What Happens To All Of Costco's Leftover Unsold Produce?

Walking through Costco's produce section means seeing oversized bags of apples, family-sized salad mixes, and bunches of bananas sold in bulk, which is a great purchase to get more out of your Costco membership. While those larger packages offer good value for shoppers, they also create a unique challenge behind the scenes. If one item inside a package no longer meets quality standards, the entire package typically has to be removed from sale, even if most of the contents are still perfectly edible.

Rather than sending all of that unsold produce straight to the landfill, Costco follows a system designed to recover as much food as possible. The retailer prioritizes keeping edible food available for people first before exploring other uses for products that can no longer be sold. Here's where much of Costco's leftover produce ends up.

Editor's note: Information in this article is based on Costco's 2025 Sustainability Report and other Costco reports. Practices and availability may vary by warehouse location.

Food donations from Costco come first

The first priority for most edible surplus produce is food donation. Costco follows the U.S. Environmental Protection Agency's Wasted Food Scale, which places feeding people above every other disposal method whenever food remains safe to eat.

According to Costco's 2025 Sustainability Report, the company donated roughly 76,000 tons of food to hunger-relief organizations across the United States during the year. Fresh fruits and vegetables accounted for nearly 47% of those donations, making produce the largest category of food donated.

Those donations support organizations including Feeding America, The Global FoodBanking Network, and hundreds of regional food banks and local charities. Produce that may have only a limited remaining shelf life often reaches families through these partners instead of ending up in a trash bin.

Some Costco ingredients find a second purpose

Not every product that leaves the sales floor is considered waste. In certain cases, Costco is able to repurpose foods that remain safe for consumption into prepared items sold elsewhere in the warehouse.

One well-known example involves the retailer's popular rotisserie chickens, which frequently become ingredients in freshly prepared chicken salad and other deli offerings. While fresh produce has fewer opportunities for this type of reuse, some ingredients may occasionally be incorporated into prepared foods when food safety standards allow.

Repurposing food extends the life of products that might otherwise go unused while reducing unnecessary waste. It also helps Costco make better use of inventory that cannot remain on display much longer.

Produce that people cannot eat may feed animals

Once produce is no longer suitable for human consumption, Costco looks to the next step in the EPA's food recovery hierarchy, which is feeding animals.

In 2025, Costco diverted more than 12,000 tons of food to farms, animal rescue organizations, wildlife facilities, and zoos. Fruits and vegetables that no longer meet retail quality standards may still provide nutritional value for livestock and certain rescued animals.

This approach helps reduce landfill waste while allowing food that cannot reasonably be sold or donated to continue serving a useful purpose. Instead of becoming garbage immediately, some surplus produce supports agricultural operations and animal care programs.

Composting gives Costco food scraps another life

Not every piece of produce is suitable for donation or animal feed. Damaged, spoiled, or contaminated food eventually reaches a point where consumption is no longer appropriate.

When that happens, composting becomes another important option. Costco reported composting approximately 12,000 tons of food waste during 2025. Through composting, fruits, vegetables, and other organic materials gradually break down into nutrient-rich soil amendments used in agriculture, landscaping, and gardening.

Keeping food scraps out of landfills also helps reduce methane emissions that develop when organic materials decompose without oxygen inside traditional waste facilities.

Some Costco food waste helps generate renewable energy

Another recovery method Costco uses is anaerobic digestion, a process that converts food waste into renewable energy instead of simply discarding it.

During 2025, roughly 16,000 tons of food waste entered anaerobic digestion systems. Inside specialized facilities, microorganisms break down organic material in oxygen-free environments, producing biogas that may be captured to generate electricity, heat, or renewable natural gas.

The remaining material can often be processed into fertilizer, meaning even food that cannot be eaten still contributes useful resources rather than occupying valuable landfill space.

Costco continues improving its food recovery efforts

Costco's waste reduction efforts have expanded steadily in recent years as the company has invested in partnerships and recovery programs throughout its supply chain.

In 2025, Costco reported diverting 82.8% of its food waste away from landfills, surpassing the company's original goal of diverting at least 80% by 2025. That figure reflects the combined impact of food donations, repurposing, animal feed programs, composting, and energy recovery.

While no large grocery retailer completely eliminates food waste, Costco's recovery strategy demonstrates how multiple solutions working together may significantly reduce the amount ultimately sent to landfills.

Bottom line

Costco's bulk packaging may create more unsold produce than traditional grocery stores, especially when one damaged item affects an entire package. However, the company has built a system and has tried to start investing in feeding people before exploring other recovery options, helping keep tens of thousands of tons of food in productive use each year.

Individual warehouses may handle surplus food somewhat differently depending on local food bank partnerships, composting facilities, and regional regulations. Even so, Costco's overall approach proves how the large retailer views leftover produce as a resource with several possible destinations rather than something destined for the trash.