Ahold Sustainability Recommendations

Hunger remains to be one of most urgent sustainable development challenges of this time; yet on the flipside, the world is producing more than enough food for its entire population. One-third of the world’s food produced for human consumption is wasted every year, as per the latest report of Food and Agriculture Organization of the United Nations (FAO)^[1]. That is roughly 1.3 billion tonnes of wastes, amounting to USD 990 billion and 70% of which is coming from rich industrialized nations. On a per capita basis, consumers from Europe and North America are wasting up to 115 kg a year compared to 11kg a year from consumers in Africa and Southeast Asia. Clearly, there is a huge gap and mismatch in the production, consumption, distribution, and disposal of food across the world, creating a myriad of economic, social and environmental problems related to these wastes. [pic 3]

Supermarkets contribute a huge chunk of these food wastes, to the point where public outrage has forced these retailers to rethink their sustainability strategies and goals in the next five to eight years. While there are emerging good practices in sustainable retailing, it has barely made a dent in the hunger problem given that only an average of 2% of the wastes is being utilized to support charities^[2].[pic 4]

In this paper, the group focused on the case of Ahold Delhaize and how they are addressing and driving down food waste in their operations and support communities in need. Ahold Delhaize is a world-leading food retailer operating in the US and Europe with store formats include supermarkets, superstores, online grocery shopping, convenience stores, drugstores, wine and liquor stores. Food waste falls in the high impact on Ahold and mid-importance to stakeholders in the Materiality Matrix as per their 2016 Annual Report^[3].[pic 5][pic 6]

Development of Store Inventory and Customer Discount Portal [pic 7]

Wasted Food is the number 1 product entering landfills. The value of the food wasted globally is estimated to be between 162 and 218 Billion dollars annually. thus, we propose that Ahold Delhaize spend in the development of an online platform that will look at significantly reducing the amounts of food that reaches expiry date in their hands and is effectively wasted and ends in landfills.

The online and mobile marketplace will look at the disposal of these foods prior to their expiry date by automatically marking down the price and directing the consumers via Global Position Systems (G.P.S) location settings on mobile or online detailing the location of the stores where a consumer is likely to find the specific goods they are looking for.

Practically the Platform will consist of an enterprise resource planning (ERP) extension on the one side, and consumer-based applications on the other. Close-dated foodstuffs with a short remaining shelf-life are in the focus with a secondary focus on slow-moving consumer goods. These products shall be marketed beyond the store, and contrary to the usual practice, not end up in the bin. The platform will provide important food information to the consumer. Additionally, the platform will allow users to set personal preferences regarding food selection, the point of purchase and the providers will be able to adjust preferences and as well as push notifications. Given the diversity of the target market, the application will be designed in a manner in which availability of food is made easily understood just like use of traffic light signals. Once the consumer buys one discounted product, it is automatically entered into the ERP system by POS-scan and the product availability is updated in the app

Most retailers at this point already have moved towards Centralized procurement meaning that a centralized single department controls and manages the purchasing for the whole organization inventory and manages the product on the shelves. At this point, a manager oversees the purchasing department regarding what products need to be purchased and in what quantity, and where they need to go. Thus promoting food discounts automatically & in real time to local consumers.

We believe that in order to really address food waste issues from the retail perspective, we need a paradigm shift on how Ahold Delhaize procurement department operates. We believe that the development of this online platform is merely a start, to maximise the platform A-hold would need to develop and operate a centralized disposal team running parallel procurement team, thus creating an integrated procurement loop. The New disposal team utilizing the application will leverage the already existing ERP and POS-scan systems to track manage product expiry dates and potential discounts and the stores where these products are available.