Brad Rickard has been a long time contributor to both The New York Produce show and Conference and The London Produce Show and Conference, presenting educational sessions we have highlighted in pieces such as these:
Brad has “grown up” with the New York event and we congratulate him as this year he joins our industry gathering as an Associate Professor, an important milestone in academic life.
Sometimes junior faculty give presentations just to burnish their CVs, but Brad has a genuine enthusiasm for his work and a passion to advance the state of knowledge. When he said he wanted to come back and discuss a new issue, we were thrilled.
We asked Keith Loria, Contributing editor at Pundit sister publication, PRODUCE BUSINESS, to find out more:
Brad Rickard, Ph.D.
Associate Professor of Applied Economics and Management
Charles H. Dyson School of Applied Economics and Management
Ithaca, New York
Q: All of us here are thrilled you will be returning to speak at the New York Produce Show and Conference this year. What will your presentation be on this time around?
A: The concept will be along the lines of “Food Waste: The role of package size, product category and date labels.”
Q: Why is food waste such an important topic?
A: It is a compelling issue in food policy. There are lots of people concerned that there is too much food waste. The USDA even has some new language and info/graphics trying to encourage people to waste less food.
There’s a wide range of reports that talk about the quantity of food waste, and in some cases, people think that it’s surprisingly high; somewhere in the order of 30 to 40 percent of all food is wasted. People are also throwing around a lot of ideas about how we can influence food waste, and that served as part of the motivation for my presentation.
Q: You recently co-authored a report examining the problem, and had an interesting take on the proposition of “zero food waste”. Can you touch a bit on this?
A: I’m not convinced that these initiatives advocating zero food waste are necessarily a good idea — from an economics perspective. We found in our experiments that people know they are going to waste some food, even at the point of purchase. I’m not sure it makes economic sense to move toward a world with zero food waste, because I think there are some benefits and costs associated with food waste.
We waste some food, but we do that because it saves us time and there is an economic value to our time; or we do it out of convenience, and there’s an economic value to that as well. If we spend all our time thinking about zero waste, it eats into our time or convenience, and we need to have some tradeoffs.
There is also, potentially, a tradeoff between food waste and overeating, so you don’t want to spend too much effort decreasing food waste if it increases consumption to the point where it could have net negative economic effects (given that there are clearly economic costs associated with overeating habits and obesity).
I don’t think people should feel like they should finish all their food to not have food waste. That’s part of the problem that no one really talks about.
Q: What can those in the produce industry do to combat this problem? For those attending the show, what do you expect to talk about?
A: I want to talk about how you can measure food waste. Whenever we talk about there being way too much, somehow we have to measure food waste, and that’s not an easy task.
Most of the waste — even those people who report waste — say that in developed (or rich) countries, most of the waste is happening on the consumer level. I’m hoping to talk about the tools we might be able to use to get a better handle on how much waste is really happening.
Related to that, is it the quantity of the waste we are concerned about or the value of the waste? Those two things are related but different.
Q: Can you talk about the experiment you did concerning this?
A: We took our best shot at trying to measure food waste in an experimental setting. We didn’t ask people to tell us how much food they were wasting; but in sort of a secret way, we asked how much food they expect their household would consume based on previous experience. We used that as a proxy for food that would be wasted.
We collected this information from about 200 people in our study and in three different categories: packaged salad greens, breakfast cereal and yogurt. We presented these people with both a small and large package size of each of these products and asked some questions to tell us how much they would consume, and backed out how much that meant they would waste.
We also asked them lots of demographic questions about themselves and their families, and we asked about their general shopping habits and their fridge/pantry management style.
We polled about 50 people, who when they were exposed to these products, they saw date labels as “use by.” Another 50 saw language that said, “best by”; another 50 saw “sell by” and the last 50 we used, “fresh by.” Ultimately, we were curious about how the language used affects people’s perception about food quality and engagement with foods and their consumption patterns.
Q: Interesting. What were the findings?
A: We found that with product size, there was significantly more waste with the larger versions of these items. We found there was more waste in the perishable items, so for salad greens, there was more waste than yogurt.
For date labels, those people subjected to the “use by” label had the most waste. The food waste was significantly larger. The lowest was for the language, “sell by.” I would call these non-trivial differences for waste levels across these different treatments.
Q: Where do you go from here? Is the experiment concluded?
A: My co-author and colleague, Norbert Wilson, a professor at Auburn University, and I are moving forward with research in the arena and will continue to think about these points that I’ve been trying to make during this discussion.
We think there might be some sort of label ambiguity. The “use by” may just have more of a connection to food safety, whereas “best by” and “fresh by” are more suggestive of food quality, and “sell by” may seem more like a retailer-directed initiative. All of this is motivated by the haphazard use of date labels in grocery stores. There’s no regulation about what these labels mean. We’re finding there does seem to be consumer confusion associated with the use of different date label language.
Q: I know you’re also concerned with the economics of farm-to-school initiatives. What can you tell us about your research into this area and whether there is a connection between this research and food waste?
A: It’s probably a different discussion, but there is definitely a lot of food waste that happens in school lunches. That work is not focusing exclusively on food waste, but more on procuring local food and using it in the school programs, as well as what that could mean for local economies.
Q: Aside from your seminar, what are you looking forward to at this year’s New York Produce Show and Conference?
A: I’ve been to the show every year since it began in 2010, and I always look forward to seeing familiar faces and meeting new folks involved in the produce industry. I find that I learn so much about the pressing issues in the produce industry from the people that attend my session.
They call these “educational sessions,” and I often feel that I am the one being educated about the up-and-coming economics and marketing concerns from the Show’s participants.
This year, I am also excited to be a part of the new Foundational Excellence program that is happening just prior to the show on Monday, November 30, and organized by the team in the Food Industry Management Program from Cornell University.
Lastly, I always look forward to visiting New York City at this time of year — to see the city lit up, and so many people excited about the holiday season.
The issue of food waste is a peculiar one. In the minds of many, it has a kind of moral significance, but it is not clear that this is the right way to think about it.
Joseph Stiglitz won the Nobel Prize in economics for his research regarding asymmetric information. Up until this important work, economic theory generally held that with specific exceptions, markets were efficient. But Stiglitz explained that, in fact, markets were never perfectly efficient, and they weren’t perfectly efficient because players in the market had imperfect or insufficient information. The reason markets had imperfect or insufficient information is because the gathering of information is expensive.
Thus the insight is that the goal is not perfect efficiency but optimal efficient. That is to say that spending a million dollars to acquire information that will allow one to be more efficient by a half a million dollars is a waste, not a benefit.
We find this research very interesting because it implies that things that cost little or nothing — say more accurately labeling produce as to its proper use by date — might reduce food waste in a way profitable for society.
But, in general, we have a wonderful tool to help us have the optimal amount of waste — food waste or any kind of waste. We call it money.
Incorporated in the price of all goods and services is the waste generated in the production of that product or service. If reducing waste was obviously economically sensible, we can expect that producers would reduce waste to save money!
Consumer waste is mostly a matter of consumer preference and bulk pricing. Perhaps the easiest way to reduce consumer produce waste is to move to frozen and canned product. But many consumers prefer fresh. So we could move closer to zero food waste, but at the price of consumer satisfaction.
The Pundit Poppa had a weakness for sliced jalapeño peppers. For some time, he bought small jars in the supermarket, but one day he realized that he could buy a giant jar in Costco for less than he was paying for his small jar in the supermarket. Note that this big jar was not just cheaper in price per ounce, it was actually less expensive in total dollars expended.
He didn’t know if he could use that giant jar of sliced jalapeño peppers, but it didn’t matter. It was cheaper to buy the giant jar and throw it out half way consumed than to buy the small jar in the supermarket.
Another issue is that food waste is an issue, but not the only issue we care about. What if someone who used to make one big food buying trip every week becomes motivated to reduce food waste by shopping daily and thus buying smaller quantities. This might reduce food waste but only at the cost of more carbon emissions.
As we mentioned in our discussion of the Triple Bottom Line, there really is no way to add up these things — consumer preferences, carbon emissions, food waste — and decide one did the right thing or one path is optimal for society.
All we can say is that millions of consumers use the price mechanism to make decisions that were, based on available information, the most optimal ones for themselves and their families.
We certainly can look for externalities that may be warping these decisions, but to try to bend the outcome, to prioritize eliminating or minimizing food waste over other options that people have willingly chosen based on price signals, is unlikely to maximize human happiness.
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We look forward to discussing important industry issues together in New York.