For any type of company, developing solutions to industry inefficiencies is a key aspect of creating a successful unique value proposition (UVP). And across all sectors, a balance must be struck between the solution’s value for the end consumer and its value for the enterprise. In the food supply industry, food waste is a common side effect of inefficiency in the supply chain.
Below are some stats on annual worldwide food waste:
- 26% comes from food service and 13% from retail
- 29% of cereals are wasted
- 46% of fruits and vegetables are wasted
- 17% of dairy is wasted
- 21% of meat is wasted
- 35% of fish and seafood are wasted
Food wastage occurs at every point in the supply chain: production, shipping, storing, packaging, distribution, retail, and consumption. Early supply chain food loss, at the production through retail stages, tends to stem from low-income countries lacking access to the advanced technologies needed to curb loss and waste. For countries with medium- to high-income levels, food wastage typically materializes at the retail and consumer levels.
At a time when more than 190 million people experience acute food insecurity and 1.6 billion tons of food is either lost or wasted every year, there is a dire need for industry to implement viable waste solutions.
Fixing the Fragmented Supply Chain
As the food supply moves through often disparate and weak linkages of the chain, it’s crucial to monitor chemical degradation. When incorrect or incomplete information about a food product is passed from one intermediary to another, the likelihood of loss and wastage increases significantly.
Much of this is compounded by non-interoperable tracking software or a lack of integrated tracking systems, which means spoilage assessments still rely primarily on humans “eyeing” a small portion of the shipment to determine freshness. Manual or written reports, which require transference of data from the paper-based format to a database, serve as another entry point for human error.
The Benefits of IoT in the Supply Chain
While the human element should not be eradicated entirely from the food supply chain, technological innovations can help to significantly reduce both wastage and loss. For example:
- Systemic collaboration and coordination between all participants within the supply chain should be in place in order to establish a software solution in which continuous monitoring of food freshness and loss due to spoilage is automatically updated via Internet of Things (IoT) devices, such as sensors embedded in cold storage and transport. The data can then be simultaneously delivered to all stakeholders, from producers to retailers.
- Chemical composition imaging systems can also be used by producers — as well as throughout the supply chain — to more accurately predict spoilage levels and possible contamination (e.g., E. coli). In turn, the data generated can be utilized to automatically update pricing and assist in determining the likelihood of food decomposition as products flow through the supply chain. As with data sourced from IoT devices, all supply chain participants can receive automatic updates for more accurate decision-making regarding storage and distribution.
- With billions of smartphones and IoT devices now in the hands and homes of many end consumers — particularly in countries where food waste occurs at this stage of the supply chain — chemical imaging systems or food labels tied into a tracking and nutritional database can be incorporated using a readily available app. This allows consumers to scan fresh produce in order to determine its origin, level of freshness, and predicted spoilage date. These apps can even recommend specific frozen products, which have a longer shelf life, as an alternative to fresh products based on the intended use date inputted by the consumer.
Looking Ahead
By implementing these advanced technologies, food waste and spoilage costs could be reduced by 20% by 2025 and by 50% before the end of the decade while allowing the food industry to more efficiently deliver the highest-quality, freshest products. Thanks to highly accurate spoilage dates, consumers will also be better informed of the chances of wasting money and food when deciding whether to purchase fresh produce. And through the information provided on food products’ origins, conscientious consumers will have the ability to support small, local, or international food producers as desired.