Today, we see a rising momentum in the drive towards the zero waste movement as businesses look to operate in a sustainable manner in order to reduce wastage and conserve resources. This shift in the way businesses operate not only stems from a desire to conserve the environment, but is also partly driven by the rising cost of commodities required in production. Today, there is an increase in the emphasis to reduce food waste and save the environment. According to the Food and Agricultural Organisation (FAO), 14% of the food produced globally was lost during the post-harvest production in 2019. It is estimated that Asian producers lose up to 40% of their fresh fruit and vegetables due to inadequate post-harvest management. Furthermore, based on current agricultural systems and forecasted climate change, models suggest that most of today’s key agriculture regions are likely to experience more extreme rainfall distributions along with more frequent and extreme events such as droughts and floods which can highly impact food production. In this article, we will look at two of the leading causes of food loss and food waste as well as the solutions used to overcome these problems.
Minimising losses through demand forecasting
According to a report by FAO, it is difficult to estimate the amount of food required for consumption due to limited data. This becomes a problem for food manufacturers who overestimate demand resulting in an overproduction of food products which ultimately contributes to the massive food waste generated. As such, effective demand forecasting could allow producers to effectively balance between producing sufficient output to meet consumer demand while not incurring surpluses that could result in production wastage. Furthermore, with a better understanding of the future demand of food products, food processing firms are able to establish an effective feedback loop within the supply chain, working closely with their agricultural counterparts to ensure that the right amount of food is grown.
Thailand’s Charoen Pokphand Foods PCL (CPF) recently revamped their supply chain to improve their planning. They chose to implement a demand planning system which allows them to analyse historical customer data. The system leverages on big data to give CPF the ability to improve forecasting of customer demand. By having a more accurate forecast, CPF is able to make smarter decisions to reduce their food waste.
Singapore’s online grocery store RedMart, on the other hand, has nine years of data on customer’s patterns and preferences stored in their cloud system. They used past data to forecast the demand during special seasons to ensure they do over over-purchase unnecessary amounts of food. This method of forecasting allowed RedMart to place a more accurate order of food supply, which in turn reduces their food waste.
Outside of ASEAN, North America’s largest grocery distributor United Natural Foods, Inc. (UNFI) implemented a cloud platform to manage their food production. The system records past information and imposes the use of big data to predict demands for its users. It also gives real time updates of current demands so that the company is up to date and can make immediate decisions. This application has enabled UNFI to control their distribution and planning, reducing their food losses.
Minimizing post harvest food loss with food storage technology
According to the United Nations (UN) another root cause of food loss during production is improper storage of products. With poor management of inventory, food easily becomes defective which makes it difficult for companies to sell such products. Up to 40% of food is lost due to poor handling and storage, contributing to the food waste in food supply chains. Hence, it is important to have a good system in place to ensure the food is handled carefully. This will lead to a reduction in food wastage.
A crucial development in the efforts to combat improper food storage and transportation in the region lies in the use of cold storage. A lower temperature in the storage of food can allow producers to extend the shelf life of their products from only a few days to months. For example, Fresh green vegetables which would go bad in 2 days at a typical tropical climate of 30℃ can be stored for 1 month if stored at 0℃, extending its expiry by 15 times, allowing producers ample time to get the produce to consumers and eliminate food loss. Furthermore, cold storage ensures that perishable products are safe and of high quality at the point of consumption. With the rising popularity of online grocers aiming to provide on demand deliveries of fresh food, a strong cold chain and proper food storage is essential in order to meet the logistical requirements of these companies and further scale their operations.
TaniHub is an Indonesian B2B Platform that helps farmers sell directly to businesses and individuals through its ecommerce platform. This can be a crucial step in preventing postharvest losses caused by extensive and fragmented supply chains. Farmers would also be able to avoid high fees from working with middlemen. Furthermore, Tanihub has introduced warehouses equipped with cold storage facilities that suit different types of fruits and vegetables to help farmers with storage. This has enabled small scale farmers who lack proper storage to place their products in a suitable environment before shipment to their customers. As a result, less food waste is generated. Food-maker Malang Strudel currently works together with Tanihub to acquire fresh fruits and this has helped reduce their food losses by 15% due to the preferable storage environment.
Vietnam’s leading cheese producer Bel Vietnam also uses cold chain solutions to create the best environment to store their products. Data loggers were used to monitor the temperature and the information collected was utilized to ensure that the conditions of food products are optimal to maximise shelf life. This gave Bel Vietnam a better understanding of their products and helped to improve inventory management, lowering their food loss along the supply chain.
Besides cold storage facilities, there are also other innovations used to create a proper storage to reduce food waste. Singapore’s leading food wholesaler Ban Choon Marketing Pte Ltd has integrated Information and Communications Technology (ICT) into air cleaners to keep fruits and vegetables fresher in their warehouse. Real-Time monitoring technology and IoT was also used to gather information about the products in a timely manner to determine the next course of action. Such technologies have overall improved the handling of food, thus reducing defects and lowering food waste.
Future of food management
Food waste is an emerging problem in ASEAN and increasing awareness of the problem is the first step in addressing it. In the coming years, food waste is expected to become even more serious due to an increasing demand for food. To manage and overcome this challenge, it is important for the entire food supply chain, from food producers to manufacturers and to distribution and retail to work together in order to ensure that food supply can be better managed in response to demand. All in all, with increasing pressure for food production to occur more sustainably while still meeting the increasing demand, players in the food sector have to constantly find new and innovative ways to manage their operations in the most efficient way possible.
We have almost come to the end of our Food for Thought series (previous article). Follow us on our LinkedIn page to stay tuned for the last article, and for other insights on enterprise digitalisation through different verticals in ASEAN.
12 July 2021