Grocery Retailers Waste So Much Food It Should Be Criminal!

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Approximately 1/3rd of all food is wasted in North America. (See 2013′s Thanksgiving Post.) For years, I’ve been struggling to figure out why. It’s well known that the biggest offenders are

1. processors in developing countries who (due to financial, managerial, and technical constraints) struggle to properly store, cool, and process the food on-time to preserve it.
2. restaurants, who discard as much food as they discard other waste (Source SI)
3. retailers, who through bad forecasting, order too much and then spoiled food goes in the dumpster

But it is not well known that retailers intentionally over-order and waste food just to make sure their produce section looks nice (Source Spend Matters). And that is definitely NOT OK! Never, ever, ever! Not when over 13% of the world’s population is undernourished (Source: KFFand Wikipedia) and 15% of Americans, that’s right, 15% of Americans are considered “food insecure” and experience hunger in their households. (Source: FAO Washington)

In other words, the produce that is being wasted by retailers as an “acceptable loss” might be enough to counter a sizeable portion of the undernourishment problem in America — and that’s not counting the waste by restaurants and food processors! There’s no excuse for this. Not only are people going hungry, but we’re paying more for our retailers’ stupidity.

Why do they do this? According to Spend Matters, retailers believe that having a good-looking produce section that is fully stocked with fresh products is essential to get customers in a store. And that having more products than needed rather than running out tends to be better for business. While both of these statements are true, this doesn’t mean that a store has to considerably over-order to avoid stock out or waste food.

Not only has computing power increased dramatically since the pentium was released twenty years ago, which allows large amounts of historical data to be processed on the Procurement Manager’s workstation, but so has the accuracy of demand prediction models which can very accurately predict demand for any product at any time of the year, and even take into account the impact of sales, market shortages, and market recalls. A 1% buffer in these models is more than plenty to prevent stock-outs 99% of the time if these models are properly applied on enough data.

Furthermore, the standard practice of marking the produce down 50% when it starts to rot in hopes in that it will sell before it is unconsumable is stupid. When you see rotting tomatoes, moldy oranges, or squishy cucumbers, you’re not even going to buy them for 75% off. Stores have to smarten up and do two things.

1. Mark produce down when it’s shelf-life gets down to 72 hours or less.
   Considering we also have very accurate models of shelf life under given situations, this isn’t hard to do.
2. Donate produce with a shelf-life of less than 48 hours to a local shelter on a nightly basis.
   At this point, the store is taking a 75%+ write-off anyway and it knows it. It would be much better to donate the food, and get a charitable donation tax credit, when the food can still be safely used than throw the food in the waste bin. Especially since the retailer could use this to get a brand boost if it advertises that it donates X$ in food each year to the local food bank.
   No consumer expects every item to be in stock every time they go to the store with the never-ending stream of supply disruptions we experience these days, so the game has to change. And no consumer wants food to go to waste if people in their own city are starving! It’s not about the most fresh produce, but the most responsibility — and these days, a little goes a long way and the first store or chain in a region to capitalize on this is going to get a big brand boost.

And if you are a eco-nut who wants to protest something, here’s a cause. Protest grocery stores that build waste, or shrink, into their model without making sure that such food doesn’t end up in the dumpster. While some sustainability problems aren’t easily addressed, this one is.