Challenging the Unmarketability

of Imperfect Produce How the WWF and Grocery Retailers Can Combat

Food Waste

Team C: Jenny Lim, Lydia Liu, Michael Meng, Jack Rodman

Accenture Innovation Challenge

The Issue: Food WasteThe U.S. wastes 31% of all food produced, representing $161.6B in sunk costs. In North America, more than half of all fruits and vegetables harvested are not consumed.

How can WWF help grocery retailers reduce food waste from perceived consumer bias against “undesirable” perishable goods?

LOST AT THE STORE1 in 7 produce trucks are turned away because of imperfect produce.Perishable foods are preemptively discarded to maintain aesthetic displays.

LOST IN THE FIELDS30% of produce is not harvested because it is aesthetically imperfect.

LOST ON THE SHELVESGrocery retailers lose $15M annually from unsold fruits and vegetables alone.

The retail loss is largely due to common shelving practices.

The Solution: Food WasteWe believe that the WWF can break the equation that “unmarketable produce = unconsumable produce” by taking a two-step approach to diminishing food waste in grocery retailers’ operations:

Culling and shelving practices along grocery retailers’ supply chain operations contribute to food waste.

A market exists for aesthetically imperfect, but perfectly healthy, produce.

+ =

Education

Retailers enact a daily uniform discount on all perishables before store closing.

Consumers will be willing to purchase aesthetically imperfect produce at lower prices.

Adjusted Pricing

Incentivizes consumers to purchase a higher portion of all produce on display.

Allows retailers to merchandize a higher portion of all produce distributed.

Cutting Cost + Waste

A simple, low-cost solution to provide higher margins for retailers, cheaper food options for consumers, and a healthier planet for

all.

Solution Benefits: Environmental and Economic Impact

ALL PRODUCE DISPLAYEDAesthetically imperfect produce will be displayed on shelves and will not be prematurely culled by retailers.

ALL PRODUCE HARVESTEDFarmers will harvest aesthetically imperfect produce as there is a demonstrated market for them.

ALL PRODUCE PURCHASEDBuyers will purchase aesthetically imperfect, but still safe and healthy, produce at a lower price. Inventory surplus will also be mitigated.

Benefits Aligned with Retailers’ Economic GoalsBenefits Aligned with WWF’s Environmental Goals

ALL PRODUCE SOLDRevenue will increase from the sale of discounted produce that used to be discarded. Costs will decrease due to a reduction in inventory management and waste disposal operations.ALL SHIPMENT UTILIZEDA smaller portion of the received shipment is lost to culling, representing a maximum and efficient utilization of shipping costs.

ALL GOODWILL LEVERAGED A partnership with the WWF can affect consumers’ perception of a business and therefore draw additional customers, as evidenced by similar green initiatives.

Considerations and ConclusionCONSUMER RESISTANCEThe Concern: Consumers are resistant toward purchasing aesthetically imperfect produce at full price....but the success of salvage stores (grocery stores that sell misshapen produce at discounted prices) validates that there is a market for these items at adjusted costs.EMPTY SHELVESThe Concern: Consumers may be dissatisfied with seeing empty shelves and bins, which may affect customer satisfaction and the retailer’s brand image. ...but excessive inventory does not have to be the norm. Our solution lends itself to more efficient inventory management of fresher produce. Additionally, this issue only potentially affects a marginal part of the business day.

“BLACK FRIDAY PHENOMENON”The Concern: A specified discount period disincentives consumers from making purchases during other store hours. Anticipatory consumer behavior may lead to a large influx of customers during sale times that puts strain on the retailer’s capacity. ...but groups of consumers are willing to pay a spectrum of “premiums” to avoid crowds and ensure first dibs on produce selection.

PRODUCE QUALITY The Concern: Consumers may associate misshapen produce with produce that is unsafe to consume or of a lower quality. ...but the aesthetic imperfections that we are targeting are not indicative of a food’s quality or safety. We believe that grocery retailers can maintain their high quality of safe offerings while simultaneously reducing food waste.