BOSTON — Kraft Heinz is teaming up with Spoiler Alert to improve its food waste mitigation efforts.
The Boston-based software company helps perishable CPG brands manage excess and slow-moving inventory. Working exclusively at the manufacturing plant or distribution center level, it offers a B2B sales platform that enables food and beverage brands to manage their liquidation process across a private network of discount retailers and nonprofit channels. Companies including The Campbell Soup Co., Danone, KeHE and HelloFresh use the platform to manage their B2B liquidation efforts.
“You can think of it as an operating system for sales and supply chain managers to manage their distressed sales efforts,” said Ricky Ashenfelter, co-founder and chief executive officer of Spoiler Alert. “Companies ingest distressed inventory data into our cloud-based platform and utilize our workflows to communicate sales opportunities, collect offers from their unique buyer networks and allocate inventory — faster, with fewer errors and with more shelf life.”
Spoiler Alert feeds data on what is and isn’t selling back to supply chain and sales leaders so they can develop a better sense of how to best navigate fluctuations in the future, catching the product with more shelf life and more time to redistribute in the market.
“Demand planning remains equal parts art and science,” Ashenfelter said. “Until manufacturers are able to use forecasting tools that perfectly predict the weather, changing consumer behaviors or natural disasters, supply chain managers are always going to be faced with overages and shortages.”
Shelf life is the most pervasive instance of stress supply chain manufacturers face when dealing with excess or slow-moving inventory. Manufacturers typically resort to selling in the secondary market as inventory approaches the date-coding guarantees established with their primary retail customers.
“This is not an expiration date, and often times product still has weeks or months of shelf life to work with,” Ashenfelter said.
Other examples include seasonal items like holiday-themed or flavored products, discontinued items and promotional items.
“As one example, a major manufacturer shared with us a story about branding a number of their SKUs for a major movie release slated for last summer,” Ashenfelter said. “When the pandemic hit and the release date got pushed out, retailers backed out of carrying themed SKUs for a movie that consumers weren’t yet excited about. These types of things happen all the time.”
Most companies rely on manual workflows for liquidation. The process is error-prone and time-consuming and may end up shaving days or weeks off shelf life, resulting in food that is never sold or eaten. Companies can leverage Spoiler Alert’s platform to maximize value recovery, strengthen relationships with discount retailers and increase the efficiency of supply chain managers.
Following the initial rollout of Spoiler Alert’s platform, Kraft Heinz improved the speed with which it offers inventory to customers by 75% and reduced overall inventory processing time by 50%.
“Given the variety of products we sell across multiple channels with varying code dates, our sales solutions team takes great care in addressing excess and slow-moving inventory by working with a variety of partners to eliminate waste,” said Mike Ridenour, head of industry relations and sales operations at Kraft Heinz. “We are encouraged by the functionality that Spoiler Alert’s platform offers us from an automation, intelligence and analytics perspective.”
Food waste mitigation is a top priority for the company, added Jacob Saxon, head of US sales solutions.
“Our goal is to deliver more product into the hands of consumers through our value-channel retailers that specialize in opportunistic purchasing,” Saxon said. “Spoiler Alert lets us take these efforts to new heights, enabling our team to be better partners with our key retail customers and more rapidly respond to fluctuations in supply.”
Along with supporting food waste mitigation, Spoiler Alert’s platform can help companies tackle issues around food insecurity.
“There has been a significant increase in discount retail over the last 12 months,” Ashenfelter said. “This increase in demand comes from two things. One is tied to the public health impact of the pandemic, the other to the financial impact of the pandemic.”
Both traditional and discount grocers saw rises in demand as consumers shifted spending away from foodservice channels into at-home meal prep, he said. More meaningful has been the increase in unemployment and food insecurity. More than 10 million Americans currently are unemployed, according to the US Bureau of Labor Statistics. Millions more are underemployed. Feeding America estimates more than 50 million Americans are food insecure, up from 35 million pre-COVID.
“When rates of unemployment and food insecurity rise, unsurprisingly, so does the demand for more affordable options for nourishment,” Ashenfelter said. “Value channel retail and nonprofits provide critical sources of food for millions of Americans in hard times and in good times, too.”