In their efforts to become more “green” and sustainable, food retailers may wish to take a closer look at the most fundamental part of their business: food.
Parade magazine recently estimated that U.S. supermarkets throw away $20 billion worth of food each year — about twice as much as supermarkets in Europe, which has double the population of the U.S. Two reasons for this phenomenon, said Parade, are: the distance food travels to stores — 1,500 miles, on average — which results in some spoilage; and the massive displays of produce employed by some stores, only a portion of which can be sold.
Apart from selling more locally grown and processed foods and scaling down produce displays, another solution to the waste issue that a growing number of retailers are supporting is the age-old process of composting, which is the intentional biodegradation of organic matter such as food waste. The resulting compost can be an extremely useful nutrient in soil, helping to grow more fruits and vegetables for consumption — and completing a cycle that is a model of sustainability. Some retailers are even selling the compost their spoiled produce helped to create.
At the same time, by composting their food waste, retailers are significantly reducing their overall trash costs, increasing produce department margins and differentiating their stores in communities with a productive green twist. On the other hand, they need to be wary of holding rotting food waste too long in their stores or warehouses.
Supermarkets have two primary destinations for the organic waste accumulated in the produce, deli, seafood, meat, floral and other areas of the store, said John Connolly, principal, JFConnolly & Associates, Hampton, N.H., a consultant on sustainable business practices: a traditional composting facility or a facility with an anaerobic digester. Inside an anaerobic digester, bacteria digest the food waste and create methane gas, which can be converted into energy, primarily electricity, although increasingly it goes into cellulosic biofuel; the nutrient-rich solids left after digestion can be used as fertilizer.
Save Mart Supermarkets, the 245-store operator based in Modesto, Calif., plans to expand by summer 2010 the chain's 12-year-old composting program. The program will go chainwide, beyond the 125 stores that currently participate, to include the former Albertsons Northern Division stores acquired about two years ago.
According to Steve Gaines, senior director-retail efficiency, Save Mart has slashed total waste stream expenses some 35% by composting organic waste, 90% of which consists of fruit and vegetable waste. “We cut our landfill output by upwards of 80% in communities where we operate,” he said.
In addition, after observing the physical volume of organic waste being diverted every day, Save Mart's store managers were able to cut back over-ordering in produce, thereby improving produce department margins by upwards of two percentage points, Gaines said. Save Mart closes the loop by owning some of the finished compost product, which it donates to communities and sells at its stores.
Moreover, the California Integrated Waste Management Board, Sacramento, has recognized the chain's waste reduction efforts for eight straight years through its Waste Reduction Awards Program (WRAP), according to Gaines, who called the WRAP logo “a differentiator we include on our packaging and reusable bags.”
In central Ohio, a composting pilot run by Cincinnati-based Kroger in 24 stores diverted more than 600 tons of organic waste from landfills between July 1 and Oct. 31, 2008, according to Tonya Woodruff, director, Ohio Grocers Foundation, the philanthropic arm of the Ohio Grocers Association (OGA), Columbus. Twenty-one of the stores reassigned one trash compactor per site as an organic compactor, and three designated one dumpster per site for organic waste.
Kroger produced a training video and distributed it through KTV (Kroger TV) so store staffers could appreciate the reasons to source-separate and learn how to do it correctly and quickly. The retailer also developed a network of advocates in different stores to encourage the composting efforts. Kroger is expected to expand the program based on economic analysis of the pilot stores, Woodruff said. Kroger did not respond to a request for comment.
“What Kroger did kick-started the implementation of grocery store composting in Ohio,” said Woodruff. Other retailers now expressing an interest in the process, she said, include Giant Eagle, which will likely pilot one store in northeastern Ohio, and retailers Howard's, Fresh Encounter and Dorothy Lane Market. More activity will occur once PayGro, a composting facility, acquires a new composting truck that will be funded by a grant from the Ohio Department of Natural Resources (ODNR), she said.
OGA members will soon receive a composting manual about 30 pages in length, developed largely from the Kroger initiative and funded by ODNR. The manual is designed to “give retailers a path to building infrastructure and processes,” said Woodruff. “That should prompt a lot of phone calls and get more people involved.”
PCC Natural Markets, a nine-store cooperative in Seattle, has been composting chainwide and at its business offices for more than 15 years. In 2008, PCC diverted about 514 tons of food waste to “save money on garbage bills and save a resource that is transformed into quality compost,” explained Diana Crane, director of sustainability. “The only downside is the space taken up by the food waste collection containers.” Because of the frequency of collection — two to six times per week, depending on the store and volume — “there are no unpleasant odors,” she added.
In coastal areas, where landfill fees can run as high as $100 per ton, the economics make even more sense for chains to mount aggressive composting programs, said consultant Connolly. For example, disposal of organic waste at a compost facility in the Northeast and Mid-Atlantic regions could save supermarkets $45 per ton, compared with $15-$20 per ton in the Midwest.