AI cuts grocery waste—and food-bank donations

Grocery stores are using artificial intelligence to order more accurately, adjust prices before food expires, and reduce the amount of food they throw away. The efficiency gains are significant—but they are also reducing a crucial source of inventory for food banks. Fast Company reports that some food banks are receiving fewer donations as retailers get better at selling food before it becomes waste.

How AI is reducing grocery waste

Demand-forecasting systems use deep-learning models to estimate how much of each product a store is likely to sell. The models can factor in variables such as the weather forecast and the timing of food-stamp payments. That lets retailers order closer to expected demand instead of routinely buying excess inventory.

In some stores, the software handles ordering directly. Afresh, one of the tools cited by Fast Company, is used in more than 12,000 grocery departments and says it has helped prevent more than 200 million pounds of food waste. Guac, another AI ordering tool, says its customers have reduced food waste by as much as 38%.

The technology is also being applied after products reach the store. Crisp forecasts demand, then uses AI to estimate the remaining shelf life of perishable products. Retailers can use that information to intervene earlier, including by changing prices on produce, meat, and other items before they spoil.

One study cited in the report estimates that dynamic pricing can reduce food waste by 21%. Other apps connect shoppers with last-minute discounts on food approaching its expiration date at grocery stores and restaurants. Together, those systems give retailers more ways to sell food that might once have been discarded or donated.

That is the central trade-off: food that is sold at a discount is still useful to the retailer and the customer, but it is no longer available to a charitable organization.

Food banks are buying more of their supply

The shift comes as more Americans struggle to afford groceries and turn to food banks. Joseph Slater, chief operating officer of Gleaners Food Bank of Indiana, said the combination of higher demand and fewer surplus donations is putting pressure on charitable food networks.

“The food supply is tightening as the demand for [charitable] food is going up. What that has forced food banks into is to fill that gap, we have to buy food.”

Gleaners' budget illustrates the change. In 2018, the organization spent most of its budget on infrastructure, including warehousing, because most of its food was donated. Only 16% of charitable donations went directly toward buying food at that point.

In the period described by the report, 50% of Gleaners' budget is expected to go toward buying food. That is a major change in how the organization secures supplies: money that previously supported infrastructure can now be needed to purchase the food itself.

The problem is not limited to grocery-store software. Slater said meat producers that once donated surplus food have slowed production after experiencing excess supply during the pandemic. Those producers have also found new markets for products that might previously have entered the charitable system.

For example, chicken drumsticks that are less in demand in the United States are now being sold overseas rather than donated. Farmers are also using software to forecast demand before planting crops, reducing the chance of producing more food than the market can absorb.

The result is a more coordinated food supply chain with less waste at the retail and production stages. But food banks depend partly on the inefficiencies that create surplus: excess orders, unsold perishables, and production beyond commercial demand. As those sources shrink, charitable organizations face a direct cost for replacing them.

The reporting does not quantify how much food-bank supply has fallen nationally, nor does it establish whether the savings from reduced waste are being redirected to food assistance. It does show a clear operational change: forecasting, automated ordering, shelf-life estimation, and dynamic pricing are helping stores keep more food in commerce—and leaving food banks with more food to buy.