Retailers
Stakeholder Recommendations
Retailers: Solutions for Grocery Waste
Stakeholder RECOMMENDATIONS
Retailers
Summary
Grocery retailers operate in a consumer-facing marketplace, physical or virtual, primarily selling produce and packaged food products. Because of their unique position at the center of the supply chain, they have a lot of power to influence food waste reduction decisions – yet they face a number of unique challenges. Customers generally demand that a variety and quality of food be readily available, adding strain to inventory management and food purchasing. Additionally, adjusting or dynamically changing stocking practices or product sizes is challenging – especially when those practices are intricately tied to their brand identities. High customer standards for freshness lead businesses to dispose of safe, edible food based on a perception that is past its prime. And consumer demand for new distribution models – like curbside pick-up and home delivery – has increased handling challenges.
In 2023, retailers generated 4.45M tons of surplus food, nearly 35% of which went to landfill or was incinerated as waste. Most of this came from produce (32.6%), dairy & eggs (13.2%), and fresh meat & seafood (13.6%), and more than half was caused by concerns or confusion over freshness date labels. Importantly, 19.5% – more than any other sector – was given as donations to those struggling with food insecurity.
Retailers play an integral role in connecting all points in the supply chain, sourcing directly from farms and manufacturers and bringing consumers into their stores to purchase products. As such, they have the opportunity to engage and influence their suppliers, drive efficiency within their own operations, and engage with their consumers as to how they use/value their food to reduce grocery waste.
4.9%
Total Surplus Food in 2023 by Retailers
4.45M Tons
Causes
Date Label Concerns - 2.19M Tons (49.3%)
Handling Errors - 746k Tons (16.8%)
Spoiled - 684k Tons (15.4%)
Destinations
Landfill - 1.34M Tons (30.2%)
Donations - 862k Tons (19.4%)
Composting - 809k Tons (18.2%)
Explore solutions that can help Retailers reduce food waste.
Solutions for this sector can impact food waste generated by other sectors as well, not just waste from Retailers. ReFED's impact estimates reflect Modeled Solutions only – Unmodeled Solutions and Best Practices can take these amounts even higher.
(Annual Figures)
Top Recommendations
- Buy more of what is grown:
- Strive for stable buyer-grower relationships and innovative purchasing models, such as whole-crop purchasing, to ensure full utilization of product grown.
- Revise product specifications to accept broader cosmetic variety, using more of what is actually grown. Where not feasible, create established “imperfect” product lines.
- Enhance demand planning: Optimize forecasting and inventory management systems throughout operations with demand planning informed by machine learning.
- Employ dynamic pricing models: Implement dynamic pricing and markdown strategies such as markdown alert apps that increase sales of short-life product.
- Implement advanced distribution technologies: Implement technologies that will inform product quality and shelf life, such as early product analysis and detection, and incorporate intelligent routing solutions using dynamic decision-making based on product freshness.
- Assist customers with food management: Educate and assist consumers in better home food management through in-store information, food preparation services (e.g. meal kits, on-demand cutting or butchering), appropriate promotions, and customized product tips.
Optimize The Harvest
Key Opportunities
- Revise product specifications to accept broader cosmetic variety, using more of what is actually grown. Where not feasible, create established “imperfect” product lines.
- Strive for stable buyer-grower relationships and innovative purchasing models, such as whole crop purchasing, to ensure full utilization of product grown.
- Increase visibility of forecasted demand for suppliers, leading to reduced overproduction that results from growers lacking this information.
Enhance Product Distribution
Key Opportunities
- Use technology innovations that streamline product movement, such as intelligent routing, temperature monitoring, and early spoilage detection.
- Audit current product distribution flow for highly wasteful products or transition points to ensure integrity of the cold chain.
Refine Product Management
Key Opportunities
- Analyze and consolidate SKUs to increase inventory turnover and freshness while decreasing waste from low-performing or redundant SKUs.
- Optimize forecasting and inventory management systems throughout operations with demand planning informed by machine learning.
- Implement dynamic pricing and markdown strategies that increase sales of short-life product.
- Design in-store product management and displays to minimize waste, such as smaller produce displays, ensuring air circulation, and using night shades and covers to maintain freshness.
Maximize Product Utilization
Key Opportunities
- Repurpose perishable products pulled from shelves in deli and grab-and-go products.
- Dedicate R&D resources to create upcycled product lines in private/store brand products.
- Explore and pilot innovative shelf-life extension solutions, such as edible coatings, modified atmospheric systems, and other forms of active or intelligent packaging to improve product quality and freshness.
Reshape Consumer Environments
Key Opportunities
- Educate and assist consumers in better home food management through in-store information, food preparation services (e.g. meal kits, on-demand cutting or butchering), appropriate promotions, and customized product tips.
- Enable consumers to purchase smaller or customized portions (e.g., through bulk bins or staffed seafood and meat counters).
- Implement standardized date labeling and train staff on proper handling, donation, and sales of products based on label dates to avoid premature or unnecessary discards due to misinterpretation of dates.
- Develop innovative features to online shopping experiences that encourage consumer meal planning and improved food management.
- Adjust consumer expectations on the availability of fresh products (bread and hot, prepared foods) towards the end of service to minimize over-production.
- Collaborate with appliance and kitchen IoT companies to explore smart home innovations that can help customers improve their food management.
Strengthen Food Rescue
Key Opportunities
- Support innovation and pilots of real and near-time data-sharing technology, including type, quantity, condition, location, etc. of product nearing expiration to address time-sensitive food rescue opportunities.
- Coordinate across the sector to develop shared economies for idle assets, such as cold storage and transportation, to expand ability to food recovery organizations access to these resources at low cost.
- Expand staff training curriculums regarding donation liability protections and donation best practices, such as culling and storing procedures.
Recycle Anything Remaining
Key Opportunities
- Build relationships with livestock operations to provide food scraps as animal feed.
- Collaborate with systems players to demonstrate demand for feedstock, generate consistent inputs, and incentivize investment in recycling infrastructure.
- Pilot distributed anaerobic digestion models, including placing digester units behind processing facilities.
Your Source for Data and Solutions:
ReFED Insights Engine
The ReFED Insights Engine is an online hub for data and insights about food waste, featuring a detailed cost-benefit analysis of more than 80 food waste reduction solutions and best practices; facts and figures about the impact of food waste built from more than 50 public and proprietary datasets; a directory of organizations ready to partner on food waste reduction initiatives; and more. With more granular data, more extensive analyses, more customized views, and the most up-to-date information, the Insights Engine has been designed from the ground up to provide anyone interested in food waste reduction with the information they need to take meaningful action to address the problem.
ReFED offers a range of solutions for organizations to advance their own food waste initiatives. Our interactive tools, reports and strategic solutions can help your team get started.