SPECIAL REPORT: The Greener Grocer
The importance of sustainability continues to increase for grocers, but it’s not all about booming shopper interest in reducing plastics or consuming plant-based foods. Grocery retailers do have a clear understanding that shoppers want to see more sustainable products, more transparency and more companies taking the lead on things like decarbonization. However, inflation, smaller baskets and cost pressures are increasingly prompting grocers to invest in sustainable measures as a way to bolster profits while keeping pace with shopper preferences.
According to a survey of senior grocery executives by Incisiv and Wynshop via Grocery Doppio, 76% of grocers regard sustainability as a C-level issue and 43% will appoint a senior executive to lead their sustainability efforts this year.
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Those findings support the notion that the proverbial rubber is meeting the road when it comes to environmentally responsible actions, according to Gaurav Pant, chief insights officer of both Incisiv and Grocery Doppio, in Jacksonville, Fla.
“I think firms have been greenwashing for a period of time. The reality is that while sustainability has been at the top of the agenda, it hasn’t moved forward as much as we’d like,” Pant told Progressive Grocer, adding that things may be changing this year, thanks to a greater focus on energy and power efficiencies, waste reduction commitments, and pressures from investors. “To me, it’s getting there. At the same time, I think the only way it happens is when you have an executive sponsor of sustainability.”
The current operating environment in grocery is challenging, but it offers opportunities to grocers that act boldly when it comes to protecting people, planet and profitability. With that in mind, PG spoke to four innovative solution providers in the sustainability space that are helping grocers become more profitable — and more sustainable — no matter the challenge.
1. Greener grocers are reducing food waste.
Trusted by more than 300 grocery retailers across 18 countries, , the fresh-native platform for fresh food retail operations, is at the forefront of accelerating the digital transformation of fresh food retail operations worldwide, enabling retailers to optimize merchandising and replenishment processes while prioritizing compliance and sustainability.
Stephen Midgley, VP of marketing at Mississauga, Ontario-based Invafresh, says that the company helps grocers improve their sustainability cred by staying committed to embracing emerging technologies and providing the essential products and services required to address the unique challenges of fresh food retail operations.
“A significant source of food waste in grocery stores is over-ordering,” Midgely explains. “Grocery stores often order more food than they need, which can lead to spoilage and waste. However automated data analytics tools can analyze sales data to identify trends and patterns in customer behavior. This data can then be used to adjust order quantities and ensure that sustainable grocery stores are only ordering what they need. This can help reduce overordering, which, in turn, reduces the amount of unsold inventory that goes to waste.”
Invafresh’s automated data analytics technology can help grocery stores make more informed decisions about their orders, reducing over-ordering and food waste.
According to Midgely, grocery retailers’ top priorities when it comes to ESG (environmental, social and governance) now are:
Increase operating margins: achieved through accurate demand forecasting and accurate markdown pricing of near-to-expire products
Improve sustainability: achieved through reducing shrink
Improve the shopping experience: fresher food on shelves, improved quality and availability leads to increased customer lifetime value
“Our Invafresh collaboration will help us automate processes, such as ordering, production and inventory management, so that we are meeting customers’ expectations with the freshest foods while also more accurately predicting demand,” notes Bob Gleeson, SVP of merchandising and marketing at Sunbury, Pa.-based Weis Markets. “We expect this platform to reduce food waste and improve efficiencies.”
Food retailers generate 10.5 million tons of food waste, with almost one-third of that wasted food sent to landfills. Suppliers, retailers and consumers waste approximately 45% of all fruits and vegetables, 35% of fish and seafood, and 20% of meat and dairy products annually.
“Invafresh has helped Price Chopper to produce the correct amounts of product to meet our customers’ demand while reducing our exposure to excess shrink,” says Patrick Iannotti, director of retail operations at Schenectady, N.Y.-based Price Chopper/Market 32. “We are working on enhancements with Invafresh that will further our effort in exceeding our customers’ expectations for delivering fresh products while limiting the spoilage that ends up in landfill.”
Price Chopper’s partnership with Invafresh has proved to be a game-changer. Each week, the retailer prevented a staggering 20 tons of fresh food from going to waste, resulting in a projected prevention of more than 3,000 tons of food waste over the next three years. Moreover, by aligning its operations with sustainable practices, Price Chopper succeeded in reducing methane emissions from landfills and minimizing its carbon footprint. Price Chopper’s successful collaboration with Invafresh not only enhanced the grocer’s sustainability efforts, but also positioned it as a frontrunner in the fresh retail industry.
2. Greener grocers are reducing their energy usage.
For more than 100 years, Bridgeton, Mo.-based Hussmann has been innovating the way that food retailers merchandise their products. Founder Harry Hussmann patented the first meat display case in 1917 to provide customers a better way to view his products while maintaining food safety standards — thereby changing how fresh food is merchandised and sold today.
Lianne Tombol, VP of portfolio solutions at Hussmann, says that retailers are increasingly looking to the company as a strategic consultant to navigate the complex and ever-changing regulatory requirements with smarter, energy-efficient, low-GWP (global-warming potential) refrigeration solutions to enable them to reduce their energy consumption and carbon emissions.
“One way we are supporting our customers is through the Shop The Future mobile experience,” notes Tombol. “This summer, our team of experts is on the road with our 53-foot mobile showroom, visiting grocers across the country and sharing the latest in sustainable technologies that will help them meet their individual ESG goals.”
She adds that retailers are looking for more guidance from Hussmann on how they can achieve their ESG goals.
“With new regulations rolling out, retailers want trusted providers, like Hussmann, to guide them on the best solution that will help them achieve their goals,” asserts Tombol. “Our latest sustainable-refrigerant solutions offer the low GWP they need, along with the training and support they will require.”
Hussmann refrigeration solutions, paired with leak-detecting technology called StoreConnect, help retailers optimize operations by providing predictive diagnostics that stay on top of maintenance and prevent downtime in their stores.
When it comes to measuring ESG performance, that’s “an ever-evolving journey,” admits Tombol.
“Optimizing retail conditions for food and shoppers can be achieved in different ways,” she observes. “For example, new merchandisers can lead to enhanced energy efficiency, systems utilizing the newest refrigerants can help with meeting GWP targets ,and electronic shelf labels can reduce waste and improve shoppability.”
3. Greener grocers are maximizing profits.
Matt Schwartz, CEO and co-founder of San Francisco-based fresh food operations platform Afresh, started learning about the food industry as part of Stanford University’s Earth Program, and also by participating in an internship with food tech investor Dave Friedberg.
Through that, I got an advanced education, with a front-row seat to food tech innovation,” notes Schwartz.
This focus on fresh food led Schwartz and his Afresh co-founder, Nathan Fenner, to spend thousands of hours speaking with hundreds of people in the food supply chain and shadowing store employees to learn about the challenges facing the grocery industry.
“We quickly realized that, despite the increasing importance of fresh food for food retailers, there wasn’t any technology optimized for managing fresh food,” recounts Schwartz. “We were going to all these multibillion-dollar chains, and they were all running this process on pen and paper. Some retailers had even taken center store, non-fresh technology and worked with an IT consulting shop to unsuccessfully bend it to work in fresh.”
In response, Schwartz and Fenner started Afresh in 2017, a fresh food technology company with the ultimate goal of helping eliminate food waste and make fresh food accessible to all.
Afresh’s first product, an AI-powered predictive ordering and inventory management solution, is the only built-for-fresh solution that intelligently navigates hard-to-predict and error-prone data to drive optimal decisions in grocers’ fresh departments. Afresh manages the complexities of fresh food, including seasonality and perishability, to drive more efficient store teams and more profit for grocers that are already operating on razor-thin margins.
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“Afresh unifies previously disjointed processes, from forecasting and inventory to store operations, driving transformative results that help grocery retailers stock the freshest food for customers, increase cost savings and reduce shrink,” asserts Schwartz. “We’re using machine learning to determine the absolute profit-maximizing and shrink-minimizing order quantity for every fresh item at a store daily for grocers like Albertsons, Cub, Fresh Thyme, Heinen’s and more.”
He adds that social impact, when paired with profit incentives, can be a mechanism for positive change in the grocery industry, evolving our food system for the better while maximizing the business incentives of an industry that feeds and hires billions of people worldwide.
According to Schwartz, the top priority for grocers now is reducing shrink.
“Afresh helps grocers reduce their shrink by an average of 25%,” says Schwartz. “This is millions of dollars in savings and millions of pounds of food waste saved annually.”
In 2022, Afresh completed a chain-wide rollout at Cub’s 80 corporate stores. With Afresh implemented across every item in every produce department, Cub expects to prevent at least 2.1 million pounds of food waste annually, reduce greenhouse-gas emissions by 1,264 tons, and save 43 million gallons of water. Additionally, since adopting an AI-based system from Afresh, Cub has seen an 18% reduction in produce shrink.
Afresh has also rolled out chain-wide across Albertsons’ 2,200-plus stores to help improve ordering and better manage its inventory of fresh fruits and vegetables. As a result of this rollout, by simply investing in the right technology, the company was able to increase access to fresher products for customers and make meaningful progress toward achieving its goal of having zero food waste going to landfill by 2030, notes Schwartz.
4. Greener grocers are expanding access to fresh food
On a recent Saturday at Jungle Jim’s International Market and a Kroger Marketplace store — both in Ohio — shoppers in the produce department perused pesticide-free bagged lettuces with names such as “Butter Me Up,” “Fresh Squeeze” and “Rhine Garden,” all of them produced by industry-leading indoor-farming company 80 Acres Farms. The Hamilton, Ohio-based company currently serves a growing list of food retailers looking to expand its assortment of farm-to-table produce, including in addition to Jungle Jim’s and The Kroger Co., Whole Foods Market, The Fresh Market, and other regional retailers, as well as foodservice distributors.
Today, 80 Acres Farms has five production farms in southwestern Ohio, a new farm in Florence, Ky.; a future farm in Covington, Ga.; and R&D facilities in Arkansas and the Netherlands.
Earlier this year, 80 Acres Farms teamed up with Munich-based Siemens to apply innovative technology within the agriculture industry — fostering sustainable, healthy, traceable and more productive farming practices. Siemens’ technology and capital is helping 80 Acres Farms and its technology subsidary, Infinite Acres, meet global food supply demands. Using Siemens’ software and hardware solutions, spanning intelligent facility and energy management systems to advanced industrial automation technology, 80 Acres Farms is well positioned to meet its goal to optimize and standardize its operations — with the vision to support food security worldwide, the company says. In consequence, grocery retailers looking to expand access to fresher food are paying attention.
“Everyone deserves easy access to fresh, affordable, delicious food,” notes Dan De La Rosa, group VP of fresh merchandising at Cincinnati-based Kroger. “Our newly expanded partnership [with 80 Acres] means more communities will have just-picked produce at their fingertips 365 days a year. We’re proud to partner with 80 Acres Farms as we work together to create a world with Zero Hunger | Zero Waste.”
