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Grocers eye food waste tech

Kimberly Chin
Jul 11, 2022
Illustration of an apple on a "Good/Bad" scale, with the scale arm hovering over "Good".
Illustration: Aïda Amer/Axios

Around 84% of grocery retailers have plans to invest in food waste technologies over the next two years, according to a Coresight Research survey.

Why it matters: U.S. grocery stores throw out about 30% of their surplus food, according to nonprofit ReFED, and such waste is estimated to cost the grocery industry around $16 billion in net profit annually.

Context: The COVID-19 pandemic exposed how parts of the supply chain have contributed to food waste, “from the farm, the producer, the transformer, the manufacturer, the processor, the distributor, the retailer, the consumer, all of those and in between,” Susan Flake, global director of food and logistics at Avery Dennison, tells Axios.

  • Avery Dennison provides intelligent food and digital ID technologies to help retailers manage their inventory and supply chains.

State of play: Food waste management has become an increasingly important issue for retailers as they grapple with inventory levels during the pandemic.

  • Over-ordering has contributed to a supply glut for many retailers—not just in food, but in apparel and housewares, too.

What we’re watching: Accurate demand forecasting and planning technology, powered by artificial intelligence, emerged as the top area of planned future investment, Coresight’s survey finds.

  • Other hot tech includes electronic shelf labels and radio frequency identification (RFID), per the survey.
  • RFID, which gives products a digital identity, pinpoints a product’s location in the supply chain and its shelf-life, and has been used to monitor inventory levels to prevent product shortages — freeing employees to complete other tasks, Flake says.
  • Blockchain, which helps provide a system of record to better track a product’s journey, has also gained traction.

Separately: “The social impact is still going to be [an] overarching driver,” behind retailers investing in food waste technologies, Flake says.

  • Food waste accounts for about 10% of global greenhouse gas emissions.
  • About 50 million people in the U.S. will face food insecurity this year, according to ReFED.
  • Roughly 30% of retailers who plan to invest in food waste technology say part of the reason is to meet their sustainability goals, Coresight's survey finds. Another quarter say they'll invest to improve profitability.

The bottom line: Despite an uncertain macroeconomic environment, Flake says investment in food waste tech will pick up.

  • “It's going to become even more critical,” she says. “You're going to look at more and more ways to save for the bottom line.”

Editor’s note: This article was updated to clarify US grocery stores dispose of 30% of their surplus food and not 30% of their total food supply.

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