NIS 5.8 billion

savings potential for the national economy
25% of wasted food rescued would enable the food expenditure gap in Israel to be closed completely

Potential Savings for the National Economy

Rescuing around 600 thousand tons of wasted food annually, which constitute around 25% of food waste in Israel, would enable the food insecurity gap between the general population’s normative food expenditure and that of those suffering from food insecurity to be entirely closed. According to BDO and Leket Israel estimates, the current rescue multiplier is 3.6, and when taking into account greenhouse gas and air pollutant emissions as well as waste treatment costs, the rescue multiplier rises 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, it would cost only NIS 1.1 billion to rescue food worth NIS 3.9 billion (33). This NIS 3.9 billion cost equals the value of the entire food expenditure gap that exists between the food-insecure population’s consumption level and the normative consumption level.

33. 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 bridges the food insecurity gap while cutting the costs by 72% and provides significant social and environmental benefits

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.

Without food rescue, an annual cost of NIS 3.9 billion in financial aid would be required to close this gap completely. Hence, food rescue is clearly preferable to the alternatives of government stipends, donations, subsidizes or financial aid for the needy as a means of bridging the food insecurity gap. Food rescue makes it possible to reach the same social goal at the significantly lower cost of approximately NIS 1.1 billion annually. In other words, food rescue bridges the food insecurity gap while cutting costs by 72% and provides significant social and environmental benefits.

The problem of food insecurity is not only expressed in the amount of money spent on food, but also in the types of food consumed. An analysis of the average consumption basket of those who are food insecure compared to the average basket of the food-secure population reveals that the food insecurity often goes along with spending little on fruit, vegetables, meat, and fish, which have high nutritional value.

Thus for example, 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, such as potatoes, bread and pita, is lower, and ranges from 15% to 25%.

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

Source: BDO estimates

income in the form of goods is less preferable than income in the form of money, because it deprives the recipient of the freedom to allocate resources according to their full range of needs. Therefore, in principle, the general tendency is to prefer monetary support over the direct provision of products. This economic principle is also known as “subsidize people, not products.” However, in the case of food rescue, the unique set of circumstances present a clear economic advantage to supporting the needy with products over money. This stems from the specific characteristics involved in transforming waste into food, i.e. that every shekel invested in food rescue generates a direct economic return of 360%. Moreover, taking into consideration the environmental impact of greenhouse gas emissions, air pollutants, and waste treatment, the return on investment for the economy rises to 420%.

Food insecurity often goes along with spending little on fruit, vegetables, meat, and fish, which have high nutritional value
In this context, it should be noted that those suffering from food insecurity also suffer from financial insecurity, expressed in consumption gaps for other basic necessities (housing, health, education, etc.). It is likely that food rescue would enable these households to effectively allocate some of their increased disposable income towards the consumption of 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 for purchasing other goods and services.
39. 17 global Sustainable Development Goals adopted by the UN General Assembly in 2015.
In the case of food rescue, the unique set of circumstances present a clear economic advantage to supporting the needy with products over money. This stems from the specific characteristics involved in transforming waste into food, i.e. that every shekel invested in food rescue generates a direct economic return of 360%. Moreover, taking into consideration the environmental impact of greenhouse gas emissions, air pollutants, and waste treatment, the return on investment for the economy rises to 420%

In September 2015, in the context of the Sustainable Development Goals (34), the United Nations and United States government adopted the national goal of reducing food waste by 50% within fifteen years. Analysis of the data in this report shows that achieving even less than half of that goal, and donating the rescued food to approximately 465 thousand households suffering from food insecurity in Israel, would fully close the gap between their food intake and the normative level. In terms of the national economy, this would mean annual savings of about NIS 2.8 billion, bridging the gap between the value of the rescued food and the cost of rescuing it. This is before taking into account the added benefits resulting from the reduction of poverty and inequality in the economy and before factoring in the external benefits to the environment.

It should be emphasized that the incremental implementation of the 50% national food waste reduction goal over a fifteen-year period is not expected to reduce the volume of agricultural production in Israel intended for local consumption compared to the current situation, but only to slow down 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