Digitizing the food industry to increase resilience. By Arvind Pal Singh

Food supply chains continue to face significant disruption, which has been predicted to only worsen or at least, stay the same, as the year goes on. Meanwhile, the industry is also subject to safety concerns, and the need for increased resilience to market uncertainty and disruption has never been more crucial. To be future-fit, the food industry must embrace a new value chain built around new business models, practices and technologies that can enhance operational capabilities.

1. Reengineering the food supply chain for resilience

Building resilience into the global food supply chain begins with accepting that things cannot go back to the way they used to be. In a world facing a growing population that’s expected to reach 8.5 billion by 2030, as well as a climate crisis, food supply chains must be strong, nimble, and smart.

The past decade has seen a growing dependence on imported fruits and vegetables in many western countries, however the food industry is under pressure to reduce post-harvest food losses. It’s also working to cut its dependence on vapor compression-based cold storage, which is a major contributor of greenhouse gases. This means production needs to move closer to the consumer and the industry needs to invest in new-age cold-storage solutions that reduce energy consumption. In the long run, this translates into creating a more diversified food supply chain that’s better able to handle disruption.

Food retailers must optimize their last-mile delivery mechanisms. To provide on-time delivery while optimizing delivery costs, businesses need greater automation in their warehouses and delivery partners that can provide real-time visibility of shipment status for online buyers. Automation of brick-and-mortar stores can also provide a frictionless and safer buying experience for in-store customers.

2. Build transparency and trust

Satisfying the food safety concerns of today’s increasingly health-conscious and well-informed consumer requires constant monitoring of products from farm to table, as well as the ability to use gathered data to improve visibility across manufacturing and distribution. Internet of Things (IoT) technologies deployed throughout the value chain can collect and present data to improve visibility and create data-driven processes and decisions for businesses. This also improves the ability of companies to respond to unforeseen disruptions.

Similarly, technology like blockchain has emerged as a reliable way to track not just food products but the ingredients they consist of. For down-chain players such as grocery stores and restaurants, this data can help identify and reduce contamination and, in the case of product recalls, identify impacted shipments. This level of detail and monitoring will become increasingly relevant for building customer loyalty and trust.

3. Overcoming retail barriers with digital offerings

For retailers and grocers, Covid-19 demonstrated the need for a digital-first approach when it comes to customer engagement. This requires a deep understanding of customers, which can only come from enhanced data collection and analytics capabilities, which is becoming easier thanks to the rise of online shopping.

Many consumers prefer to grocery shop from home, so retailers must find ways to blend elements of in-store shopping with their digital offerings. In-store associates, for example, can be replaced by virtual store associates or artificial intelligence-enabled chatbots. Making these changes means rethinking the entire customer journey and identifying opportunities made via promotional online offers. Being data-driven also enables retailers to build trust with customers for example, by providing information about food’s origins and ingredients.

4. Advancing automation for safety and efficiency

For the food industry, automation holds great promise; the scope for automating manual processes in the food value chain extends all the way from the farm to the dinner table. For example, robotic farming, combined with crop-status analysis, can save time while quantifying yield potential and environmental impact of crops.

In warehouses, automated storage and retrieval systems can manage a variety of food products under different storage conditions. Meanwhile, at packaging facilities, restaurants and retail stores, robotics can automate repetitive processes with remote oversight and minimum human intervention, reducing human errors and food contamination.

5. Building digital-era skills and culture

While large-scale automation will replace some jobs, it will supplant them with new ones. Already, early AI adopters in the food industry have experienced an uptick in the demand for high-skill jobs. However, this puts the food industry in direct competition with other sectors for digital talent. Those that focus on upskilling existing talent and making the most of the expertise from reliable technology partners therefore stand in best stead to succeed.

A digital-first world

The uncertain and quickly changing world we live in continues to exacerbate the challenges faced by the global food industry, but technology offers huge opportunity to solve them while developing a better understanding of their customers through data-driven insights.

Food industry leaders need to take the opportunity to use technologies to drive a ground-up transformation of their supply chain while understanding customers better through data-driven insights. This will not only benefit the environment, but also help boost their own revenues, setting them up for success in the future.

For a list of the sources used in this article, please contact the editor.

By Arvind Pal Singh, Vice President, Products & Resources Consulting, GGM at Cognizant. Cognizant engineers modern businesses. It helps clients modernize technology, reimagine processes and transform experiences so they can stay ahead in our fast-changing world.