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German Retail Federation

How do German retailers reduce food waste?

1 | HDE – HOW DO GERMAN RETAILERS REDUCE FOOD WASTE?

IntroductionThe retail sector is committed to putting food to good use and to not wasting it

– and is successfully implementing this principle. Retail companies take a whole

range of measures to avoid food waste before delivery, in the stores and beyond.

Obviously, and for simple economic considerations, this is a significant issue

for the German retail sector. After all, retailers make a living from selling food,

not wasting it. By reducing wastage, the retail sector promotes a conscious and

sustainable way of handling food on the one hand. On the other hand, reducing

food waste helps to reduce loss in revenue – as every discarded item costs the

retailer money.

The level of food loss in the German retail sector is very low. A study by the

research institute EHI1 showed that the share of food which cannot be sold due

to damages or spoilage is, on average, 1.1 per cent of the total value across all

product ranges. If you relate this figure to the total German population, this means

that per person and per year the retail sector is forced to discard less than 4 kg of

food products with a value of less than 15 euros.

Retail is facing an important challenge: On the one hand, customers expect a wide

range of immaculate and fresh goods – and this right up until the very end of the

day. On the other hand, certain fresh products are not sellable the following day.

As a result, food retailers put an emphasis on planning thoroughly to predict and

manage demand as accurately as possible.

Before products reach the storesEven before food products reach the stores, retailers take important measures to prevent food wastage.

All large retail companies continually optimize their merchandise planning and control systems in order to guarantee a supply of goods that is perfectly tailored to meet the current market needs. Through the use of prognosis systems, sales data from previous years and automated ordering processes the amounts of products ordered correlate closely with the actual demand. Furthermore, retailers shorten their ordering cycles and decrease the amounts ordered in order to guarantee shorter storage times and smaller stocks and thus minimise their wastage rate.

This accuracy in planning enables companies which cooperate with regional farmers to establish detailed common cultivation plans. In the framework of such partner-ships, retailers also support special sales promotions in order to systematically sell farming surpluses within a short space of time.

1 EHI Study “Nahrungsmittelverluste im Lebensmitteleinzelhandel”, September 2011 http://www.ehi.org/fileadmin/images/content_images/Presse/Pressefotos/EHI_Studie_Lebensmittelverluste_LEH.pdf

HDE – HOW DO GERMAN RETAILERS REDUCE FOOD WASTE? | 2

In addition, retail companies train the cooperating farmers to grow produce comply-ing with international safety and quality standards so that crops do not have to be disposed of unnecessarily. Especially for imported goods product quality categories for fruit and vegetables are essential tools for guaranteeing the quality of goods without extensive controls and for ensuring legally secure and transparent contrac-tual relations between retailers and suppliers to the benefit of all parties. Moreover, marketing standards contribute to minimising wastage levels. Products that do not correspond to the respective standard criteria can be set aside for alternative ways of processing at an early stage.

The purchasing departments of retail companies increasingly order different packet sizes of the same product – up to eight different sizes. In this way, retailers can accommodate the needs of households of any size and customers’ leftovers, which might end up in the bin, can be avoided. Moreover, service counters in the stores enable consumers to buy small quantities according to their needs.

The branches of retail companies often have access to detailed weather forecasts for their region. This information is especially helpful for purchase orders of seasonal goods. For example, more barbecue meat is purchased in summer when the weather is fine than during rainy periods. In this manner, stores are able to precisely plan their supplies and stocks to avoid surplus.

Moreover, a number of retail companies call upon their suppliers to deliver food products as early as possible in order to extend the remaining shelf life. This has ad-vantages for all: Retailers can offer fresher goods to their customers and customers have more time to consume the product before the best before date (BBD) expires.

With their logistics departments companies are trying to minimize the levels of food product losses due to transport errors. This is done by ensuring short transport routes between warehouses and stores as well as an uninterrupted cold chain for products from the producer all the way to the refrigerated shelves in the retail branches. This is supported by a training of suppliers to also respect these principles. Furthermore, experts in the food sector cooperate in the development of innovative systems which protect food products during transport and guarantee they arrive in perfect condition. For example, in this vein, a new system for securing glass jars with special foil or optimized stacking patterns has been developed.

3 | HDE – HOW DO GERMAN RETAILERS REDUCE FOOD WASTE?

In the stores

When the food products arrive in the stores there are further measures which em-ployees at the branches take in order to keep the loss rate as small as possible. Some companies internally publish rankings of individual branch stores regarding the respective waste rates giving a practical incentive for employees to actively avoid food waste.

In supermarkets, trained staff regularly checks the quality of goods – for example, by examining the appearance and condition – as well as the expiration of the best before date. Some retailers use state-of-the-art technology with an automatic warning system which simplifies the process of re-organizing and sorting through the goods according to best before date. Moreover, fruit and vegetables whose appearance no longer meets the customer’s standards but which are otherwise in perfect condition are not discarded but processed further – for example, for salad bars or other preparations. When large amounts of a certain product are in stock, special promotions help to sell off the goods quickly.

Furthermore, fruit and vegetables are sold as loose items. This enables the customer to purchase groceries in appropriate quantities according to his needs.

Should there be products in stores which – in spite of all these measures taken – are close to the best before date, the prices of these products are often reduced and products are labelled accordingly. Many branches have separate fridge spaces or special placement near the check-out areas where price-reduced items are regularly on offer.

As far as in-store bakeries are concerned, the variety of bread is significantly reduced by most retailers to a few standard products already before closing time. Remainders are sold at a reduced price at the end of the day.

HDE – HOW DO GERMAN RETAILERS REDUCE FOOD WASTE? | 4

In order to save food products which are fit for consumption but are no longer suitable for sale from being discarded, the retail sector has been cooperating with the food bank organi-sation ‘Die Tafeln’ for many years. ‘Die Tafeln’ collects qualita-tively acceptable products which otherwise would end up on a landfill site and distributes these to socially and economic-ally disadvantaged persons – free of charge or for a symbolic price. Currently, there are over 880 of these food banks in Germany. They are all charitable organisations. In Germany, they regularly supply 1.5 million people in need with food – nearly one third of which are children and adolescents. Approximately 80 to 90 per cent of all food retailers coope- rate with organisations such as ‘Die Tafeln’. As a matter of principle, only absolutely edible goods are donated. These are primarily fruit and vegetables but also fresh daily products from the bakery sections. Since many of the food banks today also own cooling vehicles, increasingly dairy products and other perishable goods are handed out as well.

By law, it is prohibited to retail to put products with expired use-by dates into circulation. Therefore, stock remainders are often returned to the supplier so that they can be disposed of in an environmentally friendly way (e.g. in a biogas plant) or processed further appropriately (e.g. for animal feed).

Source: Survey of the German Federal Ministry for Food, Agriculture and Consumer Protection (BMELV), University Stuttgart, February 2012

Large-scale consumer 1.900.000 t 17%

Trade 550.000 t 5%

Food Industry 1.850.000 t 17%

Households 6.670.000 t

61%

Distribution of food waste by value chain

sectors for food – tonnes / year

5 | HDE – HOW DO GERMAN RETAILERS REDUCE FOOD WASTE?

At customer level

EU Study ‚Preparatory Study on Food Waste across EU 27‘, October 2010 http://ec.europa.eu/environment/eussd/pdf/bio_foodwaste_report.pdf

2

Studies of the European Commission and the German Federal Ministry for Food, Agriculture and Consumer Protection (BMELV) have shown that the majority of food waste is produced by private households – approximately 70 per cent2 of all food waste accumulated in Germany. This is often due to the lack of shopping lists and dispro-portionate caution with regard to the best before date.

Therefore, the German retail sector supports the edu-cational campaign by German Minister for Consumer Affairs Ilse Aigner called ‘Teller oder Tonne?’ (‘Plate or Bin?’). The handy flyers of this campaign provide in-formation for customers in over 21,000 retail stores throughout Germany on the most important issues sur-rounding labelling of best before and expiration dates and the responsible handling of food. Furthermore, many companies offer their customers advice on how to avoid food waste via websites with practical tips on how to make shopping lists, the correct storage of food products as well as recipes showing how to sensibly make use of leftovers.

Today customers can shop nearly all hours of the day. Many food retail stores have longer opening hours – some until midnight. The necessity of having food sup-plies at home has therefore, to some extent, become redundant. Customers can buy the right amount of fresh foods on a daily basis and thus prevent food waste.

Nevertheless, retailers cannot force their customers to change their habits. Retail companies have to consider the wishes and expectations of their customers. A good example of the limited influence of retailers on their customers is the case of potatoes. Potatoes that have not been brushed or washed keep longer as they are surrounded by a protective layer of soil. When retailers offered soiled potatoes however, customers would not buy them and chose the cleaned alternative instead.

Source: Survey of the German Federal Ministry for Food, Agriculture and Consumer Protection (BMELV), January 2011

90

80

70

60

50

40

30

20

10

0Spoilage /

Expired BBDBought

too muchPackage too big

Product does not

taste good

Most Common Reasons for Binning Food

(Multiple answers possible)

84 %

28 %19 % 16 %

HDE – HOW DO GERMAN RETAILERS REDUCE FOOD WASTE? | 6

At customer level

Today the retail sector in Germany is the third largest economic sector behind industry and crafts with 400,000 companies and a combined turnover of over 400 billion euros. Its main characteristic is the interface role with end consumers. Every day, German retailers welcome 50 million consumers in their stores – be it at the greengrocers, at the newsstand, in a department store, in a supermarket or over the internet.

The German Retail Sector

EU Study ‚Preparatory Study on Food Waste across EU 27‘, October 2010 http://ec.europa.eu/environment/eussd/pdf/bio_foodwaste_report.pdf

HDE image campaign ‘The Trade – Everything for life!‘ www.alles-fuers-leben.de

German Retail Federation (HDE)

HDE Brussels

85 Avenue des Nerviens

B-1040 Brussels

Phone: +32 (2) 7354379

Fax: +32 (2) 2308497

Email: europa@einzelhandel.de

Am Weidendamm 1 A

D-10117 Berlin

Phone: +49 (0)30 726250-0

Fax: +49 (0)30 726250-19

Email: hde@einzelhandel.de

www.einzelhandel.de

www.einzelhandel.de

German Retail Federation

www.alles-fuers-leben.de

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