- The deployment of UHF RFID technology for tracking fresh baked goods in its stores is rolling out to hundreds of stores
- Following the adoption of RFID technology for apparel, luxury goods and tires, the food industry may be poised to be the next to adopt at large scale
In what could become the largest rollout of RFID technology in grocery retail, Kroger Bakeries are deploying an RFID system with passive UHF RAIN tags applied to the packaging of freshly baked bread, muffins and cookies.
While RFID technology has been adopted or trialed for managing the inventory and freshness of food in restaurants, food retailers have been slower to adopt. That makes Kroger one of the key pioneers in the food retail space.
Kroger and Avery Dennison announced the rollout in October of this year and indicated over the next year and a half the retailer will roll out the technology across most of the company’s 2,750 stores. Stores within its brand include Fred Meyer, Dillons and Ralphs. The system includes RFID labels from Avery Dennison.
While RFID has been widely deployed in other industry segments in retail—especially tracking apparel and home goods—grocery adoption has been lagging behind, said Sandeep Unni, senior director analyst at Gartner‘s retail industry research practice. For that reason, with the wide scale bakery RFID adoption, “this is a significant development, and a potential inflection point for the industry” said Unni.
Keeping Baked Goods on the Shelves
Kroger and Avery Dennison officials declined to comment about the bakery deployment for this article. According to a press statement when the partnership was announced, Jordan Poff, vice president of retail operations at Kroger, said “our work with Avery Dennison will improve inventory visibility, which means products will be on the shelves when our customers want them, while enabling our associates to spend more time with our customers.”
Kroger Grocery officials indicated the company has been working with Avery Dennison to introduce RFID technology into its bakery department with a goal to prevent waste as well as improve Inventory accuracy and efficiency.
RFID tags that are being used in the food industry tend to enable applications such as tracking ingredients as well as finished products for first-in first-out monitoring, shelf stock levels and approaching expirations. Such data can help companies with real-time inventory tracking but also analytics to better understand how products are selling, how quickly they are made available for purchase, and what ingredients may be overstocked or understocked.
Food Traceability Mandates Ahead
The deployment comes at a time when food traceability is gaining priority for retailers and food brands. In fact, a mandate related to food traceability may drive more initiatives like the one at Kroger bakeries. In November 2022, the U.S. Food and Drug Administration (FDA) set its Food Safety Modernization Act (FSMA) for food traceability and supply-chain record keeping that gives companies two years to enable more comprehensive and accessible records about food ingredients.
Kroger also has set a Zero Hunger, Zero Waste program to meet social and environmental impact response. The company indicates its strategy is to reduce the rate of waste due to uneaten or unsold products, noting 38 percent of food in the U.S. is thrown away. The company announced that it is putting $10 million into innovating new solutions to improve food security as well as prevent waste.
Overcoming Challenges in RFID Food Deployments
RFID is making headway in the food industry among quick-service restaurants and cafes, as well as in some stores, but adoption has been slow. “In my view, this is partly due to challenges of RF technology and cost in a food setting, and partly due to retailer perception,” Unni explained.
While RFID may benefit on-shelf availability, efficiency and subsequent fresh quality of food, applying the tags around food poses unique challenges. Additionally, food products are typically lower value than apparel, meaning the cost of tags applied to each item wasn’t justifiable.
Unni pointed out that while, “technology and its costs have caught up, to solve for most of these challenges… retailer adoption has still not seen traction yet. I think [Kroger’s] deployment has the potential to change that.”
With the deployment, said Unni, “it will be important for Kroger to demonstrate its RFID deployment as a strategic investment, beyond just the initial pilot phase. They will need to show that the technology could yield quantifiable benefits as a result, whether it be on reducing food waste, improving operational efficiency, or improving the customer and associate experience in the store.”
To expand RFID deployments into similar applications he added, “other grocers need to see and hear firsthand the viability of the technology in a grocery setting to dispel myths.”
RFID technology companies may see openings ahead for solutions in the global food market based on the success of the Kroger Bakery deployment.
“Technology providers should recognize that food and grocery retailers are highly risk averse and extremely sensitive to low margins. I think they will want to see more proof points of success coming from the likes of Kroger before they decide to dip their toes in,” Unni said.
Avery Dennison Food Visibility Solutions
Avery Dennison has been on a mission to introduce RFID technology into the food retail market. Such solutions already exist for quick service companies such as Chipotle, Starbucks and McDonald’s.
Avery Dennison officials see food waste and sustainability to be a key enabler for RFID technology. In October, the company released a report with Forbes Insights that found global food waste can be addressed with RFID as well as similar technology.
By embedding RFID technology in products, the unique ID encoded on each RFID tag links to product information that can be updated automatically and tracked and interacted with digitally.
The report looked at supply chain efficiency as well—an area that can also be benefitted by use of RFID data. “We’re seeing RFID make significant impacts in logistics and supply chain management,” Julie Vargas, Avery Dennison’s VP and general manager of identification solutions, said.
When it comes to food waste, Avery Dennison is working with UK food service distributors like Reynolds using RFID-enabled reusable containers to improve visibility in logistics as well as help restaurants better manage their inventory and reduce over-ordering.
“This application is particularly interesting because it tackles both sustainability and efficiency challenges simultaneously,” Vargas pointed out.