Oser Communications Group

GourmEt nEWS FEbruArY 2018 www.gourmetnews.com SuStAinAbilitY 1 8 The Profit Potential in Food Waste Reduction bY lorriE bAumAnn Consumer concern about wasted food presents grocers with an opportunity to join their customers on the right side of the conversation, according to Doug Rauch, Founder of The Daily Table and former CEO of Trader Joe's. "Grocery chains are sometimes accused of having a strong vested interest in consumers wasting food. We fundamentally disagree with this view," he said. "This is an op- portunity to get on the right side and get out in front of your customers." The problem of wasted food is getting a lot of media attention, which means that your customers have heard about the issue and many of them are con- cerned about it. A 2015 consumer survey found that almost half of respondents said they'd heard or seen something about wasted food in the past year. Al- most half of the 6,700 adults who were surveyed were aware that it's estimated that about 40 percent of the food pro- duced in the United States is wasted. "It's not just Millennials who care about the environment and all those other values. People are really relating around what they care about," Rauch said. "Thirty nine percent of Americans are 'aspira- tionals,' people who care about doing something good. That's the biggest pro- portion of the marketplace, and those people are advocates about issues like food waste. ... If we want to keep in front of our customers, we need to be thinking about that, because they're going to be asking about and requiring action on this." According to a 2017 estimate by the Natural Resources Defense Council, the dollar value of food now wasted in the U.S. is $218 billion, which is equal to 1.3 percent of the country's gross do- mestic product, and equivalent to 1,250 calories per person per day, about half the recommended daily intake for adults. That wasted food also accounts for 2.6 percent of all U.S. annual green- house gas emissions and about one fifth of all the agricultural water usage in the U.S., more than the agricultural water usage of Texas, California and Ohio World's First DNA-Based Traceability System Verifies Sustainability Claims SafeTraces, Inc. has developed the world's first DNA-based traceability systems for fer- tilizer. The system has now been delivered to 20 manufacturers in an unnamed NATO member country. DNA-based traceability has the potential for use in sustainable commodities such as palm oil, oil seeds and beans. Illegal diversion, tax evasion, misuse, and adulteration plague many global com- modities. SafeTraces' patented D-ART 3000 systems set a new standard in undetectable, unbreakable, cost-effective tagging of high volume goods. SafeTraces is actively mar- keting the D-ART 3000 system to fertilizer manufacturers and government organiza- tions in Africa, Asia, and Europe. The first 20 systems now delivered to the NATO member country are part of a multi-system order with additional deliveries planned in the coming months. "Mislabeling of sustainable products is a worldwide problem," said Anthony Zo- grafos, CEO of SafeTraces, "as ingredients pass through multiple intermediaries be- tween growers and processors. Products are mixed or replaced along the supply chain with non-certified substitutes, putting a brand's sustainability claims into question. The only solution is greater supply chain transparency, and SafeTraces provides un- paralleled source assurance, even in the most complex supply chains." Coupled with a blockchain-based or centralized code registry system, Safe- Traces™DNA Barcodes create unbreak- able links between physical objects and their digital certificates, enabling trans- action recording and rapid verification at any point in the supply chain. When used with most commodities, SafeTraces DNA Barcodes will be stable for over two years. In the fertilizer case, the company's D-ART 3000 systems are seamlessly inte- grated into fertilizer bag-filling lines and mix a unique 'DNA Barcode' into each bag, totaling millions of unique DNA Bar- codes each year. The D-ART 3000 system is part of SafeTraces' complete solution that includes DNA Barcode customiza- tion and dispensing, DNA Barcode track- ing systems, test instruments, and test kits. "The D-ART 3000 is the first system that brings DNA tagging from the laboratory to industrial settings," said Zografos. "We de- veloped an easy-to-use, yet robust and low- cost solution that includes FDA approved, food-grade DNA Barcodes. We are putting the power of modern molecular technolo- gies in the hands of industrial customers and end users. The response from cus- tomers in a wide range of industries has been universally enthusiastic." GN combined. If there is a villain here, supermarkets aren't it — consumer households are re- sponsible for more than three times the food waste that's produced by grocery re- tailers and distributors, according to ReFED, a nonprofit organization of busi- ness, nonprofit and government leaders dedicated to reducing food waste through data-driven solutions. Grocers are challenged in their efforts to reduce food waste by consumer de- mand for a consistently wide variety of food inventory that can strain inventory management and food purchasing. "When you're dealing with an issue like wasted food, it's important to talk about culture and what you stand for. Any strategies are going to run right up against culture. You've got to get in front of this by stepping back and thinking about culture," Rauch said. "Culture starts with leadership. People are going to look to you." If you're known for offering the economy sizes that reduce packaging waste, you'll have a harder time avoid- ing the suspicion that you're encourag- ing consumers to buy more food than they can use. And of course, consumer demand for freshness and sensitivity to aesthetic values can lead you to discard produce as soon as it's past its peak out of concern for your shoppers' experi- ence. Reducing food waste offers you the op- portunity to boost revenues by market- ing discounted imperfect produce. "Imperfect produce is a great opportu- nity for retailers. As soon as you call something 'heirloom,' people will pay more for it even if it looks weird," Rauch said. "We can't let perfect be the enemy of the good. We've got to find ways to take this food that's cosmetically blem- ished but healthy and figure out how to feed the one in seven who are food inse- cure or how to use it to give our cus- tomers a better value." You can give customers a bargain and eliminate some of their need to dispose of aging product by expanding programs to discount items nearing the end of their shelf life and by allowing prepared foods to run out close to closing. Use signs to explain to customers that allow- ing items to run out helps curtail food waste. In the produce department and in seafood and meat cases, platforms and other props can help make displays ap- pear fuller without utilizing as much product. Improved inventory management sys- tems can also help. Mining your data can help analyze item performance to help identify opportunities to eliminate items as well as improve forecasting. On a macro scale, you can place greater re- liance on products packaged to prevent spoilage, and you can collaborate with manufacturers to improve date labeling on products and to educate consumers about the meaning of the dates they see on package labels. Many grocers are already leading the way by finding ways to encourage con- sumers to buy cosmetically imperfect fruit and vegetables. The Natural Re- sources Defense Council, in its 2012 update to its 2012 report that started the national discussion, "Wasted: How America is Losing up to 40 Percent of its food from Farm to Fork to Land- fill," points to French retailer Inter- marche's periodic promotion called "Inglorious Fruits and Vegetables" in which it offers prepared foods such as soups and yogurts made from lower- grade produce and sells fresh mis- shapen fruit and vegetables for a 30 percent discount. The initial rollout in 2014 saw sales of 1.2 tons per store and a 24 percent increase in overall store traffic in the first two days, ac- cording to the retailer. "Wasted" re- ports that Hy-Vee, Hannaford, Giant Eagle, Whole Foods and Walmart are among those rolling out full or pilot programs in the U.S. Other efforts to reduce food waste are being greeted enthusiastically by consumers, as evidenced by the 83,000 followers for a Twitter site called @ugly fruitandveg, which posts pictures of oddly shaped produce and United Kingdom startup Oddbox, which deliv- ers boxes of misshapen produce to London customers. In the U.S. Imper- fect Produce sells boxes of misshapen produce directly to consumers, attract- ing more than 7,000 customers in its first year after launching in July 2015, according to the company's CEO. Hun- gry Harvest has a similar business model for "rescued produce" in Wash- ington, D.C. Jody Levy and Harlan Berger are among those who've found a profit in rescuing produce that would otherwise be discarded in the field. They're the co-founders of WTRMLN WTR, which produces cold-pressed watermelon juice and markets it as an outstanding hydration product that also reduces food waste. At the time they founded the company in 2013, Berger and Levy sourced only rescued fruit to make Original WTRMLN WTR. With the growth the company has seen, the com- pany now sources other fruit from its nationwide network of growers, but, still, 60 percent of the fruit that's used to make a line that now includes four other varieties would be otherwise dis- carded. "We take many melons from growers around the country. There are times when farmers don't get the rains they're expecting, and so they have tons of watermelons they can't sell because they're sunburned. These are perfectly good watermelons, and we take them and cold-press them to obtain the water in four facilities around the country," Levy said. "We use everything but the skin." Levy herself is an example of the kind of consumers who seek her products and who connect with businesses who lead the way on the issues they care about. "I personally believe that every business is like an organism and every person con- nected to and invests in that business is part of the whole. That applies to the consumers as well," she said. "Con- sumers support our brand because they love our product, and they trust our product. They know we care, and they trust us because it aligns with what's im- portant to them." GN

• Cover