Retailers Can Substantially Decrease Fresh Food Waste

Research indicates that food waste is a choice, and retailers have many opportunities to reduce it.

Boston, October 6 – Almost 1.3 billion tons of food produced for human consumption is lost or wasted per year globally, an amount retailers often view as a fact of life.  However, the opportunity exists to significantly reduce this waste and, if pursued in the right way, create a large upside for producers, retailers, and consumers alike, according to a recent report by global management consultancy Oliver Wyman, the Food Marketing Institute (FMI), and Efficient Consumer Response (ECR) Community Shrinkage and On-shelf Availability Group.

Oliver Wyman worked with FMI and ECR to investigate how reducing waste affects on-shelf availability, and vice versa. Together, 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 study is comprised of responses from three large European grocery retailers, who provided information on more than 17,000 products and, in 27 stores, further analysis was allowed on the fresh convenience, fruit and vegetables, and fresh meat categories, where 50 percent of their waste was generated.

The research indicates that waste is a choice and retailers have many opportunities to reduce it, increase category and store efficiencies, and improve profits – they just need to take advantage of these opportunities and find the right balance between waste and on-shelf availability.

“Almost $165 billion worth of food is wasted annually in the United States alone. Ethically and economically something needs to be done to mitigate this issue,” said Oliver Wyman Partner and North American Retail Practice Co-Leader Chris Baker.  “While the idea of zero waste is unrealistic, there are clear steps retailers can take to find the right balance between reducing waste and continuing to drive sales for their businesses.”  

Three recommendations for retailers resulted from the study:

  • Set the right waste and availability targets
  • Target stores and categories that have more scope for improvement
  • Increase product shelf life

To learn more about our recommendations for cutting back waste in fresh categories, please click here.

FMI

The Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org.

ECR

The ECR (“Efficient Consumer Response”) movement was established in the early 1990s with the mission “Working together to fulfill consumer needs, better, faster and at less cost.” The ECR Community consists of representatives from national ECR organizations and the European Shrink & OSA group. Collectively, these organizations support a membership of over 1,800 retailers, manufacturers, and service providers across Europe. AIM and Euro-Commerce are also members of the ECR Community. For more information, visit www.ecr-shrink-group.com.

About Oliver Wyman

Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,700 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.