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Increasing sales with food waste reduction technology


Food waste is a global issue that requires urgent innovation. In the European Union alone, consumers waste around €30 billion worth of food every year, while another €60 billion perishes during production.

Research recently revealed how companies can potentially save up to €10 billion by embracing food waste reduction technology in the value chain. It’s no surprise, therefore, that food waste solutions are popping up like wildfire, as interest in these lucrative ethical investments increases. There are interventions at various points in the value chain too, including farming machinery that causes less crop damage, treatment methods that prolong foodstuffs in storage, as well as packaging materials that improve shelf life.

We spoke to Norwegian company Keep-it-Technologies, that believes it’s easy to use and low-cost real-time shelf-life indicator may be the ultimate fix for the food waste problem.

Keep-it-Technologies was founded in 2001 at the Norwegian University of Life Sciences. A professor there conceived the idea when thinking about how heat from the sun bleaches parking tickets that are left on a car’s dashboard. Food also degrades over time, depending on the temperature that it is exposed to. And the professor wanted to discover a way to monitor this process in food. 

Four scientists then spent six years creating the chemistry which underpins Keep-it’s shelf-life indicator. The technology, which reveals the actual shelf-life of any product, completed its first commercial test in late 2012, on mincemeat stocks at Norwegian retailer, Rema 1000.

CEO, Kristen A. Hovland takes up the story:

“A third of all food produced globally is wasted. And 65% of that waste is generated by households. A key reason for this is static date-stamping. Either the food is wasted unnecessarily because its date-stamp has expired, or the food has degraded before its expiration date because of temperature issues within the value chain. Research has confirmed that 90% of food wasted by households is still edible. It’s a gigantic problem and our indicator solves it by registering temperature over time and providing an accurate count-down of every second until a product will perish.”

 

Date-stamping is standard practice in the food industry. The stamp is based on food generally being stored at around four degrees Celsius over a period of time. Though, this almost never happens, says Kristen, as product temperatures fluctuate during production, transportation and when in-store. Consumers don’t always have their fridges set to four degrees either.

And while other sensor technology solutions on the market track temperatures throughout the value chain and offer spot-checks, Kristen noted how these solutions are inadequate for single product monitoring, as well as expensive. “Only Keep-it’s real-time shelf-life indicator can help retailers and consumers plan properly and act in time to avoid food being wasted,” he says. 

Since 2012, Keep-it has sold over 60 million indicators on the Norwegian market and the technology is currently used on almost 40 different types of product. While its shelf life indicator, which attaches to food packaging, works on any product that is sensitive to temperature over time, the business targets fresh and frozen foods. Its customers include traditional and ecommerce food retailers, as well as foodservice businesses supplying hospitals.

At Rema 1000, Keep-it’s shelf-life indicator has helped Norway’s largest food retailer reduce mincemeat, chicken and fish waste by 60%, 35% and 25% respectively. Additionally, products which utilise Keep-it’s indicator have experienced between 10% and 15% sales increases, even without price offers. A direct consequence, says Kristen, of building enhanced trust with consumers who value the freshness, quality, and accurate shelf-life of the food they purchase.  

The indicator has proven it works on vegetables too, as well as measuring pallet temperatures as foodstuffs travel throughout the value chain – so, how come it’s only Norwegian retailers taking advantage of this fantastic innovation?

 

Kristen says two factors are at play. Firstly, the technology represents a major change in the industry. To implement the shelf-life indicator, businesses require different operational processes and ways of working including getting manufacturers to install the technology, as well as communicating it to customers and consumers. And given the accuracy of the technology, customers must also be prepared for transparency, as it will flag any inconsistencies or bad assets within the value chain. 

The industry’s intrinsic inertia and focus on the short-term wins means there’s a great deal of resistance to big changes like those proposed, as Kristen explains:

“Most businesses acknowledge the importance of green innovation and giving strategic priority to sustainability programs. However, a consistent theme we encounter from potential customers is a concern about our technology exposing operational flaws. Keep-it is not a ‘quick-fix’ either. It requires long term planning to ensure the technology integrates efficiently with a business. There’s no guarantee of an immediate positive impact – and even though companies recognise our solution is concrete, they’re often unwilling to invest for that reason alone.”

As well as requiring motivated retail partners prepared to make tough decisions to ensure they leverage the technology, Keep-it must also overcome legal barriers that hinder adoption of its shelf life indicator.

By law, all food products must be date stamped. And even if Keep-it’s indicator reveals that a product is still edible past its official expiration, a “Use By” product is still illegal for retailers to sell. While the law exists to ensure consumers don’t get sick from eating food, it doesn’t yet consider the advantages offered by new smart time and temperature indicator technologies. Because of this, Keep-it must engage with food authorities in different markets and convince them to change the law or make an exception, before launching its indicator solution. This, in Kristen’s words: “takes a significant amount of time.”

There's still a lot of things to do, says Kristen, but the business is making good progress. As well as expanding in Norway, Keep-it anticipates launching in Sweden and the Netherlands very soon. Positive discussions have also taken place in the UK, the US, Japan and Korea too, and Keep-it is working with selected retailers in those markets to create three-year simulations of the likely impact and ROI adopting its technology will have on consumer trust, and most importantly, sales and profit.

“The most effective way to enter a new market is for Keep-it to engage with retail customers in the first instance,” says Kristen. “We present potential customers with the opportunity to be recognised as ‘good corporate citizens’ as well as adding profitability over time. And if we gain the support of retailers, then we enjoy better traction with the authorities.” 

Anticipating increased demand for its shelf-life indicator, Keep-it Technologies is planning to invest in two new production lines at its Oslo-based facility. The business is on the look-out for new talent too, with commercial and innovation skills a priority.

“If you haven’t got people who can sell an idea and get others engaged in your journey, then it doesn't really matter how good your solution is,” said Kristen. He also confirmed that “generation two and generation three” indicators are in development and notes a need for the business to continue “fuelling its innovation capacity by having the necessary resources in place.”

He added: “A longer shelf life means higher sales figures. And reduced waste makes it easier to manage stocks at lower costs and deliver consistent quality. These are huge advantages for retailers. Now that Keep-it is on the verge of cracking international markets, we’re confident that our message is finally getting heard.”

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