Big Data and Advanced Analytics Hold the Answers to a More Efficient and Sustainable Global Food Chain

Dan Butler
Tue, 30 Aug 2016
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From the advent of multichannel marketing to the now pervasive impact of mobile internet on customer decision-making, innovations in digital technology have reshaped the relationship between modern consumers and brands. Yet there are still areas of technological potential that as yet remain untapped. Many industry experts agree that big data is the most prospective.

By taking advantage of big data and advanced analytics at all levels of the value chain, food companies can benefit from digital’s huge potential for sustainable value creation. Utilising digital technology can help companies use resources in a more environmentally responsible way, as well as improve their sourcing decisions.

For food producers, the opportunities associated with digital technology exceed the conventional industry staple of marketing and sales. In their case, the opportunities begin higher upstream, such as with commodity costs and packaging, and end lower downstream with activities such as waste management. Food waste causes financial losses, harms natural resources and worsens food-security issues in a world where 795mn people go hungry.

Reducing postharvest losses by a half would produce enough food to feed over one billion more people. In 2007, the quantity of global food waste equated to 1.4bn hectares – roughly the size of Canada – of agricultural production.

Using technological innovations to improve areas such as weather forecasting, demand planning and the end-of-life product management would result in huge economic, social and environmental benefits. A real-world example of such innovation can be seen with the French start-up Phenix, which has developed an online marketplace to connect supermarkets with end-of-life food stock to NGOs and other consumers who could benefit from them. The enterprise allows supermarkets to reduce disposal costs, prevents edible food from going to waste, and therefore also alleviates a significant part of the social and environmental burden of waste.

The opportunities for digital innovation in the food chain are not, however, limited to mature markets. Emerging markets can also take advantage of digital potential in the food chain via innovative concepts such as precision agriculture, supply-chain efficiencies and agriculture-focused payment systems.

Precision agriculture is a technology-enabled approach to farm management that allows farmers to precisely apply water, fertiliser, pesticides, and other agricultural inputs to maximise crop yields in various and variable environments. Precision agriculture techniques let farmers know precisely how much and when to apply these inputs for individual fields and crops, ultimately optimising efficiency while reducing waste and environmental impacts. Its expansion is being driven by two technological trends: big data and advanced analytics on one side, and robotics and drone technology – aerial imaging, sensors, soil-mapping – on the other. Precision agriculture innovation is being seen by both new entrants and mature companies alike.

Automated systems that show the status and performance of acute equipment in real time can be used to optimise fleet management, therefore boosting delivery reliability and preventing food spoilage.

Automated systems that show the status and performance of acute equipment in real time can be used to optimise fleet management, therefore boosting delivery reliability and preventing food spoilage. For example, transport times can be slashed by utilising smart metres to improve routing.

Agriculture-specific payment systems and financial services can aid farmers in making better business decisions and improve the resilience of their economic models. For example, some producers use insurance contracts to offset weather risk.

“Digital methods and innovations are creating opportunities for both new and established food companies to improve their management not only for marketing and sales, but the entire journey from field to fork,” commented Dr. Aubrey Longmore, Head of Agriculture at Challenge Advisory. “The potential social, economic and environmental benefits associated with these innovations are colossal and promise to steer the agriculture and food production industries in significantly more sustainable direction.”