Insights - Food Waste

As Head of Carbon & Climate at METRO AG, Lena vom Stein is also responsible for the prevention and reduction of food waste at the wholesaler, which is a key area of action in the field of Corporate Responsibility (CR). We have talked to her about the global relevance and dimension of the issue, METRO's strategy and fields of action as well as the role of partnerships and new technologies.

Food waste is a common challenge that calls for joint action. How pressing is this challenge?

Food waste is indeed a significant challenge globally, with far-reaching implications for the environment, economy, and society. According to industry data, approximately one-third of all food produced for human consumption is wasted each year, amounting to about 1.3 billion tons globally. This waste occurs at various stages of the food supply chain, including production, processing, distribution and consumption, and contributes to 10% of global greenhouse gas emissions. Alone within EU, nearly 59 million tons of food waste (131 kg/inhabitant) were recorded in 2021.

It then must be high on the agenda of global policymakers and businesses?

Indeed. From a legal perspective, many countries and regions have recognized the urgency of addressing food waste and have launched regulations and policies to mitigate it. For example, the European Union has set a target to reduce food waste by 50% by 2030. Also on a global scale, the UN aims to half the food waste at retail and consumer level by 2030 as part of their Sustainable Development Goals (SDG). Accordingly, businesses are increasingly under pressure to address food waste – not only due to regulatory requirements but also because of customer expectations and corporate social responsibility initiatives.

What role do you see food distributors like METRO play in fighting food waste?

Compared to other sectors, trade industry’s share of food waste may be smaller than manufacturing and households themselves (see the chart of EU food waste analysis 2021), however it still plays a crucial role in addressing this issue. Food distributors like METRO have a unique opportunity to make an impact in the fight against food waste by leveraging their expertise, resources, and influence within the food supply chain.

METRO has set the target to halve its food waste by 2025. What strategy is METRO taking to steer this mission?

Our Food Waste reduction strategy is based on three pillars. First, we believe in being transparent about our goals, so we publicly set ambitious targets and objectives. This is a critically important topic for us, and we place a special emphasis on having the best possible data and using recognized standards to monitor, manage, and report our progress.

Secondly, we're always searching for technology that can help us meet our targets. We carefully consider how well these solutions fit with our business and adjust as needed.

Last but not least, we are dedicated to supporting and encouraging our customers and partners in the hospitality and catering sectors to adopt solutions that not only save resources and costs but also contribute to societal benefit. Operating across the entire wholesale value chain, from suppliers to customers, we actively share best practices and actively seek partnerships to extend our impact beyond our operations.

And how does METRO’s specifically reduce its food waste in own operations?

We stick to the Food Recovery Hierarchy set by US Environmental Protection Agency as guidance. We place very strong emphasis on the earlier stages of the Hierarchy, aiming to prevent food surplus from occurring in the potential sources - or at least minimize it. This includes optimizing store inbound processes, ordering and Supply Chain Management, structured assortment steering and optimization, as well as collaborating with suppliers (e.g., addressing post-harvest losses) and driving product and technology innovations. On the other hand, through our close partnerships with Food Banks in 19 countries, we strive to donate as much surplus food as possible to prevent waste.

What are the main challenges from a wholesaler perspective and how are we addressing them?

From our perspective, the main challenge in reducing food waste is keeping the balance between ensuring product availability and avoiding overstock; or expressed in targets, balancing growth strategy with waste reduction efforts.

This requires cooperation throughout the entire supply chain. Collaboration among all key stakeholders, including manufacturers, suppliers, distributors and consumers, is essential for implementing sustainable practices, optimizing resource use and minimizing carbon footprints of products and services. By fostering partnerships and shared commitments to sustainability, businesses can unlock greater potential for meaningful and lasting impact on both economic growth and environmental stewardship.

How much are the new technology and digital solutions deployed to enhance the capability in food waste reduction?

Digital solutions are crucial for achieving our food waste reduction goals. A very good example is the solution of Wasteless. It focuses on reducing greenhouse gas emissions by reducing food waste in retail and wholesale. Wasteless’ technology brings optimization to the pricing of perishables, using a proprietary AI-driven markdown engine to set prices automatically. This strongly supports a best-before-date-based inventory management and moreover reduces manual efforts in our operations. By offering attractive and transparent markdowns that integrate seamlessly in stores, Wasteless helps stores avoid food waste while saving customer money by incentivizing greener shopping habits.

Another good example is Too Good To Go, as we also always looking for solutions to help our customers reduce food waste in their operations, particularly in the hospitality and catering sector. Too Good To Go works via an app that connects businesses which have surplus food at the end of the day with users who want to purchase it at a discount price so that meals are saved from going to waste.

Do you see that AI technology will play a big part in this endeavour?

In general, AI can be utilized throughout the entire food supply chain to optimize processes, improve forecasting accuracy and identify opportunities for waste reduction. Let's consider the example of fresh products: We have many highly trained colleagues in our stores who are very familiar with their assortment and the purchasing behavior of their customers - and especially in Ultra Fresh products, ordering or restocking is based on experience and a good "gut feeling". However, AI-powered analytics can for sure support their expertise: They analyze sales data, weather patterns, construction sites in front of a restaurant and other factors to forecast demand more accurately, reducing the likelihood of overstocking perishable items.

Compared to other economic sectors such as food production, hospitality or households, the sector of food distribution by statistics accounts for a relatively small share of total food waste. However, it still plays a crucial role in addressing the issue and contributing to the reduction and prevention of food waste. Generally, there are 5 main sources along the supply chains that can result in potential food waste. For example, inefficiencies in the supply chain such as poor inventory management, overordering or inadequate quality controls lead to potential food waste. Also, faulty packaging makes food items more vulnerable to damages in transportation and thus not fit for sale or consumption. The shelf life is another typical source behind food waste as perishable foods, particularly fresh products like fruits and vegetables, are more sensitive regarding their expiry dates. And finally, poor forecast and inaccurate planning by producers and retailers and wholesalers can lead to overproduction and overstock respectively, which makes foods more likely to become waste.