NIS 5.2 billion

The potential savings for the national economy from food rescue
45% of the volume of wasted food that is rescuable

Food Rescue: Potential Savings for the National Economy

To bridge the gap between the amount of food actually consumed by food insecure populations in 2022, and the normative level of consumption (the average consumption in the second to fifth deciles), would have required about 510,000 tons of food, a value of about NIS 3.6b ($1b). The cost to fill the gap between the food expenditure of the population living with severe food insecurity (about 8.2% of households in Israel), in relation to normative expenditure on food, is approximately NIS 2.5b ($1.47b). An additional NIS 1.1b ($0.3b) would be needed to fill the food expenditure gap for the population living with moderate food insecurity.

It would be possible to fill the gap between food expenditures among the food-insecure population in Israel and normative food expenditure by rescuing about 510,000 thousand tons of wasted food. This represents about 20% of the volume of food that is wasted in Israel each year, and about 45% of the volume of wasted food that is rescuable. According to the estimates presented in this Report, it would cost about NIS 1b ($0.3b) to rescue food worth about NIS 3.6b ($1b). This is equivalent to the entire gap between the expenditures on food among the population living with food insecurity and the normative level of expenditure on food in Israel.

Additionally, rescuing this amount of food would save approximately 80 million cubic meters of water, 260 million kWh of electricity, 15,000 tons of fuel, NIS 300m ($85m) as a result of reducing emissions of greenhouse gases and air pollutants, and NIS 170m ($48m) as a result of reducing waste treatment costs. Further, the economy would save approximately NIS 5.2b ($1.47b) per year in excess healthcare costs accrued due to ailments caused by food insecurity.

Summary of benefits to the national economy via food rescue in USD millions per year

Source: BDO estimates

It would cost approximately NIS 3.6b ($1b) per year to fully finance filling this gap in food security through means other than through food rescue. Therefore, food rescue has a clear advantage over the alternatives for filling the food insecurity gap, such as providing allowances, donations, subsidies, or other types of support to those in need. Food rescue would cost approximately NIS 1b ($0.3b) per year, making it possible to achieve the same social goal at a significantly lower cost. That is, rescuing healthy food, with an emphasis on vegetables and fruit, could reduce food insecurity while saving about 72% of the costs. It also has health, social, and environmental benefits.

The problem of food insecurity is reflected not only in monetary expenditures on food, but also in the variety of food consumed. Comparing the food baskets consumed by food-insecure and food-secure populations shows that the former is characterized by a lower level of expenditure on fruit, vegetables, meat, and fish, which have high nutritional value.

Composition of food expenditures among households suffering from severe food insecurity (100% = diet of a population with normative food expenditures)

Source: BDO processing of data from the CBS household expenditure survey

For example, for food products such as meat, poultry, fish, and fresh fruit and vegetables, which have high nutritional value, expenditure is between 55% to 70% lower than the normative level. For products such as potatoes, bread and pita, the gap narrows to between 15% to 25%. According to the principles of economic theory, income received in the form of goods is an inferior alternative to monetary income, since it deprives the recipients of the freedom to allocate resources according to their full needs. Therefore, there is a tendency to prioritize financial support over in-kind support. This economic principle is also called “subsidy for the consumer, not for consumer goods.”

However, there are unique traits of food rescue, which offer a clear economic advantage to supporting the needy through goods rather than money. This advantage stems from the characteristics of transforming surpluses intended for destruction into consumable food, which means that every shekel invested in food rescue yields a direct economic return that is 3.6 times greater. Moreover, if the environmental impacts of the emission of greenhouse gases and air pollutants, and waste treatment are taken into account, the return to the economy is even higher, with the yield approximately 4.3 times the investment. When the health benefits from reducing food insecurity in Israel are also considered, the economic return rises to 10.68 times.

Gap between expenditures on food among population living with food insecurity and normative food expenditures, Israel, NIS millions

In this context, it should be noted that the population characterized by food insecurity also suffers from general economic insecurity, reflected in gaps in consumption of other basic needs (housing, healthcare, education, etc.). It is likely that in practice, when food is donated to these households, they will be able to direct part of their disposable income to purchasing other products. From a social point of view, these households see consumption of these other goods and services as primary needs, in terms of their economic security. Therefore, donating food to them improves their wellbeing beyond the direct value of the food itself, because their resources can be redirected towards acquiring other goods and services.

In September 2015, the UN and the US government adopted Sustainable Development Goals (SDGs), and within this framework, set a national goal of reducing food waste by 50% within 15 years (71). Data analyses presented in this Report show that rescuing food, at a rate of even less than half of this target, and distributing it to the approximately 460,000 Israeli households that live with food insecurity, would provide them with food valued at the full amount of the gap between their level of food expenditures and the normative level. In terms of the national economy, this means savings of approximately NIS 3.6b ($1b) per year; the difference between the value of the food that is rescued and the cost of rescuing it. Moreover, this does not take into account the additional economic benefits resulting from reducing poverty and inequality, and external environmental and health benefits.

It is essential to emphasize that reaching a national goal of reducing the amount of food wasted in Israel by 50%, gradually over the course of 15 years, is not expected to cause any damage to the scale of agricultural production in Israel for local consumption, as compared to the current situation. Rather, it will only slow down the rate of growth in local food production.

71. Global Sustainable Development Goals set by the UN General Assembly in 2015.