Retailers Offer Food That Is Convenient, But Sometimes Unprofitable

UA News Services
Jan. 12, 2005


Retailers scurrying to keep up with America's appetite for food routinely, and very often unwittingly, allow losses to take huge bites from their profits.

Each year, the nation's supermarkets, restaurants and convenience stores toss out approximately 27 million tons of edible food worth $30 billion, says an anthropologist who studies food waste.

Just how and how much food is wasted varies as much as the businesses themselves, but a few quick fixes could easily cut losses in half and boost the bottom line, says Timothy W. Jones of the Bureau of Applied Research in Anthropology at the University of Arizona in Tucson.

Jones has spent nearly a decade looking at food from its origins in the fields to landfills where fuzz-covered leftovers from the fridge are entombed with unopened cases of once-frozen hamburgers and chickens that never even came close to a consumer. Jones combined ethnographic interviews and observations and archaeological techniques to collect data for a huge longitudinal study funded by the U.S. Department of Agriculture.

His analysis: many companies can significantly sweeten the bottom line with just a few better business practices in management, training, transportation, storage and accounting. The resulting billions of dollars saved could be spent elsewhere.

"Some sectors, especially supermarkets and mom-and-pop restaurants, are very efficient," Jones said. "Others don't even have the first clue."

One problem, says Jones, is that the retail industry often treats food the same way factories and warehouses treat auto parts. Just-in-time delivery systems have been a disaster for many fast food chains where rapid expansion often meant building new stores without adequate frozen and cold storage.

An example: a company will load and park its trucks in a huge, cold-storage facility and send them out as scheduled. But with no cooling capacity of their own, the trucks must unload at the end of the trip, since they may likely be unable to return home before their cargo starts to spoil. If stores misjudge consumer demand, their freezers and refrigerators will still be full and managers will have no choice but to toss their deliveries.

Jones also cited a marked absence of training and compensation that would encourage and reward management and employees to spot and control food losses. While national fast-food chains average about nine percent in loses, he cited a small regional chain with about three dozen stores based in two nearby cities, and only one manager for each city.

"Food is 40 percent of their budget, and they waste about 40 percent of it," Jones said, adding that many accounting systems are inadequate for keeping track of "shrinkage" in food inventories, especially for convenience stores.

With few exceptions, convenience stores are far and away the most wasteful with food - more than 26 percent (nearly three times the rate for fast food restaurants). The reason, says Jones, is their use of the concept of "instant food" that customers can grab and eat with virtually no preparation beyond opening a package or wrapper.

"They know they lose a lot, but they don't think it represents a large share of their business," says Jones, who calculates that food loss amounts to a two-percent hit on their revenue.

Supermarkets, in contrast, waste less than one percent of their stock. And while a trash container full of produce out back might look wasteful, one store might easily accept eight or nine full semi-trailers a day. A large container would logically account for a percent of the volume taken in.

Stores also learned how to analyze their own garbage, and how to cut losses by reducing prices on those items living on borrowed time, or donating to local food banks.

Perhaps most important of all, says Jones, is that Americans generally, not just retailers, have lost their cultural connections to the agrarian landscape that once dominated the nation. Only a few people are still tied to the land through agriculture.

"We don't make food; food makes itself," says Jones. "What's needed is a separate, non-profit entity associated either with a university or a retail corporation to make food loss a perception within the food industry."

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Resources for the media

Timothy W. Jones
UA Bureau of Applied Research in Anthropology
520-626-7624
twj@u.arizona.edu
An online video presentation of Tim Jones and his work (Clean Your Plate Already!) that aired on the Discovery Channel on Jan. 25 is available at http://www.exn.ca/dailyplanet/view.asp?date=1/25/2005