Japanese companies go high-tech in the battle against food waste

Japanese companies are ramping up the use of artificial intelligence and other advanced technology to reduce waste and cut costs in the pandemic, and looking to score some sustainability points along the way.

Disposing of Japan’s more than 6 million tonnes in food waste costs the world’s No.3 economy some 2 trillion yen ($19 billion) a year, government data shows. With the highest food waste per capita in Asia, the Japanese government has enacted a new law to halve such costs from 2000 levels by 2030, pushing companies to find solutions.

Convenience store chain Lawson Inc has started using AI from U.S. firm DataRobot, which estimates how much product on shelves, from onigiri rice balls to egg and tuna sandwiches, may go unsold or fall short of demand.

Lawson aims to bring down overstock by 30% in places where it has been rolled out, and wants to halve food waste at all of its stores in 2030 compared with 2018.

Disposal of food waste is the biggest cost for Lawson’s franchise owners after labour costs.

Drinks maker Suntory Beverage & Food Ltd is experimenting with another AI product from Fujitsu Ltd to try to determine if goods such as bottles of oolong tea and mineral water have been damaged in shipping.

Until now, that’s been a time-consuming human endeavour. With the new AI, Suntory hopes to gauge when a damaged box is just that, or when the contents themselves have been damaged and need to be returned.

Suntory aims to reduce the return of goods by 30-50% and cut the cost of food waste and develop a common standard system that can be shared by other food makers and shipping firms.

SUSTAINABLE DEVELOPMENT GOALS

Japan’s notoriously fussy shoppers are showing signs of getting on board, especially as the coronavirus pandemic hits incomes.

Tatsuya Sekito launched Kuradashi, an e-commerce firm dealing in unsold foods at a discount, in 2014 after seeing massive amounts of waste from food processors while working for a Japanese trading firm in China.

The online business is now thriving due partly to a jump in demand for low-priced unsold foods as consumers became more cost conscious amid the COVID-19 pandemic.

“Sales grew 2.5 times last year from a year before, while the amount of food waste has doubled since the coronavirus cut off food supply chain,” Sekito told Reuters.

Kuradashi has a network of 800 companies, including Meiji Holdings Co, Kagome Co and Lotte Foods Co, who sell it a total 50,000 items including packs of instant curry, smoothies and high-quality nori.

“Japanese shoppers tend to be picky but we attract customers by offering not just a sale but a chance to donate a portion of purchases to a charity, raising awareness about social issues,” Sekito said.

Membership numbers jumped to 180,000 in 2021 from 80,000 in 2019.

Others have also joined forces with food firms in developing new technological platform to cut food waste as part of global efforts to meet sustainable development goals (SDGs).

NEC Corp is using AI that can not only analyse data such as weather, calendar and customers’ trends in estimating demand but also give reasoning behind its analysis.

NEC has deployed the technology to some major retailers and food makers, helping them reduce costs by 15%-75%.

NEC hopes to share and process data through a common platform among makers, retailers and logistics, to reduce mismatches in supply chains.

“Reducing food waste is not our ultimate goal,” said Ryoichi Morita, senior manager overseeing NEC’s digital integration.

“Eventually, we hope it can lead to resolve other business challenges such as minimizing costs, fixing labour shortages, streamlining inventory, orders and logistics

McDonald’s looks for ‘gender parity’ by 2030

McDonald’s has set a goal of having an equal number of men and women in leadership roles by 2030 as it looks to improve diversity at the company.

McDonald's store

The fast-food chain also said it would work to boost minority representation in the firm’s senior US ranks from 29% to 35% over the next four years.

Executive pay will be tied to meeting the targets.

The effort follows claims of racial discrimination from black franchisees and executives in the US.

Workers have also accused the firm of fostering “systemic sexual harassment” at its restaurants. 

McDonald’s has disputed the allegations. But in July, amid widespread Black Lives Matter protests in the US, the firm announced a new diversity, equity and inclusion initiative.

In November, the firm brought on a new person to lead implementation of the effort.

Activists protest in front of a McDonalds in Los Angeles, California, on July 20, 2020 during a Strike For Black Lives rally.

“We recognise these issues weigh heavily on our people and have heard – loud and clear – that diversity, equity and inclusion are priorities for our entire team, from our crews to our senior leaders,” McDonald’s chief executive Chris Kempczinski wrote in a letter to staff.

“We’re serious about holding ourselves and our leaders accountable to these foundational commitments.”

As part of its efforts, McDonald’s released demographic data of its US workforce for the first time. 

The 2018 figures show the firm had more black, Hispanic and Asian senior managers than the industry overall. Women and minorities also accounted for a larger share of service workers than the industry average.

However, the share of black and Hispanic first- and mid-level managers lagged.

The firm said it would determine executive bonuses based on a combination of sales and profit growth, with meeting diversity goals weighted at 15%.

UK: Clothes and food price rises push inflation higher

Rises in the cost of clothing and food helped to push UK inflation higher-than-expected last month.

The UK’s inflation rate, which tracks the prices of goods and services, jumped to 0.7% in October from 0.5% in September, official figures show.

Second-hand cars and computer games also saw price rises, but these were partially offset by falls in the cost of energy and holidays.

Analysts had expected the rate to remain flat at 0.5%.

“The rate of inflation increased slightly as clothing prices grew, returning to their normal seasonal pattern after the disruption this year,” said Office for National Statistics deputy statistician Jonathan Athow.

Normally prices for clothes and shoes fall each year between June and July in summer sales before autumn ranges come in, and then rise before sales towards the end of the year, the ONS said.

Throughout 2020 this pattern has been different, with increased discounting in March and April, probably as a response to lockdown, it said. After a small increase in July and August, prices rose by more than a year ago.

What is inflation?

woman shopping

Inflation is the rate at which the prices for goods and services increase.

It affects everything from mortgages to the cost of our shopping and the price of train tickets.

It’s one of the key measures of financial well-being, because it affects what consumers can buy for their money. If there is inflation, money doesn’t go as far.

Food prices rose between September and October, with most of the increase coming in fruit and vegetables, the ONS said.

Analyst firm Capital Economics said food price inflation could continue to rise in November as supermarket demand continues to increase during the Covid-19 lockdown.

cpi inflation

Second-hand car prices also rose in October as people tried to reduce their reliance on public transport.

However, car prices may stabilise and fall back in the middle of 2021 should a vaccine become widely available, according to Samuel Tombs, chief UK economist for Pantheon Macroeconomics.

The largest downward pressure on inflation was caused by a fall in household energy prices.

Gas prices dropped by 12.3% and electricity prices fell 3.2% between September and October.

This was mainly due to energy regulator Ofgem’s latest six month energy price cap, which came into effect on 1 October, the ONS said.