Wave Goodbye to Waste

On May 28, 2015, France’s parliament unanimously approved a new law prohibiting large supermarkets from throwing out unsold food, and mandated that stores donate surplus groceries to charities or for use in animal feed. The law is part of a more general energy and environmental bill that also bans the common practice of bleaching unsold food to prevent people from searching for food in dumpsters.

Soon after—on June 4—the BBC reported that Tesco, the United Kingdom's biggest grocer, will expand the practice of giving charities unsold food from its warehouses to include leftover food from 10 of its UK stores.

Those recent developments abroad illustrate the amount of food wasted on an international scale, and the important role the food industry can play in eliminating waste from the supply chain.

Food retailers and wholesalers combined disposed of about 1.7 billion pounds of food and donated 670 million pounds in the United States in 2011, with grocery stores accounting for 11 percent of U.S. food waste disposed, according to a pair of studies commissioned by the Food Waste Reduction Alliance (FWRA).

“Food waste is a very significant issue for U.S. supermarkets, cutting into already thin profit margins in a competitive sector,” says Catherine Goodall, senior consultant at Ann Arbor, Mich.-based Resource Recycling Systems (RRS). “Retailers are losing money in a number of ways—they’re paying for the food; they’re incurring costs to stock, display, refrigerate and handle it in-store; and they’re incurring costs to dispose of it or otherwise manage it once it is unsaleable.”

Examining Waste in Your Operation

Waste audits can help retailers understand the type of waste occurring within their operations, Goodall explains.

“Since food waste is lost product and results in disposal cost, grocery retailers should conduct detailed waste characterization audits to understand what waste is food and why it is becoming waste. Is it due to packaging, cold chain or distribution issues that can be remedied?” she says.

Collaboration, however, is key to unlocking the door to true waste reduction.

“To understand food waste within their supply chains, retailers will have to work more closely with their supply chain partners to inventory food waste and drive reductions,” Goodall stresses.

Working in tandem enables retailers and suppliers to target areas with the most waste-reduction potential and to identify areas where one company’s actions can cause or reduce waste. “As a result, supply chain partners can reduce waste in ways they wouldn’t have been able to if they just worked alone,” Goodall notes.

Grocers also should challenge supply chain partners to help cut losses—something that can’t be done without understanding the baseline level of loss, what’s causing the loss, and what steps can be taken to mitigate losses, she adds.

While the process can seem overwhelming, “… the benefits are myriad—economic, efficiency and environmental—and may identify new opportunities,” Goodall stresses.

Retailers Take the Lead
While companies abroad might appear to be ahead of the curve in waste reduction efforts, many businesses are making waste-reduction strides in the United States, as well. Supervalu, Kroger, Whole Foods and Walmart, for example, divert a large amount of food to regional food banks and local charities—Walmart through the Feeding America program, Goodall says.

That approach, however, can have drawbacks, cautions Nona Cusick, SVP of consumer products, retail and distribution at consulting firm Capgemini.

“While in theory we love the idea of helping to share the still edible food waste with people who need it, the logistics of doing so may become a challenge,” Cusick says. “Elise Golan, director of sustainable development at the USDA, predicts that the hidden costs of mandating food donations could do more harm than good. She says, ‘If you’re having to set up a really expensive system to recover marginal amounts of food, that’s not good for anybody.’ While there are good intentions at the heart … we think the best plan for U.S. grocers in 2015 is good production planning to reduce unsold fresh food waste in the first place.”

Several retailers are using innovative approaches to recover food not suitable for donation. Goodall says the most innovative include:

* Walmart. In many areas, leftover wasted organics are source separated and collected separately from other waste, then recycled into compost or animal feed, or through energy-producing anaerobic digestion.

* Kroger. The company opened an anaerobic digestion facility at its Ralphs/Food 4 Less distribution center in Compton, Calif. The digester has enough capacity to process 55,000 tons of organics per year and will provide power to the distribution center.

* Publix.
In partnership with Waste Management, the company opened the Organics Recycling Facility in Okeechobee, Fla., where it processes wasted produce, bakery and floral items from 40 Publix stores in Miami-Dade County and two Publix GreenWise Markets in Palm Beach County.

As much waste as the grocery industry generates, the reality is that most food waste in the United States occurs post-purchase. Consequently, the quest for waste reduction ultimately must include your customers, since they are the last stop in the farm to table supply chain.

“The next step is to figure out how to change consumer behavior to reduce consumer food waste,” Goodall says. “Since grocers interface with consumers, they have an important role to play. In our fast-paced, convenience-oriented society, raising awareness and developing stewardship behavior is challenging, but possible. What people put in their bodies and take out of their wallets are two influential leverage points to influence consumer behavior.”