Change product standard requirements to reduce food waste

Food waste is responsible for 6% of all global GHG emissions (1). Approximately one-third of all food produced for human consumption is wasted, leading to economic losses and nutritional insecurity, as well as environmental damage (2). Climate change poses an increasingly large threat to crop yields, which makes reducing food waste even more critical.

Stringent product standards are a leading cause of food waste. Harvested products must meet specific shape and size standards, following preparation and packaging. These standards exist to promote trade, optimize packaging processes, and differentiate products, rather than to reflect a product’s intrinsic quality or safety (3).

However, retailers often have much higher standards than the minimum requirements imposed by law, which leads to even larger volumes of wasted food. Cosmetic standards present a particular problem – fruit and vegetables are often discarded due to physical or aesthetic imperfections, despite having no nutritive or safety defects. These imperfections include being the wrong shape or size, having clefts or blemishes, or being broken. In the UK, aesthetic standards among retailers were responsible for 40% of wasted fruit and vegetables, according to a 2013 report (4). In Europe, 50 million tons of fruit and vegetables are wasted annually for cosmetic reasons (5).

In addition, industrialized food processing technologies often trim food products to comply with packaging requirements. These trimmings are often discarded, further contributing to food waste.

• Modify retailer practices to create a market for ‘imperfect’ products

Trade standards for fruit and vegetables have led to scrutiny over the appearance and size of products, leading many retailers to reject imperfect food items. To combat this, many retailers have begun selling ‘wonky’ or imperfect vegetables at lowered prices. In recent years, sales of imperfect vegetables have increased, despite a 2017 report estimating that 25% of apples, 20% of onions and 13% of potatoes grown in the UK are wasted on aesthetic grounds (6). Retailers can also create a market for reselling trimmings of food products that have been cut down to fit packaging requirements.

• Restructure contractual agreements between food producers and retailers

Contracts between food producers and retailers often allow retailers to reject part or all of a farmer’s produce, either because they no longer need the amount of food they ordered or because it doesn’t meet the retailer’s internal cosmetic standards. Innovative contract types can address this. For example, whole crop purchase agreements commit retailers to buying everything a farmer produces, in exchange for discounted prices (7).

• Redistribute surplus food products

Retailers can build or leverage food redistribution systems to redistribute unsold food that is still safe for consumption. This can help tackle food poverty while reducing food waste, as retailers can donate surplus food to charities and other community groups. New organizations and technologies such as ‘Neighbourly’ and ‘Google Food’ help bring food donors and recipients together. Co-op Central England predicted that working with FareShare to redistribute surplus food would reduce store waste by 40% (8).

• Educate consumers

Public engagement is key to promoting uptake and acceptance of imperfect fruit and vegetables, as consumer preferences have a significant impact on retail markets. To create a market for products currently deemed imperfect, it is important to educate consumers on why food waste is a problem, as well as the distinction between the visual and intrinsic qualities of food products. Despite differences in appearance, produce of different shapes and colors all have the same nutritional value. Campaigns such as #lovewonky, led by DASH Water, are central to educating the public on this topic and encouraging the public to purchase imperfect fruit and vegetables (9).

• Establish greater flexibility in packaging standards

Invest in packaging that accommodates a variety of food shapes and sizes, instead of trimming food products to fit a narrow range of packaging sizes.

• Advocate for regulation to minimize food losses

Your company can advocate for policy, regulation, and industry initiatives that change product standards or otherwise incentivize retailers and consumers to purchase food items of lower cosmetic value. Regulation can oblige retailers to reduce their aesthetic requirements and fulfil their contractual agreements with farmers to reduce on-farm food waste.

Environmental impact

Climate impact

Preventing food waste would reduce anthropogenic GHG emissions (notably methane, nitrous oxide, and carbon dioxide) produced by decaying food by 6-8% (10). Reducing food waste will therefore greatly contribute to meeting global targets in line with the Paris Agreement.

According to the Waste and Resources Action Program (WRAP), reducing GHG emissions associated with food and drink by 2030 (against a 2015 baseline) is an achievable near-term target aligned to a 1.5 °C pathway and meeting further targets for Net Zero by 2040 (11). Reducing food waste by changing food product standard requirements would contribute to the achievement of this ambitious target.

Decarbonization impact

FAO estimated that global 2011 GHG emissions would have been reduced by 1.4 gigatons had food waste losses at the distribution and consumption stages halved, and food losses in the upstream stages reduced. This value corresponds to 3% of all anthropogenic GHG emissions; reducing food waste can have a significant decarbonization impact (12).

Business impact

Benefits

• Improved brand image:

  • Consumers are increasingly aware of the impacts of food waste. Altering business plans to align with environmental targets could appeal to customers and therefore increase overall profits.

• Financial returns:

  • UK hospitality businesses lose an average of £12,376.24 per year through food waste alone (13). A recent study by WRAP found that UK companies that spent £1 on food waste management saw a return of £14 on average (14).

  • Displaying a wider range of products (including those of a less appealing shape/color) allows producers to sell a greater portion of their harvested produce, as opposed to discarding it.

Costs

Retailers and aggregators do not typically bear the costs of producing food that is rejected for cosmetic reasons before it leaves the farm. Restructuring contracts between farmers and retailers may entail retailers taking on more responsibility to cover these costs. For example, in whole crop purchase agreements, the costs of waste are shared by both food producers and retailers. These costs act as motivation to address food waste; retailers can avoid incurring these additional costs by minimizing waste.

Impact beyond climate and business

Co-benefits

• Redistributing surplus food can provide healthy food to those who wouldn’t otherwise have access to it. Retailers can partner with food waste charities to make sure food due to be discarded reaches those who need it most.

• Reducing cosmetic standards can also benefit small-scale farmers. Cosmetic standards threaten the livelihoods of small-scale farmers who don’t have the budget, technology, or other resources to produce consistently perfect fruit and vegetables (15). Local farmers are essential for consumers who want to purchase local produce and minimize transport emissions associated with their food.

Typical business profile

Retailers and distributors are best placed to change their internal quality standards to avoid huge food losses. They have strong purchasing power and typically make the decisions around which produce to accept or reject based on their perceptions of consumer preferences.

Farmers and primary food producers can also take advantage of solutions to bypass stringent cosmetic standards. For example, subscription services like Wonky Veg, Oddbox, Imperfect Foods, and Misfits Market collect surplus or imperfect food from producers and sell and deliver it directly to consumers.

Approach

• Trial new processes: Retailers can start by changing cosmetic standards for a small number of products. For example, the Canadian retailer Loblaw trialed its ‘No Name Naturally Imperfect’ line first with potatoes and apples before rolling it out across other product types (16). UK retailer Tesco also began with two vegetables, expanding to 12 within five years (17). If trialing new types of contracts with suppliers, retailers can also run small sample studies to work out the ideal contract terms.

• Promote adoption among customers: Retailers can use financial incentives as well as marketing strategies to encourage consumers to buy less ‘attractive’ produce. One study found that the most effective messaging emphasized that imperfect produce is natural and authentic, and that by buying it, consumers can help reduce food waste (18). Intermarche’s Inglorious Fruits and Vegetables campaign increased store traffic by 24% and increased fruit and vegetable sales by 10% (19).

• Plan: What will happen to any food that is unsold, including how it will be reused, resold, or redistributed.

• Monitor: The effectiveness of the trial, noting successes, drawbacks, and operational challenges, before expanding the scheme to additional food types, stores, and regions.

Stakeholders involved

To change internal cosmetic standards or implement imperfect produce lines or food redistribution schemes, companies should engage with several key stakeholders.

1. Internal stakeholders include:

• Procurement teams engaging directly with suppliers and negotiating terms with farmers and other food producers.

• Quality control and quality assurance teams designing and/or implementing internal quality standards should also be involved in or made aware of any changes.

• Legal teams advising on the terms of any purchase agreements with suppliers.

• Supply chain and operations teams collecting and leveraging supply chain data to prevent over-ordering.

• Marketing teams creating campaigns to promote adoption of ‘wonky’ or ‘ugly’ produce.

2. External stakeholders include:

• Food producers

• Aggregator suppliers and shippers who might decide which produce to accept or reject on behalf of a retailer.

• Food redistribution providers. WRAP recommends that retailers should ensure partnership agreements cover every store and distribution center.

• Regional and/or industry-wide initiatives. For example, the EU Platform on Food Losses and Food Waste has a Food Donation subgroup and donation guidelines (20).

Key parameters to consider

• Solution maturity

‘Wonky’ or ‘ugly’ fruit and vegetable ranges are common among large retailers; however, most food redistribution platforms are startups or SMEs. Contracts between food producers and retailers designed to reduce the volume of food retailers reject on cosmetic grounds are not currently widespread (7).

• Technical constraints or prerequisites

Retailers need to comply with relevant laws around food waste and food quality. For example, many European supermarkets began selling imperfect fruit and vegetables from 2008, when the EU relaxed rules preventing the sale of misshapen produce (21). However, similar restrictions may still apply in other regions.

In France, supermarkets are forbidden to throw away or destroy unsold food that is still fit for consumption. As such, when relaxing cosmetic standards and purchasing a wider variety of produce from suppliers (especially in the context of whole crop purchase agreements), it is essential to plan how food will be donated, redistributed, resold, or reused.

• Eventual subsidies available

There may be relevant funding in your area. For example, the European Commission and the European Health and Digital Executive Agency (HaDEA) frequently give out grants through the Single Market Program to help businesses monitor and prevent food waste in their operations (22, 23).

Implementation and operations tips

To effectively change food product standard requirements, companies should consider the following:

• Reducing the price of imperfect fruit and vegetables to promote uptake among consumers. Many retailers have opted to sell this produce at a 30% discount.

• According to some studies, bundling ‘perfect’ and ‘imperfect’ products together in mixed bunches can encourage adoption among customers. One study found that 60% standard carrots and 40% imperfect carrots was the optimum balance (24).

• Rather than renegotiating contracts with multiple individual farmers, retailers can use an aggregator, and require the aggregator to use whole crop purchase agreements as a condition of working with them.

• Any imperfect produce that isn’t sold to customers can be converted into packets of chopped vegetables, used by in-store kitchens or as animal feed. Retailers can also sell the produce to restaurants, food service providers, or consumers at a discounted price via food redistribution platforms like Too Good to Go.

• Before selling unsold produce to downstream players (restaurants, food service providers, food redistribution platforms), retailers should check that their contracts with food producers allow this ‘forward selling’.

• Retailers should ensure that contracts incentivize farmers to invest in growing high-quality produce, as there is a risk (particularly with whole crop purchase agreements) that standards will drop if there is certainty of sale regardless of quality.