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Too Good to Go: AI Stops Food Waste From Eating Into Grocers’ Margins

AI Stops Food Waste From Eating Into Grocers’ Margins

As grocers increasingly turn to artificial intelligence to boost efficiency, Too Good to Go’s new platform aims to improve food management, boosting grocers’ profit margins.

Chris MacAulay, the company’s U.S. managing director, told PYMNTS in an interview that the new AI platform makes recommendations to grocers on how best to move products that might otherwise be thrown out.

“These types of solutions can be incredibly beneficial for companies to improve the business,” MacAulay said. “It’s a very challenging business where the margin is typically right around 2%. …You’re looking to optimize and improve your workforce behavior. You’re looking to optimize and improve your distribution. You’re looking to optimize and improve your pricing strategies. And I think when you put those things all together, that’s the biggest opportunity.”

Historically, the company has offered an eCommerce app for food sellers to offer items that would otherwise go to waste at a discount. The new platform uses AI to power surplus food management, offering three primary features for retail partners: it helps track and manage items, reducing the time employees spend scanning each product; it optimizes how items are handled on the shelf; and it assists in distributing food based on AI-driven rules and recommendations.

In a 2021 interview with PYMNTS, the app’s co-founder, Lucie Basch, described it as a “win-win-win concept” where businesses can mitigate the impacts of food waste on profitability, and consumers can get a discount while addressing environmental issues.

Grocers are looking for more intelligent insights. The PYMNTS Intelligence study “Big Retail’s Innovation Mandate: Convenience and Personalization,” which drew from a survey of 300 large retailers in the United States and the United Kingdom, found that 37% of grocers were innovating on their data analytics capabilities.

The AI platform uses a broad range of data to recommend discounting strategies, taking into account external factors such as weather and localization. By considering these factors, grocers can optimize their discounting practices based on regional preferences and seasonal variations, among other factors.

Businesses overall are increasingly looking to AI to optimize all aspects of their operations. Data cited in the “Understanding the Future of Generative AI” edition of the “Generative AI Tracker®” revealed that around 40% of executives said there is an urgent necessity to adopt generative AI, and 84% of business leaders said generative AI’s impact on the workforce will be positive.

In the future, MacAulay said he expects further integration of AI into recommendations, donations, marketplace solutions and SKU management.

“We’re just at the beginning stages of the all the different ways in which we can work with our partners to tackle the problem of food waste,” he said. “Large-scale AI and machine learning can drive all sorts of optimizations across our product set. And I think the exciting part is that we can see the impact that we can have by reducing the amount of time employees spend managing SKU-level expiration dates. We can see how much of an impact AI-driven recommendations can make on the bottom line, as well as on the consumer set.”

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