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Best Practices for Food Waste Management in Retail

In this piece, we outline factors contributing to food waste in the global food system, on both the consumer and retailer sides, and explore best practices for food waste management in retail. 

With an estimated 125 – 160 billion pounds of food left behind each year, food waste continues to be an increasingly important discussion in the United States. This amounts to nearly 40% of the entire food supply chain, and losses occur in all parts of the system (i.e., from farm to distribution and from distribution to consumption). This number is even more shocking when considering the prevalence of individuals and families who struggle with food security problems.  

Food waste occurs for many reasons as a result of both business and consumer choices. Some business examples include manufacturing issues, quality control and selection, and surplus product. Waste will continue to exist in industry, and while losses should be minimized, it’s important to also maintain safety and quality standards. Among consumers, a common cause of food waste is misinterpreting the product expiration label. 80% of Americans have discarded food that can still be consumed because of this misunderstanding. Thus, education from businesses (i.e., ‘Best If Used By’, ‘USE By’, etc.) can be very impactful in reducing waste and helping consumers realize what foods are safe to consume and what foods must be discarded.  

Food Waste Management in Retail

From the perspective of a retailer, there are many factors that impact food waste. One is appearance, which is critical to grocery stores and results in traits like color and size dictating what will be accepted from suppliers. This often results in an excess of unwanted products and retailers even build ‘shrink’ into their budgets to represent the food they expect to waste. While waste is found throughout the process, these examples show there are opportunities as well. Consumers are seen as a driving force behind the movement to reduce food waste, but it must be a multi-stakeholder initiative and will require effort from farmers, manufacturers, grocers, consumers, and many others to impactfully enact change. 

Where to start? 

Food waste efforts sit at the unique intersection of supply chain work and external customer engagement, making it quite complex. To begin food waste reduction efforts, retailers must first understand their full footprint of food waste. 

The first step is to audit your facility and identify areas of high waste and the ‘quick wins’ that can make immediate and significant improvements. Collecting key data like type of food, where the waste occurred in the process, the amount wasted, and the reason for the waste is an essential starting point. After gathering this information, specific areas in the process can be targeted to have the greatest impact on waste reduction. When moving beyond the analysis phase, it’s important for supply chain teams to partner with other groups, like their sustainability colleagues, to set actionable goals to improve from their current state. While setting and achieving these goals, it’s vital to maintain data collection so that operations can continue to be optimized and that any changes in waste can be tracked and reacted to.  

Having this data is also beneficial when considering the government regulations already in place and those that are forthcoming. Making decisions with accurate and thorough data will help your business meet all relevant objectives and requirements. As your business progresses with process improvements and waste reduction, you can also begin to partner with communities and collaborate with other organizations in your industry to create a larger positive impact.  

Innovative businesses have begun to take advantage of the growing market for imperfect foods. Misfits Market works with farmers and manufacturers to sell produce and other grocery items that may not meet retailer standards, but are still safe, healthy, and delicious. This is done while selling them at affordable prices to consumers. Imperfect Food also partners with farmers to use their unwanted produce and surplus items to avoid waste, while passing savings on by charging lower prices to consumers. Both businesses have found a way to reduce food waste and highlight their sustainability impacts to attract and keep customers. This also gives food suppliers the opportunity to sell to alternative outlets and build a more varied customer base. As a result, not only does this bring in more revenue, but by selling ‘ugly’ produce, there are cost savings from no longer needing to pay for its disposal. 

What’s next? 

This problem can’t be resolved quickly and requires many stakeholders to align, so it’s important to recognize and outline the steps that need to be taken. Also, as the topic has gained momentum, state and federal governments have acted. Among other initiatives, states such as, California, Connecticut, Massachusetts, New York, Rhode Island, and Vermont are tackling the issue by restricting what food waste can go to landfills. The federal government also acknowledges the importance of reducing food waste and the U.S. Environmental Protection Agency (EPA) has set a 2030 goal for food loss and waste reduction. The target of this initiative is to cut food loss and waste at the retail and consumer level by half (about 66 billion pounds) by 2030. By achieving this goal, there will be far-reaching and positive impacts throughout the food supply chain, to consumers, and to the climate. 

With the government actively working to reduce food waste, and improvements impacting all areas of the supply chain, it’s important to continue to assess your business’ areas of opportunities to reduce waste in operations from the start.  

How can Clarkston help? 

Even though businesses are working on reducing food waste, it’s a substantial undertaking and will take time and assistance from all involved parties (consumers, business, local governments, etc.). Given the importance and breadth of organizations involved, it is important to assess your current state and create an action plan. In addition to reducing food losses, decreasing food waste will also lower costs for disposing of waste, improve your carbon footprint, and optimize operations for all parties. 

As you think through your strategy to implement waste reduction efforts, consider partnering with sustainability and supply chain experts for further guidance. 


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Tags: Retail Planning and Execution, Sustainability