One third of world food production is not consumed, and yet food insecurity is pervasive. Food waste is an issue whose resolution can contribute to more economically efficient and environmentally sustainable food systems. Previous studies on food waste reduction suggest that higher domestic competencies are associated with reduced food waste at the individual and household level. Based on a study of the nascent kodomo shokudō or Children’s Canteen (CC) movement in Japan, this paper more broadly conceptualizes these competencies under the framework of food literacy, and demonstrates the mechanisms whereby food literacy can be engaged to reduce food waste. The paper furthermore shows how food literacy can combine synergistically in groups or organizations to form ‘institutional food literacy’ that is better suited to tackle broader problems of food insecurity, waste, and social alienation. Although the CC movement emerged primarily in response to the recognition of child food poverty in Japan, its popularity and rapid diffusion across the country since 2014 have made it a significant player in the food waste sector. Unlike food banks and other professionalized welfare supports, the CCs derive their expertise and orientation from the distinctive values and lay skills associated with food literacy. Through participant observation in a CC in Okinawa, we demonstrate how the value of these lay skills, particularly when combined in institutional settings, can play a significant role in food waste reduction. In particular, institutional food literacy can contribute to reducing food waste through: (1) efficient management and leveraging of localized food (re)distribution networks, (2) increased capacity for absorbing and utilizing erratic food donations, and (3) rendering food literacy, and its associated benefits, more visible and transmissible to children and other adults.