Entrepreneur Oded Omer tackles climate change with AI-driven, supermarket pricing technology

Oded Omer

Founder and CEO of Wasteless , a technology company helping to lower Food Waste in supermarkets. He was previously CTO at WeissBeerger, which was acquired by ABInBev in 2017. He has since turned his full energy to helping the climate change crisis, and is an advisor and investor in several organizations working toward that goal. Oded has a bachelor’s degree in electrical engineering at Tel Aviv University and has an Industrial Management Engineering MBA. He is a relentless polymath, moving fluidly between corporate team building, technology advisement, software and hardware engineering, and music. Oded lives in Tel Aviv with his family.

Russ Turner: Hi Oded! Thanks for being here with us today. We are excited to get to know you and learn about the work you are doing with Wasteless.

What was the inspiration that led up to starting Wasteless in 2016?

Oded Omer: I’ve always been concerned about environmental issues, but, like many  people, it was not easy for me to envision how I could make a big difference. After WeissBeerger was acquired, I had a bit of time to reflect, to try to chart a course for the next chapter of my life. On a family vacation to Norway, I visited the site of a glacier that I had last seen when I was a young boy. By this time, there was nearly nothing left of the glacier. This monumental natural phenomenon had been reduced to an ice cube. That is when the light bulb turned on and I knew I had to turn my full attention to the problem of climate change.

Russ: So how do you get from a melted glacier to fighting Food waste?

Oded: I started studying, counting all the major factors  causing global warming. I kept coming back to food waste. I found it so surprising that food waste is one of the major causes of climate change. If we considered food waste as a nation state, it would be third behind China and the US in terms of emissions. The fact that we waste between 30% and 40% of the food we produce was just so shocking to me. This seems unacceptably high. 

I have a strong technical background, two degrees in engineering, and a great passion for technology. But I am also not naive, and I’ve worked on the business side for years. I love helping businesses scale up and become profitable. Understanding  some current food-retail challenges, I started to look at food waste as a business problem -- and an opportunity for everyone. Having a 40% loss within the food system value chain sounds like bad business. Surely there’s something that could be done to reduce these losses and still be profitable. Following thorough research on various aspects, I decided that food waste in retail was an area worth exploring. Retail is where the big losses are happening, and it’s also the place where you’re going to find the best opportunities.

Russ: Can you talk more about where you find business opportunities in food waste?

Oded: It might not sound like the most lucrative area, but, in fact, if you’re a supermarket manager, this topic is something you’re thinking about all the time. For many people, shopping for groceries is such an ingrained part of our daily lives. People don’t really think about grocery store operations, and this is partially because grocery store operations are very slow to change. This is an industry that has 1-3% net profit margins, so of course retailers need to be very cautious with changes to operations. At the same time, food waste represents, on average, 4% of expenditures. Again, the average person might not think much about 4% of anything. But to the owner of a chain of supermarkets, this 4% can amount to hundreds of millions of dollars. It depends on the turnover, of course. 

If you tell a supermarket manager that a system will reduce their food waste at least 40% and even as much as 80%, retailers understand immediately that this amounts to millions of dollars. The fact that these revenue-increasing improvements will also have a major positive impact on the environment seals the deal. 

Russ: Is this how you see sustainability functioning in business? That profits should ultimately drive sustainability decisions?

Oded: Definitely. Only great incentives can drive great changes -- we are not living in a vacuum. So yes, waste is a problem, but to reduce it we should also look at waste as an opportunity to both the consumers and the retailers.

I think there’s definitely a time and a place for regulation. Governments of the world need to set targets and dates that everyone needs to abide by. Sustainability has to be a primary component of most new public policy measures. I’m not against regulation, but businesses have to lead many of these initiatives.

Look at what’s happening in the auto industry. GM, one of the biggest auto manufacturers in the world, has recently announced that they will be all electric by 2030. This is fantastic news! We could look at this as a heroic corporate gesture of goodwill, but actually it’s an acute business move. Gas cars are simply too wasteful. Do the math, extend your equations a few decades into the future rather than a few fiscal quarters, and you see that the internal combustion engine is not fiscally sustainable. GM has completely restructured its business against a concept of waste. It will have a tremendous positive impact on the environment, and I guarantee it will also put GM back as an industry leader in terms of profit.

Russ: How does this principle operate within your organization?

Oded: Wasteless is a system that transforms how people shop for anything with an expiration date. The old model is based on throwing away food or, alternatively, guesstimated -- meaning not optimized -- discounts, often a 25% or 50% off sticker slapped on a product. 

This old method has the effect of stigmatizing marked down products in the mind of the consumer. The discounted product becomes somehow “less than” the normally priced product. Wasteless flips this paradigm with automatic, AI-enabled markdown optimization. We are no longer “discounting” products. Rather, perishables are displayed with some optional prices to select from. Products with a longer shelf life now have a premium price attached to them. This premium price is of course the regular price for the product, but the consumer reads it as a choice. You’re buying a head of lettuce for a salad you will eat in the next two days? Why shouldn’t you be incentivized for picking up an “older” item.

Our pricing engine is built on an AI system that improves itself over time, delivering smarter markdowns and better waste prevention the longer the system is used. This provides an added degree of control for the retail. They now have more data to work with and a better idea of what exactly is happening with their inventory systems not only with quantities but also with expiration dates of their assortments. Most of the waste generated by supermarkets is from the fresh products sections -- i.e. items with expiration dates. So if we can help supermarkets sell significantly more of these products, while reducing wild-card markdowns, we are helping them recover revenues and save the planet.

Russ: What else is coming up for Wasteless?

Oded: We are just getting started! We have some major announcements coming up in terms of partner stores where our technology is being used. And there are many more supermarket chains waiting to partner with us! We are also looking at ways that our technology can be applied to rising trends in grocery retail -- things like food delivery and online grocery shopping. 

The good news, which is also the bad news, is that there is a lot of waste out there in retail. We have a sense of urgency to get these systems rolling, and we have seen some fantastic results in our partner stores so far.

What makes me optimistic is that there is a growing sense of purpose in business. I think this is being driven by young consumers, and I believe we will see some major changes in the coming years as businesses align their missions with an increased sense of sustainability. I think every business can and should find profitable ways to contribute to the efforts against global warming. And we know that these efforts are highly profitable in their own right.

Russ: Oded, it has been a pleasure speaking with you today. Many of these facts are new and very startling to me, and all of us from Business Digest Magazine are going to be rooting for you as your company grows. I can’t wait to see Wasteless pricing in my local store!

Russ Turner

Director at Business Digest Magazine

Director at Academy of Business Digest