Freshflow is helping grocery retailers fight food waste

fight food waste

fight food waste


For years grocery retailers have been using data-driven forecasting to help them predict demand to figure out which products to reorder to keep shelves stocked. That’s nothing new. But Berlin-based startup Freshflow is targeting a particular slice of this market: It’s built an AI-powered forecasting platform to help retailers optimize stock replenishment of fresh, perishable goods — such as fruit and vegetables, meat, dairy and bakery products — in order that food waste is minimized and retailer revenue maximized.

It says its first customer has seen a 28% reduction in food waste and a 16% increase in revenue after around eight months of using its AI-powered system to automate fresh produce restocking — with average rates across the (handful of) early adopters standing at 30% less food waste and a 16.7% revenue boost.


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A quirk of grocery retailing is that fresh produce reordering is often still done manually, says Freshflow co-founder Avik Mukhija, with supermarket staff taking what often amount to “gut instinct” decisions on how much fresh produce to reorder — which can lead to over-ordering that not only hits revenue but leads to food waste as unsold items spoil quickly and have to be thrown away; and also under-ordering — meaning retailers are losing out on extra revenue if shoppers are frustrated by empty shelves.

The reasons manual reordering has persisted for this (fresh) segment of grocery retail are myriad, according to Mukhija — including short (but non-uniform) shelf lives; quality variation; seasonality; and products often being sold by weight rather than a piece, which complicates ERP inventory data.

Freshflow’s premise is that machine learning can do a far better, less wasteful job at restocking fresh food than the human eye, nose, and gut by being able to weigh a variety of factors that may affect demand (such as weather, season, local events) and by crunching available retailer data to do probabilistic modeling and predictions (such as to forecast the shelf life of different produce) to — overall — more accurately match supply and demand.

Assuming Freshflow’s AI can maintain this early performance as it scales to serve more retailers, the startup looks to be onto something big and important: As it notes, the grocery retail sector is responsible for some 5% of the total amount of food thrown away annually, equating to more than 4.5 million tonnes. While, in Europe, over-ordering caused by poor demand prediction contributes to $50 billion of fresh food being thrown away by retailers each year.

Food waste is also a huge contributor to climate change, generating what end up being totally unnecessary carbon emissions, which means shrinking wastage here isn’t just about optimizing retailer profits — it’s super important if humanity is to successfully tackle climate change.

FULL STORY


fight food waste

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