Wasteless combats food waste with an AI-powered pricing model
Wasteless is on a mission to reduce the environmental consequences of food waste. I amsterdam spoke to David Kat, VP of Business Development, about their AI-driven technology that incentivises shoppers with lower prices.
Examining consumer behaviour for sustainability
Most urban professionals are familiar with the concept of grabbing a ready-made salad or sandwich on the go. Which item they choose hinges on personal taste and health considerations, but Wasteless noticed something else. Customers will invariably select the salad with the furthest expiration date because there’s a “higher perceived freshness value”. What they found is that when this price is discounted, “40% of the consumers actually buy the product with shorter expiration dates.” It seems that saving cash incentivises customers to help prevent food waste, especially during times of rising food costs and inflation.
Wasted food is a big problem
Wasteless, founded in 2018, had an insight that’s brilliant in its simplicity: reduced prices motivate shoppers to purchase food items as their expiration date approaches. According to David Kat, VP of Business Development at Wasteless: “Food waste is one of the biggest problems in our society. Almost 40% of all the foods produced are never consumed and 11% of all greenhouse gas emissions are wasted food”. Food waste has a far-reaching environmental impact. It contributes to global warming, hunger, droughts and reduced biodiversity. “We looked at the food system, and we tried to understand why this value chain is so broken. How come 40% of the food produced never gets consumed?”.
Applying machine learning to food prices
In developing countries food waste is primarily caused by inadequate cold chain logistics and transport, but in Europe these are extremely efficient. Data flows between suppliers and retailers so every party knows what food items are arriving and when. This was the catalyst for Wasteless’ idea that this data could hold the key to reducing waste in the supermarket aisle.
“We realised that in supermarkets 87% of their waste is caused by unsold products reaching an expiration date. And if you're data experts, and you hear the word date, you think, ‘well if it's a date problem, there might also be a date solution’, so that’s what we set out to do”. Using machine learning, Wasteless created models to understand how customers act on price and freshness. Their solution can pinpoint the most enticing price point for customers relative to an item’s expiration date.
Increased interest in sustainability
In the 4 years since launching, Wasteless has witnessed a shift in consumer behaviour. As sustainability is increasingly talked about, customers are changing the way they shop. “Buying a product that saves your wallet and saves the planet becomes more logical. What we're seeing is that retailers are really onboard with the double whammy of selling more and wasting less. So, selling more and increasing their performance while reducing their carbon footprint becomes increasingly important.” After great success in Germany, Wasteless have now signed their first Dutch customer, Hoogvliet, an “extremely innovative” family-owned chain of approximately 70 stores. Many more Dutch retailers could benefit from the Wasteless solution, which Kat describes as “a winning formula for retailers”.
The perfect launchpad to Europe
Expanding into Amsterdam was an important move for Wasteless, and was based on several factors. “The Netherlands is just a great launchpad in the sense that it's a sophisticated, fairly manageable market. And if you prove a success here, it's valid and well-regarded across Europe…the Dutch are open to innovation and open to improving performance”. Wasteless also benifits from Amsterdam’s central location and convenient road and rail connections for the company’s frequent travel to Germany.
Collaborating for sustainable impact
“We are working together with a lot of companies that are here in Amsterdam, and would also really like to work with policymakers to make Amsterdam the first food waste free city in the world…Amsterdam should really take significant steps. We could take several coal plants out of the equation by just halving food waste in our city.”