{"id":23262,"date":"2017-11-15T22:03:14","date_gmt":"2017-11-16T03:03:14","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/xxx\/"},"modified":"2017-11-15T22:11:15","modified_gmt":"2017-11-16T03:11:15","slug":"everyday-low-cost-how-walmart-is-combating-food-waste-digitally","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/everyday-low-cost-how-walmart-is-combating-food-waste-digitally\/","title":{"rendered":"\u201cEveryday low cost\u201d: How Walmart is combating food waste digitally"},"content":{"rendered":"

An ambitious strategy for an ambitious goal<\/u><\/strong><\/h2>\n

In developed countries, 40 percent of food is wasted post-consumer and in emerging markets, 40 percent of food waste is pre-consumer.[1]<\/a> As the largest global grocer serving 28 countries, Walmart is in a unique position to combat food waste across the supply chain.[2]<\/a><\/p>\n

In 2010, Walmart set goals of reducing food waste. It has successfully met its goals of 15 percent in food waste reduction in emerging markets. However, the developed countries highlight a different story. In fact, in the U.S. and Canada, food waste has increased because consumers continue to demand fresher items.[3]<\/a> Walmart must respond by digitizing its food supply chain to deliver higher quality food.<\/p>\n

Reducing waste in the grocery space<\/u><\/strong><\/h2>\n

Short-term, Walmart\u2019s food waste objectives have been labor-intensive. Recently, Walmart decided to switch the industry norm of \u201cuse by\u201d language to \u201cbest if used by\u201d to change consumer behavior.[4]<\/a><\/p>\n

The retailer also sells misshapen produce as new varieties and promotes reuse to divert food waste from landfills. Spuglies, misshapen russet potatoes, and Ecoscraps, food scraps used as fertilizer, are two such products.[5]<\/a><\/p>\n

But Walmart knows it must act digitally, long-term. To increase transparency, the company has partnered with IBM to use blockchain technology.[6]<\/a> Blockchain allows food products to be traced to their origins and as a result, determine the source of only contaminated food.[7]<\/a> In October, Walmart pulled healthy lettuce off shelves because of a listeria outbreak.[8]<\/a> This could have been avoided through blockchain. Nevertheless, it is still in early adoption and will take time to be implemented across the supply chain.<\/p>\n

Walmart\u2019s options to integrate new technologies<\/u><\/strong><\/h2>\n

Hyperspectral imaging<\/em><\/h3>\n
\"\"<\/a>
Source: Perception Park, \u201cChemical Color Imaging,\u201d http:\/\/www.perception-park.com\/chemical-color-imaging-1, accessed November 2017.<\/figcaption><\/figure>\n

Cases of whole fruit and vegetables are rejected at the warehouse when the lot is bruised or spoiled to adhere to USDA standards.[9]<\/a> Hyperspectral imaging is a noninvasive method that goes beneath the surface and identifies internal bruising allowing for more efficient sorting at the warehouse, therefore reducing cases that are rejected.[10]<\/em><\/a><\/p>\n

Supply forecasting models<\/em><\/h3>\n
\"\"<\/a>
Source: Nicolas Denis, David Fiocco, Ryan McCullough, Viroopa Volla, \u201cThe ACRE approach to agricultural sustainability,\u201d McKinsey on Sustainability & Resource Productivity 4 (October 2016): 58-60<\/figcaption><\/figure>\n

Models that predict yields and production are more readily available. Companies can use these models to work with growers and prevent harvest failures.[11]<\/em><\/a> Often, crops in emerging markets are underdeveloped and thrown out because of insufficient fertilizer or crop protection application. Walmart can get ahead of the problem by supplying crop inputs to allow for better supply predictability.<\/p>\n

Scan based trading (SBT)<\/em><\/h3>\n
\"\"<\/a>
Source: Kent Godwin, \u201cHow Distributors Can Win With Scan-Based Trading,\u201d Inddist.com, June 23,2016, https:\/\/www.inddist.com\/article\/2016\/06\/how-distributors-can-win-scan-based-trading, accessed November 2017.<\/figcaption><\/figure>\n

This technique switches inventory control from the retailer to the supplier. SBT makes suppliers own the food until it gets purchased. As a result, suppliers understand when to replenish and where to replenish directly at the store, eliminating the need for distribution centers and reducing storage times. Walmart will control the modules but maintain just-in-time delivery of produce. [12]<\/a><\/p>\n

What is Walmart\u2019s role in influencing the industry?<\/u><\/strong><\/h2>\n

Food waste is also an upstream problem. Ten percent of food in the United States is wasted on the farm.[13]<\/a> Near-term, Walmart is focused at the store-level.[14]<\/a> Can Walmart partner with growers to proactively reduce waste? As a company that can make large-scale investments, should Walmart be leading digitization for all food suppliers and retailers?<\/p>\n

(Words: 798 excluding sources)<\/p>\n

Sources:<\/p>\n

[1]<\/a> Food and Agriculture Organization of the United Nations, \u201cKey facts on food loss and waste you should know,\u201d http:\/\/www.fao.org\/save-food\/resources\/keyfindings\/en\/<\/a>, accessed November 2017.<\/p>\n

[2]<\/a> Walmart, \u201cOur Locations,\u201d https:\/\/corporate.walmart.com\/our-story\/our-locations<\/a>, accessed November 2017.<\/p>\n

[3]<\/a> Walmart, \u201cToward a zero waste future,\u201d https:\/\/corporate.walmart.com\/2016grr\/enhancing-sustainability\/moving-toward-a-zero-waste-future<\/a>, accessed November 2017.<\/p>\n

[4]<\/a> \u201cThe biggest food makers have agreed to trash their confusing expiration labels,\u201d September 20, 2017, Quartz News, https:\/\/qz.com\/1082213\/walmart-nestle-and-other-food-companies-are-changing-labels-to-fight-food-waste\/<\/a>, accessed November 10, 2017.<\/p>\n

[5]<\/a> Walmart, \u201cNew Initiatives Taking a Bite out of Food Waste,\u201d https:\/\/blog.walmart.com\/sustainability\/20160713\/new-initiatives-taking-a-bite-out-of-food-waste<\/a>, accessed November 2017.<\/p>\n

[6]<\/a> Walmart, \u201cOutside the Box: Breaking Down Blockchain with Brigid McDermott: VP of Blockchain Business Development & Ecosystem at IBM & Frank Yiannas: VP of Food Safety at Walmart,\u201d June 20, 2017, podcast,\u00a0https:\/\/corporate.walmart.com\/outside-the-box-podcast<\/a>, accessed November 2017.<\/p>\n

[7]<\/a> \u201cPress release: IBM announces major blockchain collaboration with dole, driscoll’s, golden state foods, kroger, McCormick and company, McLane company, nestl\u00e9, tyson foods, unilever and walmart to address food safety worldwide,\u201d Dow Jones Institutional News<\/em>, August 22, 2017, Retrieved from http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1931131102?accountid=11311<\/a>, accessed November 2017.<\/p>\n

[8]<\/a> Zlati Meyer, \u201cVeggies yanked at some top supermarkets over safety concern,\u201d USA Today, October 23, 2017, \u00a0https:\/\/www.usatoday.com\/story\/money\/nation-now\/2017\/10\/23\/meijer-produce-listeria-concerns-recall\/789775001\/<\/a>, accessed November 2017.<\/p>\n

[9]<\/a> Agriculture Marketing Service \u2013 United States Department of Agriculture, \u201cFruits-About the Standards,\u201d https:\/\/www.ams.usda.gov\/grades-standards\/fruits<\/a>, accessed November 2017.<\/p>\n

[10]<\/a> Yuzhen Lu, Yuping Huang, & Renfu Lu, \u201cInnovative hyperspectral imaging-based techniques for quality evaluation of fruits and vegetables: A review,\u201d Applied Sciences\u00a07, nos. <\/em>2 (2017): 189, ABI\/INFORM via ProQuest, accessed November 2017.<\/p>\n

[11]<\/a> Nicolas Denis, David Fiocco, Ryan McCullough, Viroopa Volla, \u201cThe ACRE approach to agricultural sustainability,\u201d McKinsey on Sustainability & Resource Productivity <\/em>4 (October 2016): 58-60<\/p>\n

[12]<\/a> Jennifer McKevitt, \u201cTwo new initiatives seek to reduce food waste within the supply chain,\u201d supplychaindive.com, July 24, 2017, https:\/\/www.supplychaindive.com\/news\/food-waste-supply-chain-efficiency-initiative\/447667\/<\/a>, accessed November 2017.<\/p>\n

[13]<\/a> Statista dossier on food waste in the U.S., via Statista, accessed November 2017.<\/p>\n

[14]<\/a> Walmart, \u201cToward a zero waste future,\u201d https:\/\/corporate.walmart.com\/2016grr\/enhancing-sustainability\/moving-toward-a-zero-waste-future<\/a>, accessed November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

One-third of global food is wasted every year, equating to $1 trillion in annual food waste. 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