Supermarkets are missing out on untapped revenue from selling near-expired food because store staff wastes time searching for products with short expiration dates and manually discounting them.
At least that's the pitch for Too Good To Go, an 8-year-old Danish company that's gotten serious about tackling food waste in restaurants and is now turning its attention to expired products in grocery stores. Starting this month, TGTG is selling an artificial intelligence-powered solution to help supermarkets manage expiration dates, a major problem with retail food waste. The company will begin its global expansion by partnering with international supermarket chain SPAR.
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TGTG CEO Mette Lücke said: “Every day, our staff patrols our grocery stores, manually checking every product to ensure there are no items that are about to expire.” Ta. bloomberg green. Lykke described this as a time-consuming process that is prone to errors. Products with a short shelf life are often discovered too late, she said, and discounts aimed at encouraging purchases leave potential revenue open.
TGTG's software takes into account customer behavior, seasonality, and other considerations to estimate the likelihood that a product will sell in-store at a given point in time, and suggests discount rates as the product approaches its expiration date. The tool also helps employees track expiration dates, and Lykke said employees only need to manually check his 1% to 7% of products. Masu. It also flags when food may be donated or sold at a deep discount through Too Good To Go's namesake app.
The company trialled the new tool at a French supermarket chain. Since 2016, France has banned major grocery stores from throwing away unused food that could be donated. The grocer, which TGTG declined to name, was offering a 50% discount nationwide on cheeses delivered within two days of their expiry date. Currently, stores have different discount rates depending on region and time of year. For example, in Normandy, we buy more Camembert in the summer. Meanwhile, in the Alps, Swiss cheese is an easy sell on cold winter days when raclette (the local dish) is on the menu in many homes.
Jørgen Desigard Jensen, a professor at the University of Copenhagen who studies the economics of food waste, said inflation was driving demand for cheaper products with shorter shelf lives. Supermarkets are also increasingly focusing on discounts and promotions on expiring products to limit food waste and improve profits.
“It's better business for supermarkets if they don't have to spend so many resources selling food at discounts,” Jensen said, but there is a risk that food that is nearing its expiration date will end up being thrown away at home. mentioned.
Regardless of where it is disposed of, food waste has an impact on the environment. The United Nations estimates that around 30% of food produced for consumption is wasted worldwide, accounting for 8% to 10% of greenhouse gas emissions. Food waste can also hurt profits. According to the European Retail Association, the average cost of wasted food in supermarkets is around 1.6% of net sales. This is a notable reduction in an industry known for its low profit margins.
“Of course, it's a bad user experience to buy something past its expiration date,” Luecke says. “But the economic impact of food waste on supermarkets is also very significant.”
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Since late 2015, Too Good To Go has been tackling food waste through an app that connects consumers in the U.S., Canada, and 15 European countries with restaurants, bakeries, and grocery stores looking to part with unsold food. is. (Grocery stores are now the company's largest partner segment.) The app's 85 million users buy “surprise bags” from brands like Starbucks, Pret a Manger, and Carrefour for about $5 to $10. You can purchase it at This is approximately one third of the price of the content. TGTG recently launched a limited rollout of “Magic Parcels,” which are sold directly from manufacturers such as Unilever.
Still, much of the world's trillion-dollar food waste problem occurs at home. In the United States and Europe, households are responsible for more than half of the food wasted. The expiration date also plays an important role here. Many people confuse the use-by date label, which indicates when a food is no longer safe to eat, with the best-before date label, which indicates optimal quality.
“Consumers confuse them,” Ricke says. “As a precaution, the product will be discarded after the specified date.” Regulators could do more to clarify what these labels mean, she said.
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