Hidden in Plain Sight

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\"supplyEvery now and then, a sticky situation that has long existed, hidden behind the curtain, is suddenly thrust onto center stage. A recent manifestation of this is food waste. The new focus on food waste is destined to have a big effect on food production and retailing. More than that, this waste issue is likely to spill over to other forms of retailing as well.

There’s no doubt that food waste is a big problem in the U.S. And there’s growing consumer attention to the fact that untold amounts of food are wasted in every link in the production chain including from field or farm, to manufacturing plant to distribution, to retailing. What consumers tend to ignore is that that the real root of the problem can be found no further away than in their own personal practices and preferences.

How big is the food-waste problem? The numbers are staggering. It’s estimated that worldwide, 1.3 billion tons of food are wasted annually at a cost approaching a trillion dollars. In the U.S., the value of food wasted is estimated at $161 billion annually. These numbers are so large that they defy comprehension.

The more horrifying way to view the problem is to realize that throughout the food chain, and in consumers’ kitchens, something on the order of nearly half of all food goes to waste. How can this be? Here is a quick look at some of the causes of the problem:

  • First and most important are consumers’ high aesthetic standards for food. Is an apple bruised? Is a tomato less than bright red? Is lettuce a bit wilted? Is a cut of meat not properly marbled? In all these cases, and countless more, product is headed to the landfill.
  • Then there’s the matter of product dating. What are the meanings of “sell by,” “enjoy by,” “best before,” ”use by,” “freeze by” and the like? Who knows? I’ve even seen expiration dates with a time stamp. Is a product good at 9:13 A.M., but not a minute longer? Beyond that, some products are marked with a date of when it was manufactured, which doesn’t help consumers much.
  • The net effect of non-standard markings is to sow confusion, which causes consumers to throw out perfectly good product. For instance, eggs are fine to eat weeks beyond their expiration date. Conversely, fluid milk tends to go bad right around its expiration date. But a lot of milk could be salvaged if consumers knew it could be frozen, extending its shelf life almost indefinitely. The same is true of many other dairy products.
  • Store clerks typically don’t know the meaning of dates and mainly use them to rotate and cull stock for disposal. Supermarkets, of course, throw out vast amounts of food because of expiration dates as well as for cosmetic reasons.
  • Finally, we come to the biggest culprit of all, the consumer. Beyond insisting on perfect product, consumers also tend to overbuy and improperly cook product, serve excessively large portions, fail to consume leftovers and improperly store product. All these factors result in the disposal of product that could have been used.

In some countries, food waste has commanded much more attention than it has in the U.S. Earlier this year, France became the first nation to make it illegal for supermarkets to destroy unsalable product. Instead, it must be donated to food banks and the like. This would seem to be a very difficult mandate to enforce. Perhaps to fend off similar legislation, supermarkets in several other European countries have pledged to reduce waste.

What does this situation mean for other forms of retailing? It shows how a hidden problem can spring to the forefront and become a disruptive force for retailers. For instance, suppose consumer backlash against appalling labor conditions in offshore apparel manufacturing plants were to grow to a crescendo. Could this force change current manufacturing and retailing practices? Yes it could.

The now-foundering American Apparel retailer could have ridden through its image issues if it were headed by a more competent and skilled Founder-CEO. Instead, the retailer hasn’t turned a profit for years and has been in and out of bankruptcy. And the CEO is history. This mismanagement represents a huge missed opportunity to make right a series of wrongs.

And back to waste, there is already a consumer backlash afoot about excessive product packaging; the issue of what to do with all those Amazon Prime cardboard boxes (couldn’t there be a pick-up for empty boxes?); and then there are all those plastic supermarket bags frequently seen trapped in the branches of trees across the country.

So the message to all retailers has to be: Beware of a hidden but simmering issue. Don’t ignore it, because if you do, you are apt to become embroiled in a mess you can’t back out of.



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