By Rod Averbuch, food waste reduction consultant and founder of EndGroceryWaste.com

“Approximately 1.3 billion tonnes of food is lost or wasted every year and more than 40% of food losses happen at the retail and consumer levels.”  - United Nations report, 2011

Fresh food waste accounts for billions of dollars a year. Perishable waste negatively impacts growers, manufacturers, retailers, consumers and the environment. The energy, material and water invested in growing or producing, transporting, storing and displaying a product are wasted if it ends up in a landfill.

The average annual grocery operating profit in the U.S. is about 3.25%, with approximately 55% of sales derived from perishables. Approximately 6% of perishable sales is lost due to deep markdowns to achieve sale before sell-by date, total margin losses for wasted items, and waste disposal costs.

This means that losses from perishables can cost retailers 3.3% of their total sales, more than average annual operating profit, according to Tools to Captivate the Connected Consumer presentation by IBM's Andy Park in 2011.

Control of the perishable supply chain can only be as effective as the control of its weakest link, consumer-shopping behavior. An automatic and dynamic lot-based incentive, correlated to perishables’ remaining shelf life and specific lot inventory, is an effective means of proactively reducing perishable waste. It enables fast movement of an excessive inventory from specific lots, and transforms "last in, first out" shopping behavior into the less wasteful "first in, first out" behavior.

Razor-thin profit margins, short shelf life and high labor costs demand an automatic and dynamic lot-based promotion solution for perishables. Furthermore, the communication of promotions to consumers must be short and simple.

The “End Grocery Waste” application utilizes the emerging GS1 DataBar^TM standard along with the new Cycled Discount Labeling technique to eliminate labor-intensive manual promotional labeling of specific lots. A static Cycled Discount Label on the product is automatically and dynamically associated with the promotion level of a specific lot as displayed on a consumer’s personal smartphone or on other kind of display devices such as an Electronic Shelf Label (ESL). Please refer to the “End Grocery Waste” Application figure.

The dynamic lot-based offers are automatically redeemed at the retailer’s Point Of Sale (POS) after standard GS1 DataBar^TM scanning for product attributes such as lot #, batch # or sell-by date.

“End Grocery Waste” application gains

Benefits of the application are that it:

• Maximizes retailer sales revenue by minimizing loss from perishable waste.
• Improves food safety by making it easy to identify expired and recalled perishable food items from a specific lot while on the shelves.
• Differentiates food retailers and other technology participants as environmentally friendly by offering fresh food waste reduction.
• Makes fresh food more affordable by offering relevant discounts on products from lots whose remaining shelf life matches the consumer’s personal consumption pattern.

The EndGroceryWaste.com site provides additional application information.

Rod Averbuch can be contacted at Rod@EndGroceryWaste.com.

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