Fresh products are “living products” - sensitive to how they are handled and stored, they transform over time, and they expire if not used in time.
Almost 1.3 billion tons of food produced for human consumption is lost or wasted per year globally. That amounts to almost $950 billion.
Retailers often view this waste as a fact of life. However, the opportunity to reduce waste is actually pretty significant and, if pursued in the right way, there is a large upside for producers, retailers and consumers alike.
We worked with the Efficient Consumer Response (ECR) Community Shrinkage and On-shelf Availability Group to investigate how reducing waste affects on-shelf availability, and vice versa. To this end, we launched a major international study that was conducted by a leading research institute in the retail sector, Eindhoven University of Technology in the Netherlands. The results show that waste is a choice and retailers have many opportunities to reduce it, increase category and store efficiencies, and improve profits.
This work led to three key recommendations for retailers to find the right compromise between reducing waste and driving sales for their business.
- Set the right waste and availability targets.
- Target stores and categories that have more scope for improvement.
- Increase product shelf life.
