Fighting food waste: The role of retail

If you find yourself having to purge out-of-date food from your refrigerator every few weeks, imagine what goes on at your local supermarket. The Food and Agriculture Organisation (FAO) predict that over one third of all food produced globally is never eaten.

Food waste is growing alongside global population and with an extra 2 billion mouths to feed by 2050, food security is a critical issue. When food is thrown out the resources, labour and transport emissions all go to waste as well. A frivolous use of natural resources that drive up costs, inflate food prices, weaken the food supply chain, and create food insecurity.

“If food waste was a nation, it would be the world’s third-largest greenhouse gas contributor” – FAO

Whilst food waste occurs at every stage of processing from farm to fork, large retailers are in a unique position to fight global food loss and waste. With their direct links with food producers, processors, and consumers, they have power to influence the entire value chain. In the UK, the traditional supermarket industry is highly concentrated, with the top 5 retailers accounting for 74% of the market, making them a considerable force for change.

A four-pronged approach to fighting food waste

Technology is a key enabler in the fight against food waste. Here’s a four-pronged approach to enabling this transformation:

• Refine demand planning
• Maximise consumer purchasing
• Monitor waste hotspots
• Redistribute what remains

1) Refine demand planning

The waste: Demand planning is a major component in determining the amount of product needed at each store. Legacy systems may not account for the perishability of products or incorporate historical data on customer trends into future forecasts. This can lead to over-ordering and loss of revenue from unsold perishable products.

Inventory for the real world: Solutions such as Capgemini’s demand planning harness data analytics to consider perishability of products, weather and store promotions to accurately forecast for demand planning.  Retailers have seen cost savings of €11M from tackling their excess inventory, whilst ensuring adequate consumer order fulfilment.

2) Maximise consumer purchasing

The waste: Consumers are often hesitant to pay full price for items that they perceive as being too near their sell-by date, these items may remain unpurchased and ultimately end up being discarded. Managing markdowns remains largely manual, which prevents regular discounting of near-expiration products.

Waste less with Wasteless: AI-driven dynamic pricing solutions enable retailers to tackle waste, and increase perishable food profit, by automating markdowns of products with shorter expiration date.

I caught up with the vice president at Capgemini’s partner, Wasteless, to discuss their all-in-one solution that optimally prices items based on factors including:

• Time of day;
• Consumer shopping patterns;
• Competitor pricing; and
• Current/impending inventory.

The impact for retailers is clear. Implementation in an Italian retailer led to a 39% reduction in waste and a 110% increase in revenues. Most exciting is the release of a new API allowing retailers to reflect in-store discounts online, scaling impact.

3) Monitor waste hotspots

The waste: It is encouraging that an increasing number of retailers are publishing their own food waste data in line with the Courtauld commitment, a pledge to develop solutions to cut the carbon associated with food waste by at least one-fifth by 2025 in accordance with wider UK guidelines. However, monitoring remains a largely manual process and retailers may be missing out on further opportunities to tackle waste hotspots within their organisation.

You can’t fix what you can’t see: Technology-enabled tracking can improve the accuracy and efficiency of data collection. When coupled with analytics retailers can start to pinpoint the root causes of waste in their operations and establish an incentive for change. For example, items that are disposed of in larger volumes than others, or days of the week that are more waste intensive than others. Winnow make use of a system of cameras, weighing scales and machine learning to highlight the volume, value and environmental impact of food entering rubbish bins. Whilst currently focused primarily at restaurants, Winnow has helped inform food waste initiatives and has helped food providers cut food costs by upwards of 8% a year.

4) Redistribute what remains

The waste: Where food waste cannot be prevented, there is potential to redistribute the equivalent to around 400 million meals a year in the UK. Yet, reports show UK’s top 10 chains are currently donating less than 9 per cent of their surplus food for human consumption.

Strengthening food rescue: relies on increasing the capacity of food relief agencies, addressing distribution bottlenecks, and improving communication flow. This can be achieved by implementing coordination and matching technologies that make food donation easier. Tesco make use of FoodCloud’s platform to let local charities know of daily food surplus. Charities respond to confirm they will collect the food and arrange a pickup direct-from-store or from one of FoodCloud’s intermediary hubs. FoodCloud alone has rescued over 100 million meal donations since 2013.

Food that can’t be put to good use in the community can be repurposed. Technology has unlocked new value in food waste for example converting it to animal feed or beer; or using it to produce electricity.

Good for business and the planet

For retailers who wish to embrace the opportunities posed by tackling food waste, innovation is no longer optional. Adopting an experimentation mindset is key to support the testing of new ideas, quickly moving on from those that don’t work – or adopting winning concepts.

Those who lead the fight on food waste will be rewarded, not just through resource savings, but also by attracting a growing mass of conscious consumers, who value shopping with enablers of environmental governance and social development.

Ollie Potter

Associate Consultant, Capgemini Invent

Ollie sits within Capgemini Invent’s Analytics and AI team. Outside of work he writes about sustainable business and tech innovation in a weekly newsletter, The Triple Bottom. He would love to discuss anything sustainability related and can be reached via LinkedIn.