S1 Ep 21
Supermarket bakery waste - Innovations in Loss and Waste Prevention
Bakery, whether it is bought in, or produced in the store is consistently an area of high loss and waste, often accounting for up to 40% of all the surplus food in any one supermarket.
This week Colin Peacock is joined by Richard Thaleman to discuss insights on new bakery planning systems and how to deal with false scans at self-checkout.
They explore how innovative tools are reducing bakery waste and how retailers are balancing loss prevention with customer convenience.
Podcast summary
Cleaned transcript
Introduction
COLIN:
Supermarket bakery waste is possibly the largest overall category of food waste in a typical supermarket, often accounting for 40% of the total food waste. And there’s only so much you can donate around bakeries.
So it’s a critical category to get right.
In this podcast, I’m joined by Richard Thailman, food waste advisor to ECR Retail Loss. We’ll be exploring and discussing the findings from our recent meeting, where several retailers presented innovative approaches that they’re taking to manage bakery food waste.
Setting the scene: In‑store bakeries
COLIN:
We had our session meeting, I think a week ago or so, and we were looking at in‑store bakeries specifically, the production area in the store.
Often supermarket bakery waste can account for about 40% of the food waste in a typical supermarket. So it’s a big area from a waste perspective.
Clearly, strategically it’s very important for retailers as well to get their bakery section looking great and smelling great.
We heard from a retailer to begin with who had just launched a new production planning process and production planning tool. That told the store what you should be baking at what particular time.
Then we heard another retailer talking about how, when in‑store bakery comes up against the self‑checkout, what sort of problems that can create, and what some of the interventions retailers were looking at.
So we saw the beginning and the end, so to speak. We looked at the whole thing, but with two retailers.
What were your takeaways on both of them?
Forecasting and substitution models
RICHARD:
Yes, two great presentations. One just eked into the other, so they all linked together, as you would imagine.
I’m always thinking back to prevention. Prevention is always the key to this. Especially with bakery.
Bakery has always been at the heart of freshness and abundance in retailers. Everybody expects it, especially at the beginning part of the day. So it’s important to get that right.
The first presentation we saw was on their forecasting and substitution model, which I thought was very interesting.
They had products grouped into subgroups. It depends on the type of range that you have, but I think they’re bang on having groups where, if it’s a white roll, it’s a white roll.
So when you get to a point where you don’t need to have full availability of everything, you can ensure that you’ve got one or two items from that subcategory still on sale.
However, I would say I’m not entirely certain at what point that kicks in. It certainly shouldn’t be early in the day.
We need to make sure that’s past the time where people are probably still buying bakery. Maybe sort of mid to late afternoon, and then dwindling it down. That would really help on waste, and I can see that.
So I thought that was interesting.
Behaviour in stores and forecasting compliance
RICHARD:
But I think you always go back to the problem of colleagues. Not a problem with colleagues as such, but colleagues will think that they know best in stores.
So, in some instances, when you have a forecasting model that tells you pretty much the same thing every day, you’ll start just doing the same thing every day and forget to look at the forecast.
I think that’s a challenge that nobody’s really quite grasped or got a handle on yet and been able to fix. So there’s still some way to go on that.
The substitution model I liked. I think it was a good option to have towards the end of the day.
I thought it was quite interesting that they were producing various reports. So if the system told you to make 10 yesterday and you made 20, you could then go back to the store and say, “Why did you do too few or too many?” And maybe look at those in the context of their food waste results.
So they have got a feedback loop as such, but it’s all after the fact.
COLIN:
Yes, and I think it depends on where that feeds back into.
Colleagues are pretty astute at finding out, if that “I baked 20 yesterday” feeds into the ordering model, they’ll do it. If it doesn’t, they’ll go, “Well, I’m marking my own homework here.”
And if they don’t want someone to talk to them because they did too many, because they know that they’re going to sell them, then of course they’ll probably just mirror what it told them to bake and just say, “Well, I baked 10.”
I’ve seen that in some instances.
So I think it’s one of those things. If you could get it full circle, connected in with sales, then that would be a very beneficial tool to have.
Visibility and the role of technology in reducing supermarket bakery waste
RICHARD:
Yes, and I think underlying here, one of the issues is around visibility.
The central team having visibility to what was baked and what was on display at five o’clock, what wasn’t on display at five o’clock, what was on display at eight o’clock.
I think that lack of visibility is an issue.
I don’t know where we are in terms of computer vision and other things, but potentially that’s got a role to play in the future.
COLIN:
Yes, for sure. And we’ve seen that in a number of other webinars as well.
Self‑checkout challenges with supermarket bakery waste
RICHARD:
When we move on to the second presentation, we were talking about the challenges at self‑serve checkouts.
I think most retailers will be aware of some of these challenges.
For the retailer that’s just introducing bakery at the same time as finding the challenges at self‑serve, they’ve come at the same time.
Where they’ve got colleague intervention, that was driven by the trial stores, because they didn’t want people putting the wrong product through.
They called out where they believe they have this issue. The price point goes from something like 19 pence to a big range.
They’re worried about somebody putting a loaf of bread through for the price of a crusty roll at 19p. It’s a valid point, but you need to understand whether that is happening on a grand scale.
Mixed bags and customer experience
RICHARD:
The other interesting thing was that they’d set up this subcategory on the till where you could choose to have a mixed bag.
From a sustainability point of view, that’s brilliant. Getting people to use one bag instead of five for the five bakery items they’ve had.
But in reality, I think we’ve educated consumers for a long time that they know they might struggle at the till. Or even the checkout operator has to open the bag and look in the bag, which some people don’t want them doing and rooting around in their fresh bakery items.
So they’ve got this subcategory on the till, which allows customers to tell them everything that’s in the bag and then put it on the scale. That could work, but it may feel like it’s a bit of over‑complication.
Going back to what most people do, having a single bakery item weight in the system just means that you can do the same as you do with everything else on produce, or wherever else you have those weighted items.
So I think their conundrum was what should they do?
In essence, pretty much what every other retailer does at the moment is probably the best solution you’re going to get. Just having single items and having a weight attributed to them.
Technology options: Cameras, bags and product recognition
COLIN:
To your point, cameras, we’ve spoken about a number of times before. Cameras at the till to identify items.
If you had that for bakery, it brings back another issue. You’d have to have them go back round and look at the bags.
I know that this particular retailer has gone from a brown bag to a brown bag with the semi‑opaque window, which lots of retailers have now. So you can see in.
But a camera would probably struggle to find what that product was through that.
RICHARD:
Yes, you’d probably come into the same problem you have with peppers. Differentiating between an organic and a normal pepper through product recognition technology. That will be a challenge.
Looking ahead: Innovation in supermarket bakery waste
COLIN:
We’re doing bakery again next year. We’re going to anniversary this every year.
We’ll see what the new innovations are. Smart shelves, other ways of using RFID.
I know some people are looking at RFID in the bakery area to improve the counting.
It’s a great area for exploration and innovation, given that it’s about 40% of the waste. And you really can’t donate your way out of this problem.
So thank you very much for your notes, and we’ll see you next time.
