How Farms, Restaurants, and Grocery Stores Are Designing Food Waste Out of the System

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Courtesy somehoosier via Flickr

This post originally appeared in GOOD as part of a series on food waste.

The apples were too small. Too small to meet the exacting standards of big grocery chains. Too small even for McDonald’s to use as Happy Meal snacks. They had a fighting chance to become caramel apples, but demand was low that year. A lucky grower might have been able to sell them for juice, if the demand was there, but in all likelihood, those perfectly tasty but small Pink Lady apples—2 tons of them--were destined to become cattle feed, or possibly even get dumped in a landfill.

This excess is part of the business of farming. In a recent survey of farmers, NRDC discovered that at times, as much as 30 percent of produce never makes it off the farm. Sometimes an item might not fit the cookie-cutter standards of major produce buyers; in other cases, a farmer might have more than his buyers want, because he overplanted in order to be sure the order would be filled. On top of this waste on the farm, even “perfect” fruits and vegetables that make the grade get wasted in stores and restaurants, in part because of a desire to please customers with an impression of abundance. Grocery stores throw out 43 billion pounds of food each year, about $15 billion worth of produce alone.  Waste is designed into the food industry, all along the chain, and as a result, 40 percent of the food in this country never gets eaten. But a few smart businesses are finding ways to design waste out of the system, bucking conventional wisdom while saving money and improving customer satisfaction in the process.

Those too-small Pink Lady apples were intercepted by a company called FoodStar, which sources food in much the same way that a discount clothing retailer might source factory overruns. FoodStar teamed up with the California grocery chain Andronico’s to sell those apples from a special discount bin, where lucky customers snapped them up at a mere $0.69/pound. Instead of becoming cattle feed or garbage, those apples were finally used for the purpose for which they were intended—to feed people.

Doug Rauch, a former president of Trader Joe’s, is hoping to launch his new chain this year, based on this model—sourcing food that isn’t bought up by big retailers for minor physical imperfections, overruns, or items pulled from retailers’ shelves because they’re approaching the expiration date (which in most cases have little to do with food safety, but are set by manufacturers as a suggestion for peak quality)—and offering it at a discount for consumers. He’s targeting a location in a food desert in Boston where fresh food is in short supply.

Major chains, like Stop & Shop and Price Chopper, are tackling in-store food waste  in ways as simple as changing the design of product displays. “Pile ‘em high, watch ‘em fly,” is conventional grocery store wisdom, so a typical store manager keeps several days’ worth of food out on display, even if that means the food at the bottom of the pile might go bad. Stop & Shop redesigned its displays, using big baskets with false bottoms to give an impression of abundance while reducing the amount of fresh food brought out from storage. The chain saves about $100 million annually through this and other food-saving initiatives.  

Dining halls, like those on college campuses, hospitals, and other institutions, have reduced food waste and are saving money with a simple operational trick--removing trays. It’s basic human psychology. In a cafeteria lunch line, our eyes tend to be bigger than our stomachs, especially when we have a tray to help carry extra food. Without the tray, people are more likely to take only what they will eat. The food service company Sodexo launched trayless dining at more than 300 college campuses, and reduced food waste by about 30 percent.

Restaurants are finding success with smaller portion sizes. TGI Fridays offers a “Right Portion, Right Price” selection that’s about one-third less in size and price than regular entrees; a year after their introduction, these dishes accounted for 15 percent of the restaurant’s orders. The Potbelly Sandwich Shop offers original-sized sandwiches, the same portion size as when the chain launched in 1977, and “bigs,” which are 30 percent larger. (This increase in portion size is typical of our times. A Joy of Cooking recipe that used to serve 10 now serves 7; the average cookie has quadrupled in calories since the ‘70s.)

Some institutions are going a step further to reduce waste, using a software system in the kitchen to help monitor and reduce waste at the back end. The University of South Dakota’s Sanford Medical Center was able to save nearly $100,000 and reduce food waste 43 percent with the aid of LeanPath, a program that monitors food waste and helps identify areas for waste reduction. With data in hand, the hospital was able to spot where and how waste was occurring, and make simple changes, like adjusting food orders down during the slow holiday seasons, and training staff not to overfill trays.

For any business, reducing waste makes inherent sense for the bottom line. But sometimes it requires a shift in thinking and in practice. In grocery stores, if waste figures are too low, managers interpret this to mean that there’s not enough product on the shelves. Farmers overplant for fear of losing big buyers. And consumers are certainly less inclined to buy an apple that’s smaller or splotchier than what they’ve come to expect. These barriers are not insignificant, but they are being overcome, with the aid of technology, entrepreneurial vigor, and informed consumers. There are $165 billion in food losses in this country every year. That’s money on the table—and smart businesses will pick it up. 

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