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Food retailers are on the cusp of seismic change. Having faced unprecedented, complex challenges in recent years, the pressure is on to innovate, adapt and meet growing customer demands, placing big bets on technology to future proof their business. 

Among the biggest challenges is the need to establish more accurate and efficient supply chains. It’s perhaps no surprise that 63% of CEOs cite supply chain issues as a major threat to growth with costly consequences: a staggering $163 billion is lost annually due to discarded inventory across various sectors. Food waste in particular is a critical challenge, with 1.05 billion tons of food wasted globally each year. And that waste is taking its toll on the environment. Each year, food waste contributes to 8-10% of global greenhouse gas emissions. Which directly connects to another challenge facing food retailers – to become more sustainable.  

So how to create more effective supply chains, reduce food waste and run more sustainable operations? As we move towards an increasingly digital future, you can see why many are turning to technology as the answer. But in an industry that relies heavily on the physical movement of goods from point A to point B, technology solutions must be designed around connecting the physical and digital.  

Julie Vargas, vice president and general manager of identification solutions at Avery Dennison explains how RFID is helping retailers enhance product freshness, eliminate food waste and boost supply chain efficiency.

Giving physical products a digital identity

At Avery Dennison, we believe the answer lies at the intersection between the physical and the digital – and this is where RFID technology comes in.

RFID solutions are at the cutting edge of supply chain visibility, and are revolutionising inventory management, increasing speed and accuracy through automation. The magic lies in connecting  the physical and digital aspects of a retailer’s operations by giving each physical item its own digital identity. Enabling real-time item-level visibility, retailers are able to minimise waste, while enhancing efficiency, driving sustainability and, ultimately, boosting their financial performance. 

How intelligent RFID labels are tackling multiple challenges

In the food retail industry, inventory largely relies on people to take stock of what is coming in and out of the store. The problem is, this labour burden is costly, and will always be susceptible to human error.  

These inaccuracies often result in the wrong business decisions being made, impacting on-shelf availability and expiry management, resulting in lost sales and wasted product. Yet, with intelligent RFID-enabled labels providing digital visibility to physical items, retailers are empowered to make smarter decisions with faster, more accurate data at their fingertips. As an example, before shipments even reach the store, using RFID scanning, employees can be notified in real-time if a package is loaded onto an incorrect vehicle, so a mistake can be rectified almost immediately. This greatly reduces sorting and delivery mistakes, as well as late or missing deliveries, helping to ensure their shelves stay fully stocked. 

RFID labels in action

UK-based food service distributor Reynolds proves the wide-ranging challenges RFID can help solve. On average, Reynolds delivers 60,000 packages to restaurants every week. The boxes it uses are designed to be reused or recycled, but many ended up in landfills or were lost by the restaurants receiving them.   

To improve visibility and motivate reuse, Reynolds worked with Avery Dennison to create a solution that gives unique, scannable identities to each container through RFID labels. Upon dispatch and again at receipt, all containers are scanned so Reynolds knows exactly where each one is – whether that’s with a restaurant or back in its warehouse.

By integrating this technology, Reynolds’ supply chain runs more efficiently, and the lifespan of each container has been elongated, making them more sustainable. Also, as an added benefit, food spoilage has decreased. Restaurants can use the RFID system to get a clear view of the items they have in stock and avoid over-ordering. 

Another way to preserve freshness and reduce waste is through resealable RFID labels.

Nestlé is a great example of this in action. When the organisation wanted to reduce waste within its Cocosette, Morenitas and Deditos brands, it partnered with Avery Dennison to create new, resealable adhesive labels that can be reused and peeled back, and then resealed multiple times to reduce spoilage and packaging. Product flavours stay fresh, and the consumer gets an overall better experience. The solution has already been a success in Colombia, and there are plans to replicate it with Nestlé’s packaging on a more global scale.

Transparency builds consumer trust

RFID labels can also be used to prove product authenticity and enhance packaging communication, connecting brands with consumers through compelling storytelling tracing back to the item’s origin. 

Combining the unique digital identity from an RFID tag with a QR code allows brands to communicate the relevant information for the exact product a consumer is holding. This traceability tells them the full background story of the products they’re buying – from farm to fork – which helps better engage customers and build their trust.

RFID to prepare for the future… now

In a landscape filled with challenges, the future of the industry won’t rely on either the physical or the digital. Instead, it will require a combination of the two. Intelligent RFID labels offer a relatively simple solution to complex challenges that food retailers are facing; becoming more sustainable, reducing waste and creating more efficient supply chains.