An Overview Of Our Solution
Over one third of our fresh food production goes to waste - an $85 billion problem with financial, ethical and environmental implications. Wasted food means people go hungry and waste’s also a significant sustainability issue as it is a major greenhouse gas contributor and misuse of resources. For decades, the fresh food industry has considered waste a “cost of doing business” and has done nothing to fix the problem. Zest Labs is utilizing predictive analytics and IoT sensors to modernize the food distribution to prevent waste before it happens. We do this by providing growers, shippers and retailers with data and insights that enables them to quantify the problem and incents them to change their behavior and processes to reduce field-to-shelf food waste by 50% or more. Our solution is being deployed at growers, distributors and retailers across the USA.
- Population Impacted: 342,000,000 people in North America
- Continent: North America
Last name
Organization type
Context Analysis
Once produce is harvested, it has a finite freshness capacity – the amount of time before it spoils under ideal conditions. But, temperature and processing significantly impact the remaining freshness of produce. When unmanaged, product can spoil prematurely, resulting in waste at the retailer or consumer. And it’s not just the product that is wasted, it is also the water, fertilizer and labor to grow, harvest and process the product, the fuel to transport it and the electricity to refrigerate it. When a third of produce is wasted, so are a third of the resources that went into it. Grocers have for too long accepted that throwing a third of the product away as “acceptable” because they did not believe there was a way to solve the problem. Zest Labs’ solution provides growers and grocers with the data and insights to incent changes in their behavior that ensures all food is delivered with sufficient freshness for retail sale, reducing waste at the grocer and the consumer.
Describe the technical solution you wanted the target audience to adopt
Zest Fresh provides grocers with the insights they need to motivate process improvement and change behavior that reduces waste due to temperature handling and processing by 50% or more. Reducing waste improves profit margins and incents grocers to make changes. Zest Fresh enables grocers to proactively manage for fresh food supply chain variability. Time, temperature and location data is autonomously monitored using IoT sensors for each pallet from harvest to the store, providing complete visibility to the adherence to grocer’s requirements to ensure food freshness and reduce waste. It uses cloud-based AI algorithms to dynamically calculate the true shelf life for each pallet of product, generating a Zest Intelligent Pallet Routing Code (ZIPR Code) freshness metric for each pallet. The ZIPR Code is matched to each order to ensure each pallet has sufficient freshness to meet the retailer’s needs. Zest Fresh also provides traceability records for improving food safety.
Type of intervention
Describe your behavioral intervention
Across the fresh food supply chain, we use data and analytical insights to improve operations and adherence to best practices. People generally want to do the best they can to ensure food quality and reduce waste but, without data and insights, they are flying blind. A variety of things impact produce freshness and waste but let’s focus on temperature. Workers may not know the impact on freshness of leaving a pallet of produce in the field for hours. Warehouse workers may not understand the impact of inadequate precooling. Truckers may not be aware of the impact of improper trailer refrigeration. Grocers may not understand how much remaining freshness the produce has before they ship it to the store. Without this information the result is poor decision making that leads to waste and the grocer, at the end of the supply chain, simply accepts it and no attempt is made to improve the supply chain.
By providing data, analysis and insights at every step along the supply chain, we enable more intelligent decision making. The result is that produce is delivered with sufficient freshness for retail sell through and consumption by the customer. The result is less waste. The data, insights and the results drive behavioral change because they witness it and they save money. For evidence please visit https://www.zestlabs.com/wp-content/uploads/2018/02/WP-10-0218-Shelf-li… and http://www.zestlabs.com/wp-content/uploads/2018/03/Zest-Labs-Sample-Bas….
As needed, please explain the type of intervention in more detail
While our solution has an emotional appeal and social incentives for improving the environment, ultimately, it drives a choice between making the right decision or the wrong one. Today, supply chain workers do not have the information and insights needed to make an intelligent decision. They must guess or rely on unreliable inputs such as visual inspections of produce for freshness. The result is waste that has continued unabated for decades. But, with data and insights from our solution that says Pallet A has 10 days of shelf life and pallet B has 5 days, workers can know to ship pallet A across country and B locally instead of randomly guessing. Given this, they will most always make the right choice.
Describe your implementation
For decades, growers and grocers have operated under the false belief that waste is a “cost of doing business” and can’t be avoided. As a result, 30% of fresh food at retail is wasted – tossed in dumpsters and, with it, the water, soil, labor, fertilizer, electricity and fuel that went into growing, cooling and transport. The primary cause of produce waste is premature spoilage due to improper handling and processing. Zest Labs has been focused on changing the industry’s mindset–the single biggest obstacle to reducing waste– and convincing them that their waste can be cut by 50% or more. We have to change the behavior of relying on outdated technology that reinforces existing behaviors that leads to waste.
Due to changes in grocery market conditions (new discount competitors, increased freight costs, customer buying preferences) retailers’ margins are beings increasingly squeezed, incenting them to find new ways to reduce costs and improve profitability. By reducing waste by 50% or more, our Zest Fresh solution improves product margins by 6% or more, making a significant impact on retail competitiveness.
By applying IoT, artificial intelligence and predictive analytics, we are the first company that collects and analyzes data and dynamically calculates a freshness metric for each pallet of product. It is this pallet-level granularity data that is driving change. We have shown growers and retailers documented shelf-life variation data that compels them to act and make changes to improve delivered freshness and reduce waste because you cannot argue with facts. Ultimately, with data in hand – data that was previously unavailable to the grocers – they are motivated to change the way they do business.
We identified an issue in a grower’s process that was causing delivered shelf-life to range from 1 to 15 days. With our solution, that improved to 28 to 30 days meaning the product remains fresh significantly longer and does not spoil at the store or with the consumer.
External connections
Zest Labs has worked with growers and retailers throughout the development of the Zest Fresh solution. We partner with them to collect and analyze data about various types of produce (e.g. berries and leafy greens) and the impact of their processes from harvest to packing to cooling, and shipping and receiving as product moves through the supply chain. Our goal is not to find blame but to encourage process improvement and the use of predictive analytics to ensure delivered freshness. We also participate in industry organizations such as the Produce Marketing Association, Food Marketing Institute, ReFED, GS1 and United Fresh.
Waste reduction has yet to be codified in public policy as the cause of waste hasn’t been well understood and, we believe that it is the financial incentive to reduce waste that will ultimately drive change. Zest Labs is actively evangelizing how to identify the cause of food waste and take steps to rectify it. We are appealing not only to prospective customers but also industry associations and environmental groups to help promote the issue and the solution. Organizations like the NRDC are also focusing attention on the massive food waste problem that contributes to pollution, wasted resources and the need to feed a rapidly growing global population at a time of increasingly limited resources.
Who adopted the desired behaviors and to what degree?
Zest Labs is seeing adoption from a number of growers, distributors and retailers. As referenced in this submission, the industry has a decades long approach to managing their supply chain – an approach that factors in waste as an acceptable outcome. We are seeing an increased desire for change as a result of changing market conditions and awareness and adoption of “AgTech” (agricultural technology). Over the past several years, AgTech has been increasingly accepted as a way of improving pre-harvest operations (e.g. irrigation management) but Zest Fresh is the first post-harvest AgTech solutions on the market that’s focused on waste reduction. We are finding that, as with most innovations, there are early adopters and laggards. We are gaining traction with early adopters and innovators in the industry who recognize the value of waste reduction to their profitability and brand.
How did you impact natural resource use and greenhouse gas emissions?
Up to 40 percent of the food we produce gets thrown out, costing the nation an estimated $218 Billion each year; furthermore, food waste accounts for more than 2.6 percent of all U.S. greenhouse gas emissions annually — the equivalent of 37 million passenger vehicles. Landfill is a significant methane producer, which is a significant greenhouse gas that contributes to climate change. Additionally, landfill itself is a finite resource. Beyond that, as referenced in this submission, if 30-40% of the food we produce is wasted, the resources that went into producing the food – the water, fertilizer, labor, electricity for cooling and processing and fuel for trucks that ship food that is going to waste – is also significant. By ensuring that more food is delivered fresh, we mitigate all of these deleterious effects of waste.
What were some of the resulting co-benefits?
Reducing waste means we can better feed a growing population with finite resources. 800 million people are undernourished yet we grow enough food to feed them all. By focusing on the waste problem and the benefits of solving it, we can reduce waste at the retail-level and drive awareness and change at the consumer level and ultimately feed more people. People buy too much food, store or handle it improperly and don’t understand “Use by” dates. These issues also contribute to landfill and climate change. Water is also an increasingly precious, limited resource. California produces a majority of many fruits, vegetables, and nuts but has been dealing with persistent drought and yet 80% of the state’s water supply goes to agriculture. If one third of the produce goes to waste, so does 24% of the state’s water. If we can’t produce enough of our own food domestically, we will turn to places like South America, causing more rain forests to be plowed over to plant crops, limiting biodiversity.
Sustainability
Our solution requires no grant funding or government subsidies. The solution is paid for on a per-pallet basis by the grower, distributor and retailer. It is purely market-based revenue.
Return on investment
Our solution is delivered using the Software-as-a-Service (SaaS) model. There is no capital investment by the customer. We provide the necessary hardware and software but essentially charge for the data and insights delivered by our solution on a per pallet basis as it is used by the customer. We generally estimate that the cost of the solution when fully implemented is about 10% of the cost savings experienced by the customer. That is if, for example, the customer saved $100 by reducing their waste, our cost would be $10 meaning the customer is still $90 ahead.
How could we successfully replicate this solution elsewhere?
The solution is highly scalable as the same infrastructure used to monitor and manage one pallet is used for thousands of pallets. In fact, one of our market differentiators is that our solution doesn’t require any significant changes to process or infrastructure. Other approaches that require additional steps by laborers or changes to harvest or production processes have not been successful in the market. Our solution requires extremely minimal changes to infrastructure (installing wireless access points) and process (workers push a button on a sensor and insert it into the pallet). As such, it is extremely scalable and easy to deploy with minimal training. The data is collected and processed in the cloud and the resulting information and insights are provided to the customer via dashboards and mobile apps. The solution can be deployed essentially anywhere. No additional funding is required beyond the cost of the SaaS-based service.