Supermarket Perimeter - April 2020 - 10

consumed, which wastes energy, water, and other inputs to agricultural
production. We also lose energy and resources by transporting foods
that are later thrown away.
At the same time, the Food and Agriculture Organization of the
United Nations estimates that about one in every nine people suffers
from hunger across the globe.
"We simply cannot allow food to be wasted in the face of the extensive growth of our human population," Traasdahl said.
Of all of the points along the supply chain, retailers face a tremendous challenge in balancing supply and demand at any given moment,
Traasdahl said.
"Retailers' main priority is to delight their shoppers. This is of course
because delighted shoppers are loyal shoppers, an increasingly important factor in today's omnichannel world. If a shopper's desired product
is out of stock three times at the same retailer, they will switch stores -
possibly forever."
That creates a huge challenge for retailers: finding a way to meet
demand without stocking oversupply that leads to waste.
The food industry operates on high volumes and tight profit margins,
Traasdahl said. Many retailers have closed their doors recently due to
their inability to meet customer demand while maintaining profitability.
Retailer profitability, he said, can only be addressed through collaboration with a retailer's suppliers by sharing data and insights, especially
in an industry that has so many external threats.
Crisp's solution to the food waste problem, Traasdahl said, is the
employment of real-time, accurate and reliable data all along the supply chain.
That's easier said than done, given the current infrastructure of the
industry, which is hampered by older, larger, expensive and inflexible
ERP systems.
"That's the real root of the problem that we are addressing," he said.
"The food supply chain is ripe for a true data driven solution that gives
everyone a single point of truth."

Better data, less waste
Are Traasdahl, co-founder and CEO of Chicago-based Crisp Technologies, said that a root cause of the food waste problem is slow-moving,
inaccurate data in an industry that has a particularly complex supply
chain - one affected by weather, pricing, production, logistics and
consumer shifts.
"A lot of the loss throughout the food chain can be attributed to a
supply chain theory known as the 'bullwhip effect,'" Traasdahl said. "The
bullwhip effect theorizes that if information is not accurate or up to date
when it's sent through a supply chain, then a change of plus or minus
5% in actual consumer demand can result in companies further back in
the chain thinking it's plus or minus 40%."
As a result of such inefficiencies throughout the system, an estimated
one-third of all food produced is either lost or wasted.
There are also huge environmental consequences of food waste,
Traasdahl said. Rotting food in landfills contributes to methane emissions and contributes directly to global warming. In addition, much
of the world's agricultural land is used for food that will never be
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To that end, Crisp is partnering with companies to help them forecast demand down to the SKU and individual store level, ensuring the
right amount of product gets to the right store at the right time. With
high-precision forecasting, Traasdahl said, companies can optimize remaining shelf life, prevent out-of- stocks, and limit mark-downs needed
to move short-dated products.
"Accounting for factors such as consumer sentiment, promotional
activities, and holidays can exponentially increase our understanding of
product performance and our ability to forecast demand with unprecedented precision and accuracy," he said. "This cannot be accomplished
with legacy Excel spreadsheets, manual interventions, and the human
eye-increases in the depth, breadth, range and quality of data inputs
require companies to leverage the latest in technology, artificial intelligence, and machine learning."
Crisp, he said, gives customers greater demand forecast accuracy,
which in turn improves performance in three main ways: top line revenue growth, cost reduction and productivity gains.
The company has been working closely with food suppliers in the
United States and with REMA 1000, an $8B discount retailer in Norway

THE GIANT CO.

Forecasting - down to the SKU level

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Supermarket Perimeter - April 2020

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