In the Trenches: The diverse levels of produce shrink
Did you ever decide one day to clean the inside of your refrigerator? The first step in tackling this chore is to remove everything and sort through it. In the shuffle some items may have gone past the use by date, others were simply forgotten about in the back of the crisping drawer and have to be discarded. Those in the retail food industry supermarkets know this as shrink.
The aforementioned refrigerator chore gets one thinking about all the produce spoilage that occurs throughout the system — from farms to consumers. In supermarkets, produce departments experience waste and the losses can often reach serious dollar amounts. Every percent of produce shrink loss is a percent less on profit, and when the profit decreases, that’s when management starts snooping around for reasons causing it. Shrink is usually one of the biggest factors.
Management holds produce managers accountable for their gross profit numbers. Whenever the gross profit is deficient, they usually want to know what went into the tank — meaning the shrink loss.
It’s true that most produce shrink exists at store level, but the fact is shrink does not starts and end in store. There are many factors that can contribute to shrink, thus produce managers should not have to take the full brunt of the blame.
There are a number of areas where shrink is initiated before product arrives to a store. This is the “invisible shrink.”
For example, a banana is dropped on the floor. After picking it up the banana doesn’t show any immediate signs of damage, but when peeled the interior reveals bruised areas. The result ends up as waste.
Let’s explore and acknowledge where shrink can be set in motion before it gets to the produce manager at the store level.
Farms and Fields: Harvesting and handling of product, especially delicate items such as leafy lettuce, tomatoes and berries, can easily be lightly bruised during picking, sorting, and packing at the facility, then show up later.
Storage: Product retained on inventory at shipping points due to lower demand will speed up the aging process. This reduces the holding strength of sensitive items such as leafy greens and berries. There is only a certain length of time produce can be held prior to shipping without becoming unsuitable for sale.
Cold Chain: Interrupted temperatures broken within the supply chain from farms to stores can impact freshness of produce and its shelf life.
Transportation: Hasty loading and unloading can create product stress that can shorten shelf life right off the bat. The proper truck reefer settings to control temperature must be accurate all through the shipping journey.
Distribution Center: Once product arrives at the wholesale destination, it again may be susceptible to an unloading and loading process. There is also the moving of product in and out of coolers and making store order selections, which involves handling cases of product from storage cubicles to pallets. Any tossing, dropping or mishandling could also activate hidden damage to the product.
Obviously, there is a percentage of shrink that occurs directly in store. Once product arrives at the store until it is sold, there is a specific amount of shrink waste. There are a great number of ways that shrink materializes in produce. Controlling waste in the department operation is the sole responsibility of the produce manager.
However, 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, There are always other factors involved.
Ron Pelger is the owner of RonProCon, a produce industry advisory firm. He is also a produce industry merchandising director and a freelance writer. He can be contacted at 775-843-2394 or by e-mail at [email protected].