150,000 people

were added to the rolls of the food insecure due to the Covid-19 crisis
The combined effect of greater food waste and the increased numbers of food insecure individuals, reinforces the need to employ food rescue as a national policy tool

The Impact of the Covid-19 Pandemic on Food Waste in Israel

The Covid-19 pandemic intensified the problem of food insecurity in Israel and highlighted the importance of food rescue as a central policy tool. The pandemic impacted food insecurity in two ways: on the one hand, food insecurity increased due the damage done to earning capacity and employees leaving the labor force, and on the other, traditional systems for ensuring food security were harmed due to Covid-19 restrictions.

The pandemic led to the greatest economic crisis the Israeli economy has seen in decades. In April 2020, at the height of the crisis, about 1.2 million workers left the workforce. Over the course of the year, approximately 825 thousand employees suffered losses to their income. After deducting the Covid-19 grants provided by the government, the result of the crisis was that about another 150 thousand people became food insecure and the problem became even more severe for the needy.

Covid-19 disrupted the activity of feeding programs in educational institutions, which normally supply over 115 million meals a year to approximately 500 thousand pupils. Over the course of the year, due to the lockdowns, the shift to remote studies in capsules, and isolation days, food distribution through these programs was reduced by about 60 million meals, most of which were intended for food insecure populations. Soup kitchens’ activity was also impacted, mainly during the first lockdown. The result was a direct loss of approximately NIS 900 million in food supply to the needy.

The pandemic led to an increase in food waste in the agricultural sector. In 2020, about another 20 thousand tons were added to fresh agricultural produce worth rescuing as compared to 2019. However, the produce was wasted due to a shortage of working hands during the lockdown period, export restrictions on agricultural produce, and the shutting down of the institutional sector.

The increase in food waste and widening gap in food insecurity due to Covid-19 reinforces the need to focus on food rescue as a primary national policy tool.

The state has chosen to deal with the economic damage caused by the pandemic mainly by providing stipends, grants to the self-employed, extending unpaid leave payments, and distributing food baskets to those in isolation through the IDF’s Home Front Command. Providing stipends to the entire population rather than on a differential basis is economically inefficient. Firstly, providing a stipend to substitute the feeding programs’ activity is less effective per shekel of support, as the cost of buying food individually is more expensive than that of providing food through feeding programs.

Secondly, providing stipends to all sectors of the population and not only to those who were harmed does not reflect optimal use of the budget, which was intended to help impacted sectors. This results in a limited effect on food insecurity, in cost-benefit terms.

NIS 1.5 Billion

decrease in food waste in the retail and consumption sector due to changes in consumption patterns caused by the pandemic

The Covid-19 crisis demonstrated that it is possible to decrease food waste by changing consumption habits and patterns. The restrictions on travel and gatherings, as well as the impact on household incomes, led to changes in consumption patterns. Food shopping shifted to channels with lower waste rates – there was an increase in online shopping, a decrease in open market shopping, and a shift from food consumption in the institutional sector, which is characterized by relatively high waste rates, to household consumption, which has a lower waste rate. These changes in consumption patterns led to a decrease of approximately 50 thousand tons of food waste in Israel in 2020.

Overall, food waste in 2020 amounted to approximately 2.475 million tons, a decrease of about 1% compared to 2019. The value of wasted food in 2020 was about NIS 19.1 billion.

Covid-19:
An Inequitable Pandemic

The Covid-19 pandemic does not affect everyone equally in terms of its effects on health and finances. From a health perspective, the populations who were most impacted in Israel were the elderly, ultra-orthodox Jews, and Arabs, who are also the populations that are characterized by relatively high rates of poverty and food insecurity.

In addition, certain industries were impacted more than others, such as food and hospitality services, tourism, arts and culture, commerce and retail, construction, and others. These fields typically employ low-wage service workers from low socioeconomic strata. On the other hand, fields that did not suffer as much economic damage and even expanded their activity (such as hi-tech, information and communications, and finance and insurance industries) typically pay high salaries, thereby intensifying the problem of food insecurity and gaps in the Israeli economy.

The state’s plan of providing financial aid through Covid-19 grants did not reflect the inequitable damage caused by the pandemic, and therefore only brought about a partial solution. As a result, another 150 thousand people faced food insecurity in 2020, compared to 2019.

Covid-19 Impacted Sectors Characterized by High Rates of Food Insecurity

Source: BDO estimates based on data from the National Insurance Institute, the Central Bureau of Statistics, and the Ministry of Health.
* “Elderly” refers to families in which the head of the household is over 65 if male and over 60 if female.

The Increase/Decrease in Each of the Following Sectors in 2020 Compared to 2019

Source: BDO estimates based on data from the National Insurance Institute, the Central Bureau of Statistics, and the Ministry of Health.
* “Elderly” refers to families in which the head of the household is over 65 if male and over 60 if female.

Impact on Food Waste in Household and Institutional Consumption

In the household sector, food worth NIS 9 billion was thrown away, representing an increase of NIS 800 million compared to 2019. On the other hand, there was a decrease of approximately NIS 2.2 billion in food waste in institutional consumption, which constitutes a reduction of about 50% compared to the previous year.

In quantitative terms, food consumption per capita remained unchanged in 2020 compared to previous years. However, there was a decrease in food waste in both quantitative and monetary terms, due to a shift from food consumption outside the home (restaurants, hotels, events, etc.), which is characterized by high waste rates, to at-home food consumption.

Consumption and Waste in the Consumption Stage in 2019 and 2020

Source: BDO estimates

The Institutional Consumption Sector

The Covid-19 crisis and the lockdowns imposed on the economy since March 2020 caused substantial damage to the institutional sector, which includes restaurants, hotels, function halls, workplaces, and educational institutions. This led to a decrease of around 40% in the scope of institutional activity.

Beginning in March 2020 it became prohibited to open event halls, aside from during two hiatuses: from the beginning of June to the start of July and for a short time in September, and then too, the number of people that could participate in each event was limited. The severe impact on event hall activity substantially reduced food consumption in the industry, and consequently there was a reduction in food waste as well.

The hospitality industry also suffered a significant blow as flights were banned and lockdowns were imposed, leading to a decrease of 64% in the number of nights booked in hotels, compared to 2019 (8). Following the Ministry of Health’s guidelines, hotels changed the way they served food from buffet style to room service in prepackaged portions. This food serving method also affected food waste, because when food is made to order, food waste is lower compared to buffet service.

8. Based on data from the Central Bureau of Statistics.

Due to the Covid-19 restrictions, many workplaces were closed or switched to working in “capsules” or working from home. Workplaces that were defined as essential kept operating, however the kitchens in these workplaces were closed or switched to preparing packaged take-away or grab-and-go foods. As a result, food waste in workplaces decreased by about 37%.

The restaurant industry experienced great uncertainty regarding its continued operation during the Covid-19 crisis. Many restrictions were placed on the industry, ranging from having to shut down their operation completely to being open for takeout and delivery services only. During 2020, activity in the industry decreased by about 50% compared to 2019.

Overall, food waste in the institutional sector in 2020 stood at around 130 thousand tons, constituting a decrease of about 110 thousand tons. The value of wasted food in the institutional consumption sector stood at approximately NIS 1.8 billion.

The Household Consumption Sector

The Covid-19 crisis and lockdowns led to people staying in their homes for longer periods of time as a result of the restrictions on travel, the closing of educational institutions, the shift to working from home, closed restaurants and the shift to deliveries and the ban on flights out of Israel.

This resulted in a change in food consumption patterns: households consumed a more substantial share of their food basket at home rather than at restaurants workplaces, event halls, etc.

Consumption and Waste in the Consumption Stage in 2019 and 2020

Source: BDO estimates

This change in consumer behavior led to a decrease in waste in the entire consumption sector, as consumption shifted from the institutional to the household sector. In 2020, each household wasted about another NIS 300 over the course of the year, which was offset by the reduction in food consumption in the institutional sector, saving each household approximately NIS 800.

In 2020 household food consumption increased by about 9% compared to 2019 (9). Based on a consumer survey (10) the Covid-19 crisis led to an increase in household consumption across all food categories compared to the period before the crisis. The categories in which consumption levels increased significantly during the crisis were fruit, vegetables, dairy, and breads.

9. BDO analyses of Stornext data and data from the supermarket chains.
10. The Geocartography survey, March 2021, by Leket Israel and BDO.

Household Food Expenditure and Waste, in NIS Billions

Source: BDO analyses of data from the Central Bureau of Statistics and BDO estimates

Total food waste in the household sector in 2020 stood at approximately 900 thousand tons, constituting an increase of about 77 thousand tons compared to 2019. The value of wasted food in the household sector stood at approximately NIS 9 billion, meaning that each family threw away food valued at around NIS 3,600 over the course of the year. Based on the consumer survey, the main types of food wasted were vegetables, cooked food, and fruit. However, the survey results show that a large part of the public estimate that they wasted less food during the crisis compared to the period prior to the crises.

It should be noted that the increase in consumption in the household sector at the expense of the institutional sector contributed to the reduction in food waste, as consumption outside the home is characterized by higher waste rates. Food waste in institutional kitchens is an inevitable part of the economic activity of feeding many diners while providing a range of options that meets their preferences and taking into account inherent uncertainty factors.

Impact on Food Waste in the Retail Sector

Due to changes in consumption habits during the Covid-19 crisis, there was a decrease of 17 thousand tons of food waste in the retail sector. The value of wasted food in this sector in 2020 stood at NIS 4.3 billion.

The retail sector was characterized by two main trends during the crisis: the closing of open markets and the shift to buying food in major supermarket chains or online.

The expansion of activity through direct shopping channels, where food goes directly from an E-fulfillment center to the end customer without going through a branch, further contributed to the decrease in waste rates, as well as a decrease in environmental emissions.

The shift from open market shopping to other shopping channels contributed to the reduction of waste in the retail sector.

Total food waste in the supermarket chains in 2020 stood at approximately 420 thousand tons, constituting a decrease of about 4% compared to 2019. This was the result of the public’s shift from open-market shopping, which is characterized by high waste rates, to online shopping, which is characterized by low waste rates. Total waste in the retail sector amounted to around NIS 4.3 billion.

Food Expenditure Rate by Store Type

Impact on Food Waste in the Agricultural Sector

As a result of the Covid-19 crisis there was an increase of approximately 20 thousand tons of food waste in the agricultural sector. In total, 640 thousand tons of agricultural produce was lost, valued at NIS 2.6 billion and constituting an annual increase of about 3% compared to 2019.

During the Covid-19 crisis, the agricultural industry was defined as essential for the economy and therefore continued to operate as usual. However, part of the agricultural industries suffered significant damage due to the first lockdown. The damage was mainly the result of the following (11):

11. “At the forefront of agriculture – a journal for policy, economy & marketing” The Ministry of Agriculture and Rural Development, Sep’ 2020.

1. A shortage of manpower

As a result of the ban on flights, 1,500 foreign workers scheduled to arrive in Israel during March and April were prevented from joining the agricultural industry. In addition, Palestinian workers were also prevented from entering the country due to the lockdown.

2. Closed export channel

The crisis affected maritime transport, which caused certain export channels to be shut down (most prominently, the export of vegetables).

3. The closing of the institutional sector

The closing of restaurants, hotels, and open markets affected food sales to this sector. These sales were diverted to the retail sector and efforts were made to sell agricultural produce online directly to the consumer. However, these efforts were not able to fully compensate for the loss.

Based on estimates of the Ministry of Agriculture, approximately 2,500 dunams (about 625 acres) of vegetables remained unpicked due to a lack of demand. As a result, food waste in the agricultural sector increased by about 3% in 2020 compared to 2019. In monetary terms, the value of the food waste increased even more due to the difficulty of selling premium products and the fact that export was severely affected at the height of the economic crisis. Total food waste in this sector stood at about 640 thousand tons, valued at about NIS 2.7 billion.

During 2020, Leket Israel worked to increase the scope of rescue activity in agricultural fields and rescued about 3 thousand tons of fresh produce more than the amount rescued in 2019. Total agricultural produce which would have otherwise been thrown away, but was rescued by Leket Israel in 2020, stood at about 18.5 thousand tons.

Food Waste in the Agricultural Sector