Series 3 Episode 9
The Egg Waste Problem: Measure it before you can manage it
Eggs don't look like a big loss problem. Look closely at the numbers and the picture changes.
In this episode of Sell More Lose Less, Colin Peacock is joined by food waste expert Richard Thalemann to ask why so much egg waste goes unrecorded, and what retailers can do about it.
They cover the rule that forces a whole box to be binned when a single egg breaks, the £2 million a year one retailer puts against it, and the merchandising habits, top shelves and floor-standing shippers, that quietly drive breakages. They also look at why markdowns and confusing date codes push shoppers to waste eggs that are still perfectly good, and why eggs past their sell by date can still be donated.
The message for retailers is simple: measure the problem properly before you try to fix it.
Podcast summary
Egg waste is one of those retail problems that hides in plain sight. It rarely tops the loss reports, yet the true cost is bigger than the figures suggest, because so much of it is never recorded. In this episode of Sell More Lose Less, Colin Peacock is joined by Richard Thalemann, the food waste expert supporting ECR Retail Loss and a 30 year veteran of Tesco and retail, to look at why eggs waste more than retailers think.
The conversation starts with a rule that surprises many people. Under European and UK legislation, if one egg breaks inside a box of six or twelve, in theory the whole box has to be destroyed because of the salmonella risk. One retailer put a figure of £2 million a year against the problem. From there, Colin and Richard explore what drives egg breakages and keeps them off the books, from messy clean-ups that disappear into food waste and shrink, to merchandising on top shelves and floor-standing shippers. They also question how markdowns and confusing date codes push shoppers to waste eggs that are still good, a theme picked up in ECR research on embedded date codes and the true cost of unsold food.
Egg waste in retail: the full conversation
Why eggs waste more than the data shows
COLIN:
In this episode I’m talking to Richard Thalemann. He is the food waste expert supporting ECR Retail Loss, with 30 years of experience in food waste at Tesco and in retail. Today we’re looking forward to a conversation about eggs.
Eggs, you say. We ran a pre-meeting survey on eggs, and in truth the results didn’t put eggs right up there as a big problem for most retailers in terms of food waste or loss. At the opposite end of the scale would be bananas, which we covered in a previous episode. Even so, more than 20 retailers were interested enough to join the meeting and complete the survey. We looked at the root causes and then talked about what the interventions might be.
One angle we came at this from is the legislation, European as well as UK, that if one egg is broken within a box of six or twelve, in theory all those eggs have to be destroyed because of the risk of salmonella. One retailer stated they were losing £2 million a year on this problem. It might be very small as a percentage of sales, but it’s a big number, and it certainly generated discussion with the retailers. So, Richard, to take us through the findings and what you know about egg waste, what have you written down?
RICHARD:
Yes, it was an interesting conversation. Years ago, if you had broken eggs, you would take them out, put them in another box and sell them on. You can’t do that now. It is crazy, the amount of eggs being thrown away because one egg has smashed in a carton. There’s the legislation we talked about, so maybe that will change in the future, but for now it doesn’t.
There was also some talk about people not believing it was a big issue, not a big number for waste. A lot of that came down to the fact that nobody really wants to clear up egg waste. It’s an incredibly messy, sticky job. When that happens there’s a lot of shrink. People don’t want to deal with the mess, so they just throw it away, and then it comes out in shrink. One retailer had combined shrink and waste on eggs for that very reason. Meanwhile, other retailers may not really be looking at it. When they pull the numbers on egg waste it can look relatively small, because of that.
COLIN:
So it’s a recording issue. In the language of the ECR language police, that’s generally known as unknown loss. It’s the stuff you find about a year after it’s happened, when you do your stock take.
RICHARD:
That’s correct. I should have corrected that for the other markets, where they describe shrink as waste.
How merchandising drives egg breakages
RICHARD:
The interesting thing that came out is around packaging and merchandising, and merchandising is a real key factor. You have cases of eggs merchandised on top shelves. I remember in my time in retail, boxes of eggs on the top shelf, the whole bay, and you’re having to lift them above your head. That’s an incredibly difficult thing to do, and they’re not the sturdiest of boxes, because the cartons move around inside. So you get damage from that. You’re also expecting every customer to be tall enough to reach that top box. That in itself causes waste.
One of the bigger ones I always see is these shippers of eggs, where you rip the front of the shipper off and grab the eggs. For some reason we always end up with people pulling eggs out from underneath the bottom ones. There’s a layer of cardboard between them, but people still pull from the bottom. I can only assume it’s a customer habit, because they’re used to pulling better date codes from the back of the shelf or the bottom. But in a shipper they’re all the same date code. So you get this tipping effect. Someone pulls eggs from the bottom, and it only takes a matter of time before the boxes at the top start falling down. Then you have smashed eggs at the top, and if there are no colleagues around to clear it up, it can start spoiling the ones nearby. Because these shippers are at the bottom, you also get trolleys smashing into the front, which causes damage and waste too.
COLIN:
Which we never look at.
RICHARD:
No, exactly. So there are lots of merchandising factors to consider, as well as the packaging.
Markdowns, date codes and shopper behaviour
COLIN:
On your point about repacking the eggs, that seemed to be problematic under European law. I have seen it done in practice in some retailers, so I don’t know how they get around it, and it doesn’t seem to be just the UK, it’s other countries as well. The point you make about shelf life is interesting. Surely we can teach shoppers a bit more about food waste, and yet we give eggs a long shelf life, and we start marking them down well before they would actually expire.
RICHARD:
I don’t have a note on the exact numbers, but you’re absolutely right. Not only do they have a long life anyway, we are marking them down. It’s one of the only products where you have those two dates, a sell by and a use by. Even when you buy them on the date they have to be sold by, you’ve still got a considerable amount of time to use them at home. So I don’t think there’s a shelf life issue for customers. But people still look at the date it was reduced by. They see a yellow sticker and they’re conditioned to think they’ve only got today to use it. That’s a difficult one to circumvent, because you can’t really change it without highlighting the dates in a better way. I remember they used to hide that. On bread there was a date with a number in brackets, and that bracketed number was the date you reduced it by. So it might say bracket three, and that was the day you had to sell it by, so consumers only ever saw the date it had to be eaten by, and the sell by date was hidden. That seemed baffling when I first came into retail, but looking back it makes sense.
Self-checkout, donations and the future
COLIN:
There’s a whole stream of thought, five hours of conversation, about shelf life coding and dates and how they’re communicated. The other thing we look at is losses on self-checkouts, particularly scan and go. Because the consumer habit is to open the box of eggs before they buy them, we often find in shopper audits that eggs are one of the top items, because people do that action and forget to scan. But the bigger point you raise is that perhaps there’s a bigger problem here, because we’re not recording it, because it’s difficult to record. And on donations, if you’ve got eggs that are past their date, they can still be donated, right?
RICHARD:
Past the sell by date, yes, because they’re still within the use by date. So they can definitely be donated. It’s a shame you can’t donate the ones that only have one broken egg in. They could make use of that. Let’s hope something comes in that can change that as legislation, because if other markets still do it, it’s just here that we’re not allowed. They’re probably one of the better things to donate from a charity point of view, because that’s exactly what people need, protein and something that lasts a bit longer than just today or tomorrow.
COLIN:
In terms of the future of egg waste, we’ve just got to get better at recording. That’s probably the main point retailers could take away from this podcast: check the true size of your problem.
RICHARD:
Yes, and on the damages due to merchandising, if we actually recorded egg waste properly, you’d probably find that shops with shippers, for example, have higher egg waste, and that would give you the answer to your problem. So the recording of egg waste is probably the key factor in understanding what’s actually going on.
COLIN:
So it’s about getting good data and then understanding the variation. Thank you very much, that’s really helpful. That ends our discussion of egg waste. I don’t suppose it’s something we’ll return to in the next 12 months, but if new data starts to emerge that links to the merchandising of eggs, that would be very good, because that’s something collaboration can act on. It’s interesting that we still keep eggs at ambient temperature. Over in America they have an additional problem, because the eggs are all chilled, so they go out of temperature. So at least we’ve got it simpler than the Americans across Europe on this particular occasion. Thank you so much, Richard, and we’ll see you next time.
