Britain’s largest supermarket chain is launching a drive to reduce food waste from bread by turning unsold baguettes and batons from its in-store bakeries into new products.

Surplus bread is one of the biggest waste problems for food retailers, according to the government’s food waste adviser Wrap, particularly from freshly baked lines which have a short shelf life.

Its most recent figures show surplus bakery products account for nearly a third (67,500 tonnes) of the UK’s total retail food waste a year. Bread is the second most wasted food in the home, with an estimated 1m loaves thrown away each day. It is also one of the most wasted items at every stage of the supply chain.

Tesco said that, as well as being among the UK’s most popular breads, freshly baked baguettes and batons were among bread items left on its selves at the end of the day. The retailer said it had decided to use the unsold products to make a range of olive crostini and bread pudding which will be launched in 24 stores next week. It estimated the amount of unsold fresh bread could be cut by up to a half if the range was made available at all its outlets.

Currently, Tesco’s surplus bread is reduced in price while still on sale, and some is sent to food distribution charities on the evening of its production. The remainder is then offered free in Tesco’s staff shop, after which it is sent for use in animal feed.

The supermarket chain said it halved the amount of food that was safe for human consumption going to energy recovery last year. It added that it was now more than 80% of the way towards its target of no food safe for human consumption going to waste.

“This initiative from Tesco is an excellent example of a simple solution to a common problem,” said David Moon, the head of business collaboration at Wrap. “Using surpluses in store to make a delicious new product saves good food from spoiling and reduces the cost of waste to the business.”

Elsewhere in the supply chain, leftover bread was increasingly being used to make beer: breweries including social enterprise Toast Ale and Adnams used Marks & Spencer’s leftover factory sandwich bread crusts, while the Gail’s Bakery chain made a fresh sourdough loaf from its own unsold loaves.