As our youngsters prepare to go back to school, the breakfast of choice in this time crunch part of the day is often milk and cereal. As I recently shopped my local grocery store, I looked for the milk that had the latest date on the jug to ensure it was all consumed before spoiling.
It made me wonder if my behavior was abnormal or are others shopping the same way. More importantly, is this an industry ‘issue’ or is there enough demand that all milk gets consumed. In this discussion, we will look at the issue of spoilage and determine ways to minimize its impact on the market.
There are several terms used today to help consumers understand the relative freshness of products they are purchasing. Because there are no state or federal guidelines currently in practice to manage the use of these terms, consumers are left to interpret them the best they can.
- Shelf Life: Used in the chemical industry and references the quality/freshness of the mixture and not the quality of the mixture.
- Best By: Used for food products and is meant to define when an item is in its optimal life to consume.
- Use By: Used for perishables and is meant to define when an item is at the end of its optimal life but can still be consumed without risk.
- Expires On: Used for perishables and advises the consumer that a product is nearing its end of life but can still be consumed.
- Expiration Date: Used in the chemical industry and relates to both quality and safety of the mixture and defines if the product can be used/consumed. Products past their expiration date should be discarded.
The Harvard Food Law and Policy Clinic found that more than a third of respondents usually or always throw away food that is past the date labeled. When using the definitions above, people are throwing away millions of pounds of good food each year. On top of this, many states are using these dates and not allowing food donations past the best used by date.
Each year, some estimate that 40 percent of the U.S. food supply goes to waste. If you include the total cost (e.g. growing, transportation, processing, and disposal) of this food, The Harvard Food Law and Policy Clinic estimates the cost of this management at a staggering $218 billion (1.1 percent of the U.S. GDP) each year. Therefore, every resident in the U.S. discards over $650 per year (or over $1,700 per household) of good food.
On top of the economic impact The Washington Post estimates that, “these dates may actually be contributing to a huge environmental problem by inadvertently encouraging people to throw out perfectly good food.” The United Nations estimates three billion tons of carbon dioxide (CO2) equivalent worldwide in the food that is thrown away/discarded. The environmental impact of the current policies is great.
By throwing away so much food, more food must be grown, processed and delivered. All of these processes consume fossil fuels and thereby impact the carbon emissions. From the farmers plow to the local delivery of milk for the grocery, getting food to market for consumption is expensive in a multitude of levels.
Putting this into perspective, the U.S. (19.7 percent of the total) is only behind China (35.6 percent of the total) in carbon dioxide emissions from fuel combustion (25.4 trillion tons in 2015). By instituting change, we would remove the world’s twenty first largest CO2 emissions driver.
What can we do, if we put on our entrepreneurial hat, why not offer a discount to consumers for perishable goods the closer they are to their expiration date. By doing so, the consumer is incentivized to purchase goods that would otherwise be overlooked. In the end, we would be reducing spoilage and the carbon footprint it drives.
Managing a process like this would require that each item would need to utilize a three-day bar code (a.k.a. QR codes) which would imbed 100 times more information than the traditional two-day bar code. This would allow additional product dimensions (e.g. manufacturing date, manufacturing plant, lot number, etc.) be managed with ease. Gone are the days where a box would need multiple bar codes to manage the various components of information. The three-day bar code can collect this all into a single, scannable data cube for use as needed throughout the supply chain.
For hard goods (e.g. time sensitive electronics and fashion) retail has matured in this way by processing a markdown cadence that uses age as the determination of when to alter the expected margin and adjust the sale price. The above solution merely extends this concept to perishable items in a dynamic sense to encourage consumption and reduce loss.
There is no time like the present to recognize the need for a consistent way to define the accepted status of food. Measures must be taken to develop a clear and consistent process to define when products must be discarded. By driving clarity, The Harvard Food Law and Policy Clinic team estimates we can divert nearly 400 thousand tons of food that is unnecessarily thrown away into landfills each year.
Not only would consumers benefit, but those less fortunate would benefit from products being distributed to acceptable needed locations where these donations can be used. We are not only aimlessly throwing away good food and not distributing to those who need it, but we are paying an environmental cost in landfill consumption and additional product creation to backfill the need. As a society, we cannot continue to absorb this economic and environmental impact.
Next time you use the phrase “don’t cry over spilled milk” maybe you will think of the economic impact we have by not understanding the product life of goods and consuming them before they spoil. I challenge retailers to become aggressive with pricing actions to encourage at risk goods rather them letting them be discarded on our nation’s landfills.