Reducing Food Waste: David Sattler Of Closeout-express On How They Are Helping To Eliminate Food Waste
…we’ve all seen jaw-dropping videos of brand-new, packed food and goods dumped in the garbage every night. Day-old donuts and bagels threw away. The problem is companies view discounting soon-to-expire items as either devaluing the brand as a whole or cannibalizing full-price item sales. Even if this were true, the net outcome of keeping those goods out of landfills is a positive one. I think people buying an oven-fresh donut with their coffee at 8 am are happy to pay full price and not feel bad that someone can buy the same donut 12 hours later for 80% off.
It has been estimated that each year, more than 100 billion pounds of food is wasted in the United States. That equates to more than $160 billion worth of food thrown away each year. At the same time, in many parts of the United States, there is a crisis caused by people having limited access to healthy & affordable food options. The waste of food is not only a waste of money and bad for the environment, but it is also making vulnerable populations even more vulnerable.
Authority Magazine started a new series called “How Restaurants, Grocery Stores, Supermarkets, Hospitality Companies and Food Companies Are Helping To Eliminate Food Waste.” In this interview series, we are talking to leaders and principals of Restaurants, Grocery Stores, Supermarkets, Hospitality Companies, Food Companies, and any business or nonprofit that is helping to eliminate food waste, about the initiatives they are taking to eliminate or reduce food waste.
As a part of this series, I had the pleasure of interviewing David Sattler.
David is the founder of Closeout-express.com, a Minneapolis-based business. Closeout Express is a bulk inventory buyer that works with manufacturers, suppliers, and retailers that are looking to sell closeouts, excess inventory and distressed inventory.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a story about what brought you to this specific career path?
I had a friend whose family was in the distress inventory business, primarily focused on selling short-dated food. After a few conversations over the years, I made the decision to apply some of my background to what they were doing.
Can you share the most interesting story that happened to you since you began at your company or organization?
I can’t think of any specific interesting story but the randomness of goods we see on any day is always interesting.
The amount of goods at any given time that are looking for new homes is truly astounding. We work best with companies that we consider to be “healthy” businesses that need to move distressed inventory regularly, as opposed to “unhealthy” businesses that are shutting down and liquidating.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Every deal we do is a learning experience, and we have made our fair share of mistakes, some admittingly worse than others. We have received truckloads of goods that were supposed to expire in 9 months but were actually expiring in 3. We have bought what we thought was fresh-packed brand new goods that turned out to be all returns.
I don’t think any are laugh-out-loud funny, but one deal we took every piece of inventory and they literally “swept the warehouse floor” and packed every last “onesie-twosie” item that was left in the warehouse. It took us a week just to make sense of all the inventory.
How do you define “Leadership”? Can you explain what you mean or give an example?
Since we are such a small team, leadership doesn’t have quite the same meaning. However, remaining accountable to yourself when you’re your own boss shares many of the same ideals as motivating and leading a team.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I heard a quote the other day that was something along the lines of “At the end of a chess game, the king and pawn go back into the same box”. I thought this was really analogous to any organization, while we might have people that do more day-to-day tasks or grunt work, at the end of the day we are all a part of the same outcome.
OK, thank you for all of that. Let’s now shift to the main focus of our interview. Let’s begin with a basic definition of terms so that all of us are on the same page. What exactly are we talking about when we refer to food waste?
We are the last line of defense for many suppliers and are one step away from the dump. Many people think that all food can be donated but the reality is most food banks and organizations are seeking out basic items like canned goods or pantry staples. They aren’t often looking for more ancillary food items like candy or salad dressings or kombucha so suppliers are forced to seek out alternatives. Additionally, businesses can only write off a certain amount of donated goods, and with freight prices at all-time highs, shipping super-low to zero recovery items can often be economically burdensome.
Can you help articulate a few of the main causes of food waste?
There are plenty of reasons why we see food waste but it basically boils down to — poor planning and demand forecasting, new product innovation, mislabeled items, short-dated food, packaging changes, returns or canceled purchase orders, to name a few. A huge majority of what we see is just short-dated food.
Traditionally grocery stores like to see around 6 months of expiration at a minimum on dry goods, when the date falls below that suppliers are forced to start looking for alternative channels.
What are a few of the obstacles that companies and organizations face when it comes to distributing extra or excess food? What can be done to overcome those barriers?
The hardest part for most suppliers is figuring out at what point they are willing to take a loss on an item. Once a short-dated product gets below 2 months it’s almost untouchable for most retail stores, even at a heft discount. If suppliers started identifying and selling food closer to 4–5 months more of a market would exist for it.
Can you describe a few of the ways that you or your organization are helping to reduce food waste?
Firstly and foremost we buy short-dated food and try and resell it into the marketplace. If we buy goods and can’t sell them then we will often donate them to food banks when we can. We very rarely throw food away.
We are always trying to find more buyers of short-dated product — the more discount stores or mom-and-pop dollar stores that exist, the more homes for food waste exist.
Are there three things the community/society/politicians can do to help address the root of this problem?
For one, re-aligning incentives for consumer packaged goods companies. Waste disposal is a non-nominal cost for large enterprises, but if it’s still more economical than shipping it somewhere, it’s oftentimes the only option.
Two, allowing more stores to sell items past their “best by” date (not to be confused with “expired”.) Many items can be discounted heavily and still avoid going to the landfill.
Three, we’ve all seen jaw-dropping videos of brand-new, packed food and goods dumped in the garbage every night. Day-old donuts and bagels threw away. The problem is companies view discounting soon-to-expire items as either devaluing the brand as a whole or cannibalizing full-price item sales. Even if this were true, the net outcome of keeping those goods out of landfills is a positive one. I think people buying an oven-fresh donut with their coffee at 8 am are happy to pay full price and not feel bad that someone can buy the same donut 12 hours later for 80% off.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
As I touched on above, I think we need to convince businesses that it actually helps their brands overall to donate or sell food discounted at the end of the night rather than throwing it away. They’re clearly concerned overall that variable pricing will hurt their business, but when an employee making minimum wage has to throw away perfectly good food they could easily take home or distribute, the system is clearly broken.
Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this, especially if we tag them. 🙂
Oh great question! Howard Schultz from Starbucks would certainly be one. They clearly touch on many different parts of the ecosystem and consumption as a whole, from plastic cups to coffee grounds to uneaten breakfast sandwiches and pastries. With Starbucks being so successful and a mainstay of so many people’s routines, the opportunity to reduce waste and innovate is boundless.
Hamdi Ulukaya from Chobani is another one I admire so much. He seems like someone who truly cares about people and the earth. Having such a tightly integrated supply chain gives them much greater control over packaging and efficiency decisions that can be implemented quickly.
This was very meaningful, thank you so much, and we wish you only continued success.
Reducing Food Waste: David Sattler Of Closeout-express On How They Are Helping To Eliminate Food… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.