An estimated one-third of all food produced is either lost or wasted.
Nearly 30% of the world’s agricultural land is used for food that will never be eaten.
Food waste is one of the top issues facing the food industry. And grocery retailers and their suppliers and other supply-chain partners are working harder than ever to do something about it — for the benefit not only of hungry people but also for the health of the Earth.
Food waste is the single largest component going into landfills today, said Ashley Flower, public relations manager for Carlisle, Pa.-based retail chain The Giant Co.
Yet there are still far too many people across the country and within Giant’s own communities who don’t know where their next meal is coming from.
Giant is trying to change that. Flower said the company’s commitment to reducing food waste flows out of its overall commitment to the environment.
“We’re known for being an environmental steward, fueled by the passion of our team members who embrace earth-friendly practices both in our stores and our warehouses,” she said. “As a food retailer, we are committed to reducing waste and minimizing our environmental impact, while at the same time maximizing food donations to our regional food banks.”
Partnerships: better together
Since the early 1980s, Giant has partnered with the Central Pennsylvania Food Bank, donating canned goods and surplus food. Everything changed, however, with the onset of the recession in 2008.
“It was clear that advanced solutions were needed to help the food bank meet new, increased demand,” Flower said. “And missing from the food bank was high-protein meat.”
Giant and the food bank created a task force to address the issue, and the result was the charitable “meat rescue” program Meat the Needs. Today, all 186 Giant stores safely freeze and donate meat that is pulled from sale, a day before its sell-by date. Before the program, meat that would go unsold would end up in the waste stream.
Giant is also an affiliate partner of Feeding America, which is helping the chain roll out its food donation program (150 Giant stores currently have such programs). Giant’s donations include contributions from its meat, produce and instore bakery and deli departments, as well as from center-store.
In 2019, Flower said, Giant donated just over 5 million pounds of food to local food banks and pantries.
“Our goal is to donate as much product as possible before it needs to be recycled,” she said.
While food donations are always preferred over food waste recycling, Giant partners with Divert to recycle food that cannot be sold or donated.
That includes items that food banks cannot accept due to high risk of food borne illnesses, foods that have spoiled, and packages that have been damaged or compromised. Divert processes the unsold food waste to make a solution used in anaerobic digestion to create clean energy.
“Helping to heal our planet, while at the same time fight hunger in our local communities, is serious business for all of us at Giant.”
Better data, less waste
Are Traasdahl, co-founder and CEO of Miami-based Crisp Technologies, said that a root cause of the food waste problem is slow-moving, inaccurate data in an industry that has a particularly complex supply chain — one affected by weather, pricing, production, logistics and consumer shifts.
“A lot of the loss throughout the food chain can be attributed to a supply chain theory known as the ‘bullwhip effect,’” Traasdahl said. “The bullwhip effect theorizes that if information is not accurate or up to date when it’s sent through a supply chain, then a change of plus or minus 5% in actual consumer demand can result in companies further back in the chain thinking it’s plus or minus 40%.”
As a result of such inefficiencies throughout the system, an estimated one-third of all food produced is either lost or wasted.
There are also huge environmental consequences of food waste, Traasdahl said. Rotting food in landfills contributes to methane emissions and contributes directly to global warming. In addition, nearly 30% of the world’s agricultural land is used for food that will never be consumed, which wastes energy, water, and other inputs to agricultural production. We also lose energy and resources by transporting foods that are later thrown away.
At the same time, the Food and Agriculture Organization of the United Nations estimates that about one in every nine people suffers from hunger across the globe.
“We simply cannot allow food to be wasted in the face of the extensive growth of our human population,” Traasdahl said.
Of all of the points along the supply chain, retailers face a tremendous challenge in balancing supply and demand at any given moment, Traasdahl said.
“Retailers’ main priority is to delight their shoppers. This is of course because delighted shoppers are loyal shoppers, an increasingly important factor in today’s omnichannel world. If a shopper’s desired product is out of stock three times at the same retailer, they will switch stores — possibly forever.”
That creates a huge challenge for retailers: finding a way to meet demand without stocking oversupply that leads to waste.
The food industry operates on high volumes and tight profit margins, Traasdahl said. Many retailers have closed their doors recently due to their inability to meet customer demand while maintaining profitability.
Retailer profitability, he said, can only be addressed through collaboration with a retailer’s suppliers by sharing data and insights, especially in an industry that has so many external threats.
Crisp’s solution to the food waste problem, Traasdahl said, is the employment of real-time, accurate and reliable data all along the supply chain.
That’s easier said than done, given the current infrastructure of the industry, which is hampered by older, larger, expensive and inflexible ERP systems.
“That’s the real root of the problem that we are addressing,” he said. “The food supply chain is ripe for a true data driven solution that gives everyone a single point of truth.”
Forecasting — down to the SKU level
To that end, Crisp is partnering with companies to help them forecast demand down to the SKU and individual store level, ensuring the right amount of product gets to the right store at the right time. With high-precision forecasting, Traasdahl said, companies can optimize remaining shelf life, prevent out-of- stocks, and limit mark-downs needed to move short-dated products.
“Accounting for factors such as consumer sentiment, promotional activities, and holidays can exponentially increase our understanding of product performance and our ability to forecast demand with unprecedented precision and accuracy,” he said. “This cannot be accomplished with legacy Excel spreadsheets, manual interventions, and the human eye—increases in the depth, breadth, range and quality of data inputs require companies to leverage the latest in technology, artificial intelligence, and machine learning.”
Crisp, he said, gives customers greater demand forecast accuracy, which in turn improves performance in three main ways: top line revenue growth, cost reduction and productivity gains.
The company has been working closely with food suppliers in the US and with REMA, an $8B retailer in Norway, to tackle the challenges of food waste while increasing profitability.
“There is a huge opportunity to actually reduce the price of the product using more accurate forecasting, making it more attractive to a customer while still increasing profits for both the retailer and the supplier,” Traasdahl said. “Crisp works with both growth brands and more established brands.”
West Babylon, NY-based Nounós Creamery, for example, was able to reduce waste by 40% when it began forecasting with Crisp. The firm is confident that larger companies would be able to reduce waste by 25-30% with an even more significant impact on their bottom line and the sheer volume of waste.
The ReFED roadmap
Berkeley, Calif.-based ReFED is a multi-stakeholder nonprofit powered by an influential network of the nation’s leading business, nonprofit, foundation and government leaders committed to reducing US food waste.
ReFED takes a data-driven approach to move the food system from acting on instinct to insights to solve the food waste problem in the US. Solutions already exist to cut food waste by 20% nationwide. ReFED has identified 27 of the best opportunities through its Roadmap to Reduce US Food Waste, a first-of-its-kind economic analysis, making it easier for stakeholders across the food supply chain to meet the national 50% reduction goal by 2030.
“The ReFED Roadmap revolutionized the way the industry looks at food waste — looking beyond challenges and identifying concrete opportunities to save money and resources, feed people and create jobs,” according to the company. “ReFED’s continued efforts include promoting date label standardization through a multi-stakeholder initiative; collecting data and generating insights on the innovation taking place to reduce food waste; and centralizing food waste policies at the state and federal level.”
Those tools help businesses, nonprofits, government and investors put the most impactful solutions to reduce food waste into action.