Walmart's war on waste

It's hard to wrap your head around the numbers: a staggering 1.3 billion tons of food—roughly one-third of all food produced for human consumption—never gets eaten. Around the globe, this amounts to about $1 trillion worth of food that gets tossed each year.

And if you are under the illusion that Canadians, with their progressive environmental views, have a handle on the problem, think again. According to a new report from the Commission for Environmental Cooperation (CEC), Canadians are among the world’s biggest wasters. The Montreal-based agency found Canadians waste 396 kilograms (873 pounds) of food per capita annually.

While food loss and waste occurs at every link of the supply chain, consumers are, by far, the biggest culprits. Figures vary on exactly how wasteful consumers are with some claiming they account for 51% of the problem. And the new CEC report reveals that of the 168 million tons of food wasted in North America, 67 million occurs at the consumer level.

Still, it’s grocery stores that have the influence to take a big bite out of waste. Both the Anthony Bourdain-narrated documentary Wasted! The Story of Food Waste and the Center for Biological Diversity’s Checked Out report—which graded the 10 largest U.S. grocers on their efforts to lessen food waste—have recently called on supermarkets to step up and play a bigger role in solving food waste and help address the issues wrapped up with it, such as squandered natural resources and food insecurity.

“They are the conduit between suppliers, the producers of food, and consumers, so they have a unique role and a unique opportunity,” says Martin Gooch, CEO of Oakville, Ont.-based Value Chain Management International (VCMI), the firm whose often-referenced 2014 report pegs the value of food waste in Canada at $31 billion.

Walmart Canada is heeding the call. In a recent video created for its Canadian employees, Kathleen McLaughlin, Walmart Inc.’s chief sustainability officer and president of the Walmart Foundation (the company’s philanthropic arm), said: “As a large retailer, we have an opportunity to work upstream with suppliers, manufacturers, farmers and downstream with our customers to really get at food waste end to end.”

In Canada, Walmart is ramping up its efforts around food waste. While the retail giant has had the aspirational target of zero waste to landfill since 2005, it recently renewed its sustainability targets and has now set a deadline of 2025 to achieve the goal. It’s no small thing. Food left to rot in land fills releases methane, a potent greenhouse gas that’s more powerful than carbon dioxide. To put the problem in perspective, experts say globally if food waste were a country, it would be the third-biggest greenhouse gas emitter, trailing only the United States and China.

So how does Walmart plan to get to zero food waste? Lee Tappenden, president and CEO of Walmart Canada, says the company is employing a three-part strategy—the first of which is to improve operational efficiencies to prevent any food from ending up in landfills. One practice Tappenden says is picking up traction in stores is a more “proactive” markdown policy in its dairy, meat and bakery departments. As part of the company’s Customer Value Program, products approaching their best-before dates are sold at reduced prices. It has also introduced what it calls its “$1/$2 bag program” where culled produce (bruised or nicked, but still edible) is put back on the sales floor in bags priced for a quick sale.

While Tappenden admits the discounting initiatives are not exactly groundbreaking, they are resonating with customers and achieving the desired effect. Its fresh operations team, for instance, is reporting 90% to 95% sell-through on the $1/$2 bags. “It enables us to pass savings on to customers without having any product go to landfill,” he says.

The company is also making improvements in its bakeries to allow for more accurate bakes to reduce overbaking. And in Western Canada it has announced plans to open a perishable distribution centre to get food into stores more quickly. Walmart has also implemented organic recycling programs at 338 of its stores and distribution centres so it can take unsold or unsaleable food and turn it into other products: animal feed, compost or energy, rather than shipping it off to landfill. The company is also investing in its staff (or “associates”) providing training and resources so they are better equipped to deal with fresh food and are minimizing waste.

The retail giant’s waste-free journey has not been without a few stumbles. Back in 2016, CBC’s Marketplace news program made multiple visits to two Toronto-area stores and found dumpsters filled with packaged foods, many of which had yet to reach their expiry dates. The message was that Walmart was trashing perfectly good food. It was an embarrassing episode for the retailer, which had already made big commitments on curbing waste. At the time, the company said some mistakes were made and that it would do better.

“We had plenty of programs and efforts already in place at that point,” says Tappenden, adding that there are always challenges to be faced when operating stores. “But we’ve doubled down our efforts.” And the company says it managed to reduce food waste 23% between 2015 and 2017.

“We have now in place a whole team across the country that wasn’t there before, our field associates that are trained specifically on fresh food. We’re getting much more consistency across all of our stores on how to handle fresh, which is a unique skill,” says Tappenden, noting that Walmart Canada is a relative newcomer in this area, only in the business of selling fresh food since 2006.

When asked if the consumer’s desire for more fresh food and abundant choice in-store is slowing progress around waste, Tappenden said innovations and improvements are emerging to offset any challenges. “There’s a lot of innovative packaging, around meat especially, which improves freshness; and there’s a lot more than can be done there that enables us to offer more choice without increasing waste,” he says. “And I think we are genuinely getting more sophisticated in our whole supply chain. We’re getting better at demand planning, and it’s a small thing but we’re taking more and more promotions out of our fresh food area. The more we get to everyday low pricing and take out that volatility, helps a lot.”

Aside from the moral argument for being less wasteful, there’s a strong business case to be made for reducing or eliminating food waste. VCMI’s Gooch says retailers—and certainly consumers— sometimes don’t grasp the true cost of wasted food. “They see food and worry about X amount on face value,” he says. But they don’t see the costs that go along with waste, from disposal to handling, reconciling accounts and transporting the product through the supply chain. “All of those factors mean the true cost of food loss and waste is far greater than the face value of the food. It’s typical for it to be 3, 4, 5 times as much.”

At Walmart, where the business model is all about driving efficiency, McLaughlin says the clear links between business benefit and societal benefit make the goal of zero waste a compelling one. “Having a more resilient food chain with better availability that follows better supply security—that’s good business.”

USING ONE PROBLEM TO HELP SOLVE ANOTHER
Despite our status as an affluent nation boasting a high standard of living, hunger remains a real problem. Food Banks Canada says more than 800,000 people need to use a food bank each month. And according to the 2017 Report Card on Child and Family Poverty in Canada, 1.2 million Canadians live in poverty with food insecurity an issue.

Walmart sees hunger and food waste as two sides of the same coin, and the second part of its strategy to attack waste involves increasing donations to food banks. All of Walmart Canada’s 411 stores are now partnered with a food bank, something Tappenden says “is a really big deal” for the company. And new staff training has been implemented to maximize donations of unsold, edible food. In Canada, Walmart says its stores have donated more than 11 million pounds of food to food banks across the country.

THE BIGGER PICTURE
To tackle the issue of waste beyond the company’s operations, the Walmart Foundation is donating $19 million in the form of a suite of grants to Canadian non-profits working to come up with innovative solutions to reduce waste all along the food chain. Projects range from those that champion whole crop utilization to those studying consumer behaviour.

“It’s a big step forward for us in terms of actually trying to enable a solution end to end,” says McLaughlin. She adds that the grants will support everything from helping the Daily Bread Food Bank build up the infrastructure to collect and redistribute excess produce from up to a dozen farms and greenhouses in rural Ontario to helping the Greater Vancouver Food Bank Society scale up an enterprise that turns surplus produce into foods such as soups and sauces that will be distributed to people in need. The Foundation is also funding a project by the Canadian Centre for Food Integrity and Provision Coalition to work with 50 manufacturers across the country to conduct food loss and waste assessments and identify solutions.

Food rescue group Second Harvest is another grant recipient. Its FoodRescue.ca online system, which allows businesses to donate surplus food, will get a nearly $2-million injection of funds. In addition, the Foundation is supporting an in-depth study into the causes of food waste.

“We’re doing research with Second Harvest to look end-to-end in the chain and figure out where is the waste occurring and what is the practical roadmap for others to dive in and address it,” says McLaughlin.

McLaughlin and Tappenden are both quick to emphasize that Walmart is not only willing, but is eager to share any of its learnings from these projects with the wider industry.

“We would proactively share it with any other retailer,” says Tappenden. “That’s the whole point of this. We’re looking to provide a whole solution to reducing food waste in Canada, not just a solution to reduce food waste for Walmart Canada.”

PHOTOGRAPHY BY MIKE FORD

This article appeared in Canadian Grocer’s May 2018 issue.