The wastage of edible food still remains a major global challenge, despite its well-known consequences. Although bread and bakery products are identified as some of the most frequently wasted foods, the amounts generated and the pathways used to manage this surplus are often unknown. To support sustainable food systems, there is an urgent need to identify how much surplus is generated along the supply chain, including both sweet and savoury products, and to map how this resource is managed. The aim of this study was to quantify the surplus and waste of baked goods in Sweden, alongside mapping the pathways used for managing unsold bread generated at the supplier-retailer interface. Life cycle assessment, considering 16 midpoint indicators and three endpoint indicator, was used to assess the environmental benefits of reducing bakery product surplus. The results reveal that nearly 180 000 tonnes of baked goods are wasted annually in Sweden. Roughly 51% is generated at the supplier-retailer interface, particularly considering bread sold under take-back agreements where 14% of production becomes surplus. Only 2% of this surplus is recirculated to the food system, while the majority is instead used in energy production. Scenario analyses, including nine scenarios designed to capture various innovations to reduce surplus, demonstrated that prevention and valorisation strategies, such as data sharing and price reductions, have the greatest potential for reducing waste and environmental impact. Prevention could result in up to ten times lower climate impact per kg bread. The findings offer valuable insights for future research on sustainable food systems, and can act as practical guidance for industry actors, stakeholders, and policymakers to implement waste-reduction strategies that promote sustainable, resource-efficient food systems.