The fresh produce waste challenge spans the entire supply chain.
While data from ReFED, a nonprofit committed to reducing U.S. food waste, indicates that 43 percent of the waste tonnage occurs at the consumer level, companies across the food supply chain create 57 percent of the waste.
Much of the problem can be attributed to the nature of the product, cold chain failures, poor demand planning, and stringent requirements.
Fresh from the field or orchard
Compared to consumer staples and some other perishables, fresh produce is a sensitive product.
With few exceptions, the degradation process begins at harvest. Product protection and speed to market are essential to maximize shelf life and usability. So too are temperature and humidity management.
“Assuming you have good product coming out of the field, temperature is the top factor that affects produce safety, shelf life, and spoilage,” says Jeff Brandenburg, president of JSB Group, LLC.
“Getting things cold, keeping them cold, and minimizing temperature variation are critical. If you get produce too warm, bacteria and mold will grow. These plant pathogens may not be harmful to humans, but nobody is going to eat a moldy strawberry or moldy tomato.”
Atmospheric conditions will also contribute to waste.
“Humidity can be a double-edged sword,” Brandenburg says. “Too much humidity can cause bacterial growth; not enough takes moisture out of the products and they can dry up.”
These sensitivities, combined with long-distance transportation and numerous product transfers, increase product waste risks. A border crossing delay, an equipment failure, or extended time on a receiving dock can break the farm-to-table cold chain.
At minimum, disruptions may harm product appearance, taste, or shelf life and force costly markdowns. At worse, severe cold chain excursions render products useless and cause a total financial loss.
Too much of a good thing
Waste also results from excess production. Unlike other industries, there is limited opportunity to limit output if consumer demand wanes. Contracts may be set far in advance and production lead times are long.
Further compounding the supply/demand matching challenge are outdated methods used to forecast requirements. Companies along the produce supply chain are not effectively deploying available technologies, according to Rick Stein, vice president of fresh foods at the Food Industry Association or FMI (the recently rebranded Food Marketing Institute) BB #:162464.
“The biggest contributor to food waste is the inaccuracy of demand forecasting,” says Stein. “Demand forecasting tools are getting better and artificial intelligence is helping.”
Unfortunately, he notes, many organizations continue to work with old models and some simply can’t afford to upgrade.
Stein further notes the ongoing challenge of manual overrides by managers who trust their own intuition more than the forecasting data. Their tendency to focus on customer service leads to higher inventory. If the projected demand does not materialize, the result is waste.
Restrictions and requirements
Another major driver of waste is the stringent requirements of downstream customers.
Most retailers require grade “A” quality fruits and vegetables. These standards focus on appearance, including the presence of defects (damage, insects, disease), size, shape, and color. While it’s reasonable to reject product for defects that reduce shelf life and utility, rejection based on cosmetic appearance generates unnecessary waste.
At the point of purchase, the requirements are just as stringent.
“Consumers want uniform produce that’s very appealing to the eye,” confirms Andy Harig, vice president of tax, trade, sustainability and policy development at FMI. “The more off-spec the fruit or vegetable is, the tougher it can be to move.”
This is an excerpt from a Supply Chain Solutions feature in the November/December issue of Produce Blueprints Magazine. Click here to read the full feature.