Ahold Delhaize

Hunger remains to be one of most urgent sustainable development challenges of this time; yet on the flipside, the world is producing more than enough food for its entire population. One-third of the world’s food produced for human consumption is wasted every year, as per the latest report of Food and Agriculture Organization of the United Nations (FAO)^[1]. That is roughly 1.3 billion tons of wastes, amounting to USD 990 billion and 70% of which is coming from rich industrialized nations. On a per capita basis, consumers from Europe and North America are wasting up to 115 kg a year compared to 11kg a year from consumers in Africa and Southeast Asia. Clearly, there is a huge gap and mismatch in the production, consumption, distribution, and disposal of food across the world, creating a myriad of economic, social and environmental problems related to these wastes.

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Supermarkets contribute a huge chunk of these food wastes, to the point where public outrage has forced these retailers to rethink their sustainability strategies and goals in the next five to eight years. While there are emerging good practices in sustainable retailing, it has barely made a dent in the hunger problem given that only an average of 2% of the wastes is being utilized to support charities^[2].[pic 5]

In this paper, the group focused on the case of Ahold Delhaize and how they are addressing and driving down food waste in their operations and support communities in need. Ahold Delhaize is a world-leading food retailer operating in the US and Europe with store formats include supermarkets, superstores, online grocery shopping, convenience stores, drugstores, wine and liquor stores. Food waste falls in the high impact on Ahold and mid-importance to stakeholders in the Materiality Matrix as per their 2016 Annual Report^[3].[pic 6]

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In 2012, Delhaize became the first retailer in Belgium to donate fresh products – such as fruits, vegetables and bread – along with dry goods. The project is already being used in nearly all 130 Delhaize supermarkets as well as in its distribution centers. Further, over 400 of the independent Delhaize stores (AD Delhaize and Proxy Delhaize) have similar initiatives.

Delhaize is constantly looking to improve the process, from logistics to food safety, and is exploring new partnerships to donate even more products, which currently amount to 150 meals per supermarket per day. At the same time, Delhaize limits its own food waste as much as possible by monitoring and adjusting store-specific orders. [pic 9]

The firm aims to contribute to a food system that ensures everyone has access to nutritious food for generations to come. And is continuously working towards reviewing operational processes to reduce food waste, and also diverting unsold food to relieve hunger in communities.
Ahold is working on a three-pronged approach to
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First step includes reducing food waste across operations like stores, warehouses and transport. Ongoing actions include: smarter product ordering and supply management, providing storage        guidance on food packaging, discounting perishable products that are reaching end-of-shelf-life as well as ‘imperfect’ vegetables, and raising associate awareness.

Secondly, they divert surplus food to food banks and charities and to innovative operations such as restaurants that cook with unsold food.

And thirdly, they divert food no longer suitable for human consumption to other recycling methods, to prevent it from going to landfill. These methods can include animal feed production, green energy facilities or industrial uses.                                                                                                                        

In 2016, Ahold measured the food waste and where it went, across all Ahold Delhaize companies:

• Ahold recycled 72% of its food waste, moving towards the 2020 goal of 90%.
• Their total food waste per food sales was 5.02 tonnes per million euro. By 2020 they aim to reduce this with 20%.                

https://www.aholddelhaize.com/en/sustainable-retailing/sustainable-retailing-in-practice/reduce-food-waste/    
https://www.aholddelhaize.com/en/media/media-releases/delhaize-belgium-highlights-efforts-to-reduce-food-waste/                                                                               

Strengths:

• Integrated Strategy: Ahold Delhaize has devised a dedicated strategy of ‘Sustainable Retailing’ based on their most material topics. This strategy tries to leverage their global reach, market expertise and strong brands to enable them to be a leader in the food retail industry. The ‘Sustainable Retailing’ strategy was developed as part of their broader strategy of ‘Better Together’ after the merger between Ahold and Delhaize Group. The ‘Sustainable Retailing’ strategy embedded throughout ‘Better Together’ strategy is practiced in their everyday operations. This shows commitment of Ahold Delhaize towards shared value creation by projecting sustainability as a core business driver linked to how they save for their customers, drive growth, make promises to their stakeholders, live their values, and achieve their purpose as a company.

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• Global Focus Area: Ahold Delhaize’s ‘Sustainable Retailing’ strategy prioritizes three areas where they can have the most impact on the lives of customers and associates, and on their communities around the world. These areas are defined as their global focus areas (strategic areas) where they plan to invest their attention and energy for achieving targeted results. ‘Reduce food waste’ is one of the global focus areas; the other two being ‘Promote healthier eating’ and ‘Create healthier & inclusive workplaces’. This proves the importance of the ‘Food waste’ agenda in the company’s priority list.

Reduction of food waste by:

• Driving down food waste in own operations by 20% by 2020 (from 2016 baseline)
• Maximizing the recovery of unsold food to reduce hunger in communities
• Working with suppliers on innovations to reduce food waste upstream
• Helping customers reduce food waste at home

• Alignment towards global principles: In devising Ahold Delhaize’s startegy, they have put particular focus on aligning their efforts with the United Nations’ Sustainable Development Goals. The goals which are most aligned with the focus area of ‘Reduction of food waste’ are SDG2: ‘End hunger, achieve food security and improved nutrition and promote sustainable agriculture’ and SDG12: ‘Ensure sustainable consumption and production patterns’. Ahold Delhaize also consulted trends in the markets and around the world, integrated stakeholder feedback, and referenced other global frameworks (such as the UN Global Compact and the OECD Guidelines for Multinational Enterprises) in establishing the areas of focus.

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• Performance monitoring and measurement: Ahold Delhaize has set set 2016 baselines and 2020 targets to track the progress on two indicators: total food waste per food sales (in tonnes per millions of euros), and percentage of food waste that is recycled. The company measures these in line with the newly-released ‘Food Loss and Waste Protocol’. In addition, they report total food waste sent to disposal per food sales, in line with thier commitment as a board member company of the CGF (Consumer Goods Forum) to meet the ‘Food Waste Reduction’ resolution.

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To guide the ‘Sustainable Retailing’ strategy, track performance, and share best practices, Ahold Delhaize has put in place a global steering committee as well as topic-specific working groups (including the focus area of ‘food waste’) with participants from all their brands. They have created sustainable retailing KPIs to track operational performance across brands.