Big News! We won Ad Age Small Agency of the Year.

January 19, 2022

How AI Might Fix a Major Problem in Produce & Meat

Tony Treadway

How AI Might Fix Major Problem in Produce & Meat article.

Let me hit you with a page-stopper. About 40% of food that is generated is thrown away. At the same time, 1 in 8 Americans struggles to put food on the table.

An enormous number of resources and energy go into growing, processing, transporting, and eventually throwing waste into landfills where it generates methane, a greenhouse gas that is up to 86 times more powerful than carbon dioxide.

Some of the fault goes to grocers and the consumer. Grocers typically overstock produce to assure their customers there is an abundance of produce for the taking. Enter Artificial Intelligence (AI) as a possible solution.

According to Rick Marino, the managing director of a retailer consulting firm, a game-changing software is learning the process of fresh food merchandising in an East Coast supermarket chain. Say you have lettuce or filet mignons that are about to go out of date. The system will help retailers better understand when, and by how much, a discount on an aging item can move the product off the shelf. For retailers, it’s about optimizing price so that it allows products to be sold at the price that makes the most sense. In the words of Marino, “If a retailer can take a $1 on an item to move it, why would you take $5 off to move it?”

Thus, while AI can make more profit for the retailer, a side benefit might be to feed more people more cheaply compared to throwing away the food. This form of dynamic pricing has shown that it can reduce food waste by 50% and boost retailer revenues by 20% and net margins by 3%.

Intelligent retailing is one way of addressing an issue that has grown more vexing every year. I’ve got a feeling that we will be sharing a lot more on the AI topic in 2023.