Dive Brief:
- The food supply chain, and particularly logistics, is a pivotal partner in reducing food waste and a recent research paper reveals four steps companies can take to ensure waste reduction projects are driving the highest value, Olive Oil Times reported Tuesday.
- Stakeholders in the food supply chain must first visualize at which point of the chain waste and spoilage occurs most; second, seek to make logistics more efficient; third, change performance priorities to prioritize waste reduction; and fourth, employ emergency solutions to reduce waste, such as lowering prices of near-spoiled products at the retail level.
- The importance of full chain collaboration cannot be overstated in this process, as each solution suggested in the research project involved participation by manufacturers, logistics providers and retailers at once. However, intermodal transport provides perhaps the greatest opportunity to reduce waste.
Dive Insight:
The research project reflects two key challenges of reducing waste along the supply chain: ensuring full chain participation and collecting the right data to spot the largest sources of waste in the first place.
Previous reports highlight how opportunities for efficiency improvements exist all along the food supply chain, from leaner packaging to improved cold chain technology to post-harvest and processing methods. Utilizing data analytics to assess where in the supply chain waste is most likely to occur can help eliminate a substantial portion of food likely to either rot in advance of picking or go to waste due to consumer miscalculation.
Yet, while employing a single method for improvement can affect the bottom line, if similar steps are not being followed throughout the chain the increased supply efforts may not translate to increased demand, thereby only deflating price.
In other words, a food manufacturer may well work with a logistics provider to improve storage capacity during transit, but if the retailer does not employ similar cold storage, emergency pricing strategies, or share point-of-sale data much of the extra food will still go to waste (since demand did not increase). It serves a small purpose to have extra products in store if 50% go to waste, but if the retailer knows that 50% is going to waste, it can mark down the product 25% the day of spoilage, thereby increasing demand. In the long-run, if customers expect the mark downs, demand will rise and so can the overall price of product despite temporary decreases in price (theoretically).
As the importance of collaboration cannot be understated, neither should the significant efforts required to ensure stakeholder participation. A recent report outlines various steps to ensure partners comply with sustainable policies, but perhaps most importantly, it shows leadership and planning are key to ensuring a sustainable program's success.
