Food waste is a worldwide dilemma that has been increasing for years. Large food companies have implemented several initiatives over the last few years to raise awareness of food recycling and to encourage the purchase of products to prevent them from being thrown away.
But do you know how analytics and Artificial Intelligence can help to curb the waste that worries us so much? Read on and we will tell you about some of the innovative initiatives that rely on advanced analytics techniques to reduce this problem.
What is the situation?
When we talk about food waste, we think of those foods that are thrown away when they expire or those products that nobody wants to buy because they look “ugly”, but this concept does not only include this.
Food waste can be defined, according to AESAN, as “those agricultural and food products discarded from the food chain that are still perfectly edible and suitable for human consumption and that, in the absence of possible alternative uses, end up discarded as waste.” Therefore, food waste is a problem that affects the entire process through which the product passes.
Globally, one third of the world’s food production is wasted. This is equivalent to around 1.3 billion tons of food that are lost along the food chain. The most affected foods are mainly fruits and vegetables (50%), fish (35%), cereals (30%) and meat (20%).
Nationally, a total of 1.2 tons were wasted in 2021 according to the study on household food waste prepared by the Ministry of Agriculture, Fisheries and Food. The total volume of food waste in households between April and September 2022 has decreased by 5% compared to 2021. Although this decrease is not due to an improvement in food management, but in a decrease in consumption. The waste rate of unused products increased by 1% (4.3% in 2022) compared to 2021 (4.2%).
The government has decided to put a stop to this problem that has been going on for years. Therefore, in the first half of 2023, the new law against food waste will come into force. The aim is to promote actions to prevent food waste throughout the food chain.
You may ask, how does this new law affect companies? Companies will have to have a prevention plan and minimize losses according to a hierarchy of uses in which priority will be given to human consumption.
Initiatives to stop food waste
Retailers have been taking steps to reduce these figures for years, with the vast majority adopting surplus optimization policies. Thus, 33% involve the entire organization in this action and 42% use technology to prevent and/or detect waste.
We will now explain some of the initiatives that have been carried out to reuse the surplus generated.
Apps to sell your unsold fresh produce
The amount of leftover products that brands find at the end of the day, having to throw away kilos and kilos of food in the trash, made platforms such as “Too good to go”, “NotFoodWaste” or “Komefy” take courage in the face of this problem.
These platforms help connect consumers with supermarkets so they can purchase surplus at the end of the day at a discounted price through in-store pickup.
Waste Warrior” brand partnerships are also being encouraged. A community of major brands committed to improving this situation. Más y Más, Musgrave, Auchan Retail or Carrefour are examples of the practice of these initiatives.
On the other hand, there are apps such as “bene bono” that market products that large supermarkets have rejected for aesthetic reasons. In this way, the app manages to help organic farmers and producers to sell their products directly to consumers if the big brands do not accept them because they are not aesthetically pleasing.
Bulk sale of fresh produce
Prioritizing bulk sales over packaging so that the consumer buys the quantity he needs. A simple and effective measure to avoid over-purchasing. In addition, this helps the environment, as it avoids the excessive use of packaging. Condis Supermercats or Eroski are examples of the implementation of this initiative.
Alternative management systems for non-usable wastes
Non-usable waste is all waste that will not be reused. In this case, brands have alternative systems to give them a second life and improve the impact on the environment.
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Retailers such as Auchan use these scraps to achieve a circular flow within the brand. Examples of this use include Auchan’s compost from organic waste generated by its hypermarkets; or the range of dehydrated vegetable creams and soups made from agricultural products that, because of their size or shape, have been discarded. In this way, it has managed to recover 10% of the fruit and vegetables previously wasted.
Another alternative for giving a second life to certain wastes is energy generation. This practice consists of recovering waste to obtain heat or electricity. Although it is true that this practice is not very common in Spain, it is already widespread in northern Europe.
Avoiding overstocking through order management and optimization platforms
When the level of demand is much lower than the amount of stock available in the warehouse, products reach their expiration date and fail to be marketed. To avoid this waste and keep better control of sales and demand, many retailers have order optimization platforms.
Using proprietary tools, they are able to adjust daily fresh produce orders in supermarkets to the needs of each section. In this way, they are able to track sales and stocks in real time. This makes it easier for store personnel to offer freshness on a daily basis. Musgrave, Froiz, Mercadona are examples of retailers that have implemented these platforms to avoid surplus.
Today, retailers are increasingly aware of the need to value food and of the important role they play in transmitting to consumers the importance of responsible food consumption, which is why many chains have agreements with the Spanish Federation of Food Banks, NGOs and charitable canteens to donate food.
For example, Mercadona collaborates with soup kitchens, food banks and other social entities to which it donates basic necessities on a daily basis.
Discounted prices for products close to expiration date
Differentiating with a discount the products that are coming to an end with those that still have more margin in their expiration date is a way to encourage the consumer to buy those products at a lower price. In this way, both win; the customer saves and retailers reduce the surplus of wasted food.
Some of the large national retailers have been implementing this measure for some time through special labeling. Ahorramas, for example, has marked in all its stores with the label #desperdiciocero those products that are close to their expiration date, to which they apply a discount for a reduced time to encourage their consumption before they perish. Other retailers that have implemented this measure include Eroski, Dia, Carrefour and Auchan. However, these products or shelves marked with discounts due to their upcoming expiration date still generate a certain amount of consumer rejection.
Thanks to digitalization and advances in the use of Artificial Intelligence, this labeling model is being improved by automating the processes behind price changes. With this system, prices are adjusted automatically and in real time thanks to the use of smart labels, helping to reduce the plastic used in manual labels, eliminating the time spent by store staff in marking these products and avoiding consumer rejection of those special discounted shelves. In this way, the supermarket can have the prices of its products updated in real time, reducing them as they approach their expiration date.
At Cognodata we apply our own “dynamic smart pricing” solution, based on advanced analytics to determine which price is the most appropriate taking into account the product’s expiration variable.
This is a dynamic pricing system to improve margins and reduce food waste through an application that allows price analysis with a predictive and prescriptive solution.
Want to be part of the solution?
From cognodata we offer measures that help the planet, reducing food waste, helping both retailers and consumers. Thanks to our commitment and the experience gained from more than 20 years of projects in the industry, we have developed platforms for optimal data utilization and knowledge injection. Thanks to these self-developed solutions, we help our customers meet their zero waste objectives:
- Dynamic smart pricing: by implementing our own “dynamic smart pricing” solution, based on advanced analytics to determine which price is the most appropriate taking into account the product’s expiration variable.
- Demand forecasting: through a self-developed platform, Cognodata can forecast the level of demand through Machine Learning based models, as well as the root causes for the increase or decrease in sales.
Our core is focused on analytics, as a basis for optimizing food utilization and curbing waste through some of the main players in the Retail – Food industry.
Interested in our services? Do not hesitate to contact us if you want us to show you a demo with some of our use cases in the retail sector.