A Moral Imperative and an Economic Opportunity
According to the nonprofit ReFED, one third of all food produced in the U.S. is wasted. That is equivalent to roughly 2% of the U.S. GDP. Globally, 931 million metric tons of food are wasted annually. According to the United Nations Environment Programme’s Food Waste Index Report 2021, 61% of global food waste occurs at the consumption stage in households, 26% in food service operations, and 13% in retail outlets. This amounts to 121 million metric tons of food wasted at grocery stores, not a trivial figure.
The implications of this are staggering – the UN calculates that, if global food waste were reduced by only 25%, there would be enough food to feed all food-insecure people globally. And food waste cannot be separated from its climate change impact – ReFED estimates that, if the U.S. reaches its goal to reduce food waste by 50% by 2030, this will result in a 75 million metric ton reduction in greenhouse gases (GHGs) and save 4 trillion gallons of water. UNFAO calculates that global food waste emissions are equivalent to 3.6 GtCO2eq. If that were a country, it would come in third below China and the USA.
The food retail industry is in the spotlight, and major grocery chains are under pressure to account for, manage, and reduce their food waste more effectively through zero food waste commitments, standardized date labels, and educating employees and shoppers. The impetus to act is not just a moral imperative, but also an opportunity for food retailers to become leaders in food waste prevention and diversion – and to improve operational efficiency and profit margins along the way. A 2017 report by the World Resources Institute calculates a return on investment in food waste reduction to be between 5:1 and 10:1, as reported in GreenBiz. In line with this estimate, Fast Company reported in 2019 on a study by Champions 12.3 that calculates that food service operations save $7 per every $1 they invest in cutting food waste.
Food Retailers Face Uneven Pressures Across Markets – But Succeed
Besides the social, environmental, and economic imperatives to reduce food waste, emerging regulations mean added pressure for food retailers. California’s Senate Bill 1383 mandates 75% diversion of food waste from landfills by 2025 and pledges recovery of 20% of edible food waste for human consumption. Beyond California, similar legislative bans on landfill disposal of organic waste have been enacted in eastern states, including Connecticut, Massachusetts, Vermont, and Rhode Island. At the federal level, agencies set a goal in 2015 to cut food waste in half by 2030 in line with international targets. In addition, legislation on food waste was introduced in 2017, and the Food Date Labelling Act was introduced in the US House of Representatives in 2019. Furthermore, all of the signs are pointing to the Biden administration renewing the focus of the Obama administration on “more muscular” legislative approaches to food waste mitigation rather than depending on the private sector’s voluntary efforts.
According to Dustin Herner, Energy and Sustainability Manager at Weis Markets, a regional chain based in Sunbury, Pennsylvania, keeping up with the moving mosaic of regulations poses challenges for retailers. “The biggest challenges we have in food waste right now are standardizing a program across all stores while complying with varying legislation across our market and maintaining good store performance,” says Herner. This makes it difficult to develop and implement standardized programs across all of the chain’s stores or find a single vendor that can comply with the varying state regulations. However, even with these challenges, Weis Markets has increased its food waste diversion from landfills by 35% since 2019 through donations. According to Herner, this waste has been diverted to cattle feed, recycling of meat byproducts, and composting, and Weis Markets has been able to track its progress and compare its performance to peers using the EPA’s Food Loss and Waste 2030 Champions program.
Innovative Approaches Can Help Retailers Prevent and Track Food Waste
The EPA Food Recovery Hierarchy offers a roadmap for retailers to improve food waste prevention and the management of inedible food waste. At the top of the hierarchy is source reduction, or prevention of food waste to begin with. “To prevent food waste at the store, retailers must improve their sell-through on stocked items through correct product rotation,” says Mark Koppang, Director of Sustainability at the California-based chain Raley’s Family of Fine Stores. In other words, put systems in place to improve ordering and ensure items in stock do not expire or go bad before they are sold. According to Koppang, Raley’s has diverted 500,000 pounds of food by using a tool called Date Check Pro, which allows team members to identify and rotate products nearing expiration dates. Other tools, like Shelf Engine, use predictive modeling to help grocers only order the inventory they know will sell, preventing overstock.
These tools may be out of reach for smaller retailers with limited resources, however. Michael Orr of the Department of Public Works in the city of Cambridge, Massachusetts, cites that “small businesses…have very thin margins and face increasing costs from rents, food supplies, labor, and disposal” and must respond with simple, inexpensive solutions to food waste. These may include selling “ugly” produce or almost-expired products at a discount or diverting them to store kitchens to be used in prepared foods sold at the store. Relying on store staff to identify local programs for food donations, especially in rural communities, is also key, says Herner of Weis Markets.
Other tools and programs offer help for food retailers to measure and track their food waste. The Food Loss + Waste Protocol includes a practical guide to measuring food waste as well as a value calculator. The EPA’s Food Recovery Challenge is a voluntary incentive program in which retailers can set data-driven goals, implement targeted strategies from the food recovery hierarchy to reduce wasted food, and report results to compete for annual recognition from the EPA.
Another New England retail chain, Hannaford, recently announced the culmination of a decade-long effort to divert all of its food waste from landfills. Hannaford used a multi-pronged approach to eliminate food waste from its operations, including strategic product ordering and management at the store level, training employees to responsibly handle food to avoid damage and exposure to temperature variation, donating surplus products to community food banks, and donating to local farmers for animal feed and food-to-energy conversion programs. Collaborations with local food banks and waste-recycling companies were key to Hannaford’s success, and this highlights a path forward for other regional retailers.
Collaboration is the Key to Success
One thing is clear: retailers can’t do this alone. Industry associations and public-private partnerships play a critical role in helping retailers build their awareness of new regulations, resources, and technologies to support their food waste reduction goals.
Chris Flynn of the Massachusetts Food Association, a nonprofit trade association for the supermarket and grocery industry in Massachusetts, says that, by working collaboratively with members, government agencies like the EPA, and sustainability nonprofits like Ratio Institute, organizations like his can “find common ground to educate the industry, consumers, and others on best practices to foster food waste reductions.” Additionally, multisector collaborations are set up to align private and public sector efforts. ReFED’s newly established Food Waste Action Network aims to drive coordination and collaboration across sectors. The Pacific Coast Collaborative is an example of a regional government collaboration with a focus on supporting private-sector food waste management. Champions 12.3 is a coalition of executives from governments, businesses, international organizations, research institutions, farmer groups, and civil society who are dedicated to inspiring ambition, mobilizing action, and accelerating progress toward achieving the UN sustainable development goal SDG Target 12.3 by 2030.
This article was published in partnership with Presidio Graduate School.