Every year, the United States throws away one-third of all the food it produces — 133 billion pounds of food. And grocery stores are responsible for tossing 10% of that food.

Last week, we headed to major grocery retailers in the New York City area with a couple of “dumpster divers” and saw the food waste first-hand. It turns out food waste may be built into the business model of supermarkets. Doug Rauch, the former president of Trader Joe’s, laid out the dilemma plainly in a study by Jose B. Alvarez and Ryan Johnson at the Harvard Business Review.



“The reality as a regional grocery manager is, if you see a store that has really low waste in its perishables, you are worried. If a store has low waste numbers, it can be a sign that they aren’t fully in stock and that the customer experience is suffering,” wrote Rauch, who recently founded The Daily Table, a supermarket that re-purposes expired food.

Perfectly good produce pulled out of the trash from New York City supermarkets. Business Insider/Harrison Jacobs The general business model of supermarkets dictates that stores be fully stocked with whatever customers want at any time so they don't run to a competitor. This strategy affects operations from the top down.

However, there are other reasons grocery stores let so much good food go to waste. The National Resources Defense Council did a study in 2012 identifying some of major factors that contribute to supermarket food waste.

1. Overstocked product displays:

Most grocery stores operate under the assumption that customers are more likely to buy produce if it's from a fully stocked display. This assumption leads to overstocking, as well as damage to items on the bottom of those perfectly constructed produce pyramids. What happens to the overstocked produce when it doesn't sell. Business Insider/Harrison Jacobs

2. Expectation of cosmetic perfection:

Customers have been trained to expect perfect, identically shaped produce. Retailers stock their produce according to that expectation — even if the shape, size, and color have nothing to do with quality.

This preference leads farms to avoid selling the so-called “B” stock to supermarkets. Whatever does make it through the cracks to store floor is taken out of stock.

Thankfully, organizations like Feeding America, Food Finders, and CityHarvest have been trying their best to take over this “B” stock and provide it to those in need. Yogurts thrown out because they are approaching their "sell-by dates." Business Insider/Harrison Jacobs

3. Sell-by dates:

Most consumers have no idea what expiration dates, sell-by dates, use-by dates, or best-by dates mean. Consumers (and many sellers) wrongly assume that food is no longer good after these days. Instead, sell-by dates are guidelines for sellers to indicate peak freshness. Most foods are good long after the sell-by date.

Fearing consumers will either not buy the food or think the stores are carrying old products, most grocery stores pull the items out of stock several days before the sell-by date.

4. Damaged goods, outdated promotional items, and unpopular items:

Often, product packaging gets damaged during shipping, leading supermarkets to toss products even though the food hasn't been compromised. The stores assume, perhaps rightly, that no consumer is going to buy a dented box of cornflakes if a pristine one is right next to it.

In addition, items that fail to sell like overstocked holiday foods or unpopular new items are often tossed.

Who's to blame?

As you may have noticed, not all of these explanations are the grocery stores’ fault. A lot of the problem lies with consumers, whose picky tastes dictate what grocery stores sell.

These issues have parallels in consumers' homes. In general, consumers buy too much food, throw it away too quickly, and pay little attention to waste. Food waste on the consumer level is double that of the retail level (90 billion pounds of food versus 42 billion pounds).

A lack of education of both consumers and sellers on food safety and food waste has led to bad habits and wasteful selling practices.

A huge percentage of food waste could be mitigated if more Americans were willing to buy bananas with brown spots, or if they understood they can eat yogurt two weeks after its sell-by date.

French supermarket chain Intermarchè recently started an advocacy campaign to fix perceptions about misshapen fruit. The program has been a huge success, selling millions of tons of the weirdly shaped fruit.

In the US, grocery giant Stop and Shop ended its practice of overstocking displays in a trial to mitigate waste back in 2008. Customer satisfaction actually rose in response to the reduced stocked displays, as did sales. Many customers reported that produce was three days fresher than before.