UC San Diego study suggests dynamic food pricing to reduce landfill waste
A San Diego researcher found that lowering food prices as a product nears its expiration date could significantly reduce organic food waste.
Their findings has significant implications, as California mandates the effort to turn organic food waste into compost.
California’s organic waste law went into effect a year and a half ago. It requires all residents, grocery stores and restaurants to separate food scrapes from regular trash and send it to landfills that turn the waste into compost.
The measure aims to reduce greenhouse gas emissions coming from landfills. Officials estimate about one-third of all U.S. methane emissions leech out of landfills as organic waste decomposes.
The UC San Diego analysis looked at two strategies to gauge their impacts on keeping the organics out of the trash. Charging businesses high fees to dump organic waste and adjusting the price of produce.
“If you walk into any grocery retailer in the U.S., most of the perishables are going to have the exact same price the moment they got there to the moment they expire and go to a landfill,” said Robert Sanders, an assistant professor of marketing and analytics at UCSD’s Rady School of Management.
The study found the dynamic pricing model — lowering the price of fresh foods as the expiration date nears — could reduce the amount of organic waste that’s thrown away.
More than 10% of food waste comes from retailers throwing away perishables that have passed the expiration date.
“If you can at least change prices along the way, towards expiration, you then decrease waste ... by 21%,” Sanders said.
Drop the price as the expiration date nears, and stores boost the chance of making a sale. Selling an item before it expires means the product is cheaper for customers looking for a bargain and the item does not get thrown away.
Dynamic pricing could also divert more organic waste from landfills than residential waste diversion programs, Sanders found.
Banning organic garbage and charging high dumping fees, which is done in parts of California, had only a negligible impact on the amount of organic waste thrown away.
The City of San Diego began collecting organic waste this year.
California grocery stores and restaurants are already required to segregate organic food waste for composting and steer edible leftovers to the hungry.
“You have to figure out what elements are still edible and recover those so we can redistribute them to food banks,” said Joe LaCava, a San Diego City Council member who is chair of the council’s Environment Committee.
San Diego’s residents are adjusting to the new rules and LaCava said he is encouraged by the response.
The study found 133 billion pounds of food waste is generated in the U.S. each year.