July 20, 2017

Food waste is at historic highs

U.S. Department of Agriculture funding research, awards $992,996 to ASU
July 20, 2017 (Tempe, AZ) – Researchers from ASU’s W. P. Carey School of Business will explore solutions to food waste through two unique research projects funded by the USDA’s Agriculture and Food Research Initiative.

The first project will test online marketplaces and mobile apps. These emerging sharing economy companies could help farmers, restaurants, retailers and households manage problems with day-to-day food waste.

For example, if a farmer has a box of ugly fruits or tomatoes that won’t sell in the supermarket because they’re too big for the grocery store display, for instance he can use an online platform to let others know he has a surplus of food. Consumers then visit the app or website, select the items they want, and the app coordinates delivery logistics and payment for the farmer.

Lead investigator Professor Tim Richards says the idea is making markets, out of what would otherwise be waste.

“In Arizona and around the country 18 percent of landfills is food waste, according to the EPA - and that may be a conservative number,” says Richards, Marvin and June Morrison Chair in Agribusiness at the W. P. Carey School. “If we can figure out a way to better utilize food that would otherwise be wasted we can minimize what goes into our landfills and more importantly make better use of the water that’s used to irrigate plants, saving 25 percent of our freshwater supply each year.”

Researchers at ASU are teaming up with Imperfect Foods, a startup delivery company based in San Francisco to test market theories and demand conditions. In addition, the experiment will use 400 business school students at Arizona State University and California Polytechnic State University to measure their use of food waste.

At the conclusion of the two-year research period, investigators hope to be able to answer the following: · How will these innovations impact farmers and consumer food prices?

· How will knowledge and information impact demand uncertainty among food manufacturers, family meal planning, and food waste?

· Are stakeholders in the food supply chain receptive to dealing with collaborative enterprises?

"Food Waste: A Market-Based Solution Using Commercial Peer-to-Peer Mutualization Systems" won an Agriculture Economics and Rural Communities (AERC) grant totaling $496,589.

"Scan-Based Trading: Opportunities for Enhancing Supply-Chain Efficiency"

A second ASU research project will put scan-based trading (SBT) under the microscope. SBT is a newer type of contract used by food suppliers and retailers like Walmart and Target, where the supplier retains ownership of the inventory in stores, until the product is scanned at the register for checked-out by the customer.

Suppliers, such as dairy producers or bakery vendors are responsible for keeping products in stock, while the retailer provides vendors with valuable shelf space and its employees manage that space. Any loss of product between delivery and checkout is typically the responsibility of the supplier, not the retailer.

One major problem in SBT is ‘shrink,’ the loss of product between delivery and checkout – anything from expired inventory, broken cartons, and even theft. This could mean a loss for the supplier under an SBT contract, who may decide to increase wholesale prices to cover its losses. The retailer could then pass that increase along to customers, by raising prices according to lead investigator Elliot Rabinovich.

SBT contracts do have benefits, including giving suppliers access to real-time sales information from retail checkouts and the flexibility of replenishing stock in-store, without having to go through a distribution center which traditional contracts often require.

At the conclusion of the two-year research period, investigators hope to be able to answer the following:

• How can SBT contracts support the objectives for both retailers, suppliers, and the farmers who sell to them?

• Is there potential to minimize food waste through the supply system by using SBT?

• How does shrink at SBT stores and non-SBT stores impact wholesale and retail costs?

"Scan-Based Trading: Opportunities for Enhancing Supply-Chain Efficiency" won an AERC grant totaling $496,407.

Please contact Rebecca Ferriter to schedule an interview, or live broadcast from our high definition TV studio on campus.

Rebecca.Ferriter@asu.edu or (310) 871-9041

About the W. P. Carey School of Business

The W. P. Carey School of Business at Arizona State University is one of the top ranked business schools in the United States. The school is internationally regarded for its research productivity and its distinguished faculty members, including a Nobel Prize winner. Students come from more than 100 countries and include over 50 National Merit Scholars.

For more information, please visit www.wpcarey.asu.edu.