeding America 2,100 2,200 2,600 2,950 Federal Purchase Local Donation National Donation Total Product Donations Increasing

5. 5 Worst Employment Recession Since WWII Months after Peak Employment % Job Losses Relative to Peak Employment Nearly 7 Million Unemployed for Over 26 Weeks Month/Yea r Unemployed over 26 Weeks 1969Current 0 47 Current Recessio n 50.2M Americans are Food Insecure Source: calculatedriskblog.com; USDA Demand Outpacing Supply

6. Usage Alternative Channels (519) Estimated US Food Supply Chain (1) (billions of lbs) 6 Production International Trade Farming (1,270) Agri-Processing (405) Manufacturing (710) Wholesaling (673) Primary Distribution (861) Drug Stores (10) Retail (372) Caterers (2) Hospitality (17) Institutional (38) Convenience (14) Foodservice (465)Grocery (396) Restaurants (407) Secondary Distribution (~19) Closeout Stores (1) Dollar Stores (14) Exports (94) Imports (82) Note: (1) Industrial waste is not included; numbers may not balance Source: USDA: 2007 U.S. Census of Agriculture; 2007 U.S. Economic Census; National Restaurant Association; others Animal Feed (311) Donation (3-5) Biofuels (208) Consumed (664) Food Waste (78) Packaging Waste (138) Raw Inputs US Food Production = 900B lbs

7. Hunger Waste Obesity The Food Paradox 77 Source: USDA; CDC; A. T. Kearney analysis A coordinated effort is needed across the industry to tackle these issues  In 2009, the number of food insecure individuals rose to 50 million  Obesity easily exceeds 30% in most age groups, including children  Americans throw away tens of billions of pounds of food each year We are living in a Food Paradox

8. 8 Additional Donation Opportunity in Existing Programs (B pounds) Source: Feeding America Grocery Supply Chain Support

9. 9 Annual US Food Waste Generation (1) (estimated, B lbs) (1)Post-recycling (2)Consumers, grocery channels, etc. Source: EPA; www.zerowasteamerica.org; BioCycle; Industry interviews; ATK analysis Procurement Plate Preparation Waste of food that has already been served to consumers Waste that occurs at the site during preparation Uncooked food waste that occurs along the supply chain Foodservice All Other Sources (2) US Food Waste = 78B lbs

10. 10 Food Waste ProcurementPreparationPlate Example Reasons for Waste Uncooked food waste that occurs along the supply chain Waste that occurs at the site during preparation (includes trimmings) Waste of food that has already been served to consumers Excess Damage Test Process design Lack of training Quality requirements Incentive to “push” food Portion sizes Lack of tracking The Three P’s of Food Waste Description Source: A. T. Kearney analysis Evaluation Framework

11. Procurement Wholesaling (3.4 B) Plate Preparation Procurement Institutional (4.2 B) Hospitality (2.2 B) Plate Preparation Procurement Restaurant (40.7 B) Plate Preparation Procurement Estimated Foodservice Waste by Industry (billions of lbs) 80% of food service waste from Restaurants

12. 12 Hotels: Companies donate part of food purchase There is excess food at banquets & conventions, which typically is discarded Companies can prevent plate waste by reduce their food purchase (e.g. decrease menu options, smaller tray sizes, etc) Institutional: Go “trayless” in cafeterias Students at Northwestern University weighed their plate waste to quantify their waste stream Trays were then eliminated trays at select cafeterias, limiting customers from taking excess food Anecdotal evidence suggests that “going trayless” reduced plate waste by 30% Caterers: Passengers donate value of their meal On average, 1-2 first class meals are thrown away at the end of each flight Airlines could provide first- class passengers the opportunity to refuse their complimentary meal in lieu of a donation to Feeding America Monetary savings can be donated to FA to purchase food for the hungry Source: Industry interviews; A. T. Kearney analysis Solutions ‘out of the box’

13. 13 Identify and Quantify the Waste Explore Ways to Reduce the Waste Recover and Donate the Remainder “Quantify” Where is food waste occurring? Why is there waste? How much waste is there? Who owns the waste? How can we reduce the amount of waste? How much waste will remain? What kind of waste is it? Is the waste edible? Can it be donated “as is”? If not, are there steps that can be taken recover the waste? What is the cost of these steps? Strategies for waste reduction and donation can live in harmony, as the common enemy is dumping and landfill waste Source: A. T. Kearney analysis “Reduce”“Donate” Partnership Strategies

14. 14 Source: A. T. Kearney analysis Increasing Time Desired Change in Waste Flow Dumped Donated Identify Waste Decrease Product Losses Capture Edible “Waste” Maximize Saleable Product Maximize Donation Minimize Dumping Reduction Strategy (Quantify, Reduce, Donate) Reduce Inedible Waste Goal: 0 Landfill

15. Secondary market is increasingly important revenue stream for manufacturers but impacts donations 15 Non-Produce National Pounds over time Our lean enterprise initiative is really taking hold The business environment forced us to embrace secondary markets We’re selling to secondary market 2x what we donate Recession has driven us to tighter production plans and reduce new product introductions …and macro trend validated at donor levels through interviews Pounds (MM)Fiscal Year YTD FY11 June 1, 2011 Need vs. Opportunity

16. Waste solution opportunities Dry, frozen, refrigerated Short-coded Past code with approved extensions Discontinued Mislabeled Unlabeled / brites Test product Promotional Items Private label/ licensed Packaging changes Line start up waste Reformulations Seasonal Items Overruns Customer returns Food service sizes Bulk Product Low weights/short fills Ingredients Boxes, Containers, Shelving & Equipment Through out the Supply Chain

17. Benefits of Donating Waste reduction An inventory management solution Potential tax benefits Centralized donation process; local community support Security and integrity of brands Savings in storage and transportation Savings in dumping fees: $4,000 per truckload! Cost-free way to handle unsaleable product Sophisticated tracking, reporting and recall procedures Supports ‘green’ initiatives and corporate commitments to sustainability

18. Join in the FIGHT Institute Corporate Donate do not Dump policy Clear process for all employees Early identification of unsaleables Immediate action to donate Extended code dates on consumables Engage locally with your community food bank volunteer event sponsorship 18

19. Thank you Steve, a former shipping and receiving associate, and his wife both worked two jobs to support their daughters. But that was five years ago. The couple now relies on unemployment benefits to feed 15-year-old Katie and 10-year-old Olivia. Until things turn around, they turn to their local food shelf for assistance. This agency of the Second Harvest Heartland food bank in St. Paul, Minn., provides them with the food the parents need to keep their family fed. There’s a Steve in your own community. www.feedingamerica.orgwww.feedingamerica.org to see how you can help.