Retail Unwrapped from The Robin Report https://therobinreport.com Retail Unwrapped is a weekly podcast series hosted by our Chief Strategist Shelley E. Kohan. Each week, they share insights and opinions on major topics in the retail and consumer product industries. The shows are a lively conversation on industry-wide issues, trends, and consumer behavior. Sun, 24 Feb 2019 23:29:45 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.2 The Robin Report The Robin Report info@therobinreport.com Retail Unwrapped from The Robin Report https://therobinreport.com/wp-content/uploads/2023/12/RR_RU_Podcast_CTAArtboard-02-copy.jpg https://therobinreport.com Retail Unwrapped from The Robin Report Retail Unwrapped is a weekly podcast series hosted by our Chief Strategist Shelley E. Kohan. Each week, they share insights and opinions on major topics in the retail and consumer product industries. The shows are a lively conversation on industry-wide issues, trends, and consumer behavior. false All content copyright The Robin Report. Waste Not, Not Wasting Time https://therobinreport.com/waste-not-not-wasting-time/ Sun, 24 Feb 2019 23:29:45 +0000 https://therobinreport.com/waste-not-not-wasting-time/ LewisL WasteReductionI think the time is right to declare a national emergency. This isn\’t about some perceived or imagined threat at the Southern border, North of the 38th parallel or in the deep, dark recesses of the Kremlin. But it is […]]]> LewisL WasteReduction

I think the time is right to declare a national emergency.

This isn\’t about some perceived or imagined threat at the Southern border, North of the 38th parallel or in the deep, dark recesses of the Kremlin. But it is a crisis of global proportions-the escalating amount of waste generated by food and packaging that\’s clogging oceans and landfills that are barely able to contain it.

For decades, the solid waste issue was the purview of environmental guerrillas, roving bands of treehuggers or anyone running for office in a deep blue state. These days, a broader group of activists are stepping up to the plate – whether it\’s paper or plastic.

Retailers, manufacturers, distributors and everyone involved in the farm-to-fork supply chain are focusing on waste reduction not only as a good-for-business green initiative but also for economic incentives. Waste is expensive!

Some headway is being made thanks to public awareness and innovative new technology in recyclable and reusable containers. But we are only touching the tip of the iceberg since an estimated 30 to 40 percent of the food produced in the U.S. is thrown away every year.

Industry Activism

One of the most extensive reports, albeit four years old, was compiled by BSR, a global non-profit organization for the Food Waste Reduction Alliance, a collaborative group consisting of the Food Marketing Institute, the Grocery Manufacturers of America and the National Restaurant Association.

A percentage of so-called waste isn\’t really wasted. Some is donated, rendered into biofuels, composted, turned into animal feed or in the case of packaging, repurposed for road construction and building materials.

Manufacturing respondents reported donating or recycling 94.9 percent of food waste; of this, more than 85 percent is repurposed for animal feed. Retail and wholesale respondents reported donating or recycling 42.4 percent of food waste with composting and donation the most common diversion methods. Restaurant respondents reported donating or recycling 15.7 percent of food waste. Of this, more than 70 percent is cooking oil recycling.

This points to significant progress. But there\’s certainly room for improvement. Additionally, the survey does not include waste by consumers, nor does it include waste created by packaging which is a more urgent problem. More of that is being recycled and repurposed than in previous decades. But it remains a huge ecological issue and a political hot button in places like California where virtually every county and township has its own set of rules governing solid waste.

However, there are multiple other barriers facing food donations including transportation, storage and refrigeration costs along with regulatory constraints and liability concerns-despite widespread \”good Samaritan\” laws designed to shield donating companies from those liabilities.

Consumer Guilt

But food waste is more of a humanitarian issue than an environmental one. We feel badly after throwing that half-eaten sandwich in the garbage or tossing out the vegetables the kids don\’t eat. I always hear my mother\’s admonishing tone when she said: \”There are people starving in China who would be glad to have that.\” My, how times have changed.

The real problem impacting both manufacturers and retailers, is waste reduction related to packaging materials which has become a social and political hot potato.
Allow me to throw out a couple of statistics to legitimize the issue. Over 262 million tons of municipal solid waste are generated annually in the U.S., of which 78 million tons is attributable to containers and packaging, according to the Environmental Protection Agency. You can probably add a few million tons to these figures since an increasingly politicized EPA hasn\’t updated them since 2015.

Of the total municipal solid waste, approximately 68 million tons were recycled and an additional 23 million tons were composted. Another 33 million tons went to energy recovery and 137 million tons ended up in landfills.

One of the materials often singled out for vilification has been PET, polyethylene terephtalate, commonly used in food and beverage container. However, much of that is recycled for clothing and carpet fibers as well as nonfood containers like shampoo bottles.

Environmental Impact

Frankly, there\’s enough environmental blame to go around. A recent study by Ameripen, an industry group devoted to issues related to packaging and the environment, says that food like beef and cucumbers have a far greater impact on the environment-specifically greenhouses gases-than the packaging in which it\’s transported, stored and sold.
I don\’t believe that eliminating waste entirely is possible. The question is how to reduce it to manageable levels. There is little clarity on from any quarter and no national dialogue on the subject. It\’s just not sexy enough for cable news and the blogosphere.

The poster child for governmental dysfunctionality-as it has been on other issues-is California with everyone from the state legislature to counties, municipalities and freight haulers issuing their own-and often contradictory-waste reduction regulations. The result is a frustrated bunch of retailers who want to do the right thing and steer clear of fines but don\’t know which set of rules to follow.

For example, in Sacramento, Waste Management said it would no longer take #5 plastic or polypropylene, the material used in everything from yogurt containers to medicine bottles and coffee lids. Other cities have already banned this material and more are joining all the time. We used to send it all to China but even they don\’t want it anymore.

Strength in Numbers

However, all segments of industry are starting to band together to solve waste reduction. Companies like Pepsico, H&M, Unilever, Coca Cola, SC Johnson and Danone have been brought together by the Ellen MacArthur Foundation and are teaming up with governments to reduce waste in the oceans under what the organization\’s circular economy model. In other words, getting everyone in the supply chain-including consumers-involved in balancing the flow of renewable resources.

Companies are committing resources to boosting use of reusable or renewable plastic and, reportedly to make everything recyclable by 2025. At the same time, governments are signing on to put policies in place that encourage recycling and to help build the infrastructure needed to do it.

One of the most innovative programs out there right now has been developed by a number of corporate giants like Unilever, Procter & Gamble in conjunction with Terracycle which recycles hard-to-recycle materials. Together they developed a zero-waste platform called Loop, which sends products with reusable containers, ordered through Loop\’s online site, to consumers via reusable totes.

Zeroing Waste?

Loop is making it as convenient as possible for consumers who don\’t even have to clean out the containers before tossing them in the bin for the return trip to Loop and then to the manufacturer for refilling. This is a noble idea and may have legs. Time will tell.
However, I see several problems with the model, as I understand it. Will this impact the cost of these products and will consumers have to pay UPS shipping costs or take it to a UPS store? What happens if the reused containers are not cleaned well enough and people get sick? And how does private label fit into the mix? Do retailers have to take the ultimate responsibility for the package and its reuse?
Personally, I blame the Industrial Revolution for our 21st. century waste woes. However, we\’re never going back to an agrarian mentality. The real problem is that we are a convenience-oriented society addicted to, disposables Nothing changes if the mindset remains the same.

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Trash Talk https://therobinreport.com/trash-talk/ Mon, 12 Dec 2016 21:36:01 +0000 https://therobinreport.com/trash-talk/ RR TrashTalk Lewis2Lately I’ve been hearing more “trash talk” than at an NBA playoff game. But this isn’t the usual on-court banter. It’s the conversation about food and solids reaching large proportions. It’s happening as activists, government agencies and even some in […]]]> RR TrashTalk Lewis2

\"rr-trashtalk-lewis2\"Lately I’ve been hearing more “trash talk” than at an NBA playoff game.

But this isn’t the usual on-court banter. It’s the conversation about food and solids reaching large proportions. It’s happening as activists, government agencies and even some in retailing view waste  reduction not only as an environmental and business issue, but also as a solution to global hunger. And it’s happening as the world’s population increases and demand for food rises while the amount  of arable land remains the same.

None of these issues is new. When I was growing up, my friends and I would ride our bikes along the shoreline until we came to what we called “Garbage Mountain,” an expansive landfill that towered over an otherwise pristine seascape. When the wind was just so, the cool ocean breezes were overpowered by the sour stench of millions of tons of garbage, and the steady roar of bulldozers pushing the pile higher. That landfill finally closed not because it was an environmental hazard, but because it was full.

Of course, we’ve always been able to bury it, bag it, burn it, and even pay others to take it off our hands. And if we could, we’d probably shoot trash into space or colonize the moon with the first off-planet garbage dump.

Changing the Future

The thorny issue is not just getting rid of garbage, but reducing massive amounts  of waste at every level of the supply  chain. I believe that retailers can become agents of change to solve a problem that’s reaching a critical point.

Food waste is particularly disturbing. Retailers, restaurants—led by fast feed-ers—schools and consumers are wasting an astounding 40 percent of the U.S. food supply, according to U.S. Department of Agriculture figures. Furthermore, food accounts for more than 20 percent of the solid waste in municipal landfills. That 40 percent may be a conservative estimate given that growers and distributors are tossing out tons of food because supermar-kets don’t want produce that’s blemished or nearing or past the “sell-by” date.

To make matters worse, nearly half of consumers tallied in a recent Ohio State University survey didn’t think food waste was a problem. The number startled in a country where one in seven households struggles to afford regular healthy meals and where 20 percent of households are termed “food insecure,” meaning they don’t know where their next meal will come from.

The unvarnished truth is that waste is a byproduct of a consumer culture that places a high value on convenience  regardless of cost or consequence. We’ve been on this disastrous trajectory for decades and only a concerted effort  by every segment of the supply chain  will allow us to sidestep a dystopian future in which the American landscape, indeed that of the world, is dominated  by ugly landfills.

Government Intervention

We want to avoid a scenario in which government mandates supplant industry initiatives. In France for example, the Senate voted to ban large supermarket chains from throwing away food nearing its expiration date, requiring them to either compost the waste or donate the items to charity. Italy has adopted a  similar law and the European Union is looking into legislation that would reduce food waste across the entire European  bloc—an unlikely scenario given the  fragile state of the E.U. and the vocal detractors in Brussels.

Government efforts in the U.S. are a bit more altruistic than dictatorial—at least for now. The Food Recovery Act, which beefs up the Good Samaritan laws protecting retailers from liability when they donate food, is gaining support on both sides of the aisle in an otherwise contentious election year.

Additionally, the Food Date Labeling Act is trying to deal with the complex and often esoteric world of expiration dates, which adds to the waste pile when consumers unwittingly toss out good food they think has gone bad. The legislation would require food producers to use a label indicating quality (“best if used by”) or one indicating safety (“expires on”). The last thing food producers want is another label to deal with. But this requirement would create some standardization and save an estimated 400,000 tons of food annually as long as consumers under-stand that sell-by dates are guidelines and not food safety indicators.

The law could be a tough sell because the Ohio State study found that 68 percent of consumers thought that tossing food after the expiration date reduced the chance of foodborne illness, and nearly 60 percent of those surveyed were convinced that some waste was necessary to make sure meals were fresh.

This tells me that the American public needs a wake-up call.

Private Sector Initiatives

Before anyone starts laying blame, let’s be clear that meaningful waste reduction has to come from the private sector—farm-to-table and manufacturing-to-retail initiatives that will require unwavering discipline at every point in the distribution channel.

The most aggressive attempt to change the industry’s environmental footprint is the Food Waste Reduction Alliance, which consists of the Food Marketing Institute, The Grocery Manufacturers of America and the National Restaurant Association. The Alliance is co-chaired by ConAgra Foods, one of the world’s largest food processors, Wegmans Food Markets, a leading U.S. grocery store chain, and Wendy’s QSCC, the exclusive supply  chain manager for all Wendy’s  restaurants in North America.

New data is expected this fall. But based on recent FWRA research, approximately 7.1 billion pounds of food waste is  generated every year, and for every  $1,000 in supermarket revenue, 10 pounds of food waste is created. The upside here is that more than 40 percent of waste is donated or recycled for animal feed, compost or biofuel. Meanwhile, the alliance helped get Congress to pass legislation in the 2016 Omnibus Budget that provides comprehensive tax incentives for food donations. It’s working with federal and state governments to further ease restrictions and within the food industry to overcome transport and storage issues.

Retailing Dives In

But some retailers, recognizing the urgency of the situation, are to be applauded for taking matters into their own hands. In the U.K., Asda is making waste reduction a dollar and cents—or pound and pence—issue for consumers. In a multi-channel campaign with the University of Leeds, the chain is telling consumers that throwing out good food is costing them about $75 a year. At the same time, Asda is re-evaluating pressure points within its own supply chain and Tesco admitted that it’s own food waste exceeded 59,000 tons last year, equal to 119 million meals. The chain, with operations worldwide, has reduced the amount of time food sits in the supply chain to increase shelf life and has introduced a line of blemished produce called Perfectly Imperfect.

In Denmark, a new store called Wefood  is the country’s first surplus food  supermarket and is striking special deals with importers, producers and other retailers to obtain surplus or blemished foods at deep discounts. Similar no-waste supermarkets have cropped up in Vienna, Barcelona and Berlin.

In the U.S., Asda’s parent company, Walmart, as well as Whole Foods have launched their own initiatives amid heightened concerns among consumers and activist groups. The Daily Table, run by former Trader Joe’s president Dough Rauch, is a nonprofit supermarket in the lower-income Boston neighborhood of Dorchester that exclusively sells products near or past their expiration dates donated by growers, wholesalers and manufacturers.

Creating Energy

One of the most interesting, and all encompassing, projects comes from Stop & Shop, part of the Ahold/Delhaize group, which has opened anaerobic digestion facilities at distribution centers. Stores backhaul waste to the DCs where a “digester” breaks down the food and creates a slurry. That goes into another tank which produces methane, which  is then fed to a generator to create renewable energy for the facility’s refrigeration system.

Every segment of retailing needs to address packaging, or more to the point, excess packaging, one of the major sources of waste paper and plastics and accounts for one-third of garbage sent to landfills. A growing number of companies are using more minimalist and environmentally safe packaging. Trouble is, packaging has long been used to make products more attractive to consumers. And industries like cosmetics are not about to give up any competitive advantage.

Vendor Cooperation

The next move for retailers will be to work with vendors on supplying products with less packaging or using reusable materials like cardboard or polystyrene packaging peanuts. Vendors should also supply small containers for business recycling programs.

Mall stores are encouraged to talk to property managers and anchor stores to coordinate waste prevention and recycling programs. These kind of multi-tenant programs that collect large amounts of material can make recycling more cost-effective.

On a corporate level, companies like the Gap, Walmart, Levi’s, Nike and others  are part of the Clean By Design program run by the National Resources Defense Council to leverage the power of the multinationals to get overseas suppliers  to reduce waste.
Not everyone will like this idea, but retailers could be convinced to eliminate catalogs, newsletters and simply rely 100 percent on digital marketing.  Truthfully, it’s not a big deal since we’re going in that direction anyway.

Retailing, which is always looking for ways to cut costs and service customers, has a unique opportunity to shape its own legacy. Do you want to talk trash  or do something about it?

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