Food Surplus Management Maturity Model: How to Exit Surplus Food from Stores

A Food Surplus Management Maturity Model in Retail: Where is Your Business?

Our food surplus management in retail research discovered varying levels of maturity across the different areas we explored in this study.

Based on these findings, we inductively developed a model with three levels of maturity (developing, established, leading) across seven dimensions, as presented in Table 3.

This inductive approach is grounded in data collected through open-ended and structured survey-based interviews, as well as store visits, which provided rich insights into participants’ practices and approaches.

By synthesizing these insights with our expertise and familiarity with retail operations, we were able to identify patterns and envision actionable steps for participants to advance along the maturity ladder.

For clarification, when referring to food surplus management in retail, we further elaborate on these dimensions and the differences across varying levels of maturity:

Identification of food surplus: The key differences between maturity levels lie in the frequency of date checking and the efficient use of labor. Retailers at the “established” level check dates far more frequently than those at the “developing” level. In contrast, “leading” retailers leverage technology and algorithms to enhance labor productivity by identifying items with a high probability of expiration and directing labor accordingly.

Repurposing: The “established” retailer has taken advantage of all low-hanging fruit; however, these efforts are not yet systematically supported by a headquarters team. In contrast, the “leading” retailer receives robust support from a headquarters team to develop successful recipes, optimize processes, acquire necessary tools, and build partnerships with third-party upcyclers. Additionally, product- and store-level reporting incentivizes stores to improve their performance.

Markdowns: The key difference between “developing” and “established” retailers lies in their data tracking capabilities and the extent to which markdowns are applied across categories. “Developing” retailers tend to use markdowns in limited categories (e.g., high-value items such as meat), likely due to concerns about their impact on brand perception and the retailer’s freshness image. The “leading” retailer distinguishes itself from the “established” retailer through its use of technology and algorithms: while “established” retailers rely on fixed discount percentages or amounts, “leading” retailers dynamically determine discounts based on factors such as product category, inventory levels, demand, and other factors.

Notably, our interviews revealed that no retailer has fully resolved the markdown challenge. Even the most advanced retailers continue to experiment with various strategies to simultaneously optimize sell-through rates and margins. Thus, “leading” retailers, as defined in our model, remain in a state of continuous improvement in their markdown processes.

Donation: Retailers at the “developing” level lack visibility into department participation due to store-level tracking, have poor-quality and non-granular donation data, and donate only a limited amount of surplus. “Established” retailers have addressed data challenges and assigned charities to most stores. However, this does not necessarily result in higher donation volumes, as issues like infrequent pickups or limited capacity of the charities persist. “Leading” retailers donate the majority of their unsold but edible food, demonstrating advanced competencies in processes, data quality, and utilizing multiple channels to maximize donations.

Animal feed: At the “developing” level, retailers only respond to requests from nearby farms. “Established” retailers are more proactive, with support from headquarters; however, pickups still occur at the store level, meaning store participation happens only when it is convenient and cost-effective for the recipient. The key difference between “established” and “leading” retailers lies in the amount of food diverted to the animal feed channel. “Leading” retailers implement central collection, ensuring that stores not conveniently located near recipients can still divert their surplus to the animal feed channel.

Recycling: When determining maturity levels for the recycling dimension, we considered retailer efforts in relation to the rules and infrastructure in their respective regions. For example, in Massachusetts, which bans the disposal of food waste in landfills for large companies, or in the UK, where recycling is cheaper than landfill disposal, a retailer that simply complies with the rules or takes the economically advantageous route of recycling surplus would likely be placed at the “established” level. By contrast, a “leading” retailer would demonstrate additional efforts—such as incurring extra costs or engaging in industry collaborations to support recycling networks—particularly in regions with less developed infrastructure. In this context, a retailer in a developing country might be ranked as “leading” based on the challenges they overcome to implement recycling.

Goals / Organization / Incentives: At the “developing” retailer, food waste reduction is not yet recognized as a key mission, and no dedicated roles are assigned to address it. The “established” retailer has corporate roles specifically focused on food waste reduction, and food waste prevention and surplus management are included in onboarding training for new store employees. The “leading” retailer takes it a step further by aligning employee incentives with corporate food waste reduction goals through appropriate bonus structures.

How to Use the Food Surplus Management Maturity Model in Retail

Retailers can leverage the maturity model to conduct self-assessments. By evaluating their current practices against the model and drawing inspiration from higher maturity levels, they can identify areas for improvement, set goals, and determine actions. Accordingly, they can prioritize investment decisions and develop a roadmap to enhance their food surplus management practices over time. Additionally, periodic assessments can be conducted to benchmark progress against the initial state and track ongoing improvements.

The maturity model can also serve as a tool for internal alignment. Different groups within the organization—such as store managers, district managers, category managers, buyers, merchants, logistics teams, supply chain teams, and other relevant headquarters departments—can conduct separate assessments. Following these evaluations, retailers can analyze differing opinions to uncover knowledge gaps and address them. By building consensus with input from all stakeholders, they can collectively set priorities and develop an action plan that outlines specific steps and responsibilities for each team. Ultimately, this exercise can foster stronger employee engagement and motivate them to work collaboratively toward achieving the organization’s goals.

Another significant benefit of the model, as noted by some retailers, is that it provides reassurance and supports discussions with the board or CEO, showing that the retailer’s capabilities align with those of the majority of the market.

Finally, the model can be used in the development of a retailer’s broader sustainability strategy.

Click here to access a pdf document that you could use to complete your own team self assessment.

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