How private label can tackle climate change
The recent UN Intergovernmental Panel on Climate Change report warned that global warming is dangerously close to spiraling out of control. Other than it being a code red for all of humanity, what does this have to do with the grocery industry and private brands? Actually, a lot!
When thinking about climate change, the usual culprits like fossil fuel usage or deforestation may come to mind, but a large source of human-caused global warming is our food waste. In addition to losing the incredible amount of energy that goes into growing and distributing our food, when food goes bad it is often tossed into landfills and emits methane — so much so that the carbon footprint of U.S. food waste is greater than that of the airline industry and globally, it is responsible for roughly 8% of emissions.
Project Drawdown, a preeminent thinktank helping the world reach the point when levels of greenhouse gases in the atmosphere stop climbing and start to steadily decline, lists reducing food waste as the number one thing we can do to address climate change and reduce emissions.
Many point to the agricultural industry and people throwing out food at home as large sources of food waste, but we can’t ignore that grocery retail is directly responsible for 10.5 million tons of food waste per year, according to ReFed. In addition, waste at home is often driven by shelf life that is lost higher up in the supply chain. We need to get our arms around this problem and figure out how to prevent the waste of perishable items. And that means private label too – according to Nielsen, “fresh private label products represented 44.9% dollar share of bakery, 31.5% of deli, 26.5% of seafood, 21.8% of meat and 11.8% of produce as of November 2017.”
How can we tackle this enormous problem? The private label industry often receives guidance to create simplified, clearer sell-by dates — for instance, “Best if Used By” for nonperishable products, and “Use By” for perishable food. And while this is a step in the right direction, there is an opportunity to place more focus on better ordering and demand planning of perishable product to better prevent waste.
Making smart decisions across the supply chain will make a huge impact. You’ve likely heard of the bullwhip effect, which is the demand distortion that travels upstream in the supply chain from the retailer through to the wholesaler and manufacturer due to compounding errors in forecasting and order decisions. This causes shrink, lost sales and lost profits. Creating more accurate systems for ordering fresh food — via innovative technology solutions designed for this — can help solve for inefficiencies across the supply chain and get the right amount of product on-shelf with more days of shelf life. This, in turn, will drive less shrink in grocery and less waste at home. Thus, we all waste less and help curb climate change together.
Matt is the CEO and co-founder of Afresh, an AI solutions provider, powering the global fresh food industry. Afresh’s first solution combines artificial intelligence with human-centered workflows to optimize the quantity of fresh food delivered to grocery stores daily.
