Walmart faces $2bn lawsuit over use of food waste technology

Walmart is facing a $2 billion lawsuit over technology that tracks the freshness of perishable produce and aims to reduce the amount of wastage in its US stores.

Speaking about its development in March, Walmart’s vice-president for supply chain technology, Parvez Musani, said that the technology – called Eden – had been created “in just six months by our own associates”. At the time, he said that two separate patent applications had been filed, but FoodBev has been unable to find public records of either the applications or any issued patents themselves.

But now the CEO of Zest Labs, a Silicon Valley-based ag-tech company, has said he was “surprised” to find out about Eden, having previously worked alongside Walmart to demonstrate the value of its own technology called Zest Fresh.

“Starting in 2015, Zest Labs engaged with Walmart to demonstrate the value of Zest Fresh to reduce waste and improve delivered shelf-life consistency. During this time, Zest Labs’ proprietary information and trade secrets were shared with Walmart, including members of Walmart’s executive leadership team,” the company wrote in a statement.

Zest Labs developed Zest Fresh as a means to reduce field-to-shelf food waste and improve freshness for consumers. The data and insights provided by Zest Fresh also help growers, food distributors and retailers reduce the $85 billion problem of fresh food waste, the company claimed.

It has filed a lawsuit in Arkansas’ Eastern District Court with a number of complaints – including unfair competition, breach of contract and breach of good faith – and is seeking $2 billion in damages. The claim is equivalent to the value of food waste that Walmart aims to save through the Eden programme over the next five years.

Peter Mehring, CEO of Zest Labs, said: “We were surprised and concerned by how similar Walmart’s Eden description was to Zest Fresh. Like most innovative companies, we believe strongly in the need to protect our intellectual property, recognising the importance of preserving the value for our shareholders and customers.

“Zest Labs challenged long held beliefs at most retailers by properly identifying the primary contributing factor to pre-consumer waste. We then defined and implemented a breakthrough, proactive approach to managing fresh food from the farm to the shelf, significantly reducing that waste.”

Walmart spokesman Randy Hargrove told Reuters that the company “respects the intellectual property rights of others” and would defend the case in court.

The filing is unrelated to Eden Green Technology, the vertical farming upstart that announced plans to supply produce to the retailer in June.