By Nina Lund, EMEA retail and consumer goods lead
As the European Parliament signs off on its flagship Farm-to-Fork plan and events such as World Food Day gain momentum, the issue of food waste is rapidly rising up the collective agenda. On the heels of COP26, the link between food waste and climate change is now stronger than ever, as experts agree that the issue of food waste must be part of the ongoing conversation around offsetting carbon emissions.
According to research from the UN, an estimated 931 million tonnes of food, or 17% of total food available to consumers, went into the waste bins of households, retailers, restaurants and other food services.
Never has the phrase ‘what a waste’ been so true!
As someone who has spent a lot of time working with brands and retailers and getting to the heart of supply chain matters, I can see clearly where this kind of disconnect stems from. With the desire to give customers choices throughout the year:
- food is increasingly being transported over longer distances to be available more widely and all year round
- supply chains are becoming longer and more fragmented to keep up
- consumer purchase patterns don’t get reflected back to producers or suppliers
Marta Antonelli, Head of Research at the Barilla Foundation and member of the expert group working on the European Commission’s Farm to Fork strategy, points out, with the world facing climate change, biodiversity loss and natural resources depletion, sustainability takes on double the significance for food companies. The margins for sustainability are rapidly narrowing, threatening the bottom line of food producers, distributors and retailers – but equally, sustainability is what determines their social license to operate.
So where to start, to break the vicious cycle of food waste?
The truth is that there’s no single perpetrator of the problem – and no single solution either. It will take innovation across all parts of the food chain. As consumers, we can make more active choices about how we shop for food and how we use it so there’s less wastage in our homes. As professionals in the retail sector, we can look at the ways in how we use technology to trace and manage food supply chains – and how we use insights to act and innovate upon.
Take the example of Nordic food tech company LMK Group, which delivers meal kits – approximately 1.74 million in 2020 – directly to its customers’ doors. Using a bespoke machine learning model, built on Azure, LMK has made predicting what its customers are likely to order into a fine art. Meaning the company can provide its food producers and suppliers with precise forecasting, up to 10 weeks in advance, so they don’t need to grow crops that they won’t end up using. Today, LMK hits less than 1% food waste in its production process, which is incredibly low for the food retail sector.
Just as important as informing what food gets grown and produced, is how that food gets from the farm to the fork. As the demand for ethical and sustainable supply chains continues to grow, the ability to develop successful responsible sourcing programs becomes ever more important.
Microsoft partner Transparency-One has been working with leading food and beverage company Danone on how it can grow and accelerate its Regenerative Agriculture program. The Transparency-One platform uses a cascading supply chain mapping model that links supplier to supplier through all tiers of the supply chain; meaning Danone can use it to analyse what its suppliers are already doing and identify new opportunities to implement regenerative agriculture practices in its partner farms
Storage in store is another potential source of significant waste. For example, a stray freezer door left open can lead to tens of thousands of Euros worth of food going off! To help reduce this kind of commercial food waste, Danish manufacturer Danfoss developed a monitoring service, which uses sensors to help ensure that refrigerators and freezers in grocery stores stay at the correct temperatures and alert staff if they change for any reason.
Elsewhere, Turkish retailer Migros is using AI to monitor the stock status of fruits and vegetables on its shelves and generate alarms about their condition; meaning food can be prioritized and promoted for sale before it goes off. Similarly, German retail technology leader Bizerba has taken the subjectivity out of deciding what to order and what to do about overstocked shelves. Bizerba combined its innovative weighing technology with retail shelving systems, resulting in shelves – and self-service bakery stations – capable of monitoring and checking their own inventory; and, in the case of the ovens, automatically baking pretzels when stocks run low. Using IOT to enable dynamic pricing, products from full shelves can be priced lower in real time—making them more attractive to buyers— and, again, reducing waste.
At Microsoft, we are committed to helping retailers and brands by working side-by-side with them to co-innovate and co-develop next-generation solutions that address their most pressing business opportunities. With the Microsoft Cloud for Retail, we help our customers build a resilient supply chain by creating a centralized system that provides omnichannel inventory data in real-time. This translates into smarter fulfillment orchestration and helps you achieve optimal stock levels.
It’s clear that from production to distribution and then consumption, change will come from innovation and collaboration throughout the food ecosystem. An effective strategy to reduce waste needs to take into account demand, supply, operations and point of sale; and it hinges on building a supply chain that is sustainable not by default but by design.
Ultimately, avoiding food waste starts with each individual buying decision and every shopper doing their bit – and is an important part of our joint efforts as organizations and individuals to reduce strain on the planet.