Imagine taking your next flight on a plane with no fuel gauge. Instead, there is a red light that flashes in the cockpit only when the plane has just enough fuel to fly fifteen more minutes.

Would you board this flight? 

This is "invisible shrink." Its consequences include retailers losing consumers and strained shipper-retailer relationships. We suggest invisible shrink losses may be avoided by accurately, continuously monitoring produce temperature from field to retail case.

Invisible Shrink Impacts the Consumer

High fruit and vegetable quality is the single most important consumer factor in selecting a grocery store. Produce quality is even more important than low prices, according to the Food Merchandising Insitute (FMI).[i] More than 32% of customers told the FMI that dissatisfaction with the freshness of produce is the primary reason they avoid certain stores.[ii] It is no wonder retailers experiencing invisible shrink losses complain to the shipper, resulting in more rejections, claims and price adjustment requests.

Invisible shrink could be largely avoided if both shipper and retailer had a more accurate gauge of the temperature of the produce when it leaves the field. There is a direct correlation between higher temperatures and accelerated shelf life loss, and the impacts of various temperature levels upon produce shelf life are well-established.

Temperature, Temperature, Temperature

We consistently get calls from shippers who tell us, "My product was good when we shipped, and the truck air temperature was good. So why am I getting rejections?"

The problem is usually inadequate pre-cooling, the removal of field heat from produce. The University of Florida's Center for Food Distribution and Retailing measured effects of pre-cooling delay for truckloads of California strawberries sent to a Southeast distribution center.[iii] Normally pre-cooled strawberries had a 10% loss ($8,274). Strawberries with a four-hour delay to pre-cool had a 50% loss in the retail store. Strawberries without pre-cooling had a 91.7% loss at retail, a value estimated at $75,845. Even more sobering: each truckload was accepted at the distribution center! 

Controlled Study: Full Truck Loads, Strawberries, CA Grower to Southeast Retailer DC

From FIFO to FEFO (First Expiring First Out)

Temperature monitoring technology can automate temperature data capture, giving operations real-time information to improve shipping decisions. For example, we found 57% of blackberry pallets arriving at one pack house did not have enough shelf life for the longest supply chain. They were identical in appearance to the 43% that were ready for the longest supply chain.

But these berries did have temperature monitoring history. So instead of shipping product FIFO, the berries could be shipped based on their temperature data-determined shelf life expiration. In our research, using temperature data to determine where each pallet went resulted in just 1% of product shipped with inappropriate shelf life for its ultimate location. That is a reduction in risk of improper shipment from 57% to 1%.

Fresh produce should no longer "board the flight" to the consumer relying on incomplete shelf life determinations. Real time temperature information, shared throughout the supply chain, can help shippers and retailers distribute product based on shelf life rather than relying on inaccurate FIFO procedures. This will result in less shrink, happier retailers, and retained customer relationships and profits across the supply chain.

Our article next week will examine pre-cooling as a linchpin for eliminating invisible shrink.

Mike Nicometo is President of EmpowerTech, Inc., providing expertise in logistics processes, cool supply chain management, project management, roadmap development & control, global team leadership, software prototyping and business development. Contact him at 906-774-5532 or mike@nicometo.com.