In the Trenches: Don’t blame produce managers for all the shrink

Ron Pelger

April 28, 2025

According to various industry reports, the national average for shrink among supermarkets is in the area of 2.7 percent of sales — for all departments. Produce is 16 percent of that total shrink. The produce shrink waste is from 4 to 8 percent of the department sales.

There are millions of dollars in shrink being lost in the produce operations. If you don’t have shrink data analysis information and are just guessing at a number, chances are it is far greater than you can ever imagine.

Fresh fruits and vegetables are most susceptible to shrink, and retailers take many steps to keep the product alive until it is sold. The longer produce is in the store, the more it will lose its freshness and turn into a dollar loss shrink waste.

Since produce managers are said to be responsible for all shrink, the reality is that it actually starts to develop in other exterior areas outside of the store level. Meanwhile, a missing factor needs to be considered other than blaming all shrink only at the produce department level. We call it — invisible shrink.

There are millions of dollars in shrink being lost in produce operations. — There are millions of dollars in shrink being lost in
produce operations.

Before all the new technologies were introduced, retailers did not have push-button sophisticated programs to monitor shrink. Today, we have artificial intelligence to capture, record and analyze just about anything related to the produce business, including shrink. Product footprints can now be traced from the beginning of planting to arrival at the distribution center and stores.

Mike Nicometo, cool chain expert and president of Empower Tech Inc. in Iron Mountain, MI, said, “There are literally amazing variations in produce shelf life due to differences in cut-to-cool time and inconsistency in pre-cooling. Don’t discipline the produce manager for problems that they didn’t cause. Don’t blame the distribution center quality control inspectors for accepting product that looks good but later does not hold up to expectations. Advanced shelf-life loss is simply not visible until much later in the supply chain. In order to manage shrink and quality, we need to measure the right areas. It is time for our industry to realize that putting product into the cool chain logistics process without knowing how much shelf life it has to start out, is like sending a fleet of planes to random destinations without knowing how much fuel they have at take-off.”

In the past and still today, we use physical means to inspect product at the distribution center docks and only detect visible problems. Fortunately, new AI technology has been developed that provides data and can be read wirelessly throughout the logistic processes.

Maintaining the cold chain is one of the most critical stages in keeping fruits and vegetables alive and fresh. After harvest, produce continues to use oxygen, carbon, water and heat. Shrink sneaks into the act once the cold chain is broken anywhere along the line. It could be at any level along the cold chain route from harvesting to the distribution center arrival, outside a backroom store cooler or having inadequate storage temperatures.

Nicometo also added, “When comparing the temperature of each pallet on a load versus the commonly monitored ambient air of the trailer, for thousands of pallets during three-to-five-day trucking from Mexico to the U.S., I found over 30 percent of individual pallets were running very warm, causing high levels of advanced shelf-life loss. Typically, the advanced shelf-life loss was invisible at receiving QR inspections, resulting in the product being considered equal. In reality, many pallets were over four days older in terms of shelf life than were the others. This appears to be due to ineffective pre-cooling, resulting in pallets with hot center product.”

Produce shrink can be set off at any level of the produce chain, so it is unfair to blame produce managers for 100 percent of it. Other factors are involved.

There are a number of areas where shrink is initiated before product arrives at a store. This is that critical invisible shrink.

Here are five basic store areas that contribute to high shrink waste. Consider correcting them to reduce your shrink in 2025:

Failing to track shrink — Know actual numbers. Remember, you can’t manage what you do not monitor. Guesses and estimates are fictitious numbers.
Excess inventory — Overloaded inventory assets need to be controlled. The older the product, the more vulnerable it is to shrink. Rapid turnover is essential.
Deficient handling and operating — Poorly managed product culling, rotation, display levels, signage, out-of-stocks, sanitation and vendor monitoring are only the surface leading to shrink. Improve standards to prevent losses.
Low procurement standards — Buying for price instead of quality will show up in shrink. To be the best, you need to buy the best.
Slipshod merchandising — Sloppy and unorganized displays with no profit strategies will never supplement the gross profit. Always plan each display for profit mix and present it aggressively.