Nostico | April 22nd, 2022
How much is food waste costing your business? It could be more than you think. The United Nation’s (UN) Food and Agriculture Organization (FAO) estimates that food waste costs the global economy US$936 billion a year. Food waste burdens waste management systems, adds to the issue of food insecurity and is a major contributor to the global problems of climate change, biodiversity loss and pollution. The UN is urging countries worldwide to halve food waste by 2030.
In the UK alone, supermarkets are throwing away the equivalent of 190 million meals a year – edible surplus food that ends up in animal feed, plants, or even landfill.
Reducing food waste is an urgent challenge, but it requires a fine balancing act. By their very nature, supermarkets stock huge quantities of items with different shelf lives. They must find a way of continuing to offer this vast selection of food, keep it fresh and minimize the amount that ends up pulped in crushers at the back of their stores.
Here are six ways to help make that happen.
1. Use technology to manage expiry dates
One of the biggest culprits of food waste is expiry dates. Oded Omer, founder and CEO of AI-powered dynamic pricing company Wasteless, estimates that as much as 87% of food waste from grocery stores is because of them having to dispose of food that goes past its expiration date.
First, supermarkets can play a role by educating their customers. Confusion about what the expiry dates mean for food safety causes a great deal of edible food to be thrown away. Few consumers fully understand the difference between sell by, use by and best before dates. This is where supermarkets can step in and help by standardizing this information, presenting it to their customers in clear, simple, and accurate formats.
Supermarkets are also turning to expiration date tracking technology to tackle the problem. Tools now exist that automatically check and flag products’ expiration dates, giving stores ample time to discount soon-to-expire products and sell stock before it perishes. They can even use dynamic pricing to encourage customers to buy near-to-expired over fresher produce, changing the price of individual items throughout the day to capture the consumers’ attention and reduce potential waste.
The Too Good To Go app, launched in Denmark, takes a similar tactic. It alerts customers to excess food in supermarkets. Consumers can buy items through the app at discounted prices and then pick up in store before food goes to waste.
2. Harness data and analytics to identify waste patterns
Supermarkets capture information from numerous data points, from the eCommerce site, to vendor data, to loyalty programs, to smart shelves. Despite technological advances, too many supermarkets still operate on paper printouts and spreadsheets. But by using inefficient methods to capture, analyze, and communicate data , retailers risk missing out on insights that lead to growth and efficiency.
By using advanced data analytics and demand planning solutions, supermarkets can use both the data they collect and big data to predict demand, identify waste patterns and order exactly the right amount of food.
Walmart has been experimenting the potential of data and analytics in the Intelligent Retail Lab, its innovative AI-powered store in New York. In-store technology can automatically identify all products, regardless of wat shelf or aisle they are located in, and then compare product quantities with predicted sales demand. That means it can easily see whether it has too many packaged sandwiches out on the shelves at the weekends, or whether it doesn’t need as much barbeque food Monday to Thursday.
Although a fully automated store is not on every retailer’s list, by using shopping data and artificial intelligence, supermarkets can now anticipate what consumers want. This not only significantly cuts down on waste, but allows retailers to identify areas of high demand, quickly capitalize on sales trends and ensure that the right stock is at the right store at exactly the right moment.
3. Switch to modern appliances
According to the International Energy Agency (IEA), the grocery retail sector accounts for 2% of the electricity used globally – that’s more than data centers consume! Implementing energy and asset-monitoring solutions across stores can make a significant positive difference at scale and play a key role in developing solutions for a global food system that is currently under pressure.
The challenge is maintaining food quality and safety so products don’t unnecessarily go to waste, while using the least amount of energy possible. Success begins with using modern refrigeration appliances that are efficient, reliable, and keep food at the correct temperatures, even as customers help themselves to items. Internet of things (IoT) technologies can take this a step further by giving retailers actionable insights on how to improve energy performance. Sensors monitor food temperature and equipment energy output, and can automatically alert maintenance teams if there are equipment issues so they can be fixed early with minimal downtime.
The FAO claims that over the last five years alone, IoT solutions have saved US$37 million for food retailers by cutting food waste, while avoiding more than two million tons of carbon emissions.
4. Train staff on food waste
Damage to food and packaging is most likely to happen during transit and in storage. The simple mistake of placing heavy items on top of food that can easily bruise or break, such as fruits and eggs, can end up writing off entire boxes of fresh produce. Breaking the cold chain can lead to even more severe and costly consequences.
The FAO estimates that as much as half of temperature-sensitive produce is lost post-harvest primarily because of lack of or inadequate access to cold-chain logistics. A single break in the cold chain – whether it’s down to faulty equipment, a power outage, or the simple act of failing to close a freezer door properly – can lead to unnecessary food waste.
Food retailers can help prevent these types of events from happening through the simple act of training. By getting staff on board with tackling food waste and showing them how to mitigate it, supermarkets can see meaningful changes. In Germany, Metro Cash and Carry staff are trained in all aspects of hygiene and food safety during storage, transport, and processing. The result is reduced food loss, a larger volume of marketable products, and greater awareness on the sustainable handling of resources.
5. Embrace imperfect produce
As much as 15% of all food produced is lost before it leaves the farm, according to WWF International data. That’s down to retailers putting pressure on farmers to grow too much to guarantee agreed quantities, and rejecting goods that don’t meet their aesthetic requirements.
Knobbly carrots, marked apples and wonky cucumbers – entire fields of fresh food are disregarded by the supermarkets as they’re deemed too ugly, too small, or too large to sell. The current food system prizes uniformity over taste and the health of our planet.
France is a pioneer in excess food laws. In 2016, it introduced legislation banning supermarkets from throwing out edible food, giving way to a whole series of new initiatives and businesses committed to reducing food waste.
One rising trend is the selling of wonky veg boxes – imperfect fruits and vegetables at discounted rates. OddBox collects imperfect vegetables that would otherwise be rejected by supermarkets. Consumers can buy a weekly veg box directly at 30% less than the regular price.
“By rescuing fruit and veg from farms, we find a home for the odd, wonky, and tasty produce that supermarkets won’t accept, paying a fair price for all the farmers and growers we work with at home, and abroad,” writes the company. “Not just that, but in doing so, we are able to save the tons and tons of greenhouse gases and water that were required to grow each pear or potato you see in your boxes each week.”
6. Donate surplus food
Data shows that supermarkets can do more to ensure that surplus food finds its way to those who need it. In the UK, the top 10 chains are donating less than 9% of their surplus food for human consumption.
“We first published our food waste data in 2013 and believe that only by understanding the hotspots can we reduce waste,” said a representative for Tesco, the UK supermarket that gives away the highest percentage of its surplus food. “Our priority is to reduce this surplus through optimizing our forecasting, ordering and ‘reduce to clear’ processes. Our target is that no food safe for human consumption will be wasted and [if you deduct 16,497 tons sent to animal feed and 9,661 tons given to colleagues] we are now 77% of the way there.”
In the US, Kroger stores regularly set aside food to be donated to food banks and distributed to communities through pantries. The company has publicly committed to donate three billion meals by 2025.
While retailers and food businesses have made efforts to increase food redistribution, charities urge they should do more. The European Food Banks Federation is a network of over 300 food banks in 29 European countries that works to prevent food waste and reduce food insecurity. Its ‘Food No Waste’ challenge encourages businesses to share how they’re helping tackle the issue. Ideas included partnerships with local restaurants that turn unwanted ingredients into meals for those who need it, no food waste cookbooks and apps that track surplus food and distribute it to areas with high demand for donations.
The world’s food waste problem requires radical changes to be made across the food supply chain. Does your business have the tools it needs to play its part? Contact our team of retail technology experts to find out how the right retail software can help you measure and act on food surplus and waste.
Source: https://www.lsretail.com/resources/six-ways-supermarkets-can-reduce-food-waste
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