Month: May 2019

The Produce Marketing Association (PMA) held its annual Tech Knowledge conference May 1–2 in Monterrey, California. At this showcase for cutting-edge ag tech, experts discussed food supply chain data, the future of food production, and industry challenges.

This edition of rfxcel’s food and beverage blog takes a quick look at what some of the speakers said at Tech Knowledge 2019.

Joshua Katz, Partner, Agriculture and Strategy Practice, McKinsey & Company

Joshua said emerging technologies were disrupting industries, bringing rapid, large-scale change. He presented 12 “transformative technologies” that can improve the sustainability, efficiency, and health impacts of food systems by 2030. Examples are alternative proteins and biological-based crop protection, whose value chains account for one-third of disrupters. Joshua said disrupters included mobile tech, big data analytics, and Internet of Things (IoT) for real-time supply chain transparency and traceability.

Kenneth Scott Zuckerberg, Senior Vice President and Strategist, Wells Fargo

Ken, who focuses on food/agriculture, sustainability, and technology, talked about the convergence of farming, tech, and finance. He said that as farmers and agribusinesses adopted data-intensive tools, their systems would produce food more efficiently and thoughtfully. There will also be less waste and environmental impact. He said producers should focus on the bottom line, not yields, because it would result in less waste and more efficiency.

Vonnie Estes, Vice President, Technology, PMA

Vonnie discussed what companies need to do and know about new technology. She said we needed solutions, not technology products. “The point of all this technology” is to improve profitability, performance, and simplicity for growers. Companies should use tech to develop durable, usable solutions. Tech should anticipate and meet consumers’ demands and preferences, including reducing food waste, improving labeling, and knowing “the story” of the food they buy. It should produce varied, nutrient-rich, and safe foods. Therefore, companies that want to survive and thrive must ask themselves two questions: What strategies do you have in place to innovate? What new tech do you think will disrupt your business?

Seana Day, Partner, Better Food Ventures and The Mixing Bowl

Seana talked about trends and investing in post-harvest, value-added food. She focused on “the messy middle” of the food supply chain. Investment here can really pay off, especially for reducing waste. Yearly food waste is staggering: 1.3 billion tons worth $1 trillion — and 80% of this occurs in the supply chain. She also discussed transparency. Calling it “the T word,” she said it was “fundamental to trust.” And though retailers are promising it and consumers want it, “Supply chain actors don’t always benefit from it.” This is an honest acknowledgement of one of the barriers to adoption. Seana agreed that food supply chain data and technology should do more than increase yields. In supply chains, tech can tackle food waste, monitor temperatures, manage inventory, and forecast with real-time, actionable data.

Ranveer Chandra Chief Scientist, Microsoft Azure Global

Ranveer talked about Microsoft’s efforts to significantly increase the world’s food production. The project he leads, FarmBeats, uses IoT technology such as low-cost sensors and the cloud to gather data from farms. He said that end-to-end food supply chain data, coupled with farmers’ knowledge and intuition, could increase productivity and reduce costs. Challenges include that many farms do not have internet connectivity or reliable sources of power. Furthermore, many farmers know little or nothing about technology. He said data-driven farming was the future of agriculture, and that FarmBeats is committed to making it the global norm.

Panel Discussion: Lessons Learned on Bringing New Tech to Food Supply Chains

Vonnie Estes moderated a wide-ranging discussion with iUNU CEO Adam Greenberg; Karol Aure-Flynn, vice president, sector analyst, and team lead at Wells Fargo’s Food and Agribusiness Industry Advisors; and Nolan Paul, partner and AgTech lead at Yamaha Motor Ventures.

The panel’s opinion of blockchain might have turned some heads. They were generally unimpressed, echoing what Subway’s Director of Supply Chain Traceability Lucelena Angarita told Forbes earlier this month: “Blockchain is not seen as a good fit at present for traceability.” Though Angarita was talking specifically about Subway, the world’s largest retail food chain, Adam, Karol, and Nolan suggested it was essentially true for the entire industry.

The panel’s overall message was clear: The food industry is transforming the way it produces food. Therefore, innovation and food supply chain data are key. From IoT and artificial intelligence to drones and bioengineering, technology will better predict outcomes, determine how farmers and producers are financed and insured, and enable a larger, safer, and more sustainable food supply chain.

Food supply chains are becoming more complex, as food companies are increasingly faced with blind spots such as deviations from required environmental conditions, theft, fraud, and poor handling. Supply chains are global; transit routes that involve road, rail, sea, and air create many potential points of failure in food safety or product integrity protocol that, until recently, were largely outside a company’s control.  

To maintain product quality and safety, companies should implement an integrated monitoring solution that paints a complete picture of their food products as they move through the supply chain. IM solutions that utilize devices powered by the Internet of Things (IoT) allow real-time tracking of cargo and provide actionable data that can mitigate common problems, change outcomes, and protect brands and consumer health.  

Let’s take a deeper look into the problems that food manufacturers and distributors are facing how IM solutions can minimize or eliminate them altogether. 

Current hurdles for food supply chains

As the global network of food trade expands, the diverse challenges facing suppliers, manufacturers, distributors, and logistics companies present even more of a threat to supply chains and revenue.  

`Greg Quinn, worldwide food fraud results in losses of at least $65 billion a year. Luxury products such as Japanese Wagyu beef and Italian olive oil are regularly counterfeited and incorrectly labeled, and buyers often have no way to trace the origins of what they’re purchasing.  

Companies in the food and beverage industry also face diversion and theft, which can happen at any of the many blind spots along the supply chain. In fact, food and beverages were among the top commodities targeted by thieves in North America last year, accounting for 34 percent of all cargo theft. 

Food product quality and safety are also seriously compromised when cargo is poorly handled while in transit, with hazards such as exposure to water, heat, and cold, or substance contamination. These types of damages can be particularly acute in the cold chain, where perishable products must be moved quickly under specific environmental conditions, including temperature, humidity, and light.  

Furthermore, inefficiencies in routing — from not adhering to transport regulations to more basic oversights such as not monitoring traffic or not utilizing GPS location tracking — delay shipments, can result in product spoilage and/or shortened shelf life, and cost companies money. Routing and IM have become more important in light of government legislation, most notably the Food Safety Modernization Act (FSMA), which the U.S. Food and Drug Administration designed to better protect consumers by strengthening food safety systems for foodborne illnesses.  

In short, businesses that manage food supply chains need to be on top of their game to guarantee product quality and safety and care for their brand. 

How does product tracking technology work in food supply chains?

Real-time integrated monitoring (IM) solutions are proving to be an invaluable asset for companies seeking to combat supply chain challenges. Such product tracking capabilities give companies a vibrant and detailed picture of where their products are and what is happening to them. With IM in the supply chain, IoT technology is the crucial link to continuity, visibility, and productivity.  

So, how does integrated IM work? Sensors on pallets, cases, or containers send data over communication networks at regular intervals. The data is made available via a software platform, where users can set parameters (e.g., minimum and maximum temperature) to alert the system of irregularities or generate reports for analysis. This data is associated with the traceability data and becomes part of a product’s pedigree, making it a powerful tool for supply chain visibility. 

IM combats supply chain stumbling blocks

IM allows companies to monitor their food supply chains, protect consumers, and realize considerable return on investment. The technology can show companies how to maximize route efficiencies, change shippers, or detect theft or diversion in real time. Tracking solutions transmit alerts, empowering manufacturers and suppliers to use data to halt shipments that may have been adulterated, redirect shipments to extend shelf life, and manage food recalls — or avoid them altogether. Recalls are a particularly important consideration: One 2012 study concluded that the average direct cost of a recall in the United States was $10 million. 

The IoT-enabled technology provides real-time information about how long an item has been in transit, if the vehicle transporting it adhered to the approved route, and, if the shipment stopped, where and for how long. This is crucial information, especially for highly perishable goods. For example, leafy greens can be ruined if a truck’s engine and cooling system are turned off for hours at a border crossing. With IM and tracking, businesses are able to understand and act upon specific risks using detailed, unit-level data for their food supply chains. 

For example, a company can find out if pallets have dislodged, fallen, or have been compromised in other ways while in transit. They can receive alerts if the doors of a truck are opened at an unscheduled time or location, which could indicate theft. Thieves target food cargo more often than other products because it’s valuable, easy to sell, and perishable, and evidence of the theft does not last very long. In fact, the U.S. Federal Bureau of Investigation estimates that cargo theft costs U.S. businesses $30 billion each year, with food and beverage one of the primary targets. Businesses need to get smart about preventative actions. 

All of this actionable data is available in real time, allowing businesses to make decisions immediately, not after the fact when it’s too late. When necessary, they can divert or reroute shipments or take actions to remedy temperature excursions and other environmental concerns. This saves money and protects their reputation. Furthermore, third-party logistics firms and contracted delivery companies can be held accountable for incidents and inefficiencies. 

Final thoughts

As the benefits of global supply chains have grown, so have the risks. With the FSMA shifting responsibility for safety to food companies, real-time integrated monitoring (IM) is a vital step to ensure cargo is maintained in the correct conditions, remains on track to its destination, and is safeguarded from theft and fraud. With the advent of IoT-enabled tracking and IM technologies, supply chain operations can be streamlined and companies can prevent waste and financial losses, protect their investments and brand identity, and gain an advantage in the marketplace.