Food waste reduction in Swedish food retail: Understanding barriers and incentives

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IN

DEGREE PROJECT MECHANICAL ENGINEERING, SECOND CYCLE, 30 CREDITS

STOCKHOLM SWEDEN 2020,

Food waste reduction in Swedish food retail

Understanding barriers and incentives

ELLEN EJNARSSON

SOFIA BENGTSSON EKSTRÖM

KTH ROYAL INSTITUTE OF TECHNOLOGY

SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT

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Food waste reduction in Swedish food retail

Understanding barriers and incentives

by

Ellen Ejnarsson Sofia Bengtsson Ekström

2020-06-15

Master of Science Thesis

KTH School of Industrial Engineering and Management Energy Technology ITM-EX 2020:337

SE-100 44 STOCKHOLM

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Reducering av matsvinn i svenska livsmedelsbutiker

Förståelse av hinder och incitament

av

Ellen Ejnarsson Sofia Bengtsson Ekström

2020-06-15

Examensarbete

KTH Industriell teknik och management Energiteknik ITM-EX 2020:337

SE-100 44 STOCKHOLM

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Master of Science Thesis ITM-EX 2020:337

Food waste reduction in Swedish food retail Understanding barriers and incentives

Ellen Ejnarsson

Sofia Bengtsson Ekström

Approved Examiner

Per Lundqvist

Supervisor

Per Lundqvist

Commissioner

Whywaste

Contact person

Annika Hellenberg

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Abstract

In Sweden, the retail sector is responsible for 8% of the total supply chain waste. Although the number is relatively small, the retail sector is of key importance for food waste minimization since retail stores collect large amounts of food and connect with consumers and producers in a limited, clearly defined number of places. Therefore, initiatives or policies implemented in retail may have major implications. The Royal Swedish Academy of Engineering Sciences (IVA) concludes that prevention of food waste and redistribution to humans are the only actions that contribute to Target 12.3, aiming to halve food waste per capita from both retail and consumer levels as well as reduce food losses in the production and supply sectors by 2030. Also, research concludes that the median benefit-cost ratio for reducing waste in the supply chain is 14:1, and that unawareness of this business case is a reason for insufficient implementation of food waste reduction.

In the latest years, authorities and researchers have increased focus and emphasized importance of industry collaboration to reduce supply chain food waste; however, there are more scarce findings in literature on incentives for food waste reduction from a retailer perspective. Therefore, the purpose of the study was to understand barriers and incentives for prevention of food waste and price reduction, conversion and donation of surplus food from a retailer perspective, and thereby identify opportunities to increase incentives. A multiple case study of nine retailers from the three major Swedish retail corporations was chosen as methodology, and semi-structured interviews were conducted with managers working in each store.

The results show internal and external barriers for reduction, the major ones being the business objective to always ensure consumer satisfaction and variability in demand (prevention); inefficient label creation due to health and safety regulations (conversion) and lack of available partnerships (donation). In terms of initiative prioritization, financial benefits are found to be the major driving force for waste reduction, why food waste prevention is the most favourable option and reduction initiatives prioritize expensive products. Also, the incentive for food waste reduction depends strongly on business case awareness and integration efficiency, where the study identifies opportunities to increase incentives when: i) retailers are aware of the business case of reducing food waste, but discouraged by certain constraints; ii) retailers are unaware of the business case;

and iii) there is no existing business case.

Keywords: Food retail, Food waste, Reduction, Prevention, Financial incentives, Public intervention

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Sammanfattning

8% av Sveriges totala matavfall uppkommer i livsmedelsbutiker. Trots denna relativt låga siffra är butikerna avgörande för minimering av matavfall: de samlar stora mängder mat på ett begränsat antal platser och implementerade initiativ och policy får därmed stor verkan. Kungl.

vetenskapsakademin (IVA) har konstaterat att förebyggande av matavfall och omfördelning av överskott till människor är de enda initiativ som signifikant bidrar till att nå Förenta Nationernas hållbarhetsmål 12.3, att halvera matsvinnet per person i butik- och konsumentled, och minska matsvinnet längs hela livsmedelskedjan. Studier visar att det finns ett tydligt business case för reducering av matsvinn, att initiativ i genomsnitt genererar 14 gånger så stor finansiell vinning som kostnad för aktörer i livsmedelskedjan, men att många aktörer saknar vetskap om detta.

Myndigheter och forskare har de senaste åren i en allt större utsträckning ägnat fokus åt, och betonat vikten av, samarbete i livsmedelskedjan för att reducera matavfallet. Mindre fokus har ägnat åts livsmedelsbutikernas incitament att genomföra de initiativ som anses nödvändiga för att matavfallet i Sverige ska reduceras. Syftet med studien var därför att, från ett butiksperspektiv, förstå rådande hinder och incitament för förebyggande matavfall samt prisreduktion, förädling och donering av överskottsmat, och därigenom identifiera möjligheter att öka dessa incitament. Studien genomfördes i form av en fallstudie av nio livsmedelsbutiker från de tre största livsmedelskedjorna i Sverige, där semistrukturerade intervjuer hölls med ansvariga från varje butik.

Resultaten visar interna och externa barriärer för reduktion av matavfall, av vilka de signifikanta är att ständigt tillfredsställande av konsumenters önskemål och variation i efterfrågan (förebyggande av matavfall), ineffektivitet i tillverkning av innehållsförteckningar (förädling), samt avsaknad av fungerande partnerskap (donering). Finansiell vinning är den största drivkraften för reduktion av matavfall, varför matavfall helst förebyggs och dyra produkter prioriteras. Det råder en generell osäkerhet kring den optimala strategin för att reducera matavfall, samt bristande tid att ägna initiativ. Incitament för reduktion av matavfall beror därför i stor utsträckning på vetskap om ett initiativs business case, samt hur effektivt det kan integreras i butikens verksamhet. Möjlighet att öka incitament finns därmed där: i) livsmedelsbutiker har vetskap om ett business case, men förhinder att agera; ii) livsmedelsbutiker saknar vetskap om ett business case); och iii) det saknas ett business case.

Nyckelord: Livsmedelsbutik, Matavfall, Matsvinn, Reduktion, Förebyggande, Finansiella incitament, Styrmedel

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Acknowledgments

Firstly, we would like to thank Whywaste and our supersvisor Annika Hellenberg for providing us with the opportunity to conduct our research in collaboration with them. We truly believe Whywaste brings positive change to society.

Furthermore, we would like to thank our supervisor Per Lundqvist at The Royal Institute of Technology for his open-mindedness and confidence in our ideas.

Lastly, we would like to express our gratitude towards all interview participants, whose contributions have been invaluable.

Ellen Ejnarsson Sofia Bengtsson Ekström,

Stockholm, June 2019

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Table of Contents

1. INTRODUCTION ... 1

1.1BACKGROUND ... 2

1.2PROBLEM STATEMENT ... 3

1.3PURPOSE AND RESEARCH QUESTIONS ... 3

1.4DELIMITATIONS ... 4

2. LITERATURE REVIEW ... 5

2.1FOOD WASTE: THE OVERALL ISSUE ... 6

2.1.1 Global ... 6

2.1.2 Sweden ... 8

2.2THE FOOD AND DRINK MATERIAL HIERARCHY ... 9

2.2.1 The revised food and drink material hierarchy ... 10

2.3SWEDISH RETAIL ... 11

2.3.1 Food waste levels ... 12

2.3.2 Waste drivers and related barriers ... 13

2.3.3 Reduction initiatives ... 15

2.4RETAILER INCENTIVES FOR FOOD WASTE REDUCTION ... 18

2.4.1 Aspects limiting incentives ... 19

2.4.2 Public intervention to increase incentives ... 20

3. METHODOLOGY ... 22

3.1COLLABORATION PARTNER ... 22

3.2RESEARCH DESIGN AND APPROACH ... 22

3.3DATA COLLECTION ... 23

3.3.1 Literature Review ... 24

3.3.2 Interviews ... 24

3.4DATA ANALYSIS ... 26

3.4.1 Coding framework ... 26

3.4.2 Applying coding framework ... 26

3.5CRITICAL REVIEW OF RESEARCH METHOD ... 27

4. ANALYSIS AND RESULTS ... 29

4.1OVERALL FINDINGS ... 30

4.2MAJOR BARRIERS FOR FOOD WASTE REDUCTION ... 31

4.2.1 Prevention ... 32

4.2.2 Price reduction ... 36

4.2.3. Conversion ... 37

4.2.4 Donation ... 38

4.2.5 Final notes ... 40

4.3ASPECTS INFLUENCING INITIATIVE PRIORITIZATION ... 40

4.3.1 Strategy ... 40

4.3.2 Benefit/cost ... 44

4.3.3 Integration efficiency ... 45

4.3.4 Business case awareness ... 46

5. DISCUSSION ... 50

5.1MODIFICATION OF CONSTRAINTS ... 50

5.2KNOWLEDGE SHARING ... 52

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5.3MODIFICATION OF INCENTIVE ... 53

5.4FINAL NOTES ... 54

5.5LIMITATIONS ... 54

6. CONCLUSION ... 56

6.1FUTURE RESEARCH ... 56

REFERENCES ... 57

APPENDIX 1: INTERVIEW TEMPLATE ... 64

APPENDIX 2: SEMAFOR ... 66

APPENDIX 3: LITERATURE REVIEW INTERVIEWS ... 68

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List of Figures

Figure 1. Important initiatives and reports around food waste (Sörme et al., 2019 and IVA 2020). ... 9

Figure 2. Food and drink material hierarchy (WRAP 2020). ... 10

Figure 3. Revised Food and drink material hierarchy. ... 11

Figure 4. Livsmedelskedjans sex steg (IVA 2020). ... 12

Figure 5. Food waste in Swedish food retail 2012, 2014, 2016 and 2018 (rounded numbers). (The Swedish Environmental Protection Agency 2020). ... 13

Figure 6. Revised version of Eriksson’s (2015) waste management framework ... 16

Figure 7. Research design and process ... 23

Figure 8. The system boundary ... 32

Figure 9. Incentive for food waste reduction based on business case awareness and integration efficiency of initiative. ... 48

Figure 10. Intervention needed to increase incentive based on business case awareness and integration efficiency of initiative. ... 50

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List of Tables

Table 1. Coding framework ... 27

Table 2. Description of retailers. ... 30

Table 3. Results on major barriers for food waste reduction. ... 32

Table 4. Prevention barriers ... 33

Table 5. Price reduction barriers ... 36

Table 6. Conversion barriers ... 37

Table 7. Donation barriers ... 38

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Abbreviations and Acronyms

EG Europeiska Gemenskapen (The European Community)

EU European Union

SCB Statistiska Centralbyrån (Statistics Sweden)

FAO Food and Agriculture Organization of the United Nations FLW Food Loss and Waste

FW Food Waste

IVA Kungl. Ingenjörsvetenskapsakademien (The Royal Swedish Academy of Engineering Sciences)

SaMMa Samverkansgruppen för minskat matavfall (Collaboration Group for Reduced Food Waste)

SDG Sustainable Development Goal

SLU Svenska Lantbruksuniversitetet (Swedish University of Agricultural Sciences)

SMED Svenska Miljöemissionsdata

IVL IVL Svenska Miljöinstitutet (IVL Swedish Environmental Research Institute)

UN United Nations

WRAP Waste and Resources Action Programme

WRI World Resources Institute

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1. Introduction

The following chapter provides an introduction to the study. The different sections present background, problem statement, purpose and research questions, as well as the study’s delimitations.

1.1 Background

One-third of all food produced in the world is lost or wasted (FAO 2020). Food lost or wasted each year accounts for 8 percent of GHG emissions; requires an agriculture area the size of China;

and consumes a quarter of all water used by agriculture. The annual market value of food lost or wasted is $940 billion globally (FAO 2015a), and in a world where one in nine people are undernourished, more than 1 billion metric tons of food per year is not consumed (FAO et al.

2018).

In order to tackle the food loss and waste problem, the European Union (EU) has engaged in meeting Target 12.3 of the Sustainable Development Goals (SDGs), which aims to halve food waste per capita from both retail and consumer levels, as well as reduce food losses in the production and supply sectors by 2030 (United Nations 2015). While most of EU food waste is generated by production and households (Stenmark et al., 2016), the retail sector is responsible for an estimated 5% of EU food waste. However, for food waste minimization, the retail sector is of key importance. In retail stores, large amounts of food are collected in a limited, clearly defined number of places, connecting with consumers and producers. Therefore, initiatives or policies implemented in retail may provide benefits upstreams to producers and downstreams to consumers as well (Schӧnberger et al., 2013; Cicatiello, Franco et al. 2017). According to the Waste Framework Directive (European Parliament and Council 2008), food waste prevention and redistribution of surplus food (hereinafter, the terms are together referred to as food waste reduction), suitable for human consumption but no longer marketable, should be prioritized.

Despite this fact, there have been very few attempts in literature to evaluate the environmental and economic benefits of those types of initiatives in the retail sector (Albizzati et al. 2019).

The Business Case for Reducing Food Loss and Waste by Hanson and Mitchell (2017) highlights how reducing food loss and waste can generate a triple win: for the economy, for the environment, and for food security. Its analysis of historical data indicates that there exists a robust business case for retailers to reduce food waste; the median ratio of purely financial benefits to financial costs attributable to initiatives in the supply chain is 14:1. Despite seemingly straightforward motivation for action, food waste reduction is not implemented at sufficient scale; researchers believe a reason for this is lack of awareness of the business case for reduction (ibid.).

In a study by Kungliga Ingenjörsvetenskapsakademien [The Royal Swedish Academy of Engineering Sciences] (IVA), a framework for measuring waste is proposed for Sweden, which concludes that prevention of food waste and redistribution to humans are the only actions that contribute to Target 12.3 (IVA 2020). This view is supported by IVL Svenska Miljöinstitutet [IVL Swedish Environmental Research Institute] (IVL), leading a voluntary agreement with different

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actors in the supply chain that will aim to reduce food waste aligned with IVA’s definition (IVL 2020).

Researchers agree that awareness of food waste amount and origin is foundational for implementation of the right food waste reduction strategies (e.g. Hartikainen, Riipi et al. 2020;

Flanagan et al. 2019b). There is, indeed, a great amount of evidence in literature on where the most retail food waste is generated: in terms of tonnes, fruits and vegetables and bread and bakery products constitute the largest shares; whereas the most important products in monetary terms, with lower levels of waste, are fresh meat, cold cuts, dairy products and ready meals (Teuber and Jensen 2016; Gustavsson et al 2013). Also, interview evidence from Swedish retail conclude that reducing food waste has always, to some extent, been a focus for retailers due to the associated costs, and that an increased environmental awareness in society may have further increased motivation for action (Sörme et al. 2019). Despite these facts, the most recent statistics show that 8% of total supply chain waste, corresponding to an annual 100 000 tonnes, is generated in the Swedish retail trade (The Swedish Environmental Protection Agency 2020).

1.2 Problem statement

Clearly, food waste levels in Swedish retail imply that food waste reduction is not implemented at sufficient scale. In the latest years, authorities and researchers have increased focus and emphasized importance of industry collaboration to reduce supply chain food waste (The Swedish Environmental Protection Agency 2018; IVA 2020; Hanssen 2018; Aschemann-Witzel et al.

2017)largely due the success brought by Waste Resource Action Programme (WRAP) through the voluntary agreement The Courtauld Commitment (WRAP 2020a). In a case study of four Swedish retail stores, Sörme et al. (2019) identify drivers for food waste and barriers for reduction, where possibilities and incentives for further reduction are discussed form a wider, supply chain perspective (ibid.). However, there are more scarce findings in literature on incentives for food waste reduction from a retailer perspective.

Eriksson (2015) concludes that food waste reduction in Swedish retail can reduce both carbon footprint and cost, and that a combination of prevention, economic valorization (price reduction), conversion, donation and recovery should be used to achieve reduction. The study by Sörme et al.

(2019) concludes that current food prices generate food waste since it may be more costly for stores to prevent food from ending up as waste than to throw it away, and that understanding how to increase retailer incentives for food waste reduction is an important task for authorities.

Therefore, this study aims to contribute to current research by identifying opportunities for public intervention that target barriers for food waste reduction. In accordance with the recent framework proposed by IVA (2020), the study excludes recovery and investigates the initiatives contributing to Target 12.3: prevention, price reduction, conversion and donation.

1.3 Purpose and research questions

Derived from the problem statement above, the purpose of the study is to understand barriers and incentives - why and how initiatives are prioritized - for food waste reduction from a retailer perspective, and thereby identify opportunities to increase incentives.

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To meet the purpose of the paper, the following research questions were formulated.

RQ1: In Swedish food retail, what are the major barriers for food waste prevention and surplus food price reduction, conversion and donation?

Identifying barriers for food waste reduction serves as a good starting point for understanding incentives, answering:

RQ2: What aspects influence initiative prioritization? And what are the opportunities to increase retailer incentives?

1.4 Delimitations

This study focuses on reduction of visible retail food waste, referring to food waste that ends up in stores and get registered by the retailers. Food waste generated at supplier-retailer interface, due to take-back agreements or product returns, or retailer-consumer interface, due to campaigns, are excluded from the study. Also, the study excludes waste that does not get registered, because of e.g. human errors or theft.

This study is delimited to the physical retail stores, which means online sales, and associated food waste, is excluded from the study. The investigated barriers are defined by the retailers themselves;

hence, other possible barriers may exist but are excluded from the study.

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2. Literature review

The following chapter presents the important literature findings for the study. The first section provides on overview of what factors have made food waste an overall issue in Sweden. After that, a food and drink material hierarchy is introduced and the current state of Swedish retail, including waste drivers and reduction initiatives, is presented. The final section covers retail incentives for food waste reduction.

2.1 Food waste: the overall issue

Sweden’s current attitude towards food waste has, among other things, been affected by the publication Global Food Losses and Food Waste: Extent, Causes and Prevention (FAO 2011), initiatives from EU and actions from the organization Waste and Resource Action Program (WRAP). Presented below is a selection of important initiatives and research on global and national levels, which all have impacted Sweden’s current view of the issue.

2.1.1 Global

The FAO publication launched in 2011 concluded that one-third of all food produced in the world is lost or wasted, which lifted the issue of food waste to a global level (Sörme et al. 2019, p. 15).

In 2019, this figure was confirmed an accurate global estimation by the World Resources Institute (WRI) in the report Reducing Food Loss and Waste: Setting a Global Action Agenda(Flanagan et al. 2019). Also, strong evidence has been presented that food waste is a large source for carbon dioxide emission (FAO 2011; FAO 2013).

In 2015, as part of the 2030 Agenda for Sustainable Development, Member States of the United Nations adopted the 17 Sustainable Development Goals (SDGs). Target 12.3 aims to halve “per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses” (UN 2017) and thereby, help to meet the SDGs by 2030, sustainably feed the planet by 2050, and contribute to the Paris Agreement on climate change (Flanagan et al. 2019). Ever since this target was set, it has been an important driving force for goals and policies around the world (IVA 2020).

Champions 12.3 is a coalition of international leaders, such as executives from governments, businesses, international organizations and research institutions, aimed at accelerating the work towards achieving Target 12.3 (Champions 12.3 2020). Champions 12.3 have published several progress reports on how the world is doing towards achieving Target 12.3, as well as a the report The Business Case for Reducing Food Loss and Waste by Hanson and Mitchell 2017, concluding that the median benefit-cost ratio for reducing food loss and waste (for different actors in the supply chain) is 14:1. In the lights of this demonstrated business case, Champions 12.3 recommends public and private sector decision makers to adapt a “Target-Measure-Act” approach. Firstly, they should set explicit targets aligned with Target 12.3, since targets set ambition that motivates action. Secondly, based on the idea that “what gets measured gets managed”, governments and companies should measure their food loss and waste within specific supply chains or operations (Flanagan et al.

2019a; Flanagan et al. 2019b). Quantification provides information on how much, where and why

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food is lost or wasted and hence, enables the prioritization of actions and to monitor progress over time. Lastly, governments and companies must, on their own and together, take bold measures to reduce food loss and waste.

Globally, one of the leading actors around the issue of food waste is the non-profit organization WRAP, founded by the English and Welsh authorities in 2000. WRAP is world leading in helping organizations achieving greater resource efficiency, where food and drink is one out of seven sectors of focus. It delivers practical solutions to businesses, governments and communities and supports international food waste projects (WRAP 2020a). Furthermore, WRAP has delivered change through The Courtauld Commitment, a voluntary agreement on which other countries now draw experience, aimed at reducing waste and improving resource efficiency within the UK grocery sector. The agreement is funded by the UK governments and delivered by WRAP, who works in partnership with manufacturers, suppliers, brand owners and retailers, all of whom sign up to contribute to the delivery of the targets (WRAP 2020b).

The Courtauld Commitment was launched in 2005 and is now in its third phase; phase one and two, Courtauld 1 (2005-2009) and Courtauld 2 (2010-2012), both had a large focus on packaging and associated food waste, and the ongoing Courtauld Commitment 2025 has been developed to further reduce household and supply chain waste, prevent retail and manufacturing waste and improve packaging design. In terms of results, Courtauld 1 saved 670,000 tonnes of food waste and 520,000 tonnes of packaging waste, equivalent to 3.3 million tonnes of CO2e and £1.8 billion; Courtauld 2 reduced household waste by 3.7% and supply chain waste by 7.4%. The Courtauld Commitment 2025 aims to reduce water, waste and carbon associated with food and drink by 20 percent by 2025 (WRAP 2020).

The Waste Framework Directive obliges EU member states to takes measures to monitor and limit their food waste, putting food waste prevention at the top of the waste hierarchy (2008/90/EG). 2018, EU presented an amended directive where it is noted that member states should provide measures to promote prevention and reduction of food waste in line with the 2030 SDG’s, including economic instruments for application of the waste hierarchy (PE/11/2018/REV/2). A recommended example is fiscal incentives for food donation.

Additionally, from 2023, it states that member states will be obliged to separate and collect their food waste (ibid.).

There have been EU initiatives around food waste since 2012. The project FUSIONS was run between 2012 and 2016 and established a European Multi-Stakeholder Platform to find a shared vision and strategy to prevent food loss and waste throughout the supply chain (FUSIONS 2016), where the final recommendations were a common definition and standardized method of measuring food waste (Vittuari, Azzurro et al. 2016).

In 2015, the European Commission adapted the Circular Economy Action Plan (EU 2019a). One part of the plan is the EU Platform on Food Losses and Food Waste, focusing solely on reaching Target 12.3.

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2.1.2 Sweden

Based on the findings of the literature review, research around Swedish retailers’ food waste reduction started to appear around ten years ago through studies such as Initiatives on prevention of food waste in the retail and wholesale trades (Stenmarck et al. 2011) and Minskat matsvinn från livsmedelsbutiker - åtgärder och deras effekter på miljö och ekonomi [Reduced food waste in food retail – initiatives and associated environmental and economic effects] (Eriksson och Strid 2013), a project carried out between 2010 and 2013 by Svenska Lantbruksuniversitetet (SLU) [Swedish University of Agricultural Sciences].

In 2010, Svenska Miljöemissionsdata (SMED) presented the study Från jord till bord [From soil to table], the first one in Sweden to include data on total national food waste (Jensen et al. 2011). In 2014, the first scientific report to include food waste in different sectors, such as the food industry, restaurants and households, was published (The Swedish Environmental Protection Agency 2014).

In 2012, Samverkansgruppen för minskat matavfall (SaMMa) [Collaboration Group for Reduced Food Waste], a network for authorities, researchers, interest organisations and actors from supply chain, was launched. The primary purpose of the network was to provide a platform for the participants to exchange information and experience around the issue of food waste (SaMMa 2012).

In terms of government initiatives around food waste, two projects have been carried out by Livsmedelsverket [the Swedish National Food Agency], Jordbruksverket [the Swedish Board of Agriculture] and Naturvårdverket [the Swedish Environmental Protection Agency], presented in two different reports: En bra start – Slutrapport – Regeringsuppdrag för minskat matsvinn 2013-2015 [A good start – Final report – Governmental operation for reduced food waste 2013-2015] (the Swedish National Food Agency 2016) and Fler gör mer – Handlingsplan för minskat matsvinn 2030 [Action plan for food waste reduction by 2030]

(The Swedish National Food Agency 2018). After adapting Target 12.3, En bra start laid the groundwork for a long-term strategy to halv Sweden’s food waste, by emphasizing the importance of collaborations between actors in the food supply chain, and communication of the goal of halving food waste to the food industry and consumers. Fler gör mer is an action plan for different actors in the supply chain, including needs and proposals for action in areas such as target setting, collaborations, agreements, expiration dates and logistics (The Swedish National Food Agency 2018).

Particularly important for this study are the conclusions on contributions to Target 12.3, presented in the report Resurseffektiv livsmedelssektor i Sverige - Mätning av matsvinn och övrigt matavfall [Resource efficient food industry in Sweden – Measuring of food waste] by IVA (2020). The report proposes a framework for measuring waste; it concludes that prevention of food waste and redistribution to humans are the only initiatives that contribute to Target 12.3. In other words, all food and drink that could, but is not, consumed by humans is considered food waste (p. 46). This framework is supported by IVL;

the institute launched a voluntary agreement in February 2020, to reduce food waste in the supply chain through those specific initiatives: prevention of food waste and redistribution to humans.

Because of WRAP’s success with The Courtauld Commitment, in 2019, WRAP involved in the process of creating the above-mentioned voluntary agreement for the Swedish food industry led by IVL (IVA 2020). In addition to WRAP, IVL worked together with Statistiska Centralbyrån

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[Statistics Sweden] (SCB) and around 20 different suppliers, retailers, research and interest organisations, to create a proposal on a voluntary agreement for the Swedish food industry. The work resulted in the launch of Samarbete för minskat matsvinn [Collaboration for food waste reduction] in February 2020, a voluntary agreement that includes three components: i) targets for reduced food waste, ii) food waste data gathering, aligned with IVA’s framework iii) forum and working groups in which actors from the whole supply chain will be brought together to discuss and implement cross-sectorial initiatives (IVL 2020). In addition to this, actors joining the agreement will be provided knowledge from successful projects and a platform where they can raise their voices and market themselves (IVL 2020). The retail interest organisation has not yet signed the agreement;

however, during an interview, the sustainability manager of interest organisation stated it is only a matter of time until it signs (F Ekander 2020, personal communication, 23 March).

Figure 1 present an overview of important initiatives and reports around food waste at global, EU and national levels.

Figure 1. Important initiatives and reports around food waste (Sörme et al., 2019 and IVA 2020).

2.2 The food and drink material hierarchy

This section presents a widely adopted waste hierarchy for food waste management, as well as a revised version used for the study.

The objective of a waste hierarchy is to minimize the impact on the environment made by waste management (FAO 2016; 2008/98/EC; WRAP 2020; IVA 2020). Therefore, the order of prioritization in the hierarchy is based on factors such as level of resource efficiency and level of value creation related to a certain destination, where material removed from the food supply chain is directed (IVA 2020). In practice, the waste directive affects all businesses and organizations that produce or handle waste (including importing, producing, carrying, keeping, treating or transporting waste). Furthermore, the EU directive states that member states should take actions to favour alternatives giving the best results for the environment as a whole. Because of this, EU Member States are allowed to take different approaches of implementing the hierarchy to practice if there is evidence of better environmental outcome. However, in the revised version of the EU Waste directive, it is stated that actions aiming at human consumption should be encourage over animal feed (PE/11/2018/REV/2).

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There is currently no EU legislation on how the hierarchy should be applied on the food sector (European Court of Auditors 2016). Though, the waste hierarchy applied to the food and drink industry by WRAP (2020), is often regarded as a positive example, as seen in figure 2. The options are displayed in falling order, with the most favourable option at the top. As figure 2 illustrates, the most preferable choice is prevention of food waste including redistribution of surplus food to humans and sending it to animal feed. However, as mentioned in section 2.2.3, in the suggested national framework for Sweden by IVA, it is proposed that all food and drink that could, but is not, consumed by humans should be considered food waste (IVA 2020, p. 46). This is supported from an environmental perspective since food produced for humans generally demands more resources through production and handling than originally produced animal feed; hence, waste is prevented if it is reduced at its source or used for its intended purpose, i.e. eaten by humans (Eriksson 2015).

Figure 2. Food and drink material hierarchy (WRAP 2020).

2.2.1 The revised food and drink material hierarchy

This study applies a revised version (seen in figure 3) of the food and drink material hierarchy and only includes certain initiatives for investigation, due to the following arguments. First of all, the destination landfill is removed from the hierarchy since it is not allowed by Swedish law (IVA 2020). The destination animal feed is excluded as one of the most preferable options since according to IVA (2020), it does not significantly contribute to Target 12.3, which is supported in the in the updated EU directive from 2018 where food donation and redistribution for human consumption is explicitly encouraged over animal feed (PE/11/2018/REV/2). The remaining initiatives for investigation are therefore, as defined by WRAP (2020), prevention of food waste including redistribution to humans.

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However, as a result of an applied economic perspective, there are certain changes to the concept names. From an environmental perspective, food waste is prevented as long the food is never produced or if it is used for its intended purpose (to be consumed by humans); from an economic perspective, selling food at a reduced price is a loss of money and thereby, a waste (Eriksson 2015).

Given retailers are profit driven businesses, in this study, prevention of food waste is viewed from an economic perspective and thereby only refers to the initiative that reduces food waste at its source (without any financial loss for the retailer). Furthermore, valorization of surplus food refers to price reduction, conversion and donation that ensure that food is consumed by humans (disregarding any possible household waste) (Eriksson 2015). Finally, since the term prevention is used differently in the revised hierarchy, the initiatives for investigation in this study are commonly referred to as food waste reduction, as illustrated by the vertical arrow in figure 3.

Figure 3. Revised Food and drink material hierarchy.

To conclude, this study aims to investigate barriers and incentives for the waste management initiatives prevention of food waste and valorization - price reduction, conversion and donation - of surplus food, and to understand how they are prioritized and integrated in activities in Swedish retail.

2.3 Swedish retail

This section focuses on Swedish retailers as a part of the food supply chain. For food waste minimization, the retail sector is of key importance; retail stores connect with producers and consumers, and collect large amounts of food in a limited, clearly defined number of places, why retailer food waste reduction initiatives have major implications (Schӧnberger et al., 2013;

Cicatiello, Franco et al. 2017). This section provides an overview of the current situation of the Swedish retail sector, including levels of retailer food waste. Also, it presents previous research on

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food waste drivers and related barriers as well as descriptions of the investigated food waste reduction initiatives: prevention, price reduction, conversion and donation.

2.3.1 Food waste levels

The most previous statistics from The Swedish Environmental Protection Agency shows that in 20181, just over 1.3 billion tonnes of food waste2 was generated in Sweden, corresponding to 133 kg per person (The Swedish Environmental Protection Agency 2020).

According to The Swedish Environmental Protection Agency statistics, 81 percent of Sweden’s total food waste is generated in the consumption step, where households alone account for as much as 70 percent. Globally, food waste is more evenly distributed throughout the supply chain, with the largest amounts generated in primary production (BCG 2018). The six steps of the supply chain, as proposed by IVA (2020, p.29), is visualized in figure 4, showing all possible steps for food from primary production to consumer, includes export and import of products. However, the focus of the study is the Swedish retail trade; the barriers and incentives for food waste reduction at retail level.

Figure 4. Livsmedelskedjans sex steg (IVA 2020).

1 Statistics for the food processing industry are from 2016 (The Swedish Environmental Protection Agency 2020).

2 In Swedish matavfall, which includes unavoidable and avoidable food waste, separated at source and in residual

waste, and food waste poured out in household drains (The Swedish Environmental Protection Agency 2020).

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The food waste in the retail trade corresponds a total of 100 000 tonnes or 10 kg per person.

Figure 5 illustrates retail food waste in 2012, 2014, 2016 and 2018, in total and per person.

Figure 5. Food waste in Swedish food retail 2012, 2014, 2016 and 2018 (rounded numbers). (The Swedish Environmental Protection Agency 2020).

Between 2016 and 2018, according to The Swedish Environmental Protection Agency statistics, there was a remarkable increase in retail food waste. During the same period, the method for estimating retail food waste changed and therefore, it is impossible to draw conclusions about food waste trends. Until 2016, retailer food waste was calculated based on three sources: municipal food waste records of weight-based tariffs, sample analysis and SCB’s corporate employee register.

This, to estimate the market total of food waste in retail. Since 2016, food waste data is instead reported directly to The Swedish Environmental Protection Agency from a number of voluntary retailers, where total market food waste is calculated based on the market shares of the reporting chains. Although it is impossible to draw any conclusions about food waste trends, the estimation from 2018 is regarded more accurate than before; previous estimations of retail food waste have most likely been underestimations (The Swedish Environmental Protection Agency 2020, p. 17).

Clearly, this motivates investigation of initiatives for food waste reduction in the retail trade.

2.3.2 Waste drivers and related barriers

The report Food losses and food waste - Extent, underlying drivers and impact assessment by Teuber and Jensen (2016) highlights the economic mechanisms that generate food loss and waste (FLW) in the supply chain. For retailers, fruits and vegetables and bread and bakery products constitute the largest share of FLW in tonnages, whereas the most important products in monetary terms, with lower levels of waste, are dairy products, fresh meat, cold cuts and ready meals (p.3).

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Research by Eriksson et al. (2014) shows how product shelf-life is related to retailer food waste:

longer shelf-life is associated with decreased waste, but only for products with low turnover3. While products with short shelf-lives (less than two weeks) such as fruit, vegetables and meat, tend to have high levels of waste, products with long shelf-lives (more than two months) have very low levels of waste. However, products with short shelf-lives and a stable demand that are relatively unaffected by weather, seasonality and promotions, e.g. milk, have low levels of waste. In other words, the study shows that food waste is negatively correlated with turnover and shelf-life.

Furthermore, it highlights turnover as the most important factor for explaining differences in waste between different products.

Therefore, a major challenge for retailers is to order the right amount of products, given variability in demand. Firstly, retailers assume that consumers expect fresh products, e.g. fruit and vegetables and bread, to be available at all times and therefore, to avoid running out of stock, they overstock (Monier et al. 2010; Priefer et al. 2013; Canali et al. 2014). Sörme et al. (2019) confirms that ordering right amount of products is challenging due to unpredictability in demand. Secondly, retailers’ will to increase their sales possibly generates increased levels of waste. As they strive to sell more, they need to order more, and hence, the risk for waste increases (Sörme et al. 2019).

Furthermore, the human factor has been highlighted as a driving force for waste when it comes to product ordering by Lebersorger and Schneider (2014), as well as for handling of expiration dates, routines and cold chain management raised by Stenmarck, Hanssen et al. (2011).

Another aspect of the current retailer business model that generate waste is campaigns. In fact, waste is generated both at consumers, who buy more than they need, and in store, as retailers have a hard time predicting sales of campaign product and regular assortment. Retailers operate under high levels of competition and use campaigns to attract consumers (Sörme et al. 2019).

Expiration dates, “best-before-dates”, is a factor that drives retail waste. Although it is legal to sell products after their expiry in Sweden, most retailers decide not to sell those products due to reputation or because of product liability and hence, products probably totally safe to eat are thrown away (Canali et al. 2014). In interviews, retailers have expressed the wish that authorities engage in setting expiration dates, as they believe suppliers lack incentives to set expiration dates that reflects the actual durability of products (Sörme et al. 2019).

Moreover, certain drivers for waste derive from consumer attitude and behaviour, and retailer belief on what is required to satisfy customer demand. According to Sörme et al. (2019), retailers believe that full assortment and shelves are required for satisfied customers and good sales.

Interviewed retailer representatives and experts state that today, it might not be valid for all, but parts, of the retail trade. This perceived customer demand results in large areas of exposure where there is increased risk for damages. As an example, it is reported that occasionally, as much as a third of fruit and vegetables are wasted (ibid., p. 49).

3 In this study, turnover refers to sold items per time; hence, it is not equal to economic turnover (Eriksson et al., 2014).

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Aesthetic standards are another reason for food waste at the retail level; retailers assume consumers require aesthetic perfection and will base their store choice on the perfection of fruit and vegetables (Priefer et al. 2013; Canali et al. 2014). Interview findings with retailers conclude that consumers, by routine, choose products with the longest expiration date, and the most perfect looking fruits and vegetables; naturally, this behaviour generates food waste in-store as many products are neglected by consumers (Sörme et al. 2019, p. 50). However, in terms of aesthetic standards, it is important to note that they most probably have a stronger impact on previous stages in the supply chain, primary production in particular. This is due the fact that products that not fulfill the standards do not reach the retail stage (Cicatiello, Franco et al. 2017, p. 37).

The Swedish Environmental Protection Agency (2018) states that more often than not, legislation itself is not generating retail food waste but rather, there is lacking knowledge on how to interpret the rules in a way that reduces food waste. However, interviews with Swedish retailers by Sörme et al. (2019) conclude that rules do generate waste and halter prevention actions. As an example, rules on the provision of food information4 challenge the initiatives where retailers cook food with surplus food, and sell it in packages in the store. Retailers are obliged to provide a declaration of content, which is more time-consuming than what earnings of the meal allow. Another example is that it is no longer allowed to sell chicken that has been grilled and then cooled down, or freshly delivered fish that later has been frozen in store. Furthermore, the current rule for temperature in the cold chain generates waste (Sörme et al. 2019).

2.3.3 Reduction initiatives

This section presents the reduction initiatives investigated in the study: food waste prevention and price reduction, conversion and donation of surplus food. As mentioned, they are chosen as they are considered to contribute to Target 12.3 (IVA 2020). To provide an overview of the initiatives, figure 6 illustrates the investigated initiatives in relation to the waste hierarchy and how product quality corresponds to different initiatives. To fit the focus of this case study, the framework is an adapted version of the waste management framework by Eriksson (2015).

4 Rules on the provision of food information to consumers is regulated by Regulation (EU) 1169/2011. Additional information about food that is not pre-packaged is regulated in The Swedish National Food Agencys föreskrifter LIVSFS 2014:4. https://www.the Swedish National Food Agency.se/produktion-handel--

kontroll/livsmedelsinformation-markning-och-pastaenden/regler- om-livsmedelsinformation-och-markning

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Figure 6. Revised version of Eriksson’s (2015) waste management framework

2.3.3.1 Food waste prevention

Food waste prevention in this study is defined from an economic perspective, as raised in section 2.2.4. From this approach, selling food at a reduced price, when it was not the original purpose, is considered as waste since money (the original value of the product) is lost (Eriksson 2015).

Therefore, all actions being made for preventing waste, before interfering with the value of the product in terms of changing its price, is regarded as food waste prevention actions.

A key action for food waste prevention is order optimization through adequate demand forecasting and inventory management (Canali et al., 2014; Sörme et al. 2019). In accordance, Teuber and Jensen (2016, p. 38) identify adequate demand forecasting and product ordering as some of the major drivers for food waste and thereby, claims there is incentive to exclude the human factor from these processes and use systems that do the demand forecasting based on historic performance.

However, regardless of how well optimized the order systems are, manual routines in store are also of importance for minimizing waste. Successful food waste prevention requires correct handling of products, which in turn requires the appropriate engagement and attitude from staff.

This can be enabled by keeping staff long-term, educating staff on how to identify and prevent food waste and rewarding reduced food waste (Lebersorger and Schneider 2014; Teller, Holweg et al. 2018).

Furthermore, prevention can be achieved by consumer information around food waste and quality of products e.g. approaching the best-before-date, which may have effect both on consumer and

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retailer waste levels. Interviews with Swedish retailers (Sörme et al. 2019) conclude that there has been a change in consumer attitude over the years; today, consumers are more environmentally aware and e.g. willing to buy products close to expiry; however, their wish for certain quality is still a challenge for tackling food waste. Therefore, there is still need to spread awareness to consumers on correct handling of products, possible uses of suboptimal products, and expiration date implications (Cicatiello, Franco et al. 2016).

According to Filimonau and Gherbin (2017), store autonomy can enable appropriate prevention actions. While corporate policies might impact size and frequency of delivery by suppliers and impose strict adherence to internal health, safety and quality control standards, flexibility on the ground can allow retailers to make more rational decisions based on local conditions.

2.3.3.1 Price reduction

In this study, selling food at a reduced price is considered waste since money is lost (Eriksson 2015). However, physical food waste can still be avoided, where price reduction aiming at getting products sold before due date is an applicable method. Based on this reasoning, selling food with a 50% price reduction due to an approaching best-before date results in avoidance of food wasted but imply a partly wasted value of the product. This type of action can be classified as reducing waste through economic valorization according to Eriksson (2015), as presented in the adopted food waste hierarchy in section 2.2.4.

In particular, retailers offer price reduced products close to their best-before-date. By reducing price of products approaching expiry, surplus products can be prevented from ending up as waste.

Consumer attitude plays a major role when food is about to expire and retailers state that historically, consumers have been reluctant towards red prices tags (for reduced price) as they have implied lower quality of products. Today, consumers are more positive towards stores tackling waste and therefore, consumers chose red price tacks because they feel they do something good (Sörme et al. 2019, p. 49).

According to Hooge, Oostindjer et al. (2017), consumers buy suboptimal products when there is a reduced priced that fits the suboptimality. Suboptimal products are defined as products that deviate from normal products based on i) date labelling close to or beyond the best-before-date;

ii) appearance standards, e.g. shape, size or weight; iii) packaging, e.g. torn wrapper, without deviating from safety or intrinsic quality. Applying price reduction can positively affect consumer attitude and hence, prevent surplus food to become waste.

2.3.3.3 Conversion

In this study, conversion refers to the action of converting surplus food into new food products, either performed by retailers themselves or in cooperation with production facilities. Conversion might extend shelf-life, and make the food sellable, or open new markets. The method is scarcely evaluated in literature, but many initiatives are developing (Eriksson and Spångberg 2017).

As mentioned, conversion of food can be performed by retailers running kitchens, where surplus food is used to prepare meals either to be sold in restaurants or as packaged food. This work is

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challenged by the fact that retailers are obliged to provide a declaration of content, consuming much time.

Another way for retailer to convert surplus food is to collaborate with production facilities. One example from Sweden is a pilot project for conversion of fruits and vegetables to jam, between a producing organisation and two retailers. Fruits and vegetables of adequate quality, not considered sellable, was sorted out by the retailers and collected occasionally by the producing facility, in accordance with the production capacity. After production, the chutney was transported back to the retailers and sold under its own brand, considered to directly compete with other brands.

Hence, it replaced the production of other chutneys with similar ingredients (Eriksson and Spångberg, 2017). Similarly, examples from the UK presented by Facchini et al., (2018) are Snact, a social enterprise producing fruit jerky from fruits donated by wholesalers, and Juice Cube, producing juice from fruits and vegetables donated by wholesalers and local retailers.

2.3.3.4 Donation

Food that is still adequate for consumption but remains unsold by retailers and is collected and redistributed to people in need is in the study defined as donation of products, supported by FAO (2019) as a measure used for avoiding food waste.

Donation, or redistribution, of surplus food from retailers can be done in two different ways:

either via redistribution centers’, so called food banks, to end users, often charity organisations; or directly to charity organisations. Although donation offers a cost-effective way of food waste prevention, currently, the Nordic region is under-financed and lacks an organised system. Since most charities see the need for donations, there is great potential to expand the food donation in all Nordic countries (Teuber & Jensen 2016). Regardless of the structure around the donations, they are dependent on logistics (Hermsdorf, Rombach et al. 2017).

For both converting and donating surplus food for human consumption, retailer actions are affected by the products’ ease of recovering surplus food and depends on the required management intensity as well as intrinsic recoverability of the surplus food. Findings from a case study in Italy indicate that the required management is often significant (Garrone et al. 2014).

Therefore, it is likely to believe that systems. e.g. logistics, that decreases the required management intensity also increase incentives for retailers to engage in conversion and donation of surplus food.

2.4 Retailer incentives for food waste reduction

The financial incentives - the business case - for reducing food loss and waste, as presented in this section, applies to all actors in the supply chain, but will be used in this study to understand and analyse incentives for retailers specifically. Also, the economic case motivating public intervention is relevant for several stages of the supply chain, but will be used to identify opportunities for increased incentives for retailer food waste reduction.

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The business case is based on the idea that there are net benefits for actors from reducing food loss and waste; the initiatives involve costs, implying that rational actors will go through with the initiative to reduce food loss and waste only if the benefits outweigh the costs (FAO 2019). The report by Champions 12.3 analyses the financial case for businesses’ food loss and waste reduction, by studying 1200 businesses in 17 developed and developing countries. It is concluded that over 99 percent of the businesses earn a positive return on investment, where the financial return on investment for the median site is 14-fold. Furthermore, the report concludes, since costs are related to specific initiatives and products, it is more straightforward to estimate the costs of food loss and waste reductions than valuing the benefits (Hanson and Mitchell 2017).

The potential benefits relate to direct financial, environmental and food security benefits. If the value of food saved is less than the cost, there is no financial gain from reducing food loss or waste. However, the environmental and food security benefits (or social benefits) might increase incentives for businesses and governments to intervene (WRAP 2015). The financial benefits can be measured in cost reduction from reduced production of food and disposal of surplus food (Ellison, Muth et al. 2019). The environmental benefits might derive from e.g. reduced usage of resources and emissions from production and transportation, and measurement needs identification of the environmental benefits deriving from the initiatives as well as a method for valuing the improvements (FAO 2014). Food security benefits relate to both short-term and long- term sustainability issues. In the short-term, some gains come from redistribution of surplus food (Gundersen and Ziliak 2018; Lusk and McCluskey 2018); in the long-term, gains come from ensuring sufficient water, land and other resources for producing food for a growing population (Kummu et al. 2017; Martin 2018). Either case, new methods and metrics are required for estimating a value of improved food security (Ellison, Muth. et al 2019).

For businesses, consumers, and governments, the potential costs involved in the initiatives for reduced food loss and waste result from direct expenditures and opportunity costs of time and initiative. Among the direct expenditures for retailers are systems to track waste, technologies to store products, repackaging and redistribution of surplus food. If retailers run out of products due to food waste initiatives (e.g. smaller order amounts), it will result in a sales reduction (Ellison, Muth. et al 2019).

According to FAO (2019) there are diminishing returns to investments for reduced food loss and waste; while early reductions are relatively inexpensive, the cost increases for each additional reduction. For example, in retail, staff training may be effective and affordable to reduce food waste to a certain extent, but more costly investments in e.g. new technology might be required to tackle remaining waste. Furthermore, in general, supply chain actors seem to spend more time and money to reduce food loss and waste of products at higher price levels; for products with lower prices, actors may produce or buy more instead of taking (costly) prevention actions.

2.4.1 Aspects limiting incentives

In theory, actors in the supply chain make rational decisions – including decisions on acceptable levels of food loss or waste – that maximize their profits. From this perspective, it makes economic sense for actors to allow for certain levels of food loss or waste. However,

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there are numerous factors affecting stakeholders’ cost-benefit analysis of initiatives to reduce food loss and waste. The lack of awareness on benefits and costs of reduction initiatives may prevent stakeholder from taking rational decisions on optimal levels of food loss and waste. In addition to this, the analysis is determined by the private and social context, including the available physical and financial resources. Therefore, even if stakeholders have right awareness about the problem and the potential business case of reducing food loss and waste levels, the constraints might discourage action (FAO 2019).

Furthermore, there are market failures5 that inhibit individual actors from behaving optimally from a social point of view (Anríquez et al. 2019). One example of a market failure is the lack of reliable information about choice options and their associated impacts – bounded rationality – that might result in higher levels of food losses and waste than if the decisions were indeed perfectly rational (Segré et al. 2014). Market failures can either result in decisions optimal from an individual perspective, nonoptimal for society, or prevent adoption of e.g. practices or technologies that would serve in the individual’s best interest. Secondly, negative externalities can be ignored, which means that actors, as they strive to maximize profit, do not take the impact on the environment, such as GHG emissions, into account (FAO 2019).

2.4.2 Public intervention to increase incentives

Public interventions are motivated by the economic case for reducing food loss and waste, which includes gains for society at large and increases the well-being in three ways. Food loss and waste reduction may i) improve productivity and thereby contribute to economic growth; ii) improve the food security of the most food insecure; iii) help mitigate pressure on land and water resources and GHG emissions (FAO 2019). As presented in the previous section, following factors affect actors’ decisions on food waste reduction: lack of awareness of business case; physical or financial constraints; and market failures, such as the ability to ignore negative externalities. Here, incentives for food waste reduction can be increased though public intervention.

Public interventions are needed when there is a discrepancy between societal gains (the economic case) and individual incentives (the business case) to either, through nudging, convince individual actors of the benefits of reducing food loss or waste, or modify the incentives. Firstly, actors may lack awareness on food loss and waste, which prevents them from making rational decisions, and must be convinced of the business case on food loss and waste. Secondly, even when there is a clear business case for reducing food loss and waste, financial constraints might hinder stakeholders to implement actions. Therefore, unless the public sector helps suppliers and consumers to overcome these constraints or modifies the incentives, the society loses out (FAO 2019). Thirdly, individual actors do not take the negative implications of their decisions on food loss and waste on society at large – the negative externalities – into account. Although a certain level of food loss and waste makes sense to individuals, it has negative effects on the well-being of society. Especially in terms of environmental and food security sustainability, negative externalities are significant, strongly motivating public intervention (Shafiee-Jood and Cai 2016;

FAO 2019).

5 The situation when markets allocate resources inefficiently (Gravelle and Rees 2004).

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Nudging actors towards an existing business case is attractive to policymakers because they generally entail relatively low costs to the financial benefits. To exemplify, in the United Kingdom of Great Britain and Northern Ireland, the “Love Food, Hate Waste” campaign by WRAP led to a 21 percent reduction in food waste in households and increased product shelf life and reduced product loss in retail from 2007 to 2012. Another awareness raising campaign in Denmark by the Stop Wasting Food movement resulted in a food waste decrease of 25 percent between 2010 and 2015 (Hanson and Mitchel 2017).

Although the initiatives had substantial accomplishments, the results indicate that the business case only can provide a part of the solution. This is confirmed in a study by ReFED (2016), analysing the financial value to businesses and economic value to society of prevention, valorization and recycling solutions. The study concludes that relying exclusively on business case for reducing food loss and waste will not be successful in the United States of America. Although the study cannot be generalized to other countries, its findings suggest that initiatives implemented based on pure business considerations are unlikely to solve the problem.

Therefore, in order to achieve Target 12.3, there is an important role for the private sector to play through taxes, subsidies, investments and regulations; governments can significantly contribute to food loss and waste reduction by addressing the indirect drivers for food waste. This includes improving infrastructure through public-private partnerships, providing financial incentives for reduction through taxes, subsidies or exemptions, or issuing regulations. As an example, the Tax Reform Act in the United States of America provide food donation tax deductions and has created a stronger business case for valorization of surplus food (ReFED 2016, Harvard et al. 2016).

Lastly, public-private partnerships can be of different types, such as public financial support in the form of loans, insurance or grants to businesses or non-profit organizations, or consultative partnerships relating to policy development and planning. Evidence from Asia-Pacific Economic Cooperation (APEC) countries of public-private partnerships for food loss and waste reduction have identified knowledge sharing, improved project performance and policy as the most important advantages of public-private partnerships. The most common type of partnership is public financial support, used by two-thirds of the APEC governments. The APEC members agree that the partnerships enable savings, foster connections between stakeholders and improve quality of food waste data (APEC 2018).

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3. Methodology

This chapter explains the framework of the methodology used for answering the research questions. First, the scientific research design and approach are described and motivated. After that, data collection including literature review and empirical data is outlined, followed by a description of the data analysis procedure. Lastly, a critical evaluation of the research method including possible inaccuracies is presented.

3.1 Collaboration partner

The thesis was conducted in collaboration with the company Whywaste, which provides the digital tool Semafor for retailers to keep track on expiration dates. See appendix 1 for details around the tool. The collaboration did not aim at evaluating the tool; rather, providing information on retailer barriers, and possible opportunities for Whywaste to enable future retailer food waste reduction.

3.2 Research design and approach

The thesis was conducted with an abductive approach as a mix of inductive and deductive processes. Hence, the methodology is characterized by the interplay between theoretical and empirical reflection as described by Alvehus (2013). It was early on decided to study the issue of food waste since it is an important subject for the authors of the thesis. As a result of the collaboration with Whywaste, working with retailers, the retail sector was evident to study. It was also made sure that expectations on the study by the two main stakeholders, KTH and Whywaste, were aligned. Initially, a synoptic literature study was conducted on food waste reduction challenges in retail, and reviewing suggested areas for further research to bear in mind during the interviews. This, to evaluate whether theories and suggestions were relevant for the specific study on Swedish food retail, with reservation to adjust the focus of the study depending on empirical findings. This procedure aimed at exploring actual prevailing challenges raised by the Swedish retailers. Hence, the method was weightily inductively conducted, as described by Randall et al.

(2012), searching for patterns from empirical observations and developing theoretical explanations based on the findings, in comparison to existing theory. Existing theory was used as a guiding lens to formulate the research questions and to develop better understanding of the findings.

Consequently, the research was conducted in an exploratory nature with iterative analysis of empirical data combined with reviewing theoretical studies related to the finding. By combining collection of empirical data and examination of existing theory, as viewed in figure 7, a broader understanding of the studied phenomena was provided, which facilitated knowledge to answer the research questions. The double pointed arrows illustrate iterations.

Figure

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References

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