1 billion people live in hunger. How can retailers help
The world produces enough food to feed every one of us. Yet, almost 1 billion people live in hunger. Estimates are that one third to half of all food globally produced is yearly wasted or lost along supply chains. This amount alone would be enough to feed twice the number of hungry people in the world. What if we start seeing food losses and waste not only as problems but also as untapped potentials? By forcing us to think differently, problems can become enablers of policy changes, social development, environmental governance and business innovation.
Most food waste takes place at home
Wasting food has environmental, social and economic costs that start adding up right from the farm, and increase with every additional step towards the consumer. The household is therefore the worst possible place for food to be wasted. Yet, it is there where the highest percentage of food waste takes place. Households in economically developed countries are responsible for about 38% to 47% of their country’s food waste. According to research from WRAP, a UK-based Waste & Resources Action Program21, the 10 main reasons for food waste at home are food gone “past use” by or “best before” date, succumbing to tempting special offers, food visibly gone bad or smelling bad, cooking excessive quantity of food, not eating food that needs to be consumed first, trying to buy more fresh food.
Avoiding food waste is a source of profitable growth.
The proportion of food thrown away by retailers is the lowest, at around 5 %. Food companies along the supply chain can obtain a median of 14 dollars in return for every dollar invested in reducing food losses and waste. Retailers in particular can obtain a median of 5,1 dollars for every invested dollar by using simple and low-costs methods such as, meeting regularly with suppliers, introducing or increasing daily communications with suppliers, linking forecasting methods to order planning processes, developing tools to assess underperforming lines, improving tools to increase the accuracy of order amendment and reviewing progress on a regular basis.
Nudge consumers to reduce food waste
Food retailers have the knowledge and means necessary to influence consumers’ purchasing decisions, cooking practices and even mechanisms of food storage and disposal of food at home.
Retailers influence consumers’ choices through data-driven marketing, which includes thoughtful visual merchandizing, assortment planning, seamless customer engagement in an “Any Time” “Anywhere” and “Any Device” (ATAWAD) environment. Driving consumers to reduce food waste at home, incites immediately the fearful thought of a drop in sales volumes. Should retailers then nudge consumers to reduce food waste at home at the risk of losing sales?
Combine organizational, regulatory, and technological solutions
Fragmented approaches to reduce food waste might only cause a shift in place and time in which food waste occurs. Combining organizational, regulatory, and technological solutions is the key. The use of IT has helped optimize supply chain operations from the back-office up to the point of sale, by improving supply chain visibility and collaborative partnerships leading to enhanced quality and safety of food. However, the use of IT has been scarce in tracking food products up until their consumption or end-of-life. The focus has been mainly in streamlining logistic and transport process from the manufacturer to the retailer. Could an IT driven supply chain transformation contribute to solving the problem of food waste by consumers?
Use information technology to inculcate consumers’ waste-avoiding behavior
The internet of things, or rather, the internet of groceries, can not only facilitate tasks, but also has the potential of connecting retailers and consumers from the very moment the product is picked up at the supermarket, through its storage and cooking, up to its disposal, or ideally, the absence thereof. Consumers could create online shopping lists and add ingredients to their shopping basket based on recommended recipes, as well as validate the freshness of the product through smart labels. Retailers could reach consumers on real time to offer them personalized suggestions while prices could be adjusted in real-time to instantaneously improve the uptake of products with a shorter shelf life. The value that consumers place on products relative to their price, could increase thanks to technology taking over from us the least pleasant tasks pertaining to food handling, such as planning and storing, and leaving to us only the enjoyable activities such as cooking and eating
Negotiate the challenge posed by uncertainty and risk
Technology is roughly 10 years ahead of behavioral acceptance by most companies. Some of these companies seem to suffer from the “not invented here syndrome”. Experts in the field of sustainable supply chains make a plea for an integrated solution to food losses and waste through which the quality of food products is measured, monitored and controlled from the moment it leaves the farm until it reaches the consumer. Understandably, the innovators or early adopters of food waste reduction technologies face uncertainty and risk. Yet, the benefits can go beyond an improved brand reputation, having significant social, environmental and intergenerational outcomes.
Collaborate with the consumers
Collaboration with consumers is now more possible than ever before, especially since the act of buying food is no longer merely a necessity, but has become a cultural expression through which consumers reward companies that act according to their own principles. As a food retailer, one way to start helping consumers reduce their food waste is by:
- Understanding why some of your products are landing in consumers’ dumpsters instead of being enjoyed as intended
- Reducing the cognitive distance between production and consumption of food products by actively telling consumers how these products came to be
- Making information about your products easy to understand
- Applying information technologies to help consumers quantify the amount of food wasted at home
- Helping consumers build a tailored strategy to cut food waste at home
Eating food is one of the most natural acts of human beings. What would you say wasting it would be?