Business Solutions That Help Cut Food
Waste
Up
to 40 percent of food grown in the United States for human consumption is
wasted. But solutions are starting to come together from retailers, farmers,
academics, policy makers, and social service organizations, according
to José Alvarez.
After decades of wasteful food practices,
where perfectly good food is discarded even as poverty keeps many families
hungry, solutions are starting to come together from food retailers, farmers,
academics, policy makers, and social service organizations.
“We’re seeing a movement to rethink what we
are doing as a food industry and as consumers,” says José Alvarez, a senior
lecturer at Harvard Business School who was once CEO for Stop & Shop
markets. “We’re trying to find ways to take the food that supermarkets and
manufacturers and farmers can’t sell, recover it, and give it to people who
could use a donation or reduced price meal. We are also trying to reverse
decades of misguided thinking about what constitutes safe, consumable food.”
Alvarez was a facilitator during a conference
in June at Harvard Law School on the topic Reduce
and Recover: Save Food for People. The conference
included seminal figures in the movement, such as Dana Gunders of the Natural
Resources Defense Council, author of the white paper Wasted;
Emily Broad Leib of the Harvard Food Law and Policy Clinic, co-author with
Gunders of The
Dating Game; and Tristram Stuart, author of the book Waste.
The issue is more than just an academic
subject for Alvarez. An immigrant to the United States, his mother passionately
reinforced at her dinner table the message of not wasting food. It was clear
that other family members in their mother country weren’t enjoying food
abundance.
So, combatting the wasting of food has become
something of a crusade for Alvarez. At the conference, leaders from a range of
fields discussed how to remedy the fact that up to 40 percent of the food grown
in the United States for human consumption is wasted, even as about 15 percent
of US households are considered “food insecure,” meaning they lack reliable
access to affordable, nutritious food.
As a produce buyer early in his career,
Alvarez would visit farms after they had been picked over for the best fruits
and vegetables to be sold in stores and was astounded at the amount of edible
food that was rejected.
“If you could get consumers to go to a farm
to see what the fields look like after the perfect product gets picked, they
would be sick to their stomachs at all of the perfectly good food left behind,”
he says. “There are millions of pounds of delicious, nutritious food that is
just plowed under every year.”
In recent years, that has started to change.
Conference attendees discussed organized
efforts to collect and put to good use food that would otherwise be discarded.
For example, voluntary gleaners are visiting farms to gather produce that had
been rejected as too imperfect to sell in regular stores, so the food can be
donated. And tech experts are creating computer applications that allow
farmers, retailers, manufacturers, and food wholesalers to connect with
organizations that accept and distribute food that would otherwise get tossed.
Food
waste solutions
Alvarez has written several case studies,
including a 2012 piece about the former president of Trader Joe’s and a fellow
at Harvard University’s Advanced Leadership Initiative: Doug Rauch: Solving the American Food
Paradox. The case was co-authored by Ryan Johnson,
research associate with the Global Research Group.
Rauch came up with one solution: In June
2015, he opened Daily Table, a not-for-profit grocery store in Dorchester,
Massachusetts that works with growers, supermarkets, manufacturers, and other
suppliers who donate or offer special buying opportunities for their excess
food. The store then sells the food at significantly reduced prices from what
is charged by grocery and convenience stores—in many cases, half the
price—allowing families to eat healthier even on a tight budget.
Open for a little more than a year, the store
is thriving—and it may be the first of many like it to come, says Alvarez, who
joined the board of the organization after writing the case.
A key decision for Rauch was to sell the food
at low cost rather than simply hand it out for free at food shelters.
For many people accepting handouts is
embarrassing, Rauch says. “They want to provide for their family in a dignified
manner. Retail, because the customer holds the power of the purse, gives the
power to the shopper and builds a more dignified exchange into the
relationship.”
In addition to produce, bread, and other
grocery items, Daily Table operates a large commercial kitchen with executive
chef Ismail Samad, whose team prepares healthy “grab-and-go” meals, including
chicken, fish, beef, and vegetarian entrees, as well as a variety of soups,
chili, smoothies, and salads. (Entrees typically cost $1.99 to $3.99; a large
basic salad is $1.49, and a large salad with a cooked protein is $2.99.)
Ready-to-eat meals have proven popular because many people in the community use
public transportation as they juggle multiple jobs and have little time to
cook.
Recently, the organization did a study to
understand whether a family on the Supplemental Nutrition Assistance
Program—formerly known as the Food Stamp Program—could make it through the
month eating at Daily Table. The results showed that Daily Table is likely the
only place in the United States where it is possible to do so.
“One of the key things Doug understood after
meeting with community groups was that just providing the ingredients wasn’t
enough,” says Alvarez, noting that Dorchester has one of the highest obesity
rates in Massachusetts. “It’s helping the community find an easy and affordable
way to feed themselves, and it’s having a huge impact.”
Alvarez, who spent 20 years in the retail
food industry, looked for his own solutions to the food waste problem as chief
executive of Stop & Shop from 2006 to 2008, where he oversaw $16 billion in
sales. One thing that irked him: Store food displays were too big, which meant
a lot of food was wasted, particularly perishables including seafood, meat, and
produce.
“It was all about pile it high, make it look
beautiful, and watch it fly out the door.”
But a day later, he would observe, 10 pounds
of food had been sold, but another 20 pounds remained, touched by numerous
shoppers and left wilting under the lights. “I looked at it and said, there’s a
lot of waste here. What can we do?”
Staging with smaller amounts of food was a
start. Alvarez and his team took a numbers-based approach, putting out for
display only the approximate amount of food the store was likely to sell that
day. This allowed managers to order what was needed for the day with any
oversupply stored safely in boxes and refrigerated to keep it fresher longer.
“If you’re going to sell half a box, only
show half a box,” was the idea, he says. “Within 18 months of implementing this
new process, we were saving $100 million a year in wasted food and the costs
associated with handling and disposing of it.”
The
perfect is the enemy of the good
Part of the food waste problem also lies in
our quest for marketing perfection, Alvarez says.
“We’ve created a really high bar for what’s
acceptable to be marketed and eaten by humans,” he says. “The apple that you
see in the store has to be the perfect apple.”
He puts it this way: If you start with the
premise that grocery store displays always have to be full and always have to
look perfect, employees eliminate a product that doesn’t look right, throwing
it into the compost heap. That drives similar behavior in warehouse and packing
house workers. It goes all the way to the person who picks the fruit and passes
over many slightly imperfect pieces, concerned that compensation won’t come
from fruit that’s on the edge.
“You wind up with a system that drives waste
all the way through,” Alvarez says. “So we’re trying to get the industry to
think about: Can we have ugly produce—carrots with an extra leg—when we’re used
to the perfect carrot? In nature, carrots come out in different ways. Nature
isn’t perfect.”
Another issue that contributes to food waste
are “consume by” date labels on products. Alvarez says they were created in the
1970s, to find an easy way for workers in stores to rotate products, stacking
the newly arrived items in the back.
We tend to think that food is no longer safe
to eat after the dates on these labels, but Alvarez notes that the products
generally say “best if used by” and says it’s a misperception that the food
goes bad a day after the date on the product. “The date labels have nothing to
do with the safety and expiration of the food,” he says.
He is encouraged by congressional efforts to
standardize food date labels and do away with what is now a patchwork of state
laws.
“A lot of manufacturers and retailers are
listening,” he says. “Everyone has a grandmother who says, ‘Don’t waste food.’
This has a lot of momentum, because it’s common sense.”
by Dina Gerdeman
http://hbswk.hbs.edu/item/business-solutions-that-help-cut-food-waste?cid=spmailing-13631911-WK%20Newsletter%2010-19-2016%20(1)-October%2019,%202016
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