The Progressive Grocer and Their Biodigester

March 4, 2024

5 minutes, 10 seconds read

The Progressive Grocer and Their Biodigester

How One Investment Addresses Top Consumer Demands

In today’s volatile and competitive grocery industry, innovation is essential for keeping food retailers profitable. Innovative grocers are reevaluating how they deliver value to customers. However, the most progressive grocers are making strategic investments in solutions that provide multiple avenues for meeting consumer demands and thereby enhancing value.

Biodigesters have proven their versatility as an operational solution able to deliver the cost savings that grocers need and the sustainability impact consumers want. Below, we explain how biodigesters are helping progressive grocers redefine how they operate. 

Consumers want more affordable groceries

The biggest consumer demand today is far and away the demand for low-cost groceries. From 2021 to 2022, U.S. consumers saw an 11% increase in the cost of food, the largest such annual jump since the 1980s, according to the U.S. Government Accountability Office. Increases in food costs have outpaced inflation as supply chain and other disruptions continue to impact availability. While cost increases have slowed, there has yet to be a drop in overall grocery costs. 

As a result, consumers are overwhelmingly showing preference for innovative grocers that are taking steps to rein in costs where possible. For example, Aldi, which works to keep costs low through a “no frills” grocery experience, is seeing record growth in several countries. Other grocers are trimming prices on everyday items such as eggs, milk, and bread and prioritizing value items overall.

Biodigesters help innovative grocers rein in costs

Given consumers’ demand for more affordable food, grocers must examine every aspect of their operations for opportunities to reduce costs. Many may be surprised to find that they’re throwing away thousands of dollars’ worth of food each week.

Data from ReFED, a nonprofit organization focused on data-driven solutions to ending food waste, revealed that retailers threw away 35% of food in 2022, amounting to nearly 5 million tons of surplus. 

ReFED reports that much of this waste is the result of confusion over food date labels. Addressing this challenge by improving labeling and right-sizing purchasing can have a significant impact on profitability. So, too, can eliminating off-site waste management costs for organic waste. 

On site biodigesters allow grocers to significantly reduce their waste disposal costs. Because many hauling fees are based on weight or volume, an on site biodigester reduces waste management costs by reducing the volume of waste transported. It lowers the amount spent on landfill tipping fees that range anywhere from $25 to $150 per ton of waste. It also helps prevent fees that may be exacted when waste limits are exceeded. 

This impact on direct costs is easy to see, but onsite biodigesters also help lower indirect costs. Indirect costs include the time employees spend collecting and transporting waste to outdoor bins and the need to use plastic bags to dump that waste. Reducing the amount of time required for moving garbage allows employees to spend more time on customer-facing, value-added activities with higher potential for generating revenue. 

Consumers want more sustainable grocers

Many grocers recognize that lowering costs is not on its own an effective strategy for winning business. The competition to lower prices encourages consumers to chase the lowest deal, eschewing brand loyalty altogether, finds the payment-focused research and media platform PYMNTS. As a result, progressive grocers must take steps to increase values in multiple ways. 

Reining in operational costs is an important step for increasing value. However, another strategy is to take steps to align with shoppers’ desire to purchase from organizations that have proven their commitment to sustainability. A survey of grocery CEOs from global consultant McKinsey & Co. found sustainability remains a leading priority for consumers – and it’s driving top- and bottom-line results for grocers. 

Alongside this high consumer demand for sustainable products – including more locally produced goods and less packaging – is another sustainability driver. New regulations mandating food and packaging waste reductions and increased labeling restrictions are coming into effect across many states and municipalities. Grocers that have not taken steps to comply with these restrictions face costly fines. 

This push-and-pull is encouraging more grocers to innovate in how they ensure compliance, deliver the sustainable products consumers want, and maintain profitability in the face of high inflation. 

Biodigesters reduce environmental impact of food waste

On site biodigesters deliver value in a number of ways, but the core value of this equipment is its ability to lessen the environmental impact of food waste. When organic waste is sent to the landfill, it decomposes in an oxygen-free environment. This “anaerobic” process generates byproducts that includes methane. It is this methane that makes food waste so problematic. 

Although methane accounts for only 16% of global emissions, this greenhouse gas is more than 87 times more potent than carbon dioxide when it comes to trapping heat in the atmosphere. Because methane is also shorter lived than carbon dioxide, reducing these methane emissions today can more rapidly impact climate change than CO2 reductions alone.  

Today, landfills are the third largest source of methane emissions, reports the U.S. Environmental Protection Agency. Grocers can reduce their impact on greenhouse gas emissions by keeping organic waste out of the landfill. By disposing of this waste in an onsite biodigester, grocers allow food waste to break down in an oxygen-rich process with byproducts that include gray water that can be safely disposed of down the drain. 

Biodigesters help innovative grocers compete

With a payback period of typically under two years, on site biodigesters provide grocers with an opportunity to see a significant impact on their operational costs without breaking the bank. Leveraging a biodigester’s data analytics allows grocers to extend this impact. Data on food waste can help grocers adapt their purchasing as seasonal trends and consumer demands dictate. 

Grocers can also leverage this data to demonstrate their commitment to environmental sustainability and corporate social responsibility. This can have a profound impact on how customers view a grocer and build a strong case for brand loyalty. 

To learn how businesses are expanding the business case for biodigesters, take a look at our case studies. Or contact Power Knot and take the next step in reducing food waste.