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Tiered price produce marketplace (Updated additional refinement questions)

Open up different price points (tiers) for fresh produce based on appearance and age

Photo of Angel Landeros
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Supermarkets normally have a single price for each type of produce.  What if people could choose cheaper options of the same produce because it is less fresh or looks less than premium (some blemishes, scratches, etc.).

"...U.S. supermarkets generally reject produce that doesn't meet their standards for appearance or earn top U.S. Department of Agriculture grades, leading to waste. The U.S. trashes about a third of its food supply, according to USDA estimates. The National Resources Defense Council (NRDC), an environmental action group, calculates food waste at 40%..." Source 


Supermarkets could have a discount produce section where less pretty, slightly damaged or very ripe items could be sold at a discount price.  The produce could be pre-bagged, and/or pre-cut to make it more convenient for the consumer.  It might be an economically attractive offer for:

1. Budget conscious people

2. People that might need the produce to make something that doesn't depend on the appearance of the food

3. People that are looking for something that could be eaten right away so they are not concerned with shelf life


The supermarket could squeeze more out of their fresh produce instead of throwing it out and people might save some cash given additional options.  If it works, we would also start changing perceptions on what is OK just based on its looks.

  

What early, lightweight experiment might you try out in your own community to find out if the idea will meet your expectations?

We could ask a local market to test out the idea and see if they sell some of the produce that would otherwise be discarded and calculate the savings or additional earning generated.

What skills, input or guidance from the OpenIDEO community would be most helpful in building out or refining your idea?

The complexity I see is in how to charge people the right price for the discounted produce to avoid abuse (people putting "premium" produce with the discounted items). How could I get around this? I also think it is about changing paradigms and perceptions, who could porvide experience in how to change peoples parameters of what is acceptable

Tell us about your work experience:

I am a Chemical engineer at a large CPG company.

This idea emerged from

  • An Individual

How far along is your idea?

  • It’s just been created! It’s existed for 1 day - 1 month

How would you describe this idea to your grandmother?

Imagine you go to the supermarket, and you have a chance to buy some delicious produce for a lower cost. It might not be as pretty but will taste just as good as the most expensive stuff. You would be able to buy all the tasty fruits and vegetables you were looking for and have some more money left over afterwards, doesn’t that sound like a good deal?

How is your idea unique to the space?

My idea is focusing on optimizing the existing supply chain for perishable goods in supermarkets. The proposal should require minimal effort and investment by the supermarket and it should improve their revenue, turning waste into profit. It doesn’t require a major cultural shift by every consumer. Culture change is facilitated at the point of sale, making it transparent.

Who needs to play a role in your idea in order to make it successful?

I need to have good relationships with the different store managers and store employees that will need to share my vision and be patient to communicate, adjust and improve on the idea to make it successful.

How do you plan to measure the impact of your idea?

Start with a baseline: How much does the store spend on food waste disposal and/or how many tons are sent to disposal. I can focus on one or two specific products to make it easier to track. Implement the project taking into account: 1. Additional time needed to move and prep the recovered produce 2. Pricing point that we expect to provide some profit margin vs. disposal cost. 3. Track improvement after modifying any variable to tease out the impact

What are your immediate next steps after the challenge?

If the super market I’m I contact with is interested, I would try a real life prototype to confirm if the idea works and is profitable

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Photo of Manik
Team

Thank you for your contribution Angel!
It is indeed rather shocking that food wastage is even prominent in places where it can be avoided with very simple, yet effective measures.
In this case of food wastage due to "ugly" and "not perfectly shaped" fruits and vegetables being rejected by retailers, it is important to encourage a diversification in sales. In a way it would mirror the market principles of segmentation, offering consumers options based on their preferences. 
There is no "one customer", hence I believe that the idea to separately sell "special" food, with added financial incentives, is one that just awaits implementation in order to be successful.

Photo of Romano RP
Team

Hi Angel,

Have you considered the opportunity of linking these 'ugly yet edible' items to not for profit cafes and restaurants that you purchase them at reduced prices or even donations and use them to make meals?

As there are many cafes popping up on the basis of donated food.

Photo of Molly
Team

Hi Angel, interesting idea! Certain grocery stores and businesses are in fact trying this (check out Imperfect Produce, Giant Eagle, and Walmart, for example). 

An important thing to consider is the impact on farmers with devaluing the so-called ugly produce. If produce already deemed "ugly" (i.e., not grade A) at the farm and consequently purchased at a discount to sell below market rate, how will farmers be able to financially support the cultivation and transport of this produce? It's important to look at how we can elevate the value of ugly produce so that it is priced fairly for the farmer. Long term, doing so can lower the price of ALL produce by increasing profit for farmers and increasing supply. How might ugly produce be sold in a way that doesn't cheapen it? 

Photo of Jessie Dong
Team

It is shocking to see that 1/3 of fruit are wasted because they are ugly. Fruit suppliers should find a better  channel to sell them, such as fruit process companies, juice bars or restaurants which consumers do not see raw materials. 

Photo of Dhananjay Abhang
Team

Hello Angel, I am surprised to read this data and really need some immediate solution. While the idea of low pricing is good but i think you can also consider to sell these fruits to juice manufacturing companies. Because selling these fruits to customers will need some behavior change which will take some time.

Photo of Michael Wells
Team

Hi Angel, I felt that your idea was very interesting. I couldn’t help but notice that you’re trying to reduce the amount of food wasted in the United States. By using food that has possibly exceeded its shelf life, or doesn’t look appetizing enough for consumers to buy. I like the generality of the idea, but in reality, I don’t think it would play out as you’d hope. People are extremely picky especially when it comes to their food. Most everyone would still buy from the fresh foods container. People associate fresh food with the ability to buy that food. No one wants to buy food that’s been sitting on the shelf for a while, or food that has marks, bruises, or damage to it. They don’t think it’s safe to consume, or won’t consume it because it doesn’t look safe. Yes, people that are budget conscious may buy from the less admirable food container, but I highly doubt that they’ll think it’s good or buy much of it.
It’s the whole persona about looking at a food on the shelf, and determining if it’s safe or not. People will always judge based on looks and they’ll always choose the best looking. I agree with your second point on the fact that people can cook with food that doesn’t necessarily needs to look good. Although, I don’t quite understand your third point. Why would they choose the less attractive foods to be eating right away? Those are the least fresh foods that are being sold, and the most likely to be thrown out.
I do like the point you made about how to change people’s parameters of what is acceptable. This is very important, because without provide guidance, no one would know what to buy. So informing people about how the less attractive food is actually okay to eat is worth your time. People know what they know and are afraid to find out what they don’t know. If you tell them before hand, then maybe there will be a higher chance of them buying from the less admirable food container. I hope your idea pulls through and good luck with everything in the future!

Photo of Angel Landeros
Team

Thanks for such a deep analysis, I've taken your concerns into account as I have been working off-line to design some potential tests at supermarkets.  In the end I'll have to try it out with whomever is willing to partner with me and take this potential risks into account 

Photo of Amber Matthews
Team

So is this a discount, a premium, or both?

Photo of Angel Landeros
Team

It could be handled through both options.  Discount for produce that is not as attractive could be sold for a discount as is, or it could be re-purposed in prepared foods, or ready to eat (sliced/diced, plated) at a premium price

Photo of Natalie Smith
Team

Hi Angel,
I love your idea to help eliminate food waste as people tend to buy their food based on aesthetic, assuming what looks better, tastes better. Pricing fresh produce differently based on appearance is a great idea, especially in a culture that highly values money and conserving money in any way possible. So much food is wasted, food that could feed the entire world, just by appearance. Changing perception on ugly foods will be difficult, but a trial run in a grocery store may help change the idea that ugly food tastes bad in many grocery shoppers’ minds. You mentioned that people may abuse the food discounts by placing premium produce with the discounted items. A possible way to fix this is by dividing the types of produce into different locations within the store and having separate grocery checkouts for each type of produce only. The grocers will know what type of food they are checking out, and can spot a premium-like food in a discounted produce only checkout. I love your idea and I believe it could definitely make a positive impact in reducing food waste!

Photo of Angel Landeros
Team

Thanks Natalie, I've been trying to make in-roads with local supermarkets, but finding the right person to make the decision has been tough.  Changing perceptions will be tough if we depend solely on convincing people to go beyond appearances; even I find myself picking the nicest fruit I can in the supermarket, even though I am trying to change this...

Photo of Quinlyn Highsmith
Team

Hello!
I think your idea is absolutely wonderful and if enacted could provide amazing results!
Do you have specific locations or stores this idea would be in or has that not been specified? Like, would you start with smaller grocery stores and then grow to the large chain grocery stores? Would this project be in lower income areas or higher? I think hosting the initial trial in large city that has both those who are wealthy and those who are not as much so would prove interesting. As you mentioned, there is that worry that people will take advantage of the pricing. I think labelling the fruit differently could be one solution. Maybe the imperfect fruit could have a different check out section, similar to when you buy a sandwich or fish. The imperfect fruit could have its own counter to combat illegitimacy. Also, would these nontraditional appearing fruits become so popular (being that they are cheaper), that the "perfect" fruit are no longer marketable? 
I think this idea is really great, especially for communities where the poverty rates are high. This would not only help food waste, but could potentially aid in children in poverty eating healthier. These kids often do not eat many fruits and vegetables because produce is so expensive compared to a fast food meal. But if the price is marked down, then the produce becomes more so available! It is a win-win!
This is overall a great idea and I am excited to see where this goes!

Photo of Angel Landeros
Team

Thanks Quinlyn, I've been trying to set up some trials at my local supermarkets in Mexico City.  They are big chain supermarkets in a mixed income neighborhoods.  It has been difficult to get some traction as the store managers are not used to dealing with proposals of this type coming out from the blue and corporate offices don't have the time to answer to a small time trial.  I'm kind of stuck between the incapability of local managers to go ahead and try it, and the lack of interest/priority of the higher levels that could make the choice.  It also doesn't help that I am not dedicating all the time I would like to do this so my follow up leaves a lot to be desired at this moment.
Setting the right price point will be tricky as it would have to be worth the effort for the store without cannibalizing too much of its premium produce.  If it just eats up its current purchasing base instead of growing it, it won't be sustainable.  That's why I was also considering options of selling it ready to eat (sliced, cubed, prepared or mixed, etc.) so it could be sold at a premium price without directly competing with the standard produce.
Your words of encouragement make me want to give this an extra push and get the stores to try it out!  I hope this works out! 

Photo of Mandi
Team

I think this is a great idea.  Walmart recently sold potatoes and apples in some of its Florida stores. http://www.npr.org/sections/thesalt/2016/07/20/486664266/walmart-world-s-largest-grocer-is-now-selling-ugly-fruit-and-veg
I do not know the results, but would be a good resource.

Photo of Angel Landeros
Team

Mandi, thanks for sharing! This is just what I'm aiming for, something that does not require major disruption of the existing supply chains and is conveniently packaged for the consumer to ease the decision making process.  What a great find, I really appreciate it. 

Photo of OpenIDEO
Team

Welcome to the Refinement phase Angel! We've added new Refinement questions to your original submission that we'd love for you to answer. Please check out the Refinement Phase Toolkit for instructions on how to answer the new questions and other recommendations we encourage all idea teams to consider in the upcoming weeks.

Refinement Phase Toolkit: http://ideo.pn/2du9sf7

Lastly, here's a useful tip: When you update the content of your post, it'd be helpful to indicate this in your idea title by adding an extension. For example, you can add the extension " - Update: Experience Maps 09/28" to you idea title. This will be a good way to keep people informed about how your idea is progressing!

Photo of OpenIDEO
Team

Hi Angel, we updated the link to the Refinement Toolkit. Please use this new link instead: https://d3gxp3iknbs7bs.cloudfront.net/attachments/bda1f109-0466-4f8e-9699-1359e406df56.pdf

Photo of Vanessa Shaw
Team

Hi Angel, Felicidades! What a great idea.  Its so funny because yesterday I just learned that this organization in Oakland and Berkeley, California have a business mailing you the ugly fruit/veggies http://www.imperfectproduce.com/#ugly-produce-delivered And inside each box they include a packet of Googley eyes for you to make little creatures with your 'ugly produce', so cute! They showcase them in their instagram account. https://www.instagram.com/p/BItYMIfjxsi/?taken-by=imperfectproduce   I would love to see this service grow nationwide.

Photo of Angel Landeros
Team

Gracias! Yes, I think we need to rebrand ugly produce and make it attractive for people to purchase and advertise that purchase.  Your links are very helpful and insightful!  Thanks for taking the time to share!

Photo of Kate Rushton
Team

Congratulations on being one of the forty ideas in the refinement phase. 

Photo of Angel Landeros
Team

Hi Kate.  I working on getting some UX maps and some testing to get more info to share as part of the refinement phase.  i hope you can give me some feedback once I update the idea.

Photo of Angel Landeros
Team

Hi Kate.  I working on getting some UX maps and some testing to get more info to share as part of the refinement phase.  i hope you can give me some feedback once I update the idea.

Photo of Franzi
Team

Hi Angel,
I have encountered a somewhat similar system in some supermarkets in Germany. It does not only work with fruits and vegetables, but also with any other kind of product that is about to hit it's expiration date. I always like to check out those boxes, both out of principle and because it is nice for a student budget.
One problem with these existing solutions, in my opinion, is the display.
They are usually stuffed into a box or a shopping cart in some corner of the market and you have to actively search for them. I think a better way to market & display odd or soon-to-expire products could definitely have an impact. Love your idea!

Photo of Angel Landeros
Team

Thanks Franzi.  I am trying to get a local supermarket to tryout to put these product front and center.  The worry is cannibalizing higher gross margin product.  I need to find a balance between losses related to product going to waste vs. potential losses due to people purchasing discounted product.

Photo of Famey Williams
Team

Hello Angel Landeros I thought i'd share something similar happening here in Australia with one of our major grocery stores.  https://www.woolworths.com.au/Shop/Discover/our-brands/the-odd-bunch 

I can attest that I personally always look for the odd bunch veges and fruit as they are so much cheaper. The marketing is incredibly endearing and you are often feeling so sorry for these ugly vegetables after watching an advertisement. 

Great idea  and definitely needs to spread the world over :)

Photo of Angel Landeros
Team

Love it Famey!  Thanks for the link.  It touches on a point that I think is key to making this work, which is prepackaging to add the convenience to the cost. 

Photo of Olivia Kang
Team

Hi Angel,

I'm currently teaching a college course looking at group wisdom and influence. As a classroom exercise, we tackled this challenge, and one of the ideas we came up with was similar to yours: how can we find a way to make ugly foods more saleable? The idea of playing with price points is great -- one other idea we had regarding this idea was how we could combine this with branding/advertising. What kind of campaign could we create in order to make buying "ugly" foods not only good from an environmental or budgeting standpoint, but also trendy? 

Photo of Angel Landeros
Team

Hi Olivia!  I think that it could be made trendy if it is linked to a person's social status.  For example, people that purchase a bag of "ugly" produce could scan a QR code or punch in a specific serial number and their social media could display a message showing that he has helped local farmers or the environment by avoiding X amount of waste.  People could rack up points per purchase and get recognized on a monthly basis or win credit at the store where they purchase their goods.  What were your ideas?  I'd love to know what came from your group's discussions! 

Photo of Yannik Walther
Team

Hi Angel!
Some grocery stores in Switzerland (from where I am from) already have such a system, although on a very small scale. From what I have observed so far is the actual customer segment which gets attracted by this produce is rather small. Because people still prefer to buy more expensive (and nicer looking) produce. However, I think people’s behavior in other countries will be different because of the in most of the cases much lower purchasing power.
Another point which you mentioned is that such a system could be beneficial for the supermarkets since they can squeeze more out of their fresh produce. I think this point has to be examined in more detail because this statement assumes that people who buy the cheaper produce wouldn’t buy the other in case there is no option to choose. Further, one also has to take into consideration that people who normally buy at a high price could switch.

Photo of Angel Landeros
Team

Hi Yannik.  Supermarkets ans retailers are throwing out about 30 billion worth of produce every year in the US alone.   A lot of this comes from produce with slight blemishes, discoloration, or damage.  The statement does not assume that there wouldn't buy the other.  Just as with any promotional or sale in a store,  some will take it and some will not.  There is a good point of analysis of the level of damaged product that could cannibalize sale of  premium product, but in the end, there should be a balance is optimal for the vendor.
 

Photo of Gerald
Team

Hello Angel

My comments might seem negative here but please bear with me.

Fresh produce is a sector which is under extreme pressure due to low margins. Most fresh produce companies supply to retailers and have margins in the SINGLE figure % range i.e. they make less than 10% of the products sold to retail stores.

While the idea you have is commendable - please think about the economic impacts of trying to get this through the retail sector. If there are serious efforts to introduce this my views (which are only humble!!!) is that it is not a commercially viable route to market for producers or retailers. Given that there will be an expected discount and that the costs to get the product (ugly or perfect) will be almost identical - there is actually no incentive for the producers to increase supply of sub-specification products for 2 reasons:
1- It will decrease the overall return to growers which is not a viable option long term - they have too much pressure to produce at low cost already.
2- It will increase the operating costs of retailers (i.e. having more products lines to manage and could result in more store waste)

The trick to attack this is to get the retailers to lower their overall specifications - which in todays climate is highly unlikely but this is where effort needs to be focussed.

That being said - your idea MIGHT have merit if used in a direct Producer to consumer system - e.g. website sales, farm store sales etc. But please also bear in mind that sometimes the defects which make fruit "ugly" and decrease the shelf life too so waste and spoilage could become an issue if the supply chain is too long.

Making fresh produce cheaper and therefore affordable to waste product wont minimise the waste. 40-50% of waste produced in the fresh sector is POST RETAIL. food is already cheap enough for people to afford to waste up to half of what they buy.

If you would like to have a chat around this then send me a message- geraldeva@hotmail.com I would be happy to chat further on this with you.

Sorry if I sound negative - I am not trying to be. I just believe that farmers need more help making sustainable businesses than trying to find ways to make food cheaper.
I hope that you have a great day.

Photo of Angel Landeros
Team

Thanks for investing the time to provide your point of view and insights.  I actually agree with you, living Mexico, I know produce is literally dirt cheap.  This has caused retailers and consumers to become desensitized to wasting a large percentage of food.
I want to focus on the produce that is already making it to the supermarket aisle that gets passed over because it has some very minor appearance flaws, gets some scratches or bruising, and ends up being tossed out by the supermarket.
The focus would be to maximize profitability of hat has already been purchased and worked by the supermarket.  Rather than have everything end up in the bin, some items could be salvaged if they are sold at a discount or if they are reworked into more convenient presentations (pre-cut, in platters, or used in ready made meals offered by some establishments)
The objective is not to change the existing supply chain but to reduce losses in the existing process to make it attractive for implementation as it would require manageable change at store level.
I'll look at the way I've written the proposal and be clearer on the focus and intent.

Photo of Kate Rushton
Team

Hi Angel! Thank you for your post. 

I read somewhere that it was possible to buy a sealed box of mixed ugly fruit and vegetables. Maybe this is an option for your idea. They have these boxes in a supermarket in the UK. 

Are you also considering an online element to your idea or is it just for physical supermarket stores?

Maybe some inspiration to take your idea to the next stage could come from these posts in the research phase:

https://challenges.openideo.com/challenge/food-waste/research/imperfect-picks-reduce-food-waste-help-farmers-and-save-money

https://challenges.openideo.com/challenge/food-waste/research/imperfect-produce-saves-ugly-produce-from-waste-by-offering-affordable-delivery-service-in-bay-area

Photo of Angel Landeros
Team

Before anything else Kate Rushton , I really appreciate the time you have taken to provide detailed responses and links to the research ideas where I can draw more data and details.
For this idea, I wanted to focus on the marginal produce that makes it to the supermarket but normally gets passed over just for a single blemish or scratch, there are some "ugly" ones that make it through to the supermarket shelves but is not that much. 
The rationale behind the focus is to look for ways to get the most out of the effort and work that is already being done to get this produce to the consumer.  The idea is for it to be a relatively small tweak to the existing  process to facilitate buy in by the supermarket and accelerate execution.  

Regarding your other point, I think it could be a viable option, having the store bag and tag the produce past its prime might facilitate its purchase through convenience for the consumer.  I also think that we could take it a step further and have the store dice the fruit or prepare ready-made meals and make them ready for consumption.

Photo of TEENY
Team

Great idea! Intermarche launched something similiar called "Inglorious Produce" where they sell "ugly" fruits & vegetables at a 30% discount!!