Fresh Produce in Retail
Did you know that of all the food items to go to waste within retail, fruits and vegetables have the highest wastage rate at 45%!
You’d think that with an ever-increasing global population there would be little room for food to go to waste but you’d be wrong. The increase in population has spurred on a greater production of food items that end up contributing towards increased waste numbers.
In fact, most western countries waste around 50% more food than they did just 50 years ago.
In the US, 9.3 Billion pounds of fresh produce is thrown away at the retail level each year. This waste amounts to 12% of the fresh fruit supply and 10% of the fresh vegetable supply. While in Canada, 32% of fresh food waste happens during distribution and retail, and in the UK, 4.5% of all strawberries, 7% of all apples, 10% of all avocados, 3% of all tomatoes, and 3% of all broccoli in the food supply chain ended up as waste during distribution and retailing.
This increase in food waste is due to a number of factors across the retail, hospitality and consumer aspects of the food supply chain. In this particular case, we wish to focus on factors specifically contributing to retail waste and what measures can be put in place to counteract these food waste practices.
Most of the waste in retail operations is within perishable products. The USDA estimates that US supermarkets lose $15 Billion annually in unsold fruits and vegetables alone.
Unfortunately, the retail model views waste as a part of doing business. For a lot of regional grocery managers, if they see a store that has really low waste in its perishables, they are worried. If a store has low waste numbers it can be viewed as a sign that they aren’t fully in stock and the customer experience is suffering. This perception of the market is a damaging outlook that needs to be reevaluated in order to reduce unnecessary food waste numbers.
Some of the typical causes of food waste in the retail section of the supply chain include;
Overstocked product displays
The expectation of cosmetic perfection
Pack sizes that are too large
Availability of fresh, ready food until closing
Expired “sell by” dates
Damaged goods and outdated promotional products
Low staffing
Improper sales/demand forecasts
Improper storage/ presentation
Improper handling
Nearing of the "best-before" date
Overstocked product displays. Most retail stores operate under the assumption that customers buy more from brimming, fully-stocked displays, preferring to choose their apples from a towering pile rather than from a scantily filled bin. This leads to overstocking and overhandling by both staff and customers and damage to items on the bottom from the accumulated weight.
The expectation of cosmetic perfection. Many customers select stores based on the quality of perishables, and therefore retailers feel compelled to have only produce of perfect shape, size, and colour—leading to much of the culling discussed above.
Pack sizes that are too large. Produce arrives in preset quantities according to case size. This limits the flexibility of produce buyers to purchase exactly the amount needed. For example, if a grocer wants 50 grapefruit but they come in cases of 80, the store is then stuck with 30 extras.
Availability of fresh, ready food until closing. Stores are increasingly offering more prepared, ready-made food in their delicatessens and buffets. On the one hand, this can be a good way to make use of marginally damaged or nearly expired products if the labour is available to do so. However, as with produce, store managers often feel compelled that displays of ready-made items remain fresh and fully stocked instead of letting shelves hold fewer items as they run out. Rotisserie chickens, for instance, might be thrown away and replaced after four hours on display. One grocer estimated that his store threw away a full 50 percent of the rotisserie chickens that were prepared, many of those from the last batch of the day. Ready-made food makes up a large portion of food lost at convenience stores, which discard approximately 25 percent of their food products.
Expired “sell by” dates. Products are discarded when sell-by dates—almost none of which are regulated by law—are near. Different from the use by or best-by dates (see the section on reducing expiration-date confusion that follows), sell-by dates are designed to help the store with stocking and ensure freshness to consumers. One industry expert estimated supermarkets on average discard $2,300 per store worth of out-of-date food every day. Almost all of this food is still consumable but may have a limited shelf life left. In most states, it is not illegal to sell products after the sell-by date, but stores don’t do so out of concern that their image of carrying fresh products will be damaged. Most stores, in fact, pull items 2 to 3 days before the sell-by date.
Damaged goods, outdated promotional products, and unpopular items. Products are also discarded due to damaged packaging or promotions that have passed (post-holiday discards are most common, but other time-sensitive products may go to waste as well). In addition, many of the 19,000 or so new food products placed on grocery store shelves each year are not popular with consumers and may be discarded when they fail to sell. In addition to in-store waste, this can lead to large volumes of overruns left with the manufacturer without a market.
Low staffing. Stores that prepare food on-site are able to use damaged food or food that has passed its sell-by date as ingredients. With tight staffing, there is less labour to prepare food on-site and therefore less opportunity to use those products.
Although in-store retail losses are significant, they are only a portion of the losses driven by retailers both up and down their supply chains. Out-of-store losses driven by retailers also are a contributing factor. Anecdotally, large commercial food buyers can demand tough contract terms including quantity guarantees and the ability to change orders at the last minute. Growers often overplant beyond their contracts for fear of not fulfilling them.
And downstream of the retailer, consumers are directly affected by their retail experience. Much food waste begins with choices made at the grocery store, which often are influenced by store promotions. Bulk discounts, merchandising that encourages impulse buys, and high volume promotions such as buy-one-get-one-free all contribute to consumers’ purchasing items or quantities that they are unlikely to consume.
Improper sales/demand forecasts. Procurement planners in food retail have to please customers who have never made more exacting demands on availability, freshness, and range. And they ignore such expectations at their peril: the competition is relentless, driving all market participants to seek out improvements incessantly.
When planners need to order supplies to restock their shelves, there can often be cases of miscalculated supply orders. This often stems from archaic forecasting practices that either predict supply-demand off of last season’s numbers or simpler still, just reordering supplies off the previous quote.
Internally, planners are often struggling with outdated IT systems that are isolated from each other, unreliable sources of information, and in some cases, largely manual and poorly coordinated processes.
Improper storage/ presentation. A lot of retailers unfortunately do not do the simple things first to ensure their produce has the best quality shelf life possible. Things like properly cleaned and tidied backroom areas, dedicated map systems for backroom refrigerator supplies, checking temperature recordings on deliveries, product rotation systems like First-In-First-Out (FIFO), and so on.
Beyond improper storage procedures, the use of poor presentation techniques such as over-stacking and the layout of incompatible fresh produce in close proximity to one another, are all contributing factors towards steep declines in shelf-life quality and increases in food waste.
Improper handling. A lot of employees are either uneducated or lacking in training when it comes to proper handling techniques. Fragile items, such as berries or mushrooms can often be subject to crushing under these circumstances.
Even trivial things such as dropping a box of apples as little as three inches can drastically decrease their shelf life and increase waste.
Nearing of best-before dates. As products approach their best-before dates, consumers that are unfamiliar with the true definition of the term and quality of the product, tend to steer clear of purchasing such products despite the fact that they’re fine and should theoretically be the first to go off the shelves.
Some retail employees tend to lean into this customer trend and preemptively remove and rotate products on display in order to cater to and attract customer purchases.
Ways to Reduce Food Waste in Retail
Smaller product displays. There is an old saying in retail, “stack ‘em high, watch ‘em fly”. And while there may be some truth to this statement, it doesn’t fully account for the waste it can incur as a result.
Implementing something as simple as a shelf stacking system that ensures that employees do not over-stack fresh produce can help to both reduce the potential damage of supplies and lower labour costs. The main catch being that employees will need to be more vigilant in the fresh produce section, monitoring and replenishing levels of produce on the shelves.
This method of displaying fresh produce, while working out to have a similar labour cost to that of piling fresh produce supplies in the long run, manages to preserve a greater amount of fresh produce supplies and in doing so, has greater outgoings.
Turn “Ugly” produce into an Opportunity. Supermarket management sets impossibly high cosmetic standards for food products. Even slightly “imperfect” fruits and vegetables (asymmetrical, discoloured, too small, or even too large) are usually rejected at the loading dock and never make it to the produce bin. The USDA estimates that supermarkets lose $15 billion annually due to these so-called “flaws,” even if the fruits and vegetables are of high quality and nutritional value.
In order to ensure that such large quantities of perfectly healthy fresh produce don’t go to waste, retailers can sell “ugly” fruits & vegetables at discounted prices. It really is as simple as that. It takes no more time than displaying conventional produce. Better yet, retailers can make a profit on sales to customers who either value a discounted rate, sustainability or both.
Create upcycled food products. When food products are damaged, ugly or just reaching the end of their shelf life, they can be repurposed into upcycled products in order to defy food waste expectations. Certain over-ripe fruits can be converted into snacks, vitamin supplements and fertilisers.
Prevent or minimise perishable food surpluses. Investing in new technology can reduce excess inventory and the number of wasted perishables. Advancements in automation and software have made inventory management scalable. Companies can set KPIs related to food loss and waste, track performance against those metrics, and adapt their processes to improve performance.
Some companies use software to input their store layouts so that deliveries can be organised in a shelving sequence. This practice eliminates intermediaries between the distribution warehouse and the retail floor.
Piling produce in bins high causes greater damage and labour costs. Finding new ways to display produce while reducing stock levels ends up boosting customer satisfaction because their produce stays fresh for longer.
Reduced portion sizes. A lot of prepackaged fresh produce, whether it be fresh-cut or bundled, more often than not exceeds the required amount that consumers actually need, however, the price point entices consumers into purchasing more than they need.
The simple act of reducing prepacked sizes can help greatly cut down on food waste purchases. This doesn’t necessarily mean the current package sizes should be removed from retail shelves, there simply needs to be a range of options to ensure that the supplied options can cater to the unique requirements of customers.
Reduce the availability of fresh, ready food until closing. While this mostly applies to hot meals, there is also a range of fresh produce items that are prepared and displayed within retailers daily, such as, fruit cups or yoghurt cups.
While these items are often a great way for retailers to reuse fresh produce items that would have otherwise been discarded, the regular restocking of shelves with such items often dooms the end of day supplies. While some fruit cups may be good enough for restocking the next day, the visual depreciation often leaves them on the shelves as customers will often choose fresher neighbouring options.
This can be avoided by either having a dedicated number of ready food options made each day or to have a dedicated cut-off time for further restocks. This may leave a customer or two at the end of the day disappointed but
Prioritise “best before” and “sell by” dates. While most retailers have sufficient monitoring methods in place to make sure that food supplies maintain their profitability, human error allows for individual items to slip through the cracks and exceed their “best before” and “sell by” dates. Unfortunately, stocked shelves will always result in some measure of products exceeding these dates, however, there are ways to reduce the amount of waste in this area.
Having a regulated logbook of products on shelves can help employees to be conscious of which particular items need to be prioritised for sale and presented at the forefront of displays. Another way to ensure items do not exceed these dates is to train employees restocking fresh produce shelves to rotate the new stock underneath the older stock, as a lot of employees will simply place fresh stock on top of old stock, dooming those products to becoming waste.
Increase staffing. A lot of the listed contributing factors towards food waste on a retail level tend to hinge on the input of employees, so retailers that are under-staffed are unfortunately doomed to experience consistent waste numbers purely on the principle that they do not have the manpower required to carry out efficient stocking, monitoring, storing and cleaning practices.
A simple answer to this is to make sure that there is ample staff rostered on daily to maintain a required level of care for fresh produce supplies.
Reasons for food waste generation at retail stores
Stage in Supply Chain
Reasons for Waste Generation
Potential root causes
Retail stores - receipt
Product rejected owing to failures in the cold chain, i.e. cannot guarantee produce remained at correct temperature
Technical failure in trucking fleet, information about correct handling not transmitted through supply chain, poor methods for opening/handling truck doors, lack of compliance with guidelines
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Product rejected because it doesn’t meet quality specifications (e.g. fresh produce that doesn’t meet retailer aesthetic standards) or damaged in transport
High consumer expectations, unnecessarily strict standards, spoilage/damage during transportation, information about quality standards not transmitted through supply chain
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Packaged product rejected due to packaging damaged in transport
Inadequate packaging, poor handling practices
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Packaged product rejected due to incorrect packaging/labelling by manufacturer/ processor
Poor quality control at supplier/wholesale
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Disposed of due to product being incorrectly selected at warehouse
Inadequate communication or business processes, disposal cheaper than return to warehouse
Retail stores - storage/shop floor
Disposed of as a result of damage in handling or display
Consumers picking over produce to find the perfect/ripe items Product falling off shelf, insufficient storage stability
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Disposed of as a result of spoilage
Inaccurate forecasting, low level of demand, poor inventory control, fresh produce has shorter shelf life due to being affected by extreme weather or poor practice earlier in supply chain
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Disposed of due to refrigeration failure, i.e. cannot guarantee produce remained at the correct temperature
Poor maintenance, insufficient cold store capacity
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Disposed of packaged products as a result of insufficient remaining shelf life (use by or best before dates).
Inaccurate forecasting, low level of demand, poor inventory control, competing promotions
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Unavoidable fresh produce waste disposed of (trimmings, scraps)
Inedible scraps e.g. leaves on fresh produce such as cauliflower
