Six reasons to embrace food supply chain transparency

The United Nations’ Food and Agriculture Organization (FAO) estimates the global volume of food wastage to be about 1.3 billion tons per year, which amounts to one-third of food produced for human consumption. This happens in a backdrop where nearly 870 million people are undernourished globally.

Food waste and loss can happen at any stage of the farm-to-table process.

On the farm

• Low produce due to weather and climate fluctuations.1
• Availability, quality, and nutritional aspects vary due to the seasonal nature.

In the factory

• Poor handling
• Lack of knowledge and training
• Obsolete processes and equipment.

Transportation

• Spoilage caused by delays
• Improper temperature control during transportation
• Improper storage during transportation

In the warehouse

• Pest infestations
• Improper temperature and humidity levels
• Poor planning leading to prolonged storage of products with a limited shelf life

In the store

• Limited shelf life
• Not meeting the freshness, color, flavor, and texture expectations

At the table2

• Expiry
• Overbuying

1 Global climate change threatens up to 25% of crop yields – report by World Economic Forum and McKinsey & Company

2 Average U.S. household wasted 31.9% of its food – American Journal of Agricultural Economics

The ability to easily track the source and usage of raw materials, ingredients, and finished food batches across all the above stages is key to understand how, when, and where food loss and waste happens in the food supply chain.

Public health is a high priority for governments and policymakers. Newer regulations require agile responses to food recalls and the manufacturer’s ability to trace products quickly. For example, under the Food Safety Modernization Act of 2011, the US FDA will have the authority to require traceability for selected high-risk food items. Australia’s National Livestock Identification System (NLIS) mandates the identification and traceability of cattle, sheep, and goats throughout their lifespan. European Food Safety Authority has laid down similar measures.

Also, regulations change often; having supply chain transparency and traceability enables manufacturers to adapt to new regulations and provide the information required for doing business with new markets, quickly.

While sustainable and environment-friendly farming practices play a critical role, sustainability matters beyond the farm, throughout the food supply chain.

The sustainability goals in the food supply chain are under challenge due to the growing world population and resource scarcity. Adding to the woe, if ecosystems continue to degrade at the current rate, we will soon reach a point of no return.

On the farm, food manufacturers practice crop rotation to preserve soil health and to prevent soil erosion. Methane, a greenhouse gas emitted by dairy cows, affects the earth’s temperature and climate stability. A 2015 study showed that adding seaweed to cattle feed can significantly cut down methane emissions. Similarly, many novel technologies have been implemented to improve sustainability during transportation, warehousing, and retail.

For F&B companies, sustainability is no longer a trend but a business imperative for better profitability, long-term viability, and, most importantly, to safeguard the wellbeing of consumers. And to identify, plan, implement and optimize sustainable practices throughout the food supply chain, transparency and visibility play a key role.

In the next blog post, let’s explore how enterprises can use the cloud, business intelligence, analytics, and Industry 4.0 technologies to improve visibility, transparency, and traceability across the food supply chain.

References:

1. Estimating Food Waste as Household Production Inefficiency, American Journal of Agricultural Economics
2. Best Practice Guide: Improving supply chain transparency in modern food and beverage manufacturing, Infor
3. Report: Incentivizing Food Systems Transformation, World Economic Forum in collaboration with McKinsey & Company