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How Can Supermarkets Do Good and Profit, Too?

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How Can Supermarkets Do Good and Profit, Too?

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Can items removed from shelves save the store's entire electricity costs? Can unappealing fruits and veggies add value? Environmentally- and consumer-friendly approaches can be profitable, as initiatives undertaken by French, British, and German supermarkets have proven.

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How Can Supermarkets Do Good and Profit, Too?

By Grace Kin
From CommonWealth Magazine (vol. 559 )

One wave after another of food scandals has plagued Taiwan recently. The latest involves the Matsusei supermarket chain, a subsidiary of the embattled Ting Hsin International Group at the center of the furor, and several of the supermarket chain's stores having been found selling expired food, either changing the content labels or making it into hot food for sale. Not only do such clever little commercial tactics severely damage the brand's reputation, more importantly they threaten the well-being of countless consumers.

Whether the Ting Hsin Group or Megmilk Snow Brand – the company responsible for widespread food poisoning in Japan – what these unconscionable enterprises have in common is shortsighted greed and unwillingness to shoulder short-term losses, completely lacking in awareness of sustainable operation.

Does this mean that enterprises that run their businesses with a conscience are relegated forever to losing out and not making money? The supermarket operators introduced below take issue with that notion. For them, the methods and policies they take to promote environmental protection and reduce food waste are not thankless jobs, but rather proper operational strategy resulting from business consideration.

Even ugly fruit has its day in the sun

Intermarché is France's third-largest supermarket chain. They noticed an absurd situation, whereby people on the one hand had to spend a considerable amount of cash to practice the good habit of eating five types of fruits and vegetables each day, while on the other hand 300 million tons of "ugly" fruit are discarded and wasted for nothing every year.

Fortunately, they came up with a good method, purchasing the "ugly fruit" that was destined for the landfill from the producers, and selling it at 30 percent off the usual retail price. In addition, they made fruit and vegetable soup and juice from the less attractive fruit, helping impress upon consumers that whilst these fruits are not as appealing they are just as nutritious and delicious as the fruit we are used to consuming.

The program achieved unprecedented success, as over just a two-day period each supermarket outlet not only sold an average of 1.2 tons of ugly fruit, but helped attract 24-percent more customer traffic than usual.

Even more importantly, media exposure helped boost their image while successfully getting people to take the issue of food waste seriously.

Hundred-percent "food powered"

Each week when we go shopping at the supermarket and see all that fruit stacked up like a pyramid, we cannot help but wonder what happens to all of that fresh produce if it's not sold in time? In the United Kingdom, over NT$70,000 worth of food is taken off the shelves, and many supermarkets opt to send it directly to the rubbish dump.

The UK's second-largest supermarket chain, Sainsbury's, takes a different approach, converting the food not fit for donating to food banks or other uses into electric power. One Sainsbury's outlet near Cannock has worked out its method for "food power," producing enough energy to supply all of the store's energy needs.

If Sainsbury's were to transport all of the expired food to the dump, it would cost over NT$7000 per ton. So rather than spending money on hauling rubbish, it makes more sense to turn that unwanted food into a useful resource.

Sainsbury's is not only the UK's largest retailer generating electricity from marsh gas, but the energy it produces each year from food taken off the shelves is enough to supply 2500 households power. No wonder, then, that Sainsbury's says, "This is not just a good thing, but the right commercial decision."

Package-free supermarkets

When you think about it, how much "rubbish" do we haul home from the supermarket every week? Plastic milk and juice bottles, egg cartons, plastic yogurt cups, potato chip bags… nearly all products outside of fresh produce is wrapped up or packaged in a plastic bag or cardboard carton.

However, the useful life of this packaging usually ends the moment the consumer opens it up, after which it is destined for the garbage can (or recycling bin, at best). And not a small quantity of packaging is simply tossed in the street or even into the sea.

Two young German women decided to forge a completely new way of patronizing supermarkets, where you enter the store and instead of being bombarded with advertisements and packaging that soon becomes rubbish, but neatly arranged produce and goods in environmentally friendly containers.

Want to try a new brand of shampoo? Here you need not purchase a whole bottle. Need only a day's worth of oatmeal? Then bring your own container, and fill it with as much as you like. Want to buy a tube of toothpaste for your trip? Here you can choose "toothpaste capsules," where even the tube isn't necessary. Customers can purchase exactly the quantity of items they need at this supermarket, where everything is calculated by weight.

Their project became the darling of crowd funding websites right after it was launched. Originally looking for only 45,000 euros in funding (around NT$1.75 million), they doubled that amount, and the supermarket, called Original Unverpackt, opened up in Berlin last month.

Apart from management's commitment to zero packaging, if Germany's packaging-free supermarkets are to become a reality, it will require the cooperation of upstream suppliers, which throws such an arrangement into question for Taiwan. U.K. supermarkets' initiative to generate power from food removed from store shelves needs the technical support of biogas power stations, which have a relative high technical threshold, but it's feasible if there is a willingness to invest in them. The French model of "ugly fruit" utilization may be the practice easiest to achieve, because every chain supermarket in Taiwan is capable of putting the idea into effect.

The time has come for Taiwanese supermarket operators to engage their brains, set their sights high, and use the resources at hand to put strategies into place that are environmentally- and consumer-friendly while also being profitable.

(The author is the co-founder and editor-in-chief of Social Enterprise Insights)

Translated from the Chinese by David Toman

Keywords:

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