Aligning supply with demand – how the grocery sector can help tackle food waste

It’s estimated that 1.3 billion tonnes of food are wasted every year. This amounts to almost a third of the world’s entire food supply being thrown straight in the bin.

Despite the efforts of Marcus Rashford, Jack Monroe, and other prominent food campaigners, UK supermarkets alone are believed to be discarding the equivalent of 190 million meals a year.

The majority of this wasted food comes from perishable items. According to the UN’s Environment Programme, nearly half of all fruit and vegetables produced globally are wasted. With further waste derived from meat, seafood, milk and dairy, deli items, and fresh grain products such as bread, it’s easy to see how it stacks up for the grocery sector. Indeed, food waste alone accounts for 8-10% of man-made greenhouse emissions, making it the third-highest single contributor in the world – all for produce that isn’t consumed.

 

Attempts to tackle the problem

The globalised economy has enabled a constant supply of fresh produce from around the world and consumers today expect a wide assortment of exotic foods, stocked shelves, and quality produce year round. Sudden changes to global supply chains caused by calamities such as weather events, geopolitical developments – or waves of the Covid-19 pandemic – make this challenging task even harder.

Signing up to ambitious programmes such as FareShare, an organisation that distributes surplus produce to those living in food poverty around the UK, certainly helps grocers reduce their waste. Tesco, ASDA, Waitrose and Co-op are all partners of FareShare, but much more can still be done. There is frustration, for example, that since many own-label products are packed for multiple retailers, it’s unclear who owns the waste of these products. The contracts that supermarkets have with large food charities also often exclude smaller charities from accessing own-label food, resulting in a highly avoidable 200,000 tonnes of additional waste.

Combining this with campaigns targeted at the consumer – where the consequences of shopping and eating habits are laid bare – can help stimulate greater action on the ground. Morrisons’ recent removal of “use by” dates on its milk products is one example of how to mobilise change in the consumer.

 

How technology can help

To address the issue at its source, however, supermarkets require greater visibility. Inventory and supply chain optimisation systems specifically designed to capture the nuances of supply and demand, and the sheer volume of waste within supermarkets, can help reduce the problem.

These systems offer a single view of product inventory, tying together ways in which items can be purchased in conjunction with one another, combined to create recipes, and then sold to end consumers.

Innovative retailers are also increasingly adopting AI-assisted demand forecasting to more accurately predict demand holistically – accounting for shopper purchases, in-store deli usage and prepared food demand for fresh produce in the forecasts. These types of systems are particularly useful for retailers who carry out food preparation within their stores, a sector that has increased significantly since the onset of Covid. Purchasing the correct number of apples to allow for fresh consumption, the baking of pies, and for inclusion in packaged salads, for example, requires seamless transparency across multiple management teams.

But more significantly, AI-based technology can make huge improvements to demand planning and forecasting systems, allowing for less wasteful inventory processes across the supply chain.

This means retailers will be better equipped to track waste back to the root item, and be given the required oversight to keep pace with fast-changing demand. Factors such as the weather, shelf life, and daily changes to product prices all influence supermarket sales, and can widen the gap between supply and demand.

Finally, leveraging contemporary kitchen management and fresh item management offerings strengthens retailers’ consumption projections and tracking, further enabling waste reduction.

By implementing these technologies, retailers not only align themselves closer to their revenue targets, but can also make huge strides in the global fight against food waste.

 

Food waste and climate change

The Waste and Resources Action Programme (WRAP) is seeking to halve all food waste by 2030 as part of the Courtauld Commitment – a collaborative agreement across the UK’s entire food chain that will help the sector reach new environmental goals. It includes the stipulation that organisations throughout the food chain should “target, measure and act.”

The uncomfortable truth is that many initiatives for the redistribution of surplus food simply wouldn’t need to exist if retailers had better insight into their inventory and forecasting systems. Grocers must invest in new technology that enables them to comprehensively track both sold and unsold items, as well as provide reports on their volumes of waste.

Achieving this will, of course, have a hugely positive impact on profit margins – but fighting food waste is also a fight against food poverty – and a campaign for the health of our planet.

 

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