What will retailers do about food waste in 2023?

Supermarkets waste $25 billion worth of food every year, according to Divert, a technology company focused on solving the problem.

The company, which was founded in 2007, works with more than 5,200 retail locations to recycle expired food, increase food pantry donations and address the root causes of food waste. Some of the retailers the company works with include Ahold Delhaize, Kroger, Albertsons, Safeway, CVS and Target. Divert currently removes more than 220,000 tons of food waste per year.

Looking ahead, Divert's Ryan Begin, co-founder and CEO, and Nick Whitman, co-founder and COO, weighed in on the technology retailers may be looking at and changing this year as they continue to tackle food waste.

Investments in actionable data

“Retailers across the U.S. know that leveraging data and analytics is critical to mitigating food waste across their supply chains. In the next year, I expect that retailers will invest in more real-time tracking data on products like fruits, vegetables and dairy, specifically when it comes to monitoring real-time freshness,” Begin told WGB. “Inconsistency in execution of best-managed practices in managing fresh food are one of the leading causes of food spoilage. The more variations in time, temperature and handling throughout the food journey—from the farm to the distribution center, to being transported on trucks to a store’s back room—the higher the impact on food quality." 

Begin said this level of tracking and insights won’t just happen at an individual box and container level, but that more investment in action-specific technologies will take place across the supply chain—from the farm to the shelf.

Adoption of reverse logistics

“One of the main ways to mitigate wasted food is to prevent it from going to landfills and incinerators in the first place,” said Begin. “To do that, though, you need efficient diversion infrastructure in place, which traditionally has been insufficient in the U.S. In the past several years, more retailers have put in place a diversion foundation, specifically in the form of reverse logistics—a self-managed program that leverages existing infrastructure and ordering practices to more efficiently manage foods that cannot be sold or donated."

Some of the benefits of reverse logistics technology include reducing retailers’ carbon footprint and diverting unsold food to local food banks or processing facilities to prevent it from entering landfills. 

“Retailers like Ahold Delhaize and CVS have already folded this diversion and prevention approach into their business models,” said Begin. “And in the next year, I anticipate that a majority of the food retail industry will be accelerating the adoption of reverse logistics.”

Retailers may find AI alone isn’t everything

Whitman said retailers are still sorting out how to maximize artificial intelligence (AI).

“There is continued buzz around artificial intelligence and its potential to unlock new efficiencies, but it can mean very different things to each industry,” he told WGB. “AI’s greatest advantage for retailers lies in the ability to distill meaningful insights or actions from large streams of data. But these insights and actions are only as good as the existing data and, in many cases, retailers lack the complete data needed to drive meaningful results.” 

As food retailers look for ways to “improve operational and financial performance,” Whitman said they will invest in technology that measures and tracks their supply chains. “This new data—when combined with existing datasets—will deliver meaningful new insights that drive customer satisfaction,” he said. “As a result, we’re going to see more retailers turn to third- party technology companies to help them build and scale the data infrastructure to make AI a reality.”

More efficient carbon accounting

“As a key player in the food supply chain, grocery retailers have a large impact on emissions. According to a 2022 Food and Agriculture Organization study, the processing, packaging, transport, consumption and disposal of food make the food supply chain one of the top greenhouse gas emitters,” said Whitman. “In 2023, I anticipate that more food retailers will invest in the technologies and analytics that enable efficient carbon accounting across the supply chain, with carbon-intensity metrics driving actions on wasted food to reduce food waste and emissions.”