Economy

Salvage Grocery Stores Look To Fight Food Waste, At A Profit

Not your (hippy) Grandma's dumpster diving...

Members of the French anti-food waste group, Nous.
Hannah Steinkopf-Frank

A bruised piece of fruit, a can of soup just past its best-by-date or even an outdated brand logo: In the past, these "less than perfect" items would have ended up in the trash, contributing to the estimated one-third of food that is lost or wasted each year. Industrialized countries produce about $680 billion in food waste annually, and it's also becoming a significant problem in developing economies. But around the world, so-called salvage grocery stores are popping up to not only decrease the foodstuff we throw out, but provide affordable products and other community support through social programs.

Food waste sitting in a blue bin — Photo: Nick Saltmarsh, Creative Commons User

Saving at scale: While many of these are individual local initiatives, Nous, an anti-waste company in France, is spreading its mission throughout the country. With 17 stores, Nous aims to address this issue from the source, given that 55% of food waste in France comes from producers (the rest is in stores and homes).

  • Since opening its first shop in Brittany (France's largest food-producing region) in 2018, Nous has grown to 150 employees working with upwards of 700 suppliers.

  • They partner with a range of companies, from small farmers to large grocery store brands like Carrefour and Franprix, selling groceries ranging from produce to dairy products to meats as well as hygiene and personal care items.

  • The goal is to have 50 stores by 2024, with managers having a financial stake in the business.

Food waste litters the ground next to a trash can — Photo: ​@paul_schellekens Unsplash User

A risky business model: As Le Monde reports, Nous buys goods at close-to-production cost and sells to consumers at a discounted rate: about 20-25% less than at a traditional store. But given the unpredictable nature of what food waste companies produce, it's often a gamble of what will line the shelves.

  • Still, Nous boasts that every month in each store, 35 tons of products are saved from the trash. And it's a profitable enterprise, with two million euros in sales per month.

  • Nous has also just launched its own private label, beginning with 15 products with an expansion to 50 by September, whether it be slightly broken cookies or cheeses that don't meet weight requirements. But what does Nous do with its own food waste? In addition to donating to associations, Nous also plans to open restaurants next to its stores, where chefs whip up dishes with unsold items.

Wasteless in Europe and North America: Other companies and projects around the world are finding commercially viable ways to reduce food waste:

  • In Germany, SurPlus is Berlins' first salvage grocery store, selling products in person and online through subscription boxes. Since 2017, SurPlus, which works with 700 partners, has saved over 2,500 tons of food through its Tafel-First (Table-First) principle. SurPlus also has a social initiative, donating 20% of its products to nonprofit organizations.

  • Starting in 2016, the Real Junk Food Project made history in the United Kingdom through opening its first "pay-as-you-feel" food waste grocery store. Located in Pudsey, this warehouse sells perishable and nonperishable items, especially to those who might not be able to afford full-priced groceries. The organization began in 2013 with a "pay-as-you-feel" cafe and also has an initiative providing food to students.

  • Amish communities in the United States are behind many of the country's salvage grocery stores, known as "bent ‘n" dent" shops that are both one-off and chain companies. Pallets of items are bought and sold, often at least 50% less than their retail price, to fellow Pennsylvania Dutch and all bargain-seekers.

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Economy

Merkel's Legacy: The Rise And Stall Of The German Economy

How have 16 years of Chancellor Angela Merkel changed Germany? The Chancellor accompanied the country's rise to near economic superpower status — and then progress stalled. On technology and beyond, Germany needs real reforms under Merkel's successor.

Chancellor Angela Merkel looks at the presentation of the current 2 Euro commemorative coin ''Brandenburg''

Daniel Eckert

BERLIN — Germans are doing better than ever. By many standards, the economy broke records during the reign of outgoing Chancellor Angela Merkel: private households' financial assets have climbed to a peak; the number of jobs recorded a historic high before the pandemic hit at the beginning of 2020; the GDP — the sum of all goods and services produced in a period — also reached an all-time high.

And still, while the economic balance sheet of Merkel's 16 years is outstanding if taken at face value, on closer inspection one thing catches the eye: against the backdrop of globalization, Europe's largest economy no longer has the clout it had at the beginning of the century. Germany has fallen behind in key sectors that will shape the future of the world, and even the competitiveness of its manufacturing industries shows unmistakable signs of fatigue.

In 2004, a year before Merkel was first elected Chancellor, the British magazine The Economist branded Germany the "sick man of Europe." Ironically, the previous government, a coalition of center-left and green parties, had already laid the foundations for recovery with some reforms. Facing the threat of high unemployment, unions had held back on wage demands.

"Up until the Covid-19 crisis, Germany had achieved strong economic growth with both high and low unemployment," says Michael Holstein, chief economist at DZ Bank. However, it never made important decisions for its future.

Another economist, Jens Südekum of Heinrich Heine University in Düsseldorf, offers a different perspective: "Angela Merkel profited greatly from the preparatory work of her predecessor. This is particularly true regarding the extreme wage restraint practiced in Germany in the early 2000s."

Above all, Germany was helped in the first half of the Merkel era by global economic upheaval. Between the turn of the millennium and the 2011-2012 debt crisis, emerging countries, led by China, experienced unprecedented growth. With many German companies specializing in manufacturing industrial machines and systems, the rise of rapidly industrializing countries was a boon for the country's economy.

Germany dismissed Google as an over-hyped tech company.

Digital competitiveness, on the other hand, was not a big problem in 2005 when Merkel became chancellor. Google went public the year before, but was dismissed as an over-hyped tech company in Germany. Apple's iPhone was not due to hit the market until 2007, then quickly achieved cult status and ushered in a new phase of the global economy.

Germany struggled with the digital economy, partly because of the slow expansion of internet infrastructure in the country. Regulation, lengthy start-up processes and in some cases high taxation contributed to how the former economic wonderland became marginalized in some of the most innovative sectors of the 21st century.

Volkswagen's press plant in Zwickau, Germany — Photo: Jan Woitas/dpa/ZUMA

"When it comes to digitization today, Germany has a lot of catching up to do with the relevant infrastructure, such as the expansion of fiber optics, but also with digital administration," says Stefan Kooths, Director of the Economic and Growth Research Center at the Kiel Institute for the World Economy (IfW Kiel).

For a long time now, the country has made no adjustments to its pension system to ward off the imminent demographic problems caused by an increasingly aging population. "The social security system is not future-proof," says Kooths. The most recent changes have come at the expense of future generations and taxpayers, the economist says.

Low euro exchange rates favored German exports

Nevertheless, things seemed to go well for the German economy at the start of the Merkel era. In part, this can be explained by the economic downturn caused by the euro debt crisis of 2011-2012. Unlike in the previous decade, the low euro exchange rate favored German exports and made money flow into German coffers. And since then-European Central Bank president Mario Draghi's decision to save the euro "whatever it takes" in 2012, this money has become cheaper and cheaper.

In the long run, these factors inflated the prices of real estate and other sectors but failed to contribute to the future viability of the country. "With the financial crisis and the national debt crisis that followed, economic policy got into crisis mode, and it never emerged from it again," says DZ chief economist Holstein. Policy, he explains, was geared towards countering crises and maintaining the status quo. "The goal of remaining competitive fell to the background, as did issues concerning the future."

In the traditional field of manufacturing, the situation deteriorated significantly. The Institut der Deutschen Wirtschaft (IW), which regularly measures and compares the competitiveness of industries in different countries, recently concluded that German companies have lost many of the advantages they had gained. The high level of productivity, which used to be one of the country's strengths, faltered in the years before the pandemic.

Kooths, of IfW Kiel, points out that private investment in the German economy has declined in recent years, while the "government quota" in the economy, which describes the amount of government expenditure against the GDP, grew significantly during Merkel's tenure, from 43.5% in 2005 to 46.5% in 2019. Kooths concludes that: "Overall, the state's influence on economic activity has increased significantly."

Another very crucial aspect of competitiveness, at least from the point of view of skilled workers and companies, has been neglected by German politics for years: taxes and social contributions. The country has among the highest taxes on income in Europe, and corporate taxes are also hardly as high as in Germany anywhere in the industrialized world. "In the long run, high tax rates always come at the expense of economic dynamism and can even prevent new companies from being set up," warns Kooths.

Startups can renew an economy and lay the foundation for future prosperity. Between the year 2000 and the Covid-19 crisis, fewer and fewer new companies were created every year. Economists from left to right are unanimous: Angela Merkel is leaving behind a country with considerable need for reform.

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