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September 18, 2024

Fresh Produce Waste: Its Impact on Growers, Retailers, Wholesalers and Packers

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The true extent of fresh produce waste is hard to pinpoint, but the available data suggests that around 1.3 billion tons of edible food goes to waste each year. That represents a lose-lose-lose for growers, wholesalers, packers and retailers, who all bear the cost of this waste – as well as contributing to it themselves. 

Every stage of the supply chain produces waste, which inhibits growth and profitability downstream. But it’s not just these nodes in the supply chain who suffer: consumers have to bear the cost in the form of artificial scarcity in the amount of food available.

Long-time readers of this blog will already know that technology, and in particular AI, is the industry’s best hope of turning this around. But that will take collaboration and alignment between all the different types of organizations who make up the food supply. In this article, we’re examining the unique challenges that exist at each of these stages, and outlining some realistic solutions.

The Scale of Fresh Produce Waste 

Food waste occurs at every stage of the supply chain, from production to consumption.

Production: Globally, around 14% of food lost occurs between harvest and retail. This includes losses due to pests, diseases, and improper handling during harvesting.

Post-Harvest Handling and Storage: Losses occur due to inadequate storage and transportation – an especially acute problem in the developing world.

Distribution and Retail: Retailers discard a huge amount of food, especially fruits and vegetables, due to cosmetic standards and overstocking. In the United States alone, supermarkets waste around 43 billion pounds of food annually.

Consumption: Consumers are responsible for the final layer of food waste, particularly in developed countries.

The Impact of Food Waste on Growers 

Fresh produce growers and farmers can face crippling economic losses due to rejections further down the supply chain. They need to juggle this alongside a host of other challenges like labor shortages and climatic variability. 

According to some research, around 25% of fresh produce never even makes it to the distribution stage, because farmers anticipate rejections. Crucially, this isn’t necessarily defective produce from a nutritional standpoint. In many cases, rejection happens because the of appearance of the fruit

Dilemmas for Wholesalers & Shippers: Caught Between 2 Worlds

Wholesalers and shippers have to deal with many of the challenges that beset growers, such as seasonal fluctuations and anomalous weather conditions. But wholesalers and shippers are also sensitive to issues like changes in consumer preferences, and the continual need to match supply (dynamic quantity) with demand (another dynamic quantity). If they overestimate demand, wholesalers and shippers can be left with unused produce they can do nothing with. On the other hand, underestimating leads to frustrated clients and a loss of business,

On top of all of this, wholesalers and shippers need to deal with the unique technical demands of their work: logistics, transportation, proper handling and refrigeration. Failures in any of these can lead to spoilage and waste. To minimize loss, wholesalers and shippers need optimized logistics, accurate demand forecasting, and flexible response strategies.

Food Waste Challenges for Grocery Retailers

Now we arrive at the retail stage of the fresh produce supply chain, where about 14% of edible food has already gone to waste. What happens next (at both the retail and consumer levels) contributes to the remaining waste, bringing us to the staggering total we referred to earlier: one third of all food produced is lost or wasted. 

In the United States, the proportion of wasted fruits and vegetables is exceptionally high, estimated to be around 46%.

There are many drivers of food loss at this stage in the supply chain:

  • Overstocking: Ordering too much produce to ensure shelves are fully stocked can lead to unsold items spoiling before they are purchased. For retailers, this is essentially a data problem and will persist until they switch to data-driven solutions. 
  • Inadequate Inventory Management: Poor tracking of stock and expiration dates can cause fresh produce to go unsold as it becomes too ripe or spoiled.
  • Cosmetic Standards: As we saw earlier, visual standards for appearance (size, shape, color) lead to the rejection and disposal of perfectly edible grocery store food.

Environmental Consequences: The Environmental Protection Agency Takes Action

The Intergovernmental Panel on Climate Change estimates that 10% of anthropogenic greenhouse gas emissions come from food loss and waste. So efforts to reduce food waste are about much more than business profitability: they are part of the broader effort to sequester carbon dioxide emissions.

The National Strategy for Reducing Food Loss and Waste and Recycling Organics aims to set achievable goals for these efforts. A collaboration between the EPA and United States Department of Agriculture, its stated aim is to halve food waste by 2030.

What Can The Industry Do to Support This Ambitious Goal?

Achieving these objectives will require a multi-faceted approach that deals with the industry’s challenges, as well as addressing problematic consumer behaviors. Markets for “ugly” fruits and vegetables can make a substantial dent in overall waste. So can initiatives that use rejected grocery store food waste for food banks, or find innovative uses for food scraps like upcycling or composting.

But these steps all take place at the end of the process. Real change will need to come from within the supply chain itself. 

Improved forecasting and inventory management

Accuracy in matching supply with demand is essential to reduce food waste. But this is exceptionally difficult to achieve, especially for growers wholesalers and shippers, who need to juggle multiple sets of quality standards from the retailers they supply.

Optimizing transportation and storage

Logistical challenges are particularly pressing for wholesalers and shippers who handle highly perishable fruits like strawberries. Improvements in forecasting and inventory management can have a positive effect here, streamlining the use of transportation facilities and ensuring that only the necessary amount of food is in transit at any given time. 

Enhancing quality control processes

The success of both of these depends ultimately on what happens at the beginning of the process: quality control. As long as the industry continues to rely on outdated, manual inspection methods, the quality control process will remain inaccurate and non-scalable.

The Transformative Role of Technology in Fresh Produce Quality Control 

This is where AI-powered quality control is having the most dramatic impact on the problem of global food loss. As we have seen, each of the 3 categories (growers, wholesalers, shippers and retailers) have unique challenges and differing priorities. These cause them to pull in different directions, a major contributor to the problem of food waste.

Clarifresh provides them, for the first time, with a unified language of quality. Through the platform’s AI and ML capabilities, each party within the supply chain can accurately track the quality of each piece of produce, and match it against their own standards – and the standards of their clients. As a result, they gain complete transparency over the supply chain, and the ability to make accurate decisions about the distribution of produce. 

Contact our friendly team to learn more about the world’s first AI-powered solution for fresh produce quality control, and how it could help your business move into a more sustainable future.

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