NIS 4.8 billion

potential savings for the national economy from food rescue
Rescuing 20% of the food wasted could close the food insecurity gap in Israel

Potential Savings for the National Economy

Rescuing 500,000 tons of lost food, which constitutes 20% of the annual food waste in Israel, would facilitate in reducing the food insecurity gap between the general population’s normative expenditure and those suffering from food insecurity. According to BDO and Leket Israel estimates, the current rescue multiplier is 3.6; if GHG, air pollutant emissions, and waste treatment costs are included, the rescue multiplier increases to 4.2. This means that every shekel spent on food rescue saves food worth NIS 3.6 or NIS 4.2, respectively.

Based on these multipliers, the cost of rescuing NIS 3.2 billion worth of food (38) would be only NIS 880 million. This is equivalent to the full value of the gap in spending on food consumption by the population suffering from food insecurity in relation to the normative level of consumption.

38. The cost of the nutritional gap of households living with food insecurity was calculated on the basis of the Chernichovsky and Regev report on food insecurity (Patterns of Food Expenditure in Israel, Taub Center, 2014), together with the CBS Household Expenditure Survey.
Food rescue alleviates food insecurity at a 72% cost savings, and also provides significant social and environmental benefits.
Without food rescue, an annual cost of NIS 3.2 billion of financial support would be required to fully address this gap. Therefore, food rescue is clearly preferable to the alternative of attempting to bridge the food insecurity gap by means of allocations, donations, subsidies or other methods of support for the needy. Food rescue makes it possible to reach the same social goal at a significantly lower cost, approximately NIS 880 million annually. Specifically, food rescue alleviates food insecurity at a 72% cost savings, and also provides significant social and environmental benefits. The problem of food insecurity is not expressed only by the amount of money expended on food purchases; it also affects the types of food consumed. Analysis of the average consumption basket expenditures by the portion of the population experiencing food insecurity, compared to those not experiencing food insecurity, reveals that food insecurity is accompanied by low expenditures particularly for fruits, vegetables, meat and fish, which have high nutritional values. The gap in expenditure for highly nutritious food such as meat, poultry, fish, and fresh fruit and vegetables ranges from 55% to 70% of the normative expenditure, while the gap for other products, like potatoes, bread and pita, is lower, from 15% to 25%.

Food Rescue: Summary of Estimated Savings to the National Economy (NIS millions/year)

Source: BDO estimates
Economic principles dictate that income in goods is an inferior alternative to monetary income, because it deprives those receiving support the freedom to allocate resources according to their full range of needs. Therefore, in principle, the general tendency is to provide monetary support over the direct provision of products. This economic principle is also summarized as “Subsidize people, not products.”
Food insecurity is accompanied by low expenditures particularly for fruits, vegetables, meat and fish, which have high nutritional values.

However, food rescue offers a unique set of circumstances in which there is a clear economic preference for supporting the needy with products over money. This advantage stems from the specific characteristics involved in transforming waste into food (i.e., that every shekel invested in food rescue generates a direct economic value 3.6 higher than the cost). Moreover, taking into consideration the environmental impact of GHG, air pollutant emissions, and waste treatment, the benefit to the economy increases further to 4.2 times its cost.

In this context, it should be noted that those suffering from food insecurity also suffer from financial insecurity, evident in consumption gaps of other basic necessities (housing, health, education, etc.). It is reasonable to assume that food rescue would enable households to then choose to allocate some of the effective increase in their disposable income to consuming other goods. From a social perspective, these households view consumption of such products as prerequisites for ensuring their financial security. Therefore, beyond the direct value of the rescued food distributed to them, they also benefit from having more resources available to purchase other goods and services.

In September 2015, the United Nations and US government, in the context of sustainable development (SDG) goals (39), established a national food waste reduction goal of 50% within fifteen years. Analysis of the data in this report shows that rescuing even less than half of that goal, and contributing it to the approximately 465,000 households suffering from food insecurity in Israel, would provide enough food equivalent to fully cover the gap in their food intake compared to the normative level. For the national economy, such efforts would generate a value of NIS 2.3 billion annually, bridging the gap between the value of rescued food and food rescue costs. This is even before considering the added benefits to the national economy from reducing poverty and inequality, and before factoring in the external environmental benefits.

39. 17 global Sustainable Development Goals adopted by the UN General Assembly in 2015.
Food rescue offers a unique set of circumstances in which there is a clear economic preference for supporting the needy with products over money. This advantage stems from the specific characteristics involved in transforming waste into food (i.e., that every shekel invested in food rescue generates a direct economic value 3.6 higher than the cost). Moreover, taking into consideration the environmental impact of GHG and air pollutant emissions, and waste treatment, the benefit to the economy increases further to 4.2 times its cost.
It should be emphasized that the incremental realization of a 50% national food waste reduction goal, over a fifteen-year period, is not expected to reduce the volume of agricultural production in Israel for local consumption compared to current conditions. Rather it is expected to only slow the growth rate of local food production.

Impact of Food Insecurity on the Food Expenditure Patterns of Households Experiencing Severe Food Insecurity 100% = Diet of population with normative food expenditures

Source: BDO analysis and Survey of Household Expenses, CBS