How Can Retail Solve the Food Waste Issue?
The growing food waste problem requires fast and decisive actions.
An estimated 17% of total global food production is wasted, and 11% of that occurs in households.
According to the Food and Agriculture Organization of the United Nations, reducing food loss and waste is key to reducing greenhouse gas emissions and pressure on land and water resources.
If we are to improve sustainability in retail, we can’t ignore the 2% of estimated food waste in the industry. Masses of edible food are thrown out at supermarkets worldwide, and the solution is not clear-cut.
In the recent episode of Disruption Talks, Patrick Rowse, the Sustainability Manager at Delivery Hero, and Jinder Kang, Innovation Consultancy Lead at Netguru, discuss the possible ways to tackle this issue and the role of technology in making retail more sustainable.
It all starts with personal habits
While individuals may not be able to solve the global food waste problem alone, collectively we can help to make a difference. The first step is being aware of more environmentally friendly behaviors and making simple changes to reduce waste in our own households.
Patrick’s own personal habits are all about reducing food waste and carbon usage. He likes to ride his bike rather than drive and buys small quantities of food to reduce wastage. He also uses separate bins for plastics, general waste, and compost, a benefit of living in Berlin with its great waste management system.
As for Jinder, he focuses on buying food he needs for today and tomorrow without loading up on too many items that might go out of date. He also uses local markets without single-use plastics.
How quick commerce can help to reduce food waste
Quick commerce or Q-Commerce is a next-generation of ecommerce which aims to cut delivery times. Quick commerce helps you get small quantities of goods delivered within minutes or hours rather than days.
Many households will stock up on groceries and other items each week, but there’s a problem with this.
Unless you’re very organized, it’s easy for that food to go out of date or get forgotten and then thrown away.
By doing smaller shops, you can get exactly what you need for a day or two rather than waste food each week.
This is something Delivery Hero has been interested in for a while now, which led to the launch of quick commerce.
Delivery Hero’s CEO and Co-Founder Niklas Östberg said:
“We started looking into delivering groceries about two years ago, and in the second half of 2019, we decided to really drive it forward."
"Launching quick commerce has been a natural extension of what we’ve been doing for many years,"
“Food has always been our strength, but as consumer behavior is changing and the demand for delivery of other products is expanding, we are happy to grow our services together with our customers.”
Whose responsibility is food waste, retailers or consumers?
While it’s not about pointing fingers and placing blame, we need to know who can make real changes.
Do consumers need to change their behavior, or do supermarkets and retailers need to change their business model?
Jinder believes that this needs to be a collective effort because everyone has a role in the supply chain.
From farming, through processing, packaging, manufacturing, transportation, logistics to purchasing the food itself.
Households are the source of some of the largest quantities of food waste, but retailers and restaurants have a similar problem.
"There's a role of responsibility for all to take upon themselves to really move the needle in reducing food waste,"
- Jinder says.
Patrick agrees with this and calls the whole thing an ecosystem with multiple different players. He says that everyone needs to move towards the same agenda together for real change to occur.
“Some players inherently have more power than others. Mass manufacturing, food suppliers, or these aggregations that sometimes occur within the farming industry. They obviously have a huge role to play, but also consumers have a role to play in terms of making informed and educated choices,” - adds Patrick.
Educating consumers about sustainable food choices
Part of the solution has to start with education. One way to increase education and awareness is with those big headlines that highlight the problems with food waste.Beyond that, education needs to happen at all levels of the value chain. It needs to occur within the big retailers, the suppliers, farmers, manufacturers, and the consumers themselves.
Patrick thinks we need to have a wider conversation about the impact on the environment:
“If we can really address the food waste issue, we'll be having a huge effect on carbon emissions.”
He says that 8-10% of the current carbon emissions in the world come from food waste.
The effect this has on global warming is what he calls a “first-order problem” because all other problems feed into it and make it worse. Second-order problems include global plastic pollution and the food waste problem.
“I think it's really important for people to understand, without putting too much negative spin on it, how dire the situation is and how much we need to course-correct. Those big headline facts can really get into people's heads and be those earworms when they're having a shower in the morning or just thinking about whatever before they go to work to make big decisions around food waste.”
Predicting demand and changing packaging
On the supermarket side, a great deal of the food wasted is down to inaccurately predicting demand. This is something that Jinder has been working on.
In his research into food waste, one of the biggest insights was that there’s work to do on the consumer side, but a lot more work needs to be done on the infrastructure level.
A lot of the infrastructure solutions that we use to handle food and plastic waste have been around since the 1980s.
“They haven't evolved in the same way that many other technologies or business models have in that time,”
- Jinder explains.
Some ways to combat this include using more sustainable packaging or products that help fresh produce last longer.
This is an area that Delivery Hero has been exploring with its Global Sustainable Packaging Program. As Patrick explains, this program was designed to provide local restaurants with eco-friendly packaging at a competitive cost. It’s currently being piloted in eight countries.
The main reason why restaurants use plastic packaging is that it’s cheaper and readily available. As a business, you need to think carefully about where you spend money. That’s why this program could make a real difference because it makes sustainable packaging more affordable.
Food waste at the beginning of the supply chain
Food waste occurs at all levels of the supply chain. Even by the time it gets onto supermarket shelves, waste has already been produced.
Part of the solution here could be more transparency. Jinder believes that improving transparency between supermarkets and partners will help to improve things.
"Supermarkets haven’t usually looked too closely at where they’re getting their food and instead look at profits,"
- he says. “I think supermarkets need to understand that it's not just about the benefits that it will provide in regard to the finance of food waste, but just injecting that general agility across their supply chain.”
Jinder continues with saying that we need to approach this topic with supermarkets in the right way. They’re businesses, after all, and so speak in the language of profits and financial incentives.
“One thing I always lead back to is the idea of the triple bottom line. So the idea of profits, of the planet, and of people,"
he explains. "And that's how we need to help them to understand that this is much bigger than just one first-order problem. As Patrick educated me today on, and how it can influence other parts of the operations of their organization.”
Overall, food waste is a problem that follows every step of the supply chain. The solutions may not be simple or even clear-cut, but there are things that we can do to improve it.
Increased transparency, increased awareness and education, and also government legislation to point hesitant companies in the right direction can all help to reduce food waste and emissions as a result.
This discussion is part of our Disruption Talks recordings, where we invite experts to share their insights on winning innovation strategies, the next generation of disruptors, and scaling digital products. To get unlimited access to this interview and many more, sign up here: www.netguru.com/disruption/talks