New data from the U.S. Food Waste Pact’s 2025 report reveals a shift in how retail food waste moves through the system — and the implications reach well beyond grocery store loading docks. For the first time, industrial composting and anaerobic digestion together account for the largest share of retail surplus food destinations, surpassing landfill. Composting handles 21.9 percent, anaerobic digestion 14.5 percent, donations 18.3 percent, and landfill has dropped to 21.1 percent.
The Numbers Behind the Shift
In 2024, Pact signatories reported 3.98 million tons of unsold food — a 2.90 percent unsold rate against total retail inventory. While that tonnage ticked up slightly with overall food sales growth, the share of inventory going unsold continued to decline, suggesting that retailers are getting better at inventory management even as they generate more total volume. The biggest growth categories in unsold food were fresh meat, seafood, and prepared foods, which together accounted for over 72 percent of the year’s increase in surplus tonnage.
What’s especially notable is how quickly anaerobic digestion is gaining ground. Both AD and food donations increased by 171,000 tons year over year — the largest jumps among all destination categories. Composting grew by 22,000 tons by comparison. The trajectory is clear: AD infrastructure is scaling, and retailers are using it.
Why Anaerobic Digestion Works for Retail
Grocery store waste presents a particular challenge. Much of it arrives in packaged form — shrink-wrapped meat trays, sealed prepared foods, dairy containers. Separating food from packaging on-site requires extra bins, staff training, and labor time that most stores operating on thin margins simply don’t have.
The solution that’s gaining traction is bundled service models where haulers, depackaging facilities, and digestion operators work together. Packaged food waste gets picked up, depackaged off-site, and processed through anaerobic digestion — all without requiring store-level separation. That convenience is a major driver of AD adoption in the retail sector. It removes the operational friction that kept food waste flowing to landfill by default.
What This Means for Communities
When food waste goes to a landfill, it decomposes anaerobically without any capture system, releasing methane directly into the atmosphere. When that same material goes through controlled anaerobic digestion, the methane is captured and converted into renewable energy — biogas that can power facilities, fuel vehicles, or feed into natural gas grids. The digestate left behind becomes nutrient-rich fertilizer that returns organic matter to soil.
For communities, this shift represents something more fundamental than waste management logistics. It means local organic waste can become a local energy and soil resource. It means fewer truck miles to distant landfills. It means reduced methane emissions from waste that would otherwise decompose uncontrolled. And as diversion infrastructure scales, it creates jobs in collection, processing, and distribution of recovered resources.
The Tracking Gap Is Closing
One of the most encouraging data points is the decline in food waste classified under “unknown” destinations — dropping from 27 percent to 15 percent, a 44 percent reduction. Retailers are getting dramatically better at knowing where their waste goes. That visibility matters because you can’t optimize a system you can’t see. Better tracking creates better baselines, which enables better infrastructure planning and policy decisions.
Building the Next Phase
The retail food waste diversion landscape is diversifying. Donations, composting, and anaerobic digestion each serve different segments of the surplus food stream, and their combined growth reflects a system becoming more specialized over time. The question for communities isn’t whether food waste diversion is happening — it clearly is. The question is whether local infrastructure is positioned to capture the value that food waste represents. Because every ton that moves from landfill to digestion is a ton that produces energy, builds soil, and reduces emissions — outcomes that benefit the whole community.