Seeing Beauty in Ugly Produce: Do Ugly Produce Retailers Reduce Food Waste?

ABSTRACT Ugly produce refers to cosmetically unconventional yet taste‐ and nutrition‐wise perfectly edible produce. Advocates of ugly produce retailers claim that they help reduce food waste, but skeptics argue that ugly produce is often not wasted but meets alternative demands such as from restaurants and processed food manufacturers. Given such complications, it is necessary to model the entire produce supply chain to properly evaluate the impact of ugly produce retailers on food waste. We model an agricultural cooperative producing, pricing, and selling produce to a retailer and an alternative buyer and find that the retailer selling ugly produce indeed strictly reduces food waste. However, doing so also weakly reduces the retailer's profit, which explains traditional grocery chains' hesitancy to carry ugly produce. Fortunately, we find that a dedicated ugly produce retailer competing with a traditional retailer yields the same food waste reduction. This research reveals supply‐chain level insights into the debate about ugly produce retailers and alludes to the sustainability value of dedicated ugly produce startups.